West Virginia-Parkersburg-Parkersburg Business Park Lease - Parkersburg-Wood County Area Development Corp. and Coldwater Creek Inc.
PARKERSBURG-WOOD COUNTY AREA DEVELOPMENT CORPORATION
and
COLDWATER CREEK, INC.
LEASE AGREEMENT
Dated as of June 12, 1998
(Distribution Center)
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THIS LEASE AGREEMENT dated as of June 12, 1998, is between the
Parkersburg-Wood County Area Development Corporation, a not for profit
corporation duly organized and validly existing under the laws of the State of
West Virginia, having its office at 408 Juliana Street, Parkersburg, West
Virginia 26102 (the "Lessor"), and Coldwater Creek, Inc., a for profit
corporation duly organized and validly existing under the laws of the State of
Delaware and authorized to do business in the State of West Virginia, having its
principal office at One Coldwater Creek Drive, Sandpoint, Idaho 83864 (the
"Lessee"):
RECITALS
WHEREAS, Lessor is a not-for-profit corporation organized for the
purpose of and operating exclusively for the promotion of social welfare,
including the promotion, encouragement and development of commercial enterprises
in Wood County, West Virginia;
WHEREAS, Lessee operates an international mail-order catalog business
and desires to locate a merchandise distribution facility and a call center in
Wood County, West Virginia;
WHEREAS, the Lessor, in accordance with its purpose of promoting the
social welfare of the citizens of Wood County, West Virginia, presently desires
to build a merchandise distribution facility to lease to Lessee, with the option
to expand the facility during the lease term with the addition of a call center;
WHEREAS, Lessor holds title to certain real property of approximately
60 acres located in the Parkersburg Business Park (hereinafter, the "Park"),
Parkersburg, Wood County, West Virginia (hereinafter, the "Site"), which is well
suited for the construction of the merchandise distribution facility;
WHEREAS, at the commencement of the lease term, the leased premises
shall consist of the Site, the buildings and improvements, and the Fixtures to
be attached thereto, (the "Distribution Center") to be constructed to
accommodate the merchandise distribution operation of the Lessee in accordance
with the Plans and Specifications prepared by or at the direction of the Lessee
(the "Campus");
WHEREAS, the Lessor proposes to lease the Campus to the Lessee, and
the Lessee desires to rent the Campus from the Lessor, upon the terms and
conditions set forth in this Lease Agreement.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants of the parties herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lessor hereby demises and lets to Lessee, and Lessee hereby takes from Lessor,
those certain premises herein defined and described as the "Campus" for the term
and upon the covenants, terms and conditions herein contained, the parties
hereto do hereby mutually agree as follows:
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ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. The following words and terms shall have
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the following meanings unless the context otherwise requires:
"Alterations" shall mean alterations, modifications, additions,
improvements and betterments of any kind to the Campus other than the normal
day-to-day maintenance and repairs, including without limitation all additions
to the Campus after the Delivery Date made to attain completion.
"Campus" shall mean the Site, the Distribution Center constructed on
the Site by the Lessor and, when affixed to or incorporated into the
Distribution Center, the Fixtures, and leased to the Lessee as contemplated by
this Lease Agreement.
"Commencement Date" shall mean the date of this Lease Agreement.
"Construction Period" shall mean that period of time commencing as of
the Commencement Date and continuing to the Delivery Date during which the
Lessor constructs and equips the Campus.
"Cost of the Project" shall mean the total aggregate cost of the Site
and the construction and equipping of the Campus based upon the Plans and
Specifications as of the Commencement Date.
"County" shall mean Wood County, West Virginia.
"Delivery Date" shall mean the date on which the Campus is ready for
occupancy and the Lessee takes possession of the Campus and the Lessee delivers
the Certificate of Acceptance for the Campus to the Lessor substantially in the
form of Exhibit A attached hereto and made a part hereof.
"Expiration Date" shall mean the twentieth (20th) anniversary of the
Delivery Date.
"Fixtures" shall mean (i) all appliances, parts, instruments,
appurtenances, accessories and other miscellaneous equipment of whatever nature
which may from time to time be affixed to or incorporated in the Campus
including without limitation the equipment described in Schedule I hereto, as
the same may be amended from time to time by the parties hereto as circumstances
may require, and (ii) Replacement Parts.
"Hazardous Materials and Hazardous Substances" shall mean any
hazardous material or hazardous substances as defined by any federal or state
environmental law.
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"Lease Documents" shall mean this Lease Agreement and any other
instruments, agreements, certificates and documents necessary to consummate the
transactions contemplated in this Lease Agreement.
"Lease Term" shall mean the period beginning on the Delivery Date and
ending on the Expiration Date, unless the Lease shall have been terminated
earlier pursuant to the terms hereof.
"Lender" shall mean the entity or, collectively, the entities, who are
specified as parties to whom amounts are payable under the Notes.
"Lessor" shall mean the Parkersburg-Wood County Area Development
Corporation and its successors and assigns.
"Notes" shall mean the promissory notes which the Lessor will execute
and deliver for the financing of the Campus.
"Net Proceeds" shall mean the gross proceeds from any insurance
recovery or condemnation award remaining after payment of attorneys' fees, the
costs of reparations to the Site as may be required of Lessor by law, and all
other expenses incurred in the collection of such gross proceeds.
"Park" shall mean the Parkersburg Business Park, Parkersburg, West
Virginia.
"Parts" shall mean all appliances, parts, instruments, appurtenances,
accessories and other miscellaneous equipment of whatever nature, which may from
time to time be incorporated or installed in or attached to the Campus or the
Fixtures.
"Person" shall mean any individual, association, unincorporated
organization, corporation, partnership, joint venture, business trust or a
government, or an agent or a political subdivision thereof, or any other entity.
"Permitted Encumbrances" shall mean (i) this Lease Agreement, (ii)
liens granted to the Lender under the Notes, (iii) liens for taxes either not
yet delinquent or being contested by the Lessee in good faith with due diligence
and by appropriate proceedings (and for the payment of which adequate reserves
or appropriate bonding has been provided), but only if the nonpayment of any
such tax or the contest of any such payment in such proceedings does not
adversely affect the title, property or rights of Lessor or the Lender, (iv) any
contractors, materialmen, mechanics, workmen, repairmen, employees or other like
liens arising in the ordinary course of business of the Lessee and not
delinquent (and for the payment of which adequate reserves or appropriate
bonding has been provided), (v) those items set forth in Schedule B to the title
insurance commitment relating to the Site, (vi) liens, exclusive of any listed
in clauses (i) through (v) hereof, incurred in the ordinary course of business
including without limitation tangible personal property, office equipment or
furniture leases and security interests, liens and encumbrances relating to
procurement of utilities, cable television, other
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telecommunication equipment or component parts and supplies for the use in the
operations of the Lessee at the Site, and (vii) liens otherwise permitted, i.e.,
not expressly prohibited, under the terms of this Lease Agreement.
"Plans and Specifications" shall mean the plans and specifications for
construction of the Campus which the Lessee has provided to Lessor pursuant to
Section 4.1 hereof, and any changes thereto as provided for pursuant to Section
4.4 hereof.
"Replacement Parts" shall have the meaning set forth in Section 6.4
hereof
"Rent" shall mean the rent payable pursuant to Article V hereof.
"Rent Factor" shall mean that percentage which shall be agreed to by
the Lessor and the Lessee on the Commencement Date.
"Site" shall mean that certain parcel of real property of
approximately 60 total acres located in the Parkersburg Business Park,
Parkersburg, West Virginia, currently owned by the Lessor, as more completely
described in the Legal Description attached hereto as Exhibit B, and all
buildings and improvements now or hereafter situated thereon.
"State" shall mean the State of West Virginia.
"Supplement" shall mean any Lease Agreement supplemental to, and
authorized and executed pursuant to the terms of, this Lease Agreement.
"Total Project Cost" shall mean the total aggregate cost of real
property and the acquisition, construction and installation of the improvements
thereon in accordance with the Plans and Specifications for the Campus.
Section 1.2. Rules of Construction. The following rules shall apply
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to the construction of this Lease Agreement unless the context otherwise
requires:
(a) Singular words shall connote the plural number as well as the
singular and vice versa.
(b) Words importing the masculine, feminine or neutral gender shall
include any other gender.
(c) All references herein to particular articles or sections are
references to articles or sections of this Lease Agreement unless otherwise
indicated.
(d) The headings and table of contents herein are solely for
convenience of reference and shall not constitute a part of this Lease Agreement
nor shall they affect its meaning, construction or effect.
<PAGE>
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1. Representations and Covenants of Lessor. The Lessor
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makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Lessor is a not for profit corporation duly organized and
validly existing under the laws of the State of West Virginia, authorized to do
business in the State of West Virginia, in good standing under the laws of the
State of West Virginia and has the corporate power and authority to execute,
deliver and perform each of the Lease Documents to which it is a party. Each of
the Lease Documents to which Lessor is a party has been duly authorized,
executed and delivered by the Lessor, when appropriate.
(b) The Parkersburg-Wood County Area Development Corporation is an
organization which is exempt from federal income taxation under 26 U.S.C. (S)
501(c)(4) of the Internal Revenue Code of 1986, as amended, and annually
receives more than one half of its support from a combination of gifts, grants,
direct or indirect charitable contributions or membership fees.
(c) The Lessor holds good and marketable title to the Site and, upon
the Delivery Date, the Lessor under this Lease Agreement will hold good and
marketable title to the Campus including without limitation the Fixtures, all
pursuant to the Plans and Specifications, and will lease the Campus to the
Lessee pursuant to this Lease Agreement, all for the promotion of the social and
economic welfare of the County and the surrounding area.
(d) Neither the execution and delivery of any of the Lease Documents
to which Lessor is a party or the consummation of the transactions contemplated
thereby nor the fulfillment of or compliance with the provisions of any of the
Lease Documents to which Lessor is a party will conflict with or result in a
breach of the Lessor's Articles of Incorporation or By-laws, as amended, or of
any corporate restriction or any agreement or instrument to which the Lessor is
a party or by which it is bound, or result in the creation or imposition of any
lien of any nature upon any property of the Lessor under the terms of any such
Articles of Incorporation, By-laws, restriction, agreement or instrument, except
for Permitted Encumbrances.
(e) No litigation, inquiry or investigation of any kind in or by any
judicial or administrative court or agency is pending or, to its knowledge,
threatened against the Lessor with respect to (i) the existence of the Lessor,
(ii) its authority to execute or deliver this Lease Agreement or the Lease
Documents, (iii) the validity or enforceability of the Lease Documents or the
transactions contemplated hereby or thereby, or (iv) the title of any officer of
the Lessor who executed the Lease Documents. No such authority
<PAGE>
or proceedings have been repealed, revoked, rescinded or amended and all are in
full force and effect.
(f) Each of the Lease Documents executed and delivered by Lessor
constitutes a legal, valid and binding obligation of the Lessor enforceable
against the Lessor in accordance with its terms.
(g) The Parkersburg-Wood County Area Development Corporation shall not
realize any profit or income from the transactions contemplated under this Lease
Agreement, except to the extent allowable under the laws and regulations of the
Internal Revenue Service necessary to maintain the Parkersburg-Wood County Area
Development Corporation's exemption from federal income taxation under the 26
U.S.C. (S) 501(c)(4) of the Internal Revenue Code of 1986, as amended, and only
to the extent that such profit or income shall not be considered unrelated
business income as such term is defined under the laws and regulation of the
Internal Revenue Service.
(h) The Lessor shall exercise its best efforts to utilize grant
dollars from the City of Parkersburg for Site acquisition during the
Construction Period as such grant dollars become available during the
Construction Period.
Section 2.2. Representations and Covenants of Lessee. The Lessee
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makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Lessee is a for-profit business corporation duly organized and
validly existing under the laws of the State of Delaware, authorized to do
business in the State of West Virginia, in good standing under the laws of the
State of West Virginia and has the corporate power and authority to execute,
deliver and perform each of the Lease Documents to which it is a party. Each of
the Lease Documents to which Lessee is a party has been duly authorized,
executed and delivered by the Lessee, when appropriate.
(b) Neither the execution and delivery of any of the Lease Documents
to which Lessee is a party or the consummation of the transactions contemplated
thereby nor the fulfillment of or compliance with the provisions of any of the
Lease Documents to which Lessee is a party will conflict with or result in a
breach of or constitute a default under any of the terms, conditions or
provisions of the Lessee's Articles of Incorporation, By-laws, as amended, or
any corporate restriction or any agreement or instrument to which the Lessee is
a party or by which it is bound, or result in the creation or imposition of any
lien of any nature upon any of the property of the Lessee under the terms of any
such Articles of Incorporation, By-laws, restriction, agreement or instrument,
except for Permitted Encumbrances.
(c) No litigation, inquiry or investigation of any kind in or by any
judicial or administrative court or agency is pending or, to its knowledge,
threatened against the Lessee with respect to (i) the existence of the Lessee,
(ii) its authority to execute or deliver this Lease Agreement or the Lease
Documents, (iii) the validity or enforceability of the Lease Documents or the
transactions contemplated hereby or thereby, or (iv) the title of any officer of
the Lessee who executed the Lease Documents. No such authority or proceedings
have been repealed, revoked, rescinded or amended and all are in full force and
effect.
(d) Each of the Lease Documents to which Lessee is a party constitutes
a legal, valid and binding obligation of the Lessee enforceable against the
Lessee in accordance with its terms.
(e) Lessee shall provide to Lender representations and warranties and
comply with all covenants and conditions necessary for the provision of the line
of credit by the Lender evidenced by the Notes for the construction financing to
be used to construct and equip the Campus.
(f) Lessee is engaged in an enterprise-wide Year 2000 project to bring
Lessee's infomration systems and, to the extent necessary, confirm Lessee's
vendors and suppliers systems progress towards Year 2000 compliance.
(g) Upon written request of Lessor, Lessee, as directed by Lessor,
shall provide Lessor with a certificate executed by its Chief Financial Officer
or other officer or person acceptable to Lessor, certifying that the
representations, warranties and covenants of Lessee set forth in this Lease
Agreement are true and correct as of the date of the certificate and further
certifying that, as of the date of the certificate, no event of default exists
under this Lease Agreement.
<PAGE>
ARTICLE III
TITLE INSURANCE
Section 3.1. Title. The Lessor holds good and marketable title to the
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Site.
Section 3.2. Title Insurance. The Lessor has obtained or will obtain
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title insurance for the benefit of the Lessor in an amount equal to the amount,
if any, required by Lender, insuring title to the Site and the improvements
thereon.
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ARTICLE IV
CONSTRUCTION AND EQUIPPING OF
DISTRIBUTION CENTER
Section 4.1. Plans and Specifications for Distribution Center.
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Lessee has provided Lessor with, and Lessor has agreed to, specific Plans and
Specifications relating to Lessor's construction and equipping of the
Distribution Center, a summary of which is attached hereto as Exhibit C and made
a part hereof (the "Plans and Specifications").
Section 4.2. Construction and Equipping of Distribution Center by
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Lessor. Lessor shall enter into such contracts and agreements as may be
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necessary, at the request of the Lessee, to enable the Distribution Center to be
constructed and equipped in accordance with the Plans and Specifications,
including any Change Orders which the Lessee may request during the course of
the construction and equipping of the Distribution Center pursuant to Section
4.4 of this Lease Agreement.
Section 4.3. Purchases of Building Materials, Supplies and Fixtures.
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The Lessor shall purchase all building materials, supplies and Fixtures to be
used in the construction of, or installed in, the Distribution Center pursuant
to the Plans and Specifications. In accordance with this Section, Lessor shall
comply with the following requirements for all purchases of building materials,
supplies and equipment, in order that the purchases thereof may be exempt from
the sales tax and the use tax of the State:
(a) Lessor shall contract with a procurement specialist, who shall be
acceptable to Lessee, to be available to assure the quality and conformity of
all materials, supplies and equipment purchased;
(b) Lessor shall receive and process all invoices for such building
materials, supplies and equipment;
(c) Lessor shall pay for all such building materials, supplies and
equipment from a bank account designated for such purpose, and all such payments
shall be made by draft of the Lessor, provided wire transfer from the designated
bank account may be approved on a case by case basis; and
(d) Lessor shall be the named beneficiary of all warranties and
guarantees upon such building materials, supplies and equipment.
Section 4.4. Change Orders. If during the course of the construction
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of the Distribution Center the Lessee desires to make any change in the Plans
and Specifications, such change shall be submitted in writing to the Lessor,
which shall constitute approval of such change as a change order for purposes of
the relevant construction contract(s), unless Lessor gives Notice to Lessee of
its objection to the change order in writing within seven (7) calendar days of
actual receipt of the change
<PAGE>
order by Lessor. To the extent that any change order during the Construction
Period, after allowances and adjustments, shall cause the costs of construction
to exceed the Cost of the Project such excess costs shall be treated in all
respects as an additional expense under Section 8.2(b) herein, and shall grant
Lessor termination rights of this Lease under said provisions. Any change
orders under this Section shall be deemed incorporated into and made a part of
the Plans and Specifications for purposes of this Lease Agreement.
Section 4.5. Inspections During Construction Period. Throughout the
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Construction Period, Lessee shall have the right to inspect the construction
site at any time.
Section 4.6. Insurance During Construction Period. During the
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Construction Period, Lessor shall maintain or cause to be maintained "all-risk"
and "extended risk" property insurance and builder's risk and fire insurance, in
each case with respect to the Campus (covering physical loss or damage to the
Campus).
<PAGE>
ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 5.1. Demise of Campus. The Lessor hereby leases the Campus
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to the Lessee and the Lessee hereby takes the Campus from the Lessor upon the
terms and conditions of this Lease Agreement.
Section 5.2. Duration of Lease Term; Quiet Enjoyment.
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(a) The Lessor shall deliver to the Lessee sole and exclusive
possession of the Campus (subject to Sections 8.3 and 10.2 hereof), and the
leasehold estate created hereby shall commence on the Delivery Date, and the
Lessee shall accept possession of the Campus on the Delivery Date.
(b) Except as provided in Section 10.2 and Section 10.3 hereof, the
leasehold estate created hereby shall terminate at 11:59 p.m. on to the
Expiration Date or on such earlier date as may be permitted by Section 5.3, 11.1
and 11.3 hereof.
(c) Except as provided in Sections 8.3 and 10.2 hereof, the Lessor
shall neither take nor suffer or permit any action to prevent the Lessee during
the Lease Term from having quiet and peaceable possession and enjoyment of the
Campus and will cooperate with the Lessee in order that the Lessee may have
quiet and peaceful possession and enjoyment of the Campus, as hereinabove
provided. Accordingly, the Lessor shall not grant, pledge, mortgage,
hypothecate or otherwise convey any mortgage, security interest or pledge or
permit any encumbrance, except Permitted Encumbrances, to be placed on the
Campus or the Fixtures without the express written consent of the Lessee.
Section 5.3. Basic Rent.
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(a) The Lessee shall not be required to pay any rent during the
Construction Period.
(b) The Lessee shall make, in advance, equal monthly payments to
Lessor commencing on the Delivery Date and thereafter payable on the 1st day of
each consecutive month over the Lease Term. The projected Basic Rent payment
schedule over the Term of this Lease Agreement is attached hereto as Exhibit D
and is incorporated herein by reference.
(c) The Lessee, under the provisions of this Section 5.3, agrees to
make the above-mentioned payments in immediately available funds and without any
further notice in lawful money of the United States of America. In the event
the Lessee shall fail to timely make any payment required in this Section 5.3,
the Lessee shall pay the same together with any charges from Lender incurred by
the Lessor.
<PAGE>
Section 5.4. Additional Rent. The Lessee shall pay the following
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amounts as Additional Rent:
(a) On demand of the Lessor other amounts payable by the Lessee under
this Lease Agreement; and
(b) On demand of the Lessor from time to time all tax amounts,
together with any interest, penalties and expenses related thereto, not paid by
the Lessee pursuant to Section 6.5 and paid by the Lessor or Lender to the
appropriate taxing authority,
Section 5.5. Prepaid Rent. The Lessee may pay certain amounts, as
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agreed and determined by Lessor and Lessee, as Prepaid Rent. Any such Prepaid
Rent may be allocated over the Lease Term, if appropriate, as determined by
Lessee.
Section 5.6. Payments by Lessee to Lessor. All rent payments to be
----------------------------
made by the Lessee under the terms of this Article shall be made payable to the
Lessor and shall be delivered to the Lessor by wire transfer to the credit of
the Lessor's account as approved by Lender.
Section 5.7. Security. The Lessee shall provide the following
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security:
(a) Prior to the commencement of the Construction Period, the Lessee
shall provide an irrevocable standby letter of credit to the Lessor in an amount
equal to twenty percent (20%) of the Cost of the Project, substantially in the
form attached hereto as Exhibit E draws upon which shall be conditioned upon
default by the Lessee in its obligations under this Lease Agreement; provided,
however, that any draw made on the letter of credit shall not exceed 89% of the
outstanding principal balance on the Notes as of the date of the draw. This
letter of credit shall remain in place until the Delivery Date. To the extent
any draws are made against this letter of credit such draw amounts shall be
considered part of the Total Project Cost.
(b) On the Delivery Date, the Lessee shall provide a standby letter of
credit to the Lessor, substantially in the form attached hereto as Exhibit F,
draws upon which shall be conditioned upon default by the Lessee in its
obligations under this Lease Agreement. The letter of credit shall remain in
place for five (5) years, commencing on the Delivery Date and expiring on the
fifth anniversary of the Delivery Date. As of the Delivery Date, the principal
balance of this letter of credit shall be in an amount equal to 10% of the
aggregate Cost of the Project which balance shall decline in equal increments
beginning at the conclusion of the fist year, and thereafter at the conclusion
of each subsequent year until extinguished.
(c) Lessee shall not be required to pay any additional security
deposit under this Lease Agreement.
<PAGE>
Section 5.8. Market Rental. The Lessor and the Lessee believe that
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the Rent payable hereunder constitutes a fair market rental for the lease of the
Campus pursuant to the terms hereof.
<PAGE>
ARTICLE VI
MAINTENANCE, SERVICES, MODIFICATIONS AND ALTERATIONS,
TAXES AND INSURANCE
Section 6.1. Maintenance and Modifications by the Lessee. The Lessee
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shall not abandon, or permit any waste to, the Campus. During the Lease Term,
the Lessee shall not remove any part of the Campus outside of Wood County and
shall (i) keep the Campus in a reasonably safe condition; (ii) make all
necessary repairs and replacements to the Campus (whether ordinary or
extraordinary, structural or nonstructural, foreseen or unforeseen); and (iii)
operate the Campus in a sound and economic manner.
Section 6.2. Maintenance of Common Areas. The Lessor shall maintain
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in good order, condition and repair all of the common areas of the Park in
accordance with the terms and conditions of the Common Grounds Agreement to be
executed simultaneously with this Lease Agreement.
Section 6.3. Installation of Additional Fixtures. Lessee or any
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permitted sublessee of the Lessee from time to time may install additional
machinery, equipment or other personal property in the Campus and such
machinery, equipment or other personal property shall not become, or be deemed
to become, a part of the Campus. The Lessee from time to time may create or
permit to be created any lien on such machinery, equipment or other personal
property. Further, the Lessee from time to time may remove or permit the
removal of such machinery, equipment and other personal property from the
Campus, provided that any such removal of such machinery, equipment or other
personal property shall not occur if any such removal shall adversely affect the
structural integrity of the Campus and provided further, that if any damage is
occasioned to the Campus by such removal, the Lessee agrees to promptly repair
such damage at its own expense.
Section 6.4. Replacement Parts. Except upon an Event of Total Loss,
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the Lessee, at its own cost and expense, will promptly replace all Parts which
may from time to time become worn out or damaged beyond repair or permanently
rendered obsolete or unfit for use for any reason whatsoever to the extent
necessary to enable the Lessee to meet its rent payment obligations under this
Lease Agreement (such substituted parts hereinafter being called "Replacement
Parts"). In addition, in the ordinary course of maintenance, service, repair,
overhaul or testing, the Lessee may, at its own cost and expense, remove any
Parts, whether or not worn out or damaged beyond repair or permanently rendered
obsolete or unfit for use, provided that the Lessee shall, at its own cost and
expense, replace such Parts as promptly as practicable to the extent necessary
to enable the Lessee to meet its rent payment obligations under this Lease
Agreement. All Replacement Parts shall be free and clear of all liens (except
Permitted Encumbrances) and shall be in as good operating condition as, and
shall have a value or utility at least equal to, the Parts replaced assuming
each replaced Part was of the value or utility and in the condition and repair
required to be maintained by the terms hereof. All Parts at any time removed
from the Campus shall remain the property of the Lessor, no matter where
located, until such
<PAGE>
Parts shall be replaced by Parts which have been incorporated or installed in or
attached to the Campus and which meet the requirements for Replacement Parts
specified above. Immediately upon any Replacement Part meeting such requirements
become becoming incorporated or installed in or attached to the Campus as above
provided, without further act, (i) title to the removed Part shall thereupon
vest in the Lessee, free and clear of all rights of the Lessor, and shall no
longer be deemed a party hereunder, (ii) title to such Replacement Part shall
thereupon vest in the Lessor, and (iii) such Replacement Part shall become
subject to this Lease Agreement and be deemed part of the Campus for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in or attached to the Campus. The Lessee agrees to execute and file
such documents as may be reasonably required to create, perfect and maintain the
security interests of the Lender in any such Replacement Part and the Lessor's
interests in any such Replacement Part.
Section 6.5. Taxes, Assessments and Utility Charges.
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(a) The Lessee shall be solely liable for all taxes with respect to
the Campus during the Lease Term. The Lessee agrees to pay, as the same become
due and before any fine, penalty, interest (except interest which is payable in
connection with legally permissible installment payments) or other cost which
may be added thereto or become due to, or be imposed by operation of law for the
non-payment thereof, all taxes, payments in lieu of taxes and governmental
charges of any kind whatsoever which may at any time be lawfully assessed or
levied against or with respect to the Campus and any machinery, equipment or
other property installed or bought by the Lessee therein or thereon, including,
without limiting the generality of the foregoing, any sales or use taxes imposed
with respect to the Campus or any part or component thereof, or the rental or
sale of the Campus or any part thereof and any taxes levied upon or with respect
to the income or revenues of the Lessor from the Campus. Provided, that any
sales or use taxes imposed with respect to the Campus or any part or component
thereof, shall be considered part of the Total Project Cost.
(b) The Lessee shall pay or cause to be paid all charges for gas,
water, sewage, disposal, garbage and refuse collection, electricity, light, heat
or power, telephone or other communication service used, rendered or supplied
upon or in connection with the Campus during the Lease Term and shall indemnify
the Lessor against any liability or damages on such account.
(c) Notwithstanding the terms of paragraph (a) above, the Lessee may,
at its option, withhold payments of franchise tax and payments of sales and use
taxes while a contest of such tax is pending, however, while any such contest is
pending the Lessee shall pay all such other taxes, assessments and other charges
when due, under protest, subject to the Lessee's contest.
(d) Within thirty (30) calendar days of receipt of written request
therefor, the Lessee shall deliver to the Lessor official receipts of the
appropriate taxing authorities or other proof satisfactory to the Lessor
evidencing payment of any tax or payment in lieu thereof.
<PAGE>
Section 6.6. Insurance Required. At all times throughout the Lease
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Term, the Lessee shall, at its sole cost and expense, maintain or cause to be
maintained insurance against such risks and for such amounts as are customarily
insured against by businesses of like size and type and shall pay, as the same
become due and payable, all premiums with respect thereto, including, but not
necessarily limited to:
(a) Insurance against loss or damage by fire, lightning and other
casualties customarily insured against, with a uniform standard extended
coverage endorsement, such insurance to be in an amount not less than the full
100% replacement value of the completed buildings and improvements, exclusive of
footings and foundations, as determined by a recognized appraiser or insurer
selected by the Lessee, but in no event less than $20,000,000. With the Lessor's
express advance written approval, the insurance described in this paragraph, or
any portion thereof, can be self-insurance by the Lessee, with such self-
insurance not to exceed $5,000,000, with an excess policy for any amount
exceeding the amount of self-insurance, but less than the amount of insurance
required by this paragraph. In addition, the Lessee shall at all times maintain
such other insurance with recognized underwriters against such other risks as
are normally insured against and in amounts normally considered prudent by
companies carrying on a similar business or another business in a similar
location. The Lessee shall upon request of the Lessor from time to time furnish
to the Lessor true and complete copies of all such insurance policies or
contracts, together with evidence of payment of premiums. In the event Lessee
requests approval to be self-insured as hereinabove provided self-insurance
shall not relieve Lessee from its obligation to fully insure Lessor from
liability.
(b) Workers' compensation insurance, disability benefits insurance and
each other form of insurance which the Lessee or any permitted sublessee is
required by law to provide, covering loss resulting from injury, sickness,
disability or death of employees of the Lessee or any permitted sublessee who
are located at or assigned to the Campus. This coverage shall be in effect from
and after the Delivery Date or on such earlier date as any employees of the
Lessee, or any permitted sublessee, contractor or subcontractor of Lessee, first
occupy the Campus.
(c) Insurance protecting the Lessor and the Lessee against loss or
losses from liability imposed by law or assumed in any written contract and
arising from personal injury, including bodily injury or death of an employee or
non-employee, or damage to the property of others, caused by an accident or
occurrence with a limit of liability of not less than $1,000,000 (combined
single limit for personal injury, including bodily injury or death and property
damage) and with a blanket excess liability coverage in an amount not less than
$5,000,000 combined single limit or equivalent protecting the lessor and the
Lessee against any loss or liability or damage for personal injury, including
bodily injury or death, or property damage.
Section 6.7. Additional Provisions Respecting Insurance. All
------------------------------------------
insurance required by Section 6.6 hereof or under any other provision of this
Lease Agreement shall be procured and maintained in financially sound and
generally recognized responsible insurance companies selected by the entity
required to procure the same and authorized to
<PAGE>
write such insurance in the State, except when such insurance is self-insurance
as permitted under this Lease Agreement. Such insurance may be written with
deductible amounts comparable to those on similar policies carried by other
companies engaged in businesses similar in size, character and other respects to
those in which the procuring entity is engaged. All policies evidencing the
insurance required by Sections 6.6 or under any other provision of this Lease
Agreement shall provide for at least sixty (60) calendar days' prior written
notice of the restriction, cancellation or modification thereof to the Lessor
and Lender. The policies under Section 6.6(a) shall contain appropriate waivers
of subrogation.
Section 6.8. Application of Net Proceeds of Insurance. The Net
----------------------------------------
Proceeds of the insurance carried pursuant to the provisions of this Lease
Agreement shall be applied as follows: (i) the Net Proceeds of the insurance
required by Section 4.6 hereof shall be applied as provided in Section 7.1
hereof, and (ii) the Net Proceeds of the insurance required by any other
provision of this Lease Agreement shall be applied toward extinguishment or
satisfaction of the liability with respect to which such insurance proceeds may
be paid.
Section 6.9. Right of Lessor to Pay Taxes, Insurance Premiums and
----------------------------------------------------
Other Charges. If the Lessee fails (i) to pay any tax, together with any fine,
-------------
penalty, interest or cost which may have been added thereto or become due or
been imposed by operation of law for nonpayment thereof, or assessment or other
governmental charge required to be paid by Section 6.5 hereof, (ii) to maintain
any insurance required to be maintained by Section 6.6 hereof, (iii) to pay any
amount required to be paid by any law or ordinance relating to the use which is
due and payable by reason of any conveyance of the leasehold estate in and to
the Campus, or (iv) to pay any other amount or perform any act hereunder
required to be paid or performed by the Lessee hereunder, the Lessor may pay or
cause to be paid such tax, assessment or other governmental charge or the
premium for such insurance or any such other payment or may perform any such
act. No such payment shall be made or act performed by the Lessor until at
least ten (10) calendar days shall have elapsed since notice shall have been
given by the Lessor to the Lessee, and in the case of any tax, assessment or
governmental charge or the amounts specified in paragraphs (iii) and (iv)
hereof, no such payment shall be made in any event if the Lessee is contesting
the same in good faith in the manner described in this Lease Agreement and no
Event of Default hereunder shall have occurred and be continuing. No such
payment by the Lessor shall affect or impair any rights of the Lessor hereunder
arising in consequence of such failure by the Lessee. The Lessee, shall, on
demand, reimburse the Lessor for any reasonable amount so paid or for reasonable
expenses or costs incurred in the performance of any such act by the Lessor
pursuant to this Section (which shall include all reasonable legal fees and
disbursements), together with interest thereon from the date of payment of such
amount, expense or cost by the Lessor.
Section 6.10. Alterations. Throughout the Lease Term, the Lessee, at
-----------
the Lessee's own expense (except for Alterations required after the Delivery
Date to attain completion, the cost of which shall be considered part of the
Cost of the Project), may from time to time make such Alterations to the Campus
as the Lessee may deem, in its
<PAGE>
sole discretion, desirable for the proper operation, use and maintenance of the
Campus provided, however, that no such Alteration shall be made by the Lessee if
such Alteration, or removal thereof from the Campus would materially diminish
the value or utility of the Campus (or any part thereof) or impair the condition
of the Campus (or any part thereof); provided further, that all Alterations
shall be in compliance with all applicable zoning, planning, building and
environmental laws, ordinances, rules and regulations of governmental
authorities having jurisdiction over the Campus. During the Lease Term, title to
any Alteration made pursuant hereto shall without further act vest in the Lessor
and shall, without further act, immediately become the property of the Lessor,
be deemed to constitute a part of the Campus and be subject to this Lease
Agreement. Notwithstanding the foregoing, the Lessor and the Lessee hereby agree
to execute, deliver and file or record all such documents as may be necessary or
appropriate to confirm the status of title to each such Part or Alteration.
<PAGE>
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1. Damage or Destruction of the Campus.
-----------------------------------
(a) If the Campus or any part or component shall be damaged or
destroyed (in whole or in part) at any time during the Construction Period or if
the Campus or any part or component shall be damaged or destroyed (in whole or
in part) at any time during the Lease Term:
(i) upon the occurrence of such damage or destruction, the Net
Proceeds derived from insurance shall be paid to the Lessor; and
(ii) the Lessee shall have the option to terminate this Lease
Agreement pursuant to Section 11.1 hereof or to require that the Lessor promptly
replace, repair, rebuild or restore the Campus or the damaged part or component
thereof to substantially the same condition and value as the operating entity
which existed prior to such damage or destruction, with such changes,
alterations and modifications as may be desired by the Lessee, and under the
same general terms for construction of the Campus as provided under this Lease
Agreement. Provided, however, that the Lessor's obligation under this Section
7.1(a)(ii) shall not require any financial expenditure on the part of the Lessor
in excess of the Net Proceeds received under Section 7.1(a)(i).
(b) All such repair, replacement, rebuilding, restoration or
relocation of the Campus shall be effected with due diligence in a good and
workmanlike manner in compliance with all applicable legal requirements, shall
be promptly and fully paid for by the Lessor in accordance with the terms of the
applicable contracts, and shall automatically become a part of the Campus as if
the same were specifically described herein. Any balance of such Net Proceeds
remaining after payment of all costs of replacement, repair, rebuilding,
restoration or relocation shall be retained by the Lessor.
(c) If the Lessee shall exercise its option to terminate this Lease
Agreement pursuant to Section 11.1 hereof, the Net Proceeds derived from such
insurance shall be applied to the payment of the amounts required to be paid by
Section 11.2 hereof and any balance remaining thereafter shall be retained by
the Lessor.
Section 7.2. Condemnation.
------------
(a) Complete Taking by Eminent Domain. If during the term of this
---------------------------------
Lease Agreement the entire Site including Campus shall be taken by an exercise
of the power of eminent domain (the "Proceedings"), this Lease Agreement shall
terminate as of the date of the vesting of title in the taking authority
pursuant to such Proceedings.
<PAGE>
(b) Partial Taking by Eminent Domain. If during the Lease Term less
--------------------------------
than the entire Site shall be taken in any such Proceeding, this Lease Agreement
shall terminate as to the portion of the Site so taken upon the vesting of title
in the Proceeding; and as to the remainder of the Site, the Rent shall be
decreased in proportion to the Net Proceeds of any condemnation award for the
portion of the Site so taken, and the Lessee shall be responsible for any
necessary restoration of the improvements, including parking spaces, driveways,
or of the building, on the remainder of the Site as required for Lessee's use
thereof. Provided that any portion of the condemnation award or compensation
intended to compensate the Lessor or the Lessee for such necessary restoration
costs shall be paid to the Lessee whether such award be made in the name of the
Lessee or the Lessor.
(c) Temporary Taking by Eminent Domain. If all or any portion of the
----------------------------------
Campus is taken by the exercise of the right of eminent domain for governmental
occupancy for a limited period, this Lease Agreement shall not terminate, and
the Lessee shall continue to perform its obligations hereunder as though such
taking had not occurred except to the extent that it may be prevented from so
doing pursuant to the terms of the order of the authority which made the taking.
In the event of such temporary taking, the Lessee shall be entitled to the
entire award made for such taking (whether paid by way of damages, rent or
otherwise) unless the period of governmental occupancy extends beyond the
termination of the Lease Term, in which case the award shall be apportioned
between the Lessor and the Lessee as of the date of such termination.
(d) If the Lessee shall exercise its option to terminate this Lease
Agreement pursuant to Section 11.1 hereof, the Net Proceeds from such
Condemnation shall be applied to the payment of the amounts required to be paid
by Section 11.2 hereof and any balance remaining thereafter shall be retained by
the Lessor.
Section 7.3. Condemnation of Lessee-Owned Property. The Lessee shall
-------------------------------------
be entitled to the proceeds of any Condemnation award or portion thereof made
for damage to or taking of any Property which, at the time of such damage or
taking, is not part of the Campus.
<PAGE>
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1. No Warranty of Condition or Suitability of Purpose. THE
--------------------------------------------------
LESSOR MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE CAMPUS IS OR WILL
BE SUITABLE FOR THE LESSEE'S PURPOSES OR NEEDS.
WITHOUT PREJUDICE TO ANY RIGHTS THE LESSEE MAY HAVE AGAINST ANY
ARCHITECT, ENGINEER, SUPPLIER OR MANUFACTURER, THE LESSEE ACKNOWLEDGES AND
AGREES THAT AS BETWEEN THE LESSEE AND THE LESSOR, AND AT ALL TIMES (BOTH BEFORE
COMPLETION AND THEREAFTER), (i) THE SIZE, DESIGN, CAPACITY AND MANUFACTURE OF
THE CAMPUS AND THE FIXTURES ARE OF THE SIZE, DESIGN, CAPACITY AND MANUFACTURE
SELECTED BY THE LESSEE AND (ii) THE LESSEE IS SATISFIED THAT THE CAMPUS AND
FIXTURES, WILL BE SUITABLE FOR ITS PURPOSES. THE LESSOR REPRESENTS AND
WARRANTS, AND THE LESSEE CONFIRMS THAT IT IS AWARE AND AGREES, THAT THE LESSOR
IS NOT A MANUFACTURER OR DEALER IN PROPERTY OF SUCH KIND AND THE CAMPUS AND THE
FIXTURES ARE LEASED HEREUNDER SUBJECT TO ALL APPLICABLE GOVERNMENTAL LAWS,
ORDINANCES, RULES, REGULATIONS, ORDERS AND REQUIREMENTS NOW IN EFFECT OR
HEREAFTER ADOPTED IN THE STATE, LOCALITY AND CONDITION OF EVERY PARTY THEREOF
WHEN THE SAME FIRST BECAME OR BECOMES SUBJECT TO THIS LEASE, WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND BY THE LESSOR, EXPRESS OR IMPLIED, AS TO
THE TITLE (EXCEPT AS PROVIDED IN SECTIONS 2.1 AND 3. 1), MERCHANTABILITY,
COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, OPERATION, FREEDOM FROM
PATENT OR TRADEMARK INFRINGEMENT, ABSENCE OF LATENT DEFECTS OR FITNESS FOR USE
OF THE CAMPUS OR FIXTURES (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE CAMPUS (OR ANY PART
THEREOF). Except as expressly provided herein, all risks incident to the
matters discussed in the preceding sentence, as between the Lessor, on the one
hand, and the Lessee, on the other, are to be borne by the Lessee. The Lessor
assigns to the Lessee all claims and rights which the Lessor may now or
hereafter have against third parties in respect of any defect of or damage to
the Campus or breach of representation or warranty by such third party, or any
other claim or right against any third party as a result of circumstances
arising out of this Lease Agreement, and shall cooperate with and comply with
all reasonable requests of the Lessee in the preservation, prosecution or
enforcement by the Lessee of such claims or rights at the Lessee's sole cost and
expense. The provisions of this paragraph have been negotiated, and, except to
the extent otherwise expressly stated, the foregoing provisions are intended to
be a complete exclusion and negation of any representations or warranties by the
Lessor, express or implied, with
<PAGE>
respect to the Campus whether arising pursuant to the Uniform Commercial Code or
any similar law now or hereafter in effect, or otherwise.
Section 8.2. Hold Harmless Provisions.
------------------------
(a) During the Lease Term, Lessee shall, at its sole cost and expense,
indemnify, defend and hold harmless the Lessor, its officials, board members,
officers, employees and agents, against and from: (i) any loss, damage, or
expense incurred or sustained by the Lessor, its officials, board members,
officers, employees or agents by reason of the operation or leasing of the
Campus; (ii) any and all claims, losses, damages or expenses by or on behalf of
any person, firm or corporation, which result from any occurrence or
circumstance on the Campus or any portion thereof and not resulting from a
breach or default in the performance of any covenant or agreement to be
performed by the Lessor under the provisions of this Lease Agreement; and (iii)
all claims, losses, liabilities, damages, costs and expenses which arise from
any breach or default in the performance of any covenant or agreement on the
part of the Lessee to be performed pursuant to the provisions of this Lease
Agreement. The indemnity herein provided shall include all reasonable costs,
counsel fees, expenses and liabilities incurred in connection with any such
claim, action or proceeding brought in connection with any of the foregoing, and
in case any action or proceeding shall be brought against the Lessor by reason
of any such claim, Lessee upon written notice from the Lessor, shall defend such
action or proceeding. Any amounts paid by the Lessee pursuant to this Section
8.2(a) shall, at the Lessee's sole discretion, be considered part of the Total
Project Cost. Notwithstanding any provision herein to the contrary, the Lessee
shall have no obligation to indemnify the Lessor to the extent the underlying
claim, loss, damage or expense arises from or in connection with the Lessor's
gross negligence or intentional acts or willful misconduct.
(b) During the Construction Period, Lessee shall, at its sole cost and
expense, indemnify, defend and hold harmless the Lessor against any costs
incurred by Lessor as a result of any loss, damage or expense incurred or
sustained by the Lessor, its officials, board members, officers, employees or
agents resulting from any action or inaction of Lessee with regard to the
financing, construction and equipping of the Campus. Provided, however, that to
the extent any such costs shall be considered part of the Total Project Costs,
to the extent that any such costs exceed the Cost of the Project, Lessor and
Lessee agree that the Lessee shall pay up to a maximum of eighty-nine percent
(89%) of such costs, and at its option and without regard to any such payment by
Lessee, Lessor shall have the independent right to terminate this Lease, at its
sole discretion and option. Any such payments made by Lessee pursuant to this
Section 8.2(b) may be considered Additional Rent or Prepaid Rent, as
appropriate, and may be allocated over the Lease Term as determined by the
Lessee.
(c) Notwithstanding any other provisions of this Lease Agreement, the
obligations of the Lessee and Lessor pursuant to this Section 8.2 shall remain
in full force and effect after the termination of this Lease Agreement until the
expiration of the period stated in the applicable statute of limitations during
which a claim, cause of action or
<PAGE>
prosecution relating to the matters herein described may be brought and payment
in full or the satisfaction of such claim, cause of action or prosecution
relating to the matters herein described and the payment of all expenses and
charges incurred by the Lessor or the Lessee, or their respective members,
directors, officers, agents and employees relating to the enforcement of the
provisions herein specified. In the event of any claim against the Lessor or the
Lessee or their respective members, directors, officers, agents or employees by
any employee or contractor of the other party or anyone directly or indirectly
employed by any of them or anyone for whose acts any of them may be liable, the
obligations of the Lessor and Lessee hereunder shall not be limited in any way
by any limitation on the amount or type of damages, compensation, disability
benefits or other employee benefit acts.
Section 8.3. Right to Inspect Campus. The Lessor and its duly
-----------------------
authorized agents shall have the right at all reasonable times to inspect the
Campus. In the case of an emergency, the Lessor shall be provided access by the
Lessee on reasonable notice. Otherwise, inspections shall be scheduled with
Lessee representatives upon the written request of the Lessor, and the Lessor
shall execute a confidentiality agreement before entering the Campus in form and
substance reasonably satisfactory to the Lessee to protect against the
disclosure by the Lessor of the Lessee's confidential or proprietary information
relating to its operations at the Campus if so required by Lessee.
Notwithstanding the foregoing, the Lessor shall not be constrained thereby from
disclosing any information required to be disclosed by it under applicable law.
The Lessor shall make a reasonable effort to timely notify the Lessee of any
proposed disclosure of information, giving the Lessee as much time as is
reasonably possible to permit the Lessee to seek judicial or administrative
order, at the Lessee's sole cost and expense, to prevent or to restrict the
proposed disclosure of such information.
Section 8.4. Lessee to Maintain Its Existence. The Lessee agrees
--------------------------------
that during the Lease Term it will maintain its existence and will not dissolve,
liquidate or otherwise dispose of substantially all of its assets; provided,
however, subject to restrictions which may arise as a result of Section 9.3
below, that it is expressly understood and agreed that the Lessee may
consolidate with or merge into another entity or permit one or more entities to
consolidate with or merge into it, in the Lessee's sole discretion, provided
Lessee shall give prior written notice of any proposed consolidation or merger
as soon as practicable under the law.
Section 8.5. Qualification in State. The Lessor and the Lessee
----------------------
throughout the Lease Term shall each continue to be each respectfully duly
authorized to do business in the State.
<PAGE>
Section 8.6. Compliance With Orders, Ordinances. Etc.
---------------------------------------
(a) The Lessee, throughout the Lease Term, agrees that it will
promptly comply, and cause any sublessee or occupant of the Campus to comply, in
all material respects, with all statutes, codes, laws, acts, ordinances, orders,
judgements, decrees, injunctions, rules, regulations, permits, licenses and
authorizations, ordinary or extraordinary, which now or at any time hereafter
may be applicable to the Campus or to any use, manner of use or condition of the
Campus of all federal, state, county, municipal and other governments,
departments, commissions, boards, courts, authorities, officials and officers
and companies or associations insuring the premises having jurisdiction of the
Campus or to any use, manner of use or condition of the Campus. Provided,
however, that any amounts paid by Lessee pursuant to this Section 8.6(a) may, at
Lessee's sole discretion, be considered part of the Total Project Cost.
(b) The Lessee shall not cause or permit the Campus to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials and Hazardous Substances,
except in material compliance with all applicable federal, state and local laws
or regulations.
(c) Notwithstanding the provisions of subsections (a) and (b) hereof,
the Lessee may in good faith contest the validity or the applicability of any
requirement of the nature referred to in such subsections (a) and (b) by
appropriate legal proceedings conducted in good faith and with due diligence.
(d) Unless the Lessee purchases the Lessor's right, title and interest
in the Campus upon the expiration or termination of this Lease Agreement, the
Lessee shall, at its own risk and expense, redeliver to the Lessor possession
and control of the Campus in its then condition and state of repair free and
clear of all liens, except Permitted Encumbrances, and in compliance with all
applicable environmental laws.
<PAGE>
ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING
Section 9.1. Restriction on Sale; Release of Certain Land.
--------------------------------------------
(a) Except for Permitted Encumbrances and as otherwise specifically
provided in this Article IX and in Article X hereof, the Lessor shall not sell,
convey, transfer, encumber or otherwise dispose of the Campus or any part
thereof or any of its rights under this Lease Agreement, without the prior
written consent of the Lessee, which shall not be unreasonably withheld.
(b) The Lessor and the Lessee from time to time may release from the
provisions of this Lease Agreement and the leasehold estate created hereby any
part of, or interest in, the real property which is not necessary, desirable or
useful for the Campus; provided, however, that the Lessor shall not release any
part or interest in the Site without the prior written consent of the Lessee,
which shall not be unreasonably withheld. In such event, the Lessor shall
execute and deliver any and all instruments necessary or appropriate to so
release such part of, or interest in, the real property and convey such title
thereto or interest therein, to the Lessee or such other Person as the Lessee
may designate.
(c) Upon conveyance of any part of, or interest in the real property
effected under the provisions of this Section 9.1, Lessee shall not be entitled
to an abatement or diminution of the rents payable by it under this Lease
Agreement
Section 9.2. Assignment by Lessor. The parties hereby agree that,
--------------------
upon the conclusion of the Construction Period and effective on the Delivery
Date, title to the Campus and this Lease Agreement shall be assigned or
otherwise conveyed to the Wood County Development Authority, a public
corporation and political subdivision of the State, which shall expressly
assume, in writing, all rights, covenants and obligations set forth in this
Lease Agreement. Such conveyance shall be accomplished so as to limit the
realization of income by the Lessor for Federal Tax purposes as contemplated by
Section 2.1(g).
Section 9.3. Assignment and Subleasing by Lessee.
-----------------------------------
(a) Except for Permitted Encumbrances and as otherwise provided in
this Article IX hereof, the Lessee shall not assign, sublease, mortgage or
encumber this Lease Agreement or the Campus or any part thereof, without the
prior consent of the Lessor in each instance. Notwithstanding the foregoing,
the Lessee shall have the right, without the Lessor's consent, to enter into an
assignment of this Lease Agreement or sublease of the Campus to any wholly owned
subsidiary entity of the Lessee, any entity succeeding to substantially all of
the assets of the Lessee as a result of a consolidation or merger, or an entity
to which all or substantially all of the assets of the Lessee have been sold;
<PAGE>
provided, however, that the other entity shall assume in writing all of the
Lessee's obligations hereunder, and, except for a wholly owned subsidiary entity
of the Lessee, shall have a net worth immediately prior to the assignment or
sublease equal to or greater than the Lessee's net worth. Notwithstanding any
such assignment or sublease, the Lessee shall not be released from any, and
shall perform all, obligations imposed upon it hereunder. The consent of the
Lessor to an assignment or subletting shall not be unreasonably withheld and
shall not be construed to release the Lessee from obtaining the consent in
writing of the Lessor to any further assignment or subletting.
<PAGE>
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default Defined.
-------------------------
The following shall be "Events of Default" under this Lease Agreement:
(i) the failure by the Lessee to pay or cause to be paid on the date
due, any amount specified to be paid pursuant to Article V hereof, which default
remains continuing and uncured;
(ii) any representation or warranty of the Lessor or Lessee herein or
in any of the Lease Documents shall prove to have been false or misleading in
any material respect;
(iii) the failure by the Lessor or the Lessee to observe and perform
any covenant, condition or agreement hereunder on its part to be observed or
performed (except obligations of the Lessee referred to in 10.1 (a)(i)) for a
period of thirty (30) calendar days after written notice, specifying such
failure and requesting that it be remedied, given to the noncompliant party by
the other party; provided, however, that if such failure is nonmonetary in
nature and is curable but is incapable of being cured within thirty (30)
calendar days, so long as the noncompliant party shall commence the cure within
such thirty (30) day period and diligently proceeds to prosecute the cure to
completion or if such failure is being contested to or against the appropriate
governmental authority or other third party diligently and in good faith by the
noncompliant party, for such period of contest, so long as the party continues
such contest, the noncompliant party shall not be in default hereunder; and
(iv) the dissolution or liquidation of the Lessee; or the failure by
the Lessee to release, stay, discharge, lift or bond within thirty (30) calendar
days any execution, garnishment, judgment or attachment of such consequence as
may impair its ability to carry on its operations; or the failure by the Lessee
generally to pay its debts as they become due; or an assignment by the Lessee
for the benefit of creditors; the commencement by the Lessee (as the debtor) of
a case in bankruptcy or any proceeding under any other insolvency law; or the
commencement of a case in bankruptcy or any proceeding under any other
insolvency law against the Lessee (as the debtor) and a court having
jurisdiction in the premises enters a decree or order for relief against the
Lessee as the debtor in such case or proceeding, or such case or proceeding is
consented to by the Lessee or remains undismissed for sixty (60) calendar days,
or the Lessee consents to or admits the material allegations against it in any
such case or proceeding; or a trustee, receiver or agent (however named) is
appointed or authorized to take charge of substantially all of the property of
the Lessee for the purpose of enforcing a lien against such property or for the
purpose of general administration of such property for the benefit of creditors.
<PAGE>
Section 10.2. Lessor's Remedies on Default by Lessee.
--------------------------------------
(a) Whenever any Event of Default for payment due pursuant to Article
V on the part of the Lessee shall have occurred, the Lessor, five (5) days after
written notice of such default and providing that such default remains uncured,
to the extent permitted by law, by written notice to the Lessee, may declare to
be immediately due and payable, whereupon the same shall become immediately due
and payable, all remaining Rent accelerated to the Expiration Date.
(b) Whenever any Event of Default on the part of the Lessee shall have
occurred, the Lessor may take, to the extent permitted by law, any one or more
of the following remedial steps:
(i) declare, by written notice to the Lessee, to be immediately
due and payable, whereupon the same shall become immediately due and payable:
(A) all unpaid installments of rent payable pursuant to Sections 5.3 and 5.4
hereof, and (B) all other payments due and payable under this Lease Agreement;
(ii) take any other action as it shall deem necessary to cure any
such Event of Default, provided that the taking of any such actions shall not be
deemed to constitute a waiver of such Event of Default;
(iii) upon at least sixty (60) days written notice, terminate this
Lease Agreement; and
(iv) take any other action at, law or in equity which may appear
necessary or desirable to collect the payments then due or thereafter to become
due and to enforce the obligations, agreements or covenants of the Lessee under
this Lease Agreement
Section 10.3. Lessee's Remedies on Default by Lessor.
--------------------------------------
(a) Whenever any Event of Default on the part of the Lessor shall have
occurred, the Lessee may, to the extent permitted by law, after notice to the
Lessor, but shall not be obligated to, remedy such default, and in connection
therewith may pay reasonable expenses and employ counsel, provided that the
Lessee shall have the right to remedy such default without notice in the event
of an emergency. All sums expended or obligations incurred by the Lessee in
connection therewith shall be paid by the Lessor to the Lessee upon demand, and
if the Lessor fails to reimburse the Lessee within ten (10) business day to
which no written notice of objection has been made by the Lessor to the Lessee,
the Lessee may, in addition to any other right or remedy that the Lessee may
have, deduct such amount from subsequent installments of rent which from time to
time thereafter become due to the Lessor.
<PAGE>
Section 10.4. Remedies Cumulative. No remedy herein conferred upon
-------------------
or reserved to the parties is intended to be exclusive of any other available
remedy, but each and every such remedy shall be cumulative and in addition to
every other remedy given under this Lease Agreement or now or hereafter existing
at law or in equity. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
a party to exercise any remedy reserved to it in this Article X, it shall not be
necessary to give any notice, other than such notice as may be herein expressly
required in this Lease Agreement.
Section 10.5. No Additional Waiver Implied by One Waiver. In the
------------------------------------------
event any agreement contained herein should be breached by any party and
thereafter waived by any other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
Section 10.6 Liquidated Damages. If payment of Rent shall have been
------------------
accelerated in accordance with the terms of this Lease Agreement, the Lessor
shall demand, by notice to the Lessee, that the Lessee pay to the Lessor, and
the Lessee shall pay to the Lessor, on such date, as specified in such Note, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of Rent
for the balance of the Lease Term remaining after the payment date specified in
such notice), an amount equal to the aggregate principal and interest due under
the Notes through, and including such date (together with interest on such
amount from the payment date specified in such notice to the date of actual
payment).
<PAGE>
ARTICLE XI
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION TO PURCHASE IN FAVOR OF LESSEE
Section 11.1. Early Termination of Lease Agreement. The Lessee shall
------------------------------------
have the option to terminate this Lease Agreement, as to all or a portion of the
Campus at any time during the Lease Term (i) upon filing with the Lessor a
certificate signed by an authorized representative of the Lessee stating the
Lessee's intention to do so pursuant to this Section and the date upon which
such payments pursuant to Section 11.2 hereof shall be made (which date shall
not be less than 45 nor more than 90 days from the date such certificate is
filed) and (ii) upon compliance with the requirements set forth in Section 11.2
hereof.
Section 11.2. Conditions to Early Termination of Lease Agreement. In
--------------------------------------------------
the event the Lessee exercises its option to terminate this Lease Agreement in
accordance with the provisions of Section 11.1 hereof, the Lessee shall make the
following payments (in the event the Lessee terminates the Lease Agreement as to
only a portion of the Campus such payments shall be prorated):
(a) To the Lessor, an amount equal to the outstanding principal and
accrued interest on the Notes and any penalties, fees or costs incurred by the
Lessor in connection with the termination of this Lease Agreement; and
(b) All other payments due and owing as of the date of conveyance
described in Section 11. 3 hereof, under this Lease Agreement for which the
Lessee is responsible under the terms of this Lease Agreement.
Section 11.3. Option to Purchase. Upon termination or expiration of
------------------
the Lease Term in accordance with Sections 5.2(b) or 11.1 hereof, the Lessee
shall have the option to purchase all of the Campus from the Lessor under the
following terms:
(a) The purchase price for the Campus shall be the greater of (i) the
fair market value (as determined below) of the Campus as of the date of
termination of the Lease Agreement or the Expiration Date, whichever the case
may be; or (ii) the outstanding principal and accrued interest on the Notes as
of the date of termination (in the event Lessee elects to purchase only a
portion of the Campus payment of the outstanding principal and accrued interest
on the Notes shall be prorated to reflect the portion of the Campus being
purchased).
(b) The Lessee shall give written notice to the Lessor (which may be
contained in the certificate referred to in Section 11.1. hereof):
(i) declaring the Lessee's election to purchase the Campus; and
<PAGE>
(ii) fixing the date of closing such purchase (the "Date of
Conveyance"), which shall be the date on which this Lease Agreement is to be
terminated.
(c) To determine the fair market value, each party shall engage and
appoint an appraiser, with a an MAI, or comparable professional designation, to
conduct an appraisal of the fair market value of the Campus. These appraisals
shall be exchanged simultaneously. For purposes of the appraisal, the Campus
shall be valued as though the Campus was not encumbered by this Lease Agreement.
If the difference between the two appraisals is 10% or less of the lesser of the
two amounts so determined, then the arithmetic average of the two amounts shall
be the price determined by appraisal. If the difference exceeds the 10%, then
the two appraisers shall obtain a third appraisal (the cost thereof to be shared
equally by the Lessor and the Lessee), utilizing the same methodology and this
appraisal shall be completed within thirty (30) calendar days of its engagement.
The two valuations which are closest together shall be arithmetically averaged
and this amount will be the fair market value of the Campus.
Section 11.4. Conveyance on Purchase. At the closing of any purchase
----------------------
of the Campus pursuant to Section 11.3 hereof, the Lessor shall, upon receipt
of the purchase price, deliver to the Lessee all necessary documents (i) to
convey to the Lessee good and marketable fee simple title to the Campus free and
clear of all tenancies, liens, encumbrances, restrictions and easements except
those set forth in the title insurance policy issued at the request of the
Lessor on the Delivery Date, and such others as the Lessee may accept; and (ii)
to release and convey to the Lessee all of the Lessor's rights and interest in
and any rights of action or any future Net Proceeds of insurance or condemnation
awards with respect to the Campus. The deed to be delivered by Lessor shall be
of the same type which the Lessor received upon the purchase of the Campus and
in the usual form, suitable for recording. The Lessee shall pay all state and
local documentary taxes imposed upon the transfer of the real estate and the
cost of the preparation of the deed. The Lessee shall also pay for any
examination of title, the costs of any loan obtained in connection with its
purchase of the Campus and all its reasonable fees and costs incurred in
connection with the closing, including (except as provided in Section 11.3(c))
those of the Lessor in connection with the conveyance of the Campus pursuant to
this Section 11.4.
<PAGE>
ARTICLE XII
ARBITRATION
Section 12.1. General Provision. In any dispute arising out of the
-----------------
terms and covenants of this Lease Agreement or any other Lease Document, such
matter shall be determined by arbitration, such arbitration to be the sole and
exclusive remedy for settlement of such dispute (except for proceedings to
enforce the arbiters' determination), and such arbitration shall be conducted in
the manner specified in this Article and under prevailing arbitration law.
Section 12.2. Selection. The party desiring such arbitration shall
---------
give written notice to that effect to the other party stating in reasonable
detail the issue(s) to be arbitrated, and shall in such notice appoint a
disinterested person of recognized competence in the field involved as arbiter
on its behalf. Within ten (10) calendar days thereafter, the other party shall
by written notice to the first party appoint a second disinterested person of
recognized competence in such field as arbiter on its behalf. The arbiters thus
appointed shall appoint a third disinterested person of recognized competence in
such field, and such three arbiters shall as promptly as possible determine such
matter; provided, however, that:
(a) if the second arbiter shall not have been appointed as aforesaid,
the first arbiter shall proceed to determine such matter; and
(b) if within five (5) business days after the appointment of the
second arbiter the two arbiters appointed by the parties shall be unable to
agree upon the appointment of a third arbiter, they shall give written notice of
such failure to the parties, and, if the parties fail to agree upon the
selection of such third arbiter within five (5) business days after the arbiters
appointed by the parties have notified the parties of their failure to agree,
either of the parties, upon written notice to the other party hereto, may
request such appointment by the then President of the West Virginia State Bar
(or any successor organization), or in his absence, refusal, failure or
inability to act, may apply for such appointment to the chief justice of the
West Virginia Supreme Court of Appeals.
Lessor and Lessee shall each be entitled to present evidence and
argument to the arbiters, which shall be done at a presentation before the
arbiters to take place within a reasonable time (but not more than thirty (30)
calendar days) after the arbiters have been selected. For purposes of this
Section 12.2, an arbiter shall conclusively be deemed "disinterested" if such
arbiter is not then, and was not at any prior time, an officer, director,
trustee, employee, partner, shareholder or immediate relative of the party
appointing him, nor any immediate relative of any such officer, director,
trustee, employee, partner, or shareholder. Any third arbiter appointed by
agreement between the two appointed arbiters or by agreement between the parties
shall be conclusively presumed to be "disinterested".
<PAGE>
Section 12.3. Rulings. The determination of the majority of the
-------
arbiters, or of the sole arbiter, as the case may be, shall be conclusive upon
the parties, and judgment upon the same may be entered in any court having
jurisdiction thereof. Such ruling shall be declaratory of the respective rights
of the affected parties under this Lease and shall not in itself be a
determination of any default. The arbiters, or the sole arbiter, as the case
may be, shall give written notice to the parties stating their or his
determination, and shall furnish to each party a signed copy of such
determination. If a majority of the arbiters shall fail to determine any dispute
within thirty (30) calendar days after the presentation of argument and evidence
of the parties, then, instead of such arbitration, either party shall be
entitled to seek a judicial determination of the manner in issue in a court of
competent jurisdiction.
Section 12.4. Fees. Each party shall pay the fees and expenses of
----
the arbiter appointed by such party and one-half of the fees and expenses of the
third arbiter, if any. Each party shall be responsible for its own legal fees
and expenses incurred for any dispute which is subject to arbitration.
Section 12.5. Extension of Time Pending Arbitration. Anything in
-------------------------------------
this Lease Agreement to the contrary notwithstanding, whenever under the
provisions of this Lease Agreement Lessee is required to make any payment with
the express exception of rent payable under Sections 5.3 and 5.4, or to perform
any act or thing at a specified time or within a specified time limit, and any
such payment or performance is subject to arbitration under this Article, such
time or time limit, as the case may be, shall be and be deemed to be extended by
the period consumed by the institution, conduct, and prosecution to final
conclusion of any arbitration concerning or relating to such payment or
performance. Provided, however, that any payment by Sections 5.3 and 5.4 that is
not a scheduled monthly payment due and payable specified under Sections 5.3 and
5.4, may be placed in escrow until final conclusion of the arbitration.
<PAGE>
ARTICLE XIII
COVENANTS, CONDITIONS AND RESTRICTIONS; PARK MASTER PLAN
Section l3.l. Park Covenants, Conditions and Restrictions/Master
--------------------------------------------------
Plan. The Lessor and the Lessee shall, as soon as possible, but in any event
not later than the Delivery Date, jointly approve the Covenants, Conditions and
Restrictions on the Site and on the Park, and shall also jointly approve the
Park Master Plan. The Lessor and the Lessee agree that the Covenants,
Conditions and Restrictions and the Park Master Plan must include the following
provisions, as appropriate:
(a) Any modification, amendment or change in the Covenants, Conditions
and Restrictions applicable to either the Site, or the balance of the Park must
have the written approval of Lessee.
(b) Prior to any further development of the Park other than that
portion leased to the Lessee, the Lessor must obtain from the Lessee written
approval of the Park Master Plan.
(c) Due to the Lessee's occupancy of a majority of the net usable
acres of the Park, the Lessee shall have a voting position on the architectural
control committee for the Park, or similar entity serving the same purpose, that
shall not be less than 51 %.
(d) The Covenants, Conditions and Restrictions and the Park Master
Plan shall provide for "best practices" with regard to all developments, and
best environmental practices for storm sewers, landscaping buffering and all
green space, recreational space and wetlands.
(e) All buildings and landscaping in the balance of the Park shall
utilize a "campus-like" setting that is in compliance with the Park Master Plan.
(f) The Park Master Plan and Covenants, Conditions and Restrictions
shall be jointly prepared by the Lessor and the Lessee, and in all respects
shall be consistent with the common goal of the State, the Lessor and the Lessee
that the Park shall be the best designed and most attractive
commercial/industrial park in the State.
Section 13.2. Signage. In addition to the signs shown on the Plans
-------
and Specifications, the Lessee may erect additional signs at the Site, provided
that such sign or signs are in compliance with the Covenants, Conditions and
Restrictions.
<PAGE>
ARTICLE XIV
SUBORDINATION/ESTOPPEL
Section 14.1. Lease Subordinate. Provided Lessee receives a non-
-----------------
disturbance agreement substantially in the form attached hereto as Exhibit G,
this Lease Agreement shall be subject and subordinate to the current credit line
deed of trust in the amount of $40,000,000 in favor of United National Bank, and
any future mortgages, deeds of trust or ground leases and any, amendments,
replacements, renewals and extensions thereof. The Lessee agrees at any time
hereafter, within fifteen (15) calendar days following demand, to execute and
deliver any instruments, releases or other documents that may be reasonably
required for the purpose of subjecting and subordinating the Lease Agreement, as
above provided, to the lien of any such mortgage, deed of trust or ground lease,
provided such documents shall be reasonably acceptable to the Lessee in form and
substance. The Lessor shall provide written notice of the existence of this
Lease Agreement to any prospective mortgagee or other secured party of the
Campus prior to encumbering the Campus.
Section 14.2. Attornment. Subject to the terms of this Article XIV,
----------
in the event the holder of any mortgage, deed of trust or ground lease shall at
any time elect to have this Lease Agreement constitute a prior and superior lien
to its mortgage, deed of trust or ground Lease, then, and in such event, upon
any such holder or landlord notifying the Lessee to that effect in writing, this
Lease Agreement shall be deemed prior and superior in lien to such mortgage,
deed of trust, or ground lease, whether this Lease Agreement is dated prior or
subsequent to the date of such mortgage, deed of trust or ground lease and the
Lessee shall execute such attornment agreement as may be reasonably requested by
said holder or landlord, provided that the form and content thereof are
reasonably acceptable to the Lessee and contain recognition and non-disturbance
covenants satisfactory to the Lessee.
Section 14.3. Lessee's Notice of Default. The Lessee agrees that,
--------------------------
provided the mortgagee, ground landlord or trust deed holder under any mortgage,
ground lease, deed of trust or other security instrument ("Mortgagee") shall
have notified the Lessee in writing (by the way of a notice of assignment of
Lease or otherwise) of its address, the Lessee shall give such Mortgagee,
simultaneously with delivery of notice to the Lessor, by registered or certified
mail, a copy of any such notice of default served upon the Lessor. The Lessee
further agrees that said Mortgagee shall have the right to cure any alleged
default during the same period that the Lessor has to cure such default.
Section 14.4. Estoppel Certificates. The Lessor and the Lessee
---------------------
shall, each without charge at any time and from time to time, within fifteen
(15) calendar days after written request by the other party, certify, to the
extent true, by written instrument, duly executed, acknowledged and delivered to
any mortgagee, assignee of a mortgagee, proposed mortgagee, or to any purchaser
or proposed purchaser, or to any other person transacting business with the
Lessor or the Lessee and relating to the Campus as follows:
<PAGE>
(a) That this Lease Agreement 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;
(b) The dates to which Rent has been paid in advance;
(c) Whether or not there are then existing any breaches or defaults by
such party or the other party known by such party under any of the covenants,
conditions, provisions, terms or agreements of this Lease Agreement, and
specifying such breach of default, if any, or any setoffs or defenses against
the enforcement of any covenant, condition, provision, term or agreement of this
Lease Agreement (or of any guaranties) upon the part of Lessor or Lessee (or any
guarantor), as the case may be, to be performed or complied with (and, if so,
specifying the same and the steps being taken to remedy the same); and
(d) Such other statements or certificates as the Lessor, the Lessee or
any mortgagee may reasonably request.
It is the intention of the parties hereto that any statement delivered
pursuant to this Section 14.4 may be relied upon by any such parties transacting
business with the Lessor or the Lessee and relating to the Campus. If the Lessor
or the Lessee does not deliver such statement to the requesting party within
such fifteen (15) day period, and such failure continues for five (5) calendar
days following receipt of a second notice stipulating that such continuing
failure shall have the consequences set forth herein, the requesting party, and
any applicable party transacting business relative to the Campus with the
requesting party, may conclusively presume and rely upon the following facts:
(i) that the terms and provision of this Lease Agreement have not been changed
except as otherwise represented by the requesting party; (ii) that the Lease
Agreement has not been canceled or terminated and is in full force and effect,
except as otherwise represented by the requesting party; (iii) that the current
amount of the Rent is as represented by the requesting party; (iv) that there
have been no subleases or assignments of the Lease Agreement; (v) that not more
than one month's rent or other charges have been paid in advance; and (vi) that
the requesting party is not in default under the Lease Agreement. In such
event, the non-requesting party shall be estopped from denying truth of such
facts, but shall be entitled to recover damages from the requesting party to the
extent such facts are not true and the non-requesting party incurs actual
damages as a result of such untrue facts.
<PAGE>
ARTICLE XV
MISCELLANEOUS
Section 15.1. Notice. All notices, certificates and other
------
communications hereunder shall be in writing and shall be deemed given if
delivered personally, by confirmed facsimile transmission (with follow-up hard
copy) or one (1) day after sent by guaranteed overnight delivery, or five (5)
calendar days after mailed by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows or to such other address as any
party may specify by like notice (provided, however, that notices of a change of
address or person to whom notice shall be given shall be made in accordance with
this paragraph and shall be effective only upon receipt thereof):
To the Lessor:
Parkersburg - Wood County Area Development Corporation
P.O. Box 1683
408 Juliana Street
Parkersburg, West Virginia 26102
Attention: President and Chief Executive Officer
Fax No.: (304) 485-5219
To the Lessee:
Coldwater Creek, Inc.
One Coldwater Creek Drive
Sandpoint, Idaho 83864
Attention: Vice President and Chief Financial Officer
Fax No.: (208)265-7108
Section 15.2. Binding Effect. This Lease Agreement shall inure to
--------------
the benefit of and shall be binding upon the parties and their respective
successors and assigns.
Section 15.3. Renewal Options. The Lessee shall have the right to
---------------
renew and extend the term of this Lease Agreement for the Renewal Terms as
hereinafter provided, subject to the following terms and conditions:
The Lessee may extend this Lease Agreement for four (4) Renewal Terms
of five (5) years each by the Lessee giving the Lessor notice, in writing, of
its intent to exercise such renewal option (a "Renewal Notice"), no less than
six (6) months prior to the expiration of the Lease Term or the immediately
preceding Renewal Term, as applicable. Such Renewal Term(s) shall commence
immediately upon the expiration of the Lease Term or the preceding Renewal Term,
and upon exercise of each renewal option the expiration date of the term shall
automatically become the last day of the applicable Renewal Term.
<PAGE>
The exercise by the Lessee of the renewal option(s) set forth herein
must be made, if at all, by delivery of a Renewal Notice to the Lessor on or
before the dates set forth-above. Once the Lessee has exercised any such renewal
option, the Lessee may not thereafter revoke the exercise of such option. At
the Lessor's election, the Lessee's rights to Renewal Terms as provided under
this Section shall terminate and be of no further force or effect if (i) an
Event of Default exists under the Lease Agreement at the time the Lessee
attempts to exercise its renewal option, or (ii) the Lessee defaults under any
provision of the Lease Agreement after exercising its renewal option and such
default continues beyond any applicable period provided in this Lease Agreement.
Rent for each year under the Renewal Terms shall be at the per square
foot rate equal to 90% of the "Fair Market Rate." The Fair Market Rate shall be
agreed upon by Lessor and the Lessee within fifteen (15) calendar days of the
date on which the Lessee exercised its renewal option. In the event the parties
are unable to timely agree on the Fair Market Rate, the dispute shall be
resolved by arbitration pursuant to Article XII.
Except as set forth herein, the leasing of the Campus for the Renewal
Term(s) shall be upon the same terms and conditions as are applicable for the
initial term and any subsequent Renewal Term(s), and shall be upon and subject
to all of the provisions of this Lease Agreement.
Section 15.4. Severability. In the event any provision of this Lease
------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 15.5. Amendments, Changes and Modifications. This Lease
-------------------------------------
Agreement may not be amended, changed, modified, altered or terminated except in
a writing executed by the parties hereto.
Section 15.6. Execution of Counterparts. This Lease Agreement may be
-------------------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 15.7. Broker. Lessor and Lessee represent to each other that
------
each has not entered into any agreement or otherwise dealt with any brokers or
finders in connection with this Lease other than Cushman Realty Corporation, Los
Angeles, California, who represents it is representing Lessee and whose
commission shall be paid by Lessee. Lessee shall protect, defend, indemnify and
hold Lessor harmless against any claims for brokerage or other commission
arising by reason of a breach of the aforesaid representation and warranty, for
any action or inaction on the part of the Lessee.
Section 15.8. Applicable Law. This Lease Agreement shall be governed
--------------
exclusive by the applicable laws of the State without regard or reference to its
conflict of laws principles.
<PAGE>
Section 15.9. Legal Costs. The parties hereto agree that each
-----------
respective party shall be responsible for any legal fees and/or expenses
incurred by said party in any way or manner arising out of this Lease Agreement,
except for fees and/or expenses incurred which are reimbursable pursuant to
Article 8.2 of this Lease Agreement.
Section 15.10. Recordation. The parties hereto, on the request of
-----------
either of them, shall enter into a memorandum of this Lease Agreement, in
recordable form, setting forth the identities of the Lessor and the Lessee, the
date of the expiration of the Lease Term, and such other information upon which
the Lessor and the Lessee shall agree. Upon any extensions hereof, an amendment
to such agreement shall be executed and recorded reflecting such renewal and
expiration date thereof.
Section 15.11. Survival of Obligations. This Lease Agreement shall
-----------------------
survive the performance of the obligations of the Lessee to make payments
required by Sections 5.3 and 5.4 and all indemnities shall survive the foregoing
and any termination or expiration of this Lease Agreement.
Section 15.12. Table of Contents and Section Headings Not
------------------------------------------
Controlling. The Table of Contents and the headings of the several Sections in
this Lease Agreement have been prepared for convenience of reference only and
shall not control or affect the meaning of or be taken as an interpretation of
any provision of this Lease Agreement.
Section 15.13. Disclaimer of Relationship. Nothing contained in this
--------------------------
Lease Agreement, nor any act of Lessor or Lessee, shall be deemed or construed
by any person to create any relationship of limited or general partnership or
joint venture between the Lessor and the Lessee, nor any third party beneficiary
in favor of any person.
Section 15.14. Further Assurances. During the Construction Period,
------------------
the Lessee shall cooperate with Lessor in providing such information and other
assistance as Lessor shall request and which, in Lessee's sole discretion, shall
be necessary to implement the permanent financing of the Campus.
<PAGE>
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Agreement to be executed in their respective names by their duly authorized
officers, all as of the date hereof.
PARKERSBURG - WOOD COUNTY AREA
DEVELOPMENT CORPORATION
By: /s/ James R. Kinnett, II
---------------------------------------
Name: James R. Kinnett, II
Title: President and CEO
COLDWATER CREEK, INC.
By: /s/ Donald A. Robson
---------------------------------------
Name: Donald A. Robson
Title: Chief Financial Officer
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions 3
-----------
Section 1.2. Rules of Construction 5
---------------------
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1. Representations and Covenants of Lessor 7
---------------------------------------
Section 2.2. Representations and Covenants of Lessee 8
---------------------------------------
ARTICLE III
TITLE INSURANCE
Section 3.1. Title 10
-----
Section 3.2. Title Insurance 10
---------------
ARTICLE IV
CONSTRUCTION AND EQUIPPING OF
DISTRIBUTION CENTER
Section 4.1. Plans and Specifications for Distribution Center 11
------------------------------------------------
Section 4.2. Construction and Equipping of Distribution Center by Lessor 11
-----------------------------------------------------------
Section 4.3. Purchases of Building Materials, Supplies and Fixtures 11
------------------------------------------------------
Section 4.4. Change Orders 11
-------------
Section 4.5. Inspections During Construction Period 12
--------------------------------------
Section 4.6. Insurance During Construction Period 12
------------------------------------
ARTICLE V
DISMISING CLAUSES AND RENTAL PROVISIONS
Section 5.1. Demise of Campus 13
-----------------
Section 5.2. Duration of Lease Term; Quiet Enjoyment 13
---------------------------------------
Section 5.3. Basic Rent 13
----------
Section 5.4. Additional Rent 14
---------------
Section 5.5. Prepaid Rent 14
------------
Section 5.6. Payments by Lessee to Lessor 14
----------------------------
Section 5.7. Security 14
--------
Section 5.8. Market Rental 15
-------------
ARTICLE IV
<PAGE>
MAINTENANCE, SERVICES, MODIFICATIONS AND ALTERATIONS,
TAXES AND INSURANCE
Section 6.1. Maintenance and Modifications by the Lessee 16
-------------------------------------------
Section 6.2. Maintenance of Common Areas 16
---------------------------
Section 6.3. Installation of Additional Fixtures 16
-----------------------------------
Section 6.4. Replacement Parts 16
-----------------
Section 6.5. Taxes, Assessments and Utility Charges 17
--------------------------------------
Section 6.6. Insurance Required 18
------------------
Section 6.7. Additional Provisions Respecting Insurance 19
------------------------------------------
Section 6.8. Application of Net Proceeds of Insurance 19
----------------------------------------
Section 6.9. Right of Lessor to Pay Taxes, Insurance Premiums and Other
----------------------------------------------------------
Charges 19
-------
Section 6.10. Alterations 20
-----------
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1. Damage or Destruction of the Campus 21
-----------------------------------
Section 7.2. Condemnation 21
------------
Section 7.3. Condemnation of Lessee-Owned Property 22
-------------------------------------
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1. No Warranty of Condition or Suitability of Purpose 23
--------------------------------------------------
Section 8.2. Hold Harmless Provisions 24
------------------------
Section 8.3. Right to Inspect Campus 25
-----------------------
Section 8.4. Lessee to Maintain Its Existence 25
--------------------------------
Section 8.5. Qualification in State 25
----------------------
Section 8.6. Compliance With Orders, Ordinances. Etc 25
---------------------------------------
ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING
Section 9.1. Restriction on Sale; Release of Certain Land 27
--------------------------------------------
Section 9.2. Assignment by Lessor 27
--------------------
Section 9.3. Assignment and Subleasing by Lessee 27
-----------------------------------
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default Defined 29
-------------------------
Section 10.2. Lessor's Remedies on Default by Lessee 30
--------------------------------------
<PAGE>
Section 10.3. Lessee's Remedies on Default by Lessor 30
--------------------------------------
Section 10.4. Remedies Cumulative 31
-------------------
Section 10.5. No Additional Waiver Implied by One Waiver 31
------------------------------------------
Section 10.6. Liquidated Damages 31
------------------
ARTICLE XI
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION TO PURCHASE IN FAVOR OF LESSEE
Section 11.1. Early Termination of Lease Agreement 32
------------------------------------
Section 11.2. Conditions to Early Termination of Lease Agreement 32
--------------------------------------------------
Section 11.3. Option to Purchase 32
------------------
Section 11.4. Conveyance on Purchase 33
----------------------
ARTICLE XII
ARTIBRATION
Section 12.1. General Provision 34
-----------------
Section 12.2. Selection 34
---------
Section 12.3. Rulings 35
-------
Section 12.4. Fees 35
----
Section 12.5. Extension of Time Pending Arbitration 35
-------------------------------------
ARTICLE XIII
COVENANTS, CONDITIONS AND RESTRICTIONS; PARK MASTER PLAN
Section l3.l. Park Covenants, Conditions and Restrictions/Master Plan 36
-------------------------------------------------------
Section 13.2. Signage 36
-------
ARTICLE XIV
SUBORDINATION/ESTOPPEL
Section 14.1. Lease Subordinate 37
-----------------
Section 14.2. Attornment 37
----------
Section 14.3. Lessee's Notice of Default 37
--------------------------
Section 14.4. Estoppel Certificates 37
---------------------
ARTICLE XV
MISCELLANEOUS
Section 15.1. Notice 39
------
Section 15.2. Binding Effect 39
--------------
Section 15.3. Renewal Options 39
---------------
Section 15.4. Severability 40
------------
Section 15.5. Amendments, Changes and Modifications 40
-------------------------------------
<PAGE>
Section 15.6. Execution of Counterparts 40
-------------------------
Section 15.7. Broker 40
------
Section 15.8. Applicable Law 41
--------------
Section 15.9. Legal Costs 41
-----------
Section 15.10. Recordation 41
-----------
Section 15.11. Survival of Obligations 41
-----------------------
Section 15.12. Table of Contents and Section Headings Not Controlling 41
------------------------------------------------------
Section 15.13. Disclaimer of Relationship 41
--------------------------
Section 15.14. Further Assurances 41
------------------
<PAGE>
[FORM OF CERTIFICATE OF ACCEPTANCE]
Pursuant to and as required by the LEASE AGREEMENT dated as of June
12, 1998 (the "Lease Agreement") between PARKERSBURG-WOOD COUNTY AREA
DEVELOPMENT CORPORATION, as Lessor (the "Lessor"), and COLDWATER CREEK, INC., as
Lessee (the "Lessee"). The Lessee hereby certifies that the status of work on
the Campus is as described in the Plans and Specifications and the Certificate
of Substantial Compliance tendered by the contractor for the work, and that it
hereby accepts the Campus. Terms used herein shall have the meanings ascribed
to them in the Lease Agreement.
The Lessee hereby represents and warrants to the Lessor that on the
date hereof:
(a) No Default or Event of Default under the Lease
Agreement has occurred and is continuing.
(b) All conditions to the Delivery Closing and for leasing
of the Campus under the Lease Agreement have been satisfied.
(c) The Lessee has obtained, and there are in full force
and effect, such insurance policies with respect to the Campus as
are required to be maintained on the date hereof under the terms
of the Lease Agreement.
(d) The Lessee hereby reconfirms its obligations and
representations set forth in the Lease as if made on the date
hereof, including without limitation, its obligation to pay all
Rent under the Lease without any Abatements for any reason
whatever, including any defect in the Campus, or in the Lessor's
title thereto, and its representations set forth in Section 2
thereof as to the lack of any representations or warranties by
Lessor with respect to the Campus.
IN WITNESS WHEREOF, the Lessee has caused this Certificate of
Acceptance to be duly executed by its officers thereunto duly authorized this
____ day of __________, 1999.
COLDWATER CREEK, INC.
By:
-------------------------------
Its:
-------------------------------
<PAGE>
CHS/164640
EXHIBIT A
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION
OF 60 ACRE SITE
---------------
<PAGE>
DEMISED PREMISES-DISTRIBUTION CENTER
------------------------------------
PARCEL ONE 58.714 AC. (DISTRIBUTION CENTER):
----------
BEGINNING N 54 (degrees) 26' 40" E 77.32' FROM THE NORTHWESTERLY CORNER OF
PWCADC 1.334 AC. R/2 TRACT AND THE END OF WV 14/25, THENCE N 33 (degrees) 03'
35" W 845.77', THENCE N 35 (degrees) 19' 02" E 1,315.44', THENCE N 88 (degrees)
27' 35" E 898.18' TO THE C/A R/W LINE OF I-77, THENCE WITH THE C/A R/W LINE OF
I-77 THE FOLLOWING S 24 (degrees) 52' 04" E 609.76', THENCE S 14 (degrees) 30'
22" E 567.52', THENCE S 04 (degrees) 11' 18" W 95.00', THENCE LEAVING THE C/A
R/W OF I-77 AND WITH THE LINES OF PWCADC 21.055 AC. TRACT S 70 (degrees) 00' 00"
W 565.00', THENCE N 20 (degrees) 00' 00" W 220.00', THENCE S 70 (degrees) 00'
00" W 130.00', THENCE S 35 (degrees) 19' 02" W 275.00', THENCE S 54 (degrees)
40' 58" E 80.0', THENCE S 20 (degrees) E 245.0', THENCE S 35 (degrees) 19' 02" W
357.64' TO THE NORTHERLY R/W LINE OF THE 1.334 AC. R/W, THENCE LEAVING THE
PWCADC 21.055 AC. TRACT LINES AND WITH THE NORTHERLY R/W LINE OF THE 1.334 AC
R/W N 69 (degrees) 21' 26" W 204.82', THENCE N 52 (degrees) 03' 35" W 287.00',
THENCE S 81 (degrees) 26' 25" W 228.11', TO THE PLACE OF BEGINNING, CONTAINING
58.714 AC.
PARCEL TWO 1.334 AC. (INGRESS AND EGRESS RIGHT OF WAY):
----------
BEGINNING IN THE LINE OF STILES AND THE PWCADC, SAID POINT BEING N-35 33'
20" W 859.09' FROM THE SOUTHWESTERLY CORNER OF THE PWCADC 83.13 ACRE TRACT,
THENCE N-35 33' 20" W 98.81'; THENCE N-54 26' 40" 77.32'; THENCE N-81 26' 25" E
228.11; THENCE S-52 03' 35" E 287': THENCE S-69 21' 26" E TO A POINT IN THE LINE
OF A 21.055 ACRE TRACT; THENCE WITH SAID TRACT THE FOLLOWING COURSES, S-36 19'
02" W 72.56', N-69 21' 26" W 197.14', N-52 03' 35" W 240', S-81 26' 25" W 176'
AND S-54 26' 40" W 73.01' TO THE PLACE OF BEGINNING, CONTAINING 1.334 ACRES.
THIS R/W IS FOR INGRESS AND EGRESS TO THE 21.055 ACRE TRACT FROM W. VA. RT.
14/25. LESSEE IS HEREBY GRANTED USE OF THIS RIGHT OF WAY FOR INGRESS AND EGRESS
TO PARCEL ONE, DESCRIBED ABOVE. LESSOR RETAINS THE RIGHT TO USE THIS RIGHT OF
WAY FOR INGRESS AND EGRESS TO THE 21.055 ACRE TRACT.
<PAGE>
EXHIBIT C
SUMMARY OF PLANS AND SPECIFICATIONS
-----------------------------------
<PAGE>
EXHIBIT D
BASIC RENT
----------
Total Rent Annual Monthly
Project Cost Factor Rent Rent
------------ ------- ------------- -----------
Years 1-15 $24,650,000 10.20% $2,513,210.00 $209,434.17
Years 16-20 24,650,000 6.55% 1,614,430.00 134,535.83
This rent payment schedule is subject to change and shall be agreed to by the
Lessor and the Lessee on the Closing Date. Adjustments shall be required due to
the following factors:
(1) Revisions to Total Project Cost.
(2) Adjustment to the Rent Factor due to interest rate changes until Delivery
Date.
<PAGE>
EXHIBIT E
CONSTRUCTION PERIOD
LETTER OF CREDIT
----------------
<PAGE>
FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT
CONSTRUCTION PHASE
IRREVOCABLE STANDBY LETTER OF CREDIT NO. _______
ISSUED IN: Boise, Idaho
BENEFICIARY: APPLICANT:
Parkersburg-Wood County Area Coldwater Creek, Inc.
Development Corporation One Coldwater Creek Drive
408 Juliana Street Sandpoint, Idaho 83864
Parkersburg, WV 26102
Attn: James R. Kinnett, II
AMOUNT: USD _________________________ DATE AND PLACE OF EXPIRY:
________________________________ THOUSAND _____________
AND 00/100 UNITED STATES DOLLARS Our counters.
CREDIT AVAILABLE WITH:
First Security Bank, N.A.
International Department
999 Main Street, 3rd Floor
Boise, Idaho 83702
BY: PAYMENT
AVAILABLE BY DRAFTS AT SIGHT DRAWN ON:
First Security Bank, N.A.
Boise, Idaho
By order of our client: Coldwater Creek, Inc., One Coldwater Creek Drive,
Sandpoint, Idaho 83864, we hereby issue in favor of Parkersburg-Wood County Area
Development Corporation, our Irrevocable Standby Letter of Credit No. S-XXXXXXX-
XXXX in the maximum amount of USD ________________ ($__________), effective
_____________.
Expiring ____________, at our counters: First Security Bank, N.A., 999 Main
Street, 3rd Floor, Boise, Idaho 83702.
Partial drawings and Multiple drawings are acceptable and demand for
payment hereunder shall not exceed an aggregate amount up to USD _______________
maximum and each drawing honored by the bank hereunder shall reduce the maximum
amount that may be drawn.
<PAGE>
The amount of this Standby Letter of Credit is available to you against
presentation of your draft(s) drawn on us at sight bearing on the face thereof
the clause:
"DRAWN UNDER FIRST SECURITY BANK, N.A.,
IRREVOCABLE LETTER OF CREDIT NO. XXXX"
accompanied by the original of this Letter of Credit and the following
documents:
1. Beneficiary's written statement signed by a person purportedly
authorized by the beneficiary, stating that Coldwater Creek, Inc. is in default
under the lease agreement entered into on June 12, 1998 between Coldwater
Creek, Inc., the lessee, and Parkersburg-Wood County Area Development
Corporation, the lessor.
2. Signed statement from Parkersburg-Wood County Area Development
Corporation of the amount due by Lessee under the Lease and that demand for
payment of such amount has been made by Parkersburg-Wood Area Development
Corporation of Coldwater Creek, Inc. and that such payment was not paid in full
within five (5) days of the demand.
This Letter of Credit is transferable and assignable upon presentation of
Beneficiary's Transfer Demand in the format of attached "Annex A". Transfers
and assignments are to be effected without charge to either the beneficiary, or
the transferee/assignee of this Letter of Credit or the proceeds. First
Security Bank, N.A., its successors and assigns, shall have no right of
reimbursement or right of recourse against Parkersburg-Wood County Area
Development Corporation for any amount(s) drawn under strict compliance of this
Letter of Credit.
In case of partial drawings, First Security Bank, N.A. will endorse the
back of this original Standby Letter of Credit for the amount drawn and return
same to beneficiary for presentation under possible additional drawings up to
the maximum aggregate amount indicated in this Standby Letter of Credit.
This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (the "UCP"). This Letter of Credit shall be deemed to be
issued under the laws of the State of West Virginia and shall, as to matters not
governed by the UCP, be governed by and construed in accordance with the laws of
the State of West Virginia.
REIMBURSEMENT INSTRUCTIONS:
PAYMENT TO BE EFFECTED PER YOUR
INSTRUCTION AGAINST CONFORMING
DOCUMENTS PRESENTED AT OUR
COUNTERS.
___________________________________________
Authorized Signature(s)
<PAGE>
CHS/165992
<PAGE>
ANNEX A (TRANSFER DEMAND)
FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT
CONSTRUCTION PHASE
IRREVOCABLE STANDBY LETTER OF CREDIT NO. _______________
TO: First Security Bank, N.A.
International Department
999 Main Street, Third Floor
Boise, Idaho 83702
RE: Instruction to Transfer Letter of Credit No. _________
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[NAME OF TRANSFEREE AND ADDRESS]
all rights of the undersigned beneficiary to payment under the above-referenced
letter of credit in the amount of the full unutilized balance hereof. Said
transferee or assigns have succeeded the undersigned as beneficiary of this
letter of credit.
By transfer, all rights of the undersigned beneficiary in such letter of
credit transfer to the transferee and the transferee shall have sole rights as
beneficiary thereof, including sole rights relating to any amendments existing,
or hereafter made.
By its signature the undersigned transferee acknowledges that it has duly
succeeded to __________ ____________________ as beneficiary of this letter of
credit and agrees to be bound by the terms of the letter of credit as if it were
the beneficiary originally appointed hereunder.
The letter of credit is returned herewith, and we ask you to endorse the
transfer on the reverse hereof, and forward directly to the transferee with your
customary notice of transfer. Also please find enclosed our payment of your
applicable transfer fee.
Very truly yours,
_____________________________________________
(Authorized Signature)
<PAGE>
Signature of the above party, duly authorized on behalf of (insert name of
beneficiary),
Authenticated By:
_________________________________________
(Name and Title)
Acknowledged by (Insert Name of Transferee)
as Successor Beneficiary
By:______________________________________
[Insert Name and Title of Authorized Officer)
CHS/165992
<PAGE>
EXHIBIT F
LEASE TERM
LETTER OF CREDIT
----------------
<PAGE>
FORM OF STANDBY LETTER OF CREDIT FOR THE LEASE TERM
COMMENCING AS OF THE DELIVERY DATE
IRREVOCABLE STANDBY LETTER OF CREDIT NO. ______
ISSUED IN: Boise, Idaho
BENEFICIARY: APPLICANT:
Wood County Development Authority Coldwater Creek, Inc.
408 Juliana Street One Coldwater Creek Drive
Parkersburg, WV 26102 Sandpoint, Idaho 83864
Attn: James R. Kinnett, II
AMOUNT: USD _____________ DATE AND PLACE OF EXPIRY:
and 01/100 United States Dollars _______________
Our counters.
CREDIT AVAILABLE WITH:
First Security Bank, N.A.
International Department
999 Main Street, 3rd Floor
Boise, Idaho 83702
BY: PAYMENT
AVAILABLE BY DRAFTS AT SIGHT DRAWN ON:
First Security Bank, N.A.
Boise, Idaho
By order of our client: Coldwater Creek, Inc., One Coldwater Creek Drive,
Sandpoint, Idaho 83864, we hereby issue in favor of Wood County Development
Authority (hereby referred to as the "Development Authority") our Irrevocable
Standby Letter of Credit No. XXXX in the maximum amount of USD
_______________________ ($_________), effective _____________.
Expiring _____________, at our counters: First Security Bank, N.A., 999
Main Street, 3rd Floor, Boise, Idaho 83702, provided, however, that it is a
condition of this Letter of Credit that it shall be automatically extended for
one year from the present or each future date of expiration, unless at least
thirty (30) days prior to any such date of expiration we send you notice in
writing by courier that we elect not to renew this Letter of Credit for such
additional period. This Letter of Credit shall expire full and finally [insert
date to indicate five (5) years from date of issue].
Partial drawings and Multiple drawings are acceptable and demand for
payment hereunder shall not exceed an aggregate amount up to USD _______________
maximum
<PAGE>
and each drawing honored by the bank hereunder shall reduce the maximum amount
that may be drawn.
The amount of this Standby Letter of Credit is available to you against
presentation of your draft(s) drawn on us at sight bearing on the face thereof
the clause:
"DRAWN UNDER FIRST SECURITY BANK, N.A.,
IRREVOCABLE LETTER OF CREDIT NO. XXXX."
accompanied by the original of this Letter of Credit and the following
documents:
1. Beneficiary's written statement signed by a person purportedly
authorized by the beneficiary, stating that Coldwater Creek, Inc. is in default
under the lease agreement entered into on June 12, 1998, between Coldwater
Creek, Inc., the lessee, and Wood County Development Authority, the lessor and
that the default under the Lease is continuing.
2. Signed statement from Wood County Development Authority of the amount
due by Lessee under the Lease and that demand for payment of such amount has
been made by Wood County Development Authority of Coldwater Creek, Inc. and that
such payment was not paid in full within five (5) days of the demand.
This Letter of Credit is transferable and assignable upon presentation of
Beneficiary's Transfer Demand in the format of attached "Annex A". Transfers
and assignments are to be effected without charge to either the beneficiary, or
the transferee/assignee of this Letter of Credit or the proceeds. First
Security Bank, N.A., its successors and assigns, shall have no right of
reimbursement or right of recourse against Wood County Development Authority for
any amount(s) drawn under strict compliance of this Letter of Credit.
In case of partial drawings, First Security Bank, N.A. will endorse the
back of this original Standby Letter of Credit for the amount drawn and return
same to beneficiary for presentation under possible additional drawings up to
the maximum aggregate amount indicated in this Standby Letter of Credit.
This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (the "UCP"). This Letter of Credit shall be deemed to be
issued under the laws of the State of West Virginia and shall, as to matters not
governed by the UCP, be governed by and construed in accordance with the laws of
the State of West Virginia.
REIMBURSEMENT INSTRUCTIONS:
PAYMENT TO BE EFFECTED PER YOUR
INSTRUCTIONS AGAINST CONFORMING
DOCUMENTS PRESENTED AT OUR
COUNTERS.
<PAGE>
____________________________________________
Authorized Signature(s)
<PAGE>
ANNEX A (TRANSFER DEMAND)
IRREVOCABLE STANDBY LETTER OF CREDIT NO. _______
TO: First Security Bank, N.A.
International Department
999 Main Street, Third Floor
Boise, Idaho 83702
RE: Instruction to Transfer Letter of Credit No. ________
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[NAME OF TRANSFEREE AND ADDRESS]
all rights of the undersigned beneficiary to payment under the above-referenced
Letter of Credit in the amount of the full unutilized balance hereof. Said
transferee or assigns have succeeded the undersigned as beneficiary of this
Letter of Credit.
By transfer, all rights of the undersigned beneficiary in such Letter of
Credit transfer to the transferee, and the transferee shall have sole rights as
beneficiary thereof, including sole rights relating to any amendments existing,
or hereafter made.
By its signature the undersigned transferee acknowledges that it has duly
succeeded to _________ _________________________________ the terms of this
Letter of Credit and agrees to be bound by the terms of the Letter of Credit as
if it were the beneficiary originally appointed hereunder.
The Letter of Credit is returned herewith, and we ask you to endorse the
transfer on the reverse hereof, and forward directly to the transferee with your
customary notice of transfer. Also please find enclosed our payment of your
applicable transfer fee.
Very truly yours,
_____________________________________________
(Authorized Signature)
Signature of the above Party, Duly Authorized
To Act on Behalf of (Insert Name of Beneficiary),
Authenticated By:
_______________________________________
(Name and Title)
<PAGE>
Acknowledged by (Insert Name of Transferee)
As Successor Beneficiary
By:___________________________________
(Insert Name and Title of Authorized Officer)
<PAGE>
EXHIBIT G
NON-DISTURBANCE AGREEMENT
-------------------------
<PAGE>
NON-DISTURBANCE AND
-------------------
ATTORNMENT AGREEMENT
--------------------
THIS AGREEMENT is made and entered into as of this ___ day of ____,
____ by and between ______________________, ("Mortgagee") and Coldwater Creek,
Inc. ("Lessee").
WHEREAS, the Lessee has entered into that certain Lease Agreement
dated June 12, 1998 with the Parkersburg-Wood County Area Development
Corporation (the "Lessor") covering the Campus as defined in the Lease
Agreement. Capitalized terms not otherwise defined herein shall have the same
meaning as ascribed to them in the Lease Agreement; and
WHEREAS, Mortgagee has agreed that the Lease Agreement is now and
shall remain subject and subordinate to the operation and effect of that certain
Deed of Trust which has heretofore been or will be recorded in the land records
of Wood County, West Virginia; and
W I T N E S S E T H:
-------------------
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, Mortgagee and Lessee hereby covenant and agree as
follows:
I. Non-disturbance and Attornment. The Lease Agreement shall
------------------------------
not be terminated, nor shall Lessee's use, possession or enjoyment of the Campus
be interfered with, nor shall the Lease Agreement hold estate granted by the
Lease Agreement be affected in any other manner, in any foreclosure or other
action or proceeding instituted under or in connection with the Security
Documents or in Mortgagee's possession of the Campus; provided, however, that
if, at the time of, or at any time subsequent to, any such foreclosure action, a
default exists and such a default has continued to exist for such period of time
(after such applicable notice and grace period, if any, as required by the Lease
Agreement) that would entitle Lessor under the Lease Agreement to terminate the
Lease Agreement or would entitle such Lessor to dispossess Lessee thereunder, a
purchaser of the Campus upon or after such foreclosure may exercise the rights
of Lessor, by reason of such default or event, to terminate the Lease Agreement
or to dispossess thereunder; and further provided that, if such rights are not
exercised, the Lease Agreement shall continue in full force and effect in
accordance with its terms and Lessee, in such event, agrees to recognize and
attorn to the new owner pursuant to such foreclosure sale. Notwithstanding the
foregoing, no failure or delay on the part of Mortgagee or purchaser in
exercising any right, power or privilege under the Lease Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under the Lease Agreement preclude any other or further
exercise thereof.
I. Lessee's Obligations. If the interests of Lessor under the
--------------------
Lease Agreement shall be transferred to and owned by Mortgagee by reason of
<PAGE>
foreclosure or other proceedings brought by it, or by any other manner, and
Mortgagee succeeds to the interests of Lessor under the Lease Agreement, Lessee
shall be bound to Mortgagee under all of the terms, covenants and conditions of
the Lease Agreement for the balance of the term thereof remaining and any
extensions or renewals thereof which may be affected in accordance with any
option therefor in the Lease Agreement, with the same force and effect as if
Mortgagee were the lessor under the Lease Agreement, and Lessee does hereby
attorn to Mortgagee as its landlord, the said attornment to be effective and
self-operative without the execution of any further instruments on the part of
any of the parties hereto immediately upon Mortgagee succeeding to the interest
of Lessor under the Lease Agreement. The respective rights and obligations of
Lessee and Mortgagee under such attornment, to the extent of the then remaining
balance of the term of the Lease Agreement and any extensions or renewals, shall
be and are the same as now set forth therein, except as herein otherwise
expressly provided.
I. Mortgagee's Obligations. If Mortgagee shall succeed to the
-----------------------
interests of Lessor under the Lease Agreement, Mortgagee shall be bound to
Lessee under all of the terms, covenants and conditions of the Lease Agreement
and, from and after Mortgagee's succession to the interest of Lessor under the
Lease Agreement, Lessee shall have the same rights and remedies against
Mortgagee for the enforcement of its rights thereunder and the breach of any
agreement contained in the Lease Agreement that Lessee might have had under the
Lease Agreement against Lessor thereunder if Mortgagee had not succeeded to the
interests of such Lessor; provided, however, that Mortgagee shall not be:
(a) liable for any act or omission of any prior or subsequent
lessor except for non-monetary defaults of a continuing
nature of Lessor under the Lease Agreement of which prior
written notice has been given to Mortgagee stating with
particularity the default and a demand to cure the default,
provided, however, that notwithstanding the date of any such
written notice, Mortgagee shall be afforded the full period
stated in the Lease Agreement to cure the expressed default
commencing from the date of Mortgagee's succession to the
interest of Lessor under the Lease Agreement; or
(b) subject to any off-sets or defenses which Lessee might have
against any prior Lessor; or
(c) bound by any rent or additional rent which Lessee might have
paid for more than 31 days in advance to any prior Lessor,
except as expressly required under the Lease Agreement; or
(d) bound by any amendment or modification of the Lease
Agreement of which Mortgagee was not provided with
<PAGE>
prior written notice by Lessee, such notice may be satisfied
by forwarding a form of the amendment or modification of the
Lease Agreement prior to its effective date from which the
executed original shall not substantially deviate.
I. Insurance Proceeds. Mortgagee agrees that in the event of
------------------
damage or destruction of the Campus, Lessee or Lessor shall be entitled to all
insurance proceeds to which either of them would be entitled under the Lease
Agreement regardless of any provision of the Security Documents to the contrary,
provided that Lessee or Lessor, whichever the case may be, shall repair or
restore the Campus following any casualty in accordance with the terms of the
Lease Agreement.
I. Title of Paragraphs. The titles of the paragraphs of this
-------------------
Agreement are for convenience and reference only, and the words contained
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the provisions of this Agreement.
I. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of West Virginia.
I. Provisions Binding. The terms and provisions hereof shall
------------------
be binding upon and shall inure to the benefit of the heirs, executors,
administrators, successors and permitted assigns, respectively, of Mortgagee and
Lessee. The reference contained to successors and assigns of Lessee is not
intended to constitute and does not constitute as consent by Mortgagee to an
assignment by Lessee, but has reference only to those instances in which Lessor
under the Lease Agreement and Mortgagee, to the extent required herein, shall
have given written consent to a particular assignment by Lessee thereunder but
nothing herein shall be construed to give Mortgagee such consent rights except
as otherwise expressly set forth in the Lease Agreement.
I. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto set their respective
hand and seals as of the day, month and year first above written.
Mortgagee:
---------
By:
--------------------------------
Its:
-------------------------------
Lessee:
------
By:
--------------------------------
Its:
-------------------------------