LEASE
THIS LEASE, made this 1st day of November, 1993, by and between Brier
Hill Steel Company, Inc., a Pennsylvania corporation having offices at P.O.
Box 386, Route 40, Brier Hill, Pennsylvania, 15415 (hereinafter called
'Lessor'), and Harsco Corporation, a Delaware Corporation, having offices at
350 Poplar Church Road, Camp Hill, Pennsylvania 17011, as the lessee party
and acting for its BMY-Combat Systems Operating Division (hereinafter called
'Harsco').
WITNESSETH:
That Lessor, in consideration of the rents hereinafter covenanted to be
paid by Harsco, and in consideration of the covenants hereinafter stipulated
to be performed by Harsco, and in consideration of the mutual covenants and
agreements, hereinafter mentioned, between Lessor and Harsco, does hereby
demise, let and lease unto Harsco all that certain real property situate in
North Union Township, Fayette County, Pennsylvania, consisting of 40.94 acres
of land and all buildings, structures and improvements located thereon,
including but not limited to two (2) buildings containing 175,000 square feet
of total manufacturing space under roof, which real property and improvements
are more specifically identified and described on Exhibit 'A', which is
attached to this Lease and made a part hereof (hereinafter called the
'Premises'). The Premises are leased to Harsco together with all appurtenant
rights and easements, including but not limited to those rights and easements
providing free and uninterrupted ingress and egress between the Premises and
the public streets, roads or highways known as PA Route No. 119 and Mt.
Braddock Road, and those rights and easements necessary to free and
uninterrupted provision of railroad carrier service to the Premises over and
through the existing sidetrack. The Premises also include all fixtures and
equipment presently located at or incorporated into the buildings and
improvements located on the Premises. This Lease is made upon the following
terms, stipulations, covenants, conditions and agreements, all of which the
parties hereto, intending to be legally bound hereby, covenant and agree to
keep and perform.
1. PERSONAL PROPERTY. This Lease and the rent payable hereunder also
include the following miscellaneous items of personal property presently
located at the Premises: One self-propelled floor sweeping machine; all
storage racks; all office equipment and furniture; and the telephone system
used for communication with the guard shack.
2. TERM. Harsco shall have and hold the Premises under this Lease,
subject to the conditions of this Lease, for the full term of three (3)
years, beginning on November 1, 1993 and ending on October 31, 1996
(hereinafter called the 'Term'), unless sooner terminated or extended as
hereinafter provided. Harsco's obligation to pay the rent shall commence on
November 1, 1993. Lessor shall deliver possession of the Premises to Harsco
on November 1, 1993. Lessor, however, shall not be liable to Harsco for any
inability to deliver possession to Harsco on said date if Lessor's failure to
deliver possession is due solely to force majeure or any other events or
circumstances which are not within Lessor's control and are not foreseeable
at the time of execution of this Lease. Such events and circumstances
excusing timely delivery of
possession shall not include any failure by Lessor to remove any third party
in possession of all or any portion of the Premises.
3. USE OF PREMISES. Harsco shall use the Premises as and for a
manufacturing facility for any of the industrial, related and ancillary
operations conducted by Harsco's BMY-Combat Systems Division as part of said
Division's defense contracting business and related commercial manufacturing
business. Harsco shall not use the Premises or any part thereof in any
manner which would (i) materially violate any applicable law or lawful
requirement of public authorities having jurisdiction over the Premises, or
(ii) cause structural injury to any building on the Premises.
4. RENT. Harsco agrees to pay to Lessor for and during the Term, the
sum of Eight Hundred and Forty Thousand and 00/100 ($840,000.00) Dollars, as
rent reserved, which rent shall be payable without demand in advance monthly
installments in the amount of Twenty Three Thousand Three Hundred Thirty
Three and 33/100 ($23,333.33) Dollars each, on the 1st day of every month of
the Term, beginning on November 1, 1993. Whenever under the terms of this
Lease any sum of money is required to be paid by Harsco in addition to such
rent, such sum, at Lessor's option, shall be deemed additional rent and
collectable as such with any installment of rent thereafter falling due
hereunder.
5. OPTION TO RENEW. Provided Harsco is not in default hereunder, Lessor
hereby extends to Harsco four (4) separate options to extend and renew this
Lease for four (4) separate, additional terms of one (1) year each, at the
identical terms and provisions set forth herein, except that the rent shall
be as hereinafter set forth. If Harsco chooses to exercise any of such
options, Harsco must do so by written notice given to Lessor no less than
sixty (60) days prior to expiration of the Term or any then effective renewal
term of this Lease. Subject only to the giving of timely notice to Lessor,
Harsco shall be permitted to exercise its options at any time for any number
of the consecutive renewal terms permitted hereunder. For instance, Harsco
may deliver a notice specifically exercising both the first and second
renewal terms at any time on or before sixty (60) days prior to expiration of
the first year of the Term. Each permitted renewal term shall run from
November 1 of the applicable year to October 31 of the following year. The
rent reserved for each one (1) year renewal term shall be and remain
unchanged in the total amount of Three Hundred Thirty Two Thousand Five
Hundred and 00/100 ($332,500.00) Dollars, and shall be payable without demand
in advance, monthly installments in the amount of Twenty Seven Thousand Seven
Hundred Eight and 33/100 ($27,708.33) Dollars each. Such rental installments
shall be paid on the 1st day of each and every month during any renewal term.
References hereinafter to 'the Term' shall include, if applicable, any of
the renewal terms which has been exercised and obtained by Harsco under this
paragraph.
6. TERMINATION BY HARSCO. At any time during the Term, Harsco shall
have the right to unconditionally and without specific cause or justification
terminate this Lease. Termination shall be effective ninety (90) days
following Harsco's notice of termination, at which time Harsco shall
surrender the Premises to Lessor in accordance with paragraph 28 of this
Lease. Harsco's obligation for the payment of rent and for other
performances under this Lease shall terminate on such effective date, but
nothing herein shall be deemed to relieve Harsco from
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the payment of monthly rental installments or other payments falling due
before the effective date of termination. The last such monthly installment
or other payment due Lessor hereunder, however, may be paid by Harsco on a
per diem basis covering any period of less than one (1) full month from the
end of the period covered by the previous installment of rent to the
effective date of termination, or covering the portion of any statement from
Lessor for reimbursement attributable to the period of time prior to the
effective date of termination. Within thirty (30) days following the
effective date of termination, Lessor shall reimburse to Harsco any amounts
paid in advance by Harsco (such as real property taxes) which are
attributable to periods following the effective date of termination.
7. NET LEASE. Lessor and Harsco intend this Lease to be net to Lessor,
so that the monthly rent required hereunder shall be paid in full in all
events, without deduction for any expenses of Harsco in connection with the
Premises, whether such expenses are to be paid by Harsco directly to third
parties or are to be reimbursed by Harsco to Lessor, including but not
limited to:
(a) Harsco's maintenance costs under paragraph 12;
(b) Harsco's utility expenses under paragraph 14;
(c) Harsco's insurance costs under paragraph 15; and
(d) Harsco's real property tax reimbursement of Lessor under
paragraph 16.
8. LATE CHARGES. Harsco agrees to pay to Lessor, as additional rent, a
late charge equal to five (5%) percent of the amount of any installment of
rent or any other sum payable hereunder which is not paid on the date when
due. Such late charge shall be deemed rent for all purposes under this Lease.
9. PEACEFUL ENJOYMENT. Lessor represents and warrants that Lessor holds
good and marketable fee simple title to the Premises, free and clear of liens
and encumbrances and subject only to applicable zoning and land use laws and
ordinances and to easements, conditions, restrictions and reservations of
record, none of which are such that shall impair use and occupancy of the
Premises by Harsco for the purposes set forth in paragraph 3 of this Lease.
Lessor covenants that Harsco shall and may peacefully and quietly have, hold,
occupy, possess and enjoy the Premises for the term hereinabove set forth,
and that Lessor shall defend such possession and enjoyment by Harsco against
all parties; provided, however, that Harsco shall pay the rent and shall
keep, observe and perform all of the other covenants and provisions as
required in this Lease.
10. CONDITION OF PREMISES. Except as otherwise specifically set forth in
this paragraph 10 and in other provisions of this Lease and subject to
Lessor's maintenance obligations under paragraph 12 of this Lease, the
Premises are leased to Harsco by Lessor in 'as is' condition. Lessor
represents and warrants to Harsco and covenants with Harsco that the
equipment and building or mechanical systems presently located at the
Premises or incorporated into the improvements located at the Premises shall
be in good repair and operating condition at
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the commencement of this Lease. Such equipment and systems include, but are
not limited to: heating, ventilating and air conditioning systems; plumbing,
including drain lines; electrical service and distribution system; fire
sprinkler system (which shall not be leaking); overhead doors and any related
control systems; cranes, including overhead cranes, with any related control
systems; air compressors and air lines; the oil/water separator tank system;
and the industrial waste water treatment system.
During the first sixty (60) days following commencement of this Lease,
Harsco shall have the opportunity to operate and inspect all of the above
mentioned equipment and systems, and to report any items which are not in
good operating condition and repair to Lessor. Harsco shall not be limited
to one (1) notice reporting all defective items, but may notify Lessor from
time to time within said sixty (60) day period of any defective items, as
they are discovered by Harsco. Promptly upon receipt of any such notice or
notices from Harsco and no later than seventy (70) days following
commencement of this Lease, Lessor, shall, at Lessor's option, either (i)
perform, at Lessor's expense, any and all repairs, maintenance and
replacements necessary to place the reported items in good operating
condition and repair, or (ii) terminate this Lease. Lessor shall notify
Harsco in writing of its decision within seventy (70) days following
commencement of this Lease. If Lessor elects to terminate this Lease,
Harsco, within ten (10) days following receipt of Lessor's notice electing
termination, may, at Harsco's option, elect to forgive Lessor's repair
obligations under this paragraph 10 as to the item or items Lessor refuses to
repair. In such case, Lessor's election to terminate this Lease shall not be
effective, and this Lease shall continue in full force and effect. If Lessor
elects to terminate this Lease under this paragraph 10, Lessor shall be
obligated to refund to Harsco, within fifteen (15) days following such
termination by Lessor, one hundred (100%) percent of the rent and all other
sums paid by Harsco under this Lease for and during the period beginning at
commencement of this Lease and ending at termination of this Lease.
At the end of Harsco's sixty (60) day inspection period, if no notice is
received by Lessor that any items are not in good operating condition and
repair, the taking of possession of the Premises by Harsco shall conclusively
establish that all equipment and systems were, at commencement of this Lease,
in satisfactory operating condition and repair, excepting only latent defects
which could not reasonably be discovered by reasonably prudent inspection
during such sixty (60) day period, and which Harsco can reasonably
demonstrate existed at commencement of this Lease. Subject to the inspection
rights provided in this paragraph, Harsco hereby agrees that it is entering
into this Lease in reliance upon its own knowledge and inspection and without
relying in any way upon any statement, written or verbal, of Lessor, except
as specifically set forth in other provisions of this Lease.
11. ADDITIONAL SECURITY FENCING. The Premises are presently enclosed by
perimeter chain link security fencing, except along the common boundary
between the Premises and the adjoining parcel now or formerly owned by Lessor
and now occupied by Fayette Engineering Company. Prior to commencement of
this Lease, Lessor, at Lessor's expense, will install substantially similar
chain link security fencing along the entire common boundary between the
Premises and the said Fayette Engineering Company property, so that the
entire perimeter of the Premises will be enclosed by security fencing.
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12. MAINTENANCE AND REPAIRS. Lessor covenants and agrees to maintain,
at Lessor's sole cost and expense, the exterior and major structural
components of the Premises, including but not limited to the roof systems of
the buildings, the exterior and/or underground portions of the utilities
services to the Premises which are not the responsibility of the Utility
Companies, any groundwater monitoring wells on the Premises that are required
by law or regulation to be continuously operated or periodically tested, and
the portions of any improved roadways, driveways or entranceways situated on
Lessor's property but to which Harsco does not have exclusive access.
However, Harsco shall be responsible for any required repairs or maintenance
to the above items, (i) arising out of Harsco's operations or activities
other than normal manufacturing processes, or (ii) resulting from the
negligent acts or omissions of Harsco, its employees, agents or invitees.
Harsco covenants and agrees that Harsco will maintain and repair, at Harsco's
sole cost and expense, the interior of the Premises, including but not
limited to, all doors and windows; the interior utility services of the
Premises and any other improved roadways, driveways, entranceways and parking
or storage areas on the premises; plumbing and drain lines; heating, air
conditioning, ventilating and electrical systems; fire sprinkler system;
overhead doors and related control systems; cranes, including the overhead
cranes, and all related control systems; air compressors and air lines; the
oil/water separator tank system; and the industrial waste water treatment
system and all other items which constitute a part of the Premises that are
not part of the specific maintenance duties of Lessor provided herein.
Harsco's obligation to maintain the oil/water separator tank system and the
industrial waste water treatment system shall not include the correction or
remediation of any contamination (see paragraph 23 for definition of this
term) related to said items which may be discovered at any time and results
from any cause other than introduction to the Premises by Harsco's own
operations at the Premises during the Term. Harsco shall likewise have no
responsibility to alter, modify, redesign or replace said items if any agency
having jurisdiction over the Premises under applicable environmental laws
(see paragraph 23 for definition of this term) shall determine, at any time,
that said items may not remain in operation or present at the Premises due to
non-compliance with any applicable environmental law, whether or not the
facts and circumstances representing such non-compliance existed at
commencement of this Lease. Harsco shall be responsible for any snow removal
desired by Harsco.
Lessor represents and warrants to Harsco that Lessor has received no
notices from any authorities having jurisdiction over the Premises that any
conditions exist at the Premises which represent violations of any applicable
zoning, building and land use and safety codes, ordinances or laws, and that
Lessor has no actual knowledge that any such conditions or violations exist
at the Premises. Notwithstanding Harsco's maintenance obligations under this
Lease, Harsco shall have no responsibility for correction, repair or
modification of any such conditions or violations, whether known or unknown
to the parties, which existed at the Premises at commencement of this Lease.
13. IMPROVEMENTS AND ALTERATIONS BY HARSCO. Harsco shall make no
improvements, additions or alterations to the Premises costing, on an
individual basis and not in the aggregate, in excess of Ten Thousand and
00/100 ($10,000.00) Dollars without Lessor's prior written approval.
Lessor's approval shall not be unreasonably withheld, taking into account the
use of the Premises permitted under this Lease and taking into account
Harsco's need to
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establish physical security of its operations at the Premises at a level
deemed satisfactory by Harsco. Any and all improvements, additions and
alterations made to the Premises by Harsco during the Term (except for trade
fixtures and equipment installed by Harsco for use in its operations) shall
become part of the Premises and shall remain with the Premises at termination
or expiration of this Lease. Harsco shall obtain and file a waiver of liens
executed by Harsco's contractor or contractors and shall submit same for
Lessor's approval prior to initiating any work at the Premises costing in
excess of Ten Thousand and 00/100 ($10,000.00) Dollars. Harsco shall pay all
bills for any such work in full, and hereby agrees to indemnify, defend and
save harmless Lessor and the Premises from and against any claims in the
nature of mechanics' liens for work performed by or at Harsco's direction.
The following improvements, additions and alterations to be performed by
Harsco have been approved by Lessor at the time of execution of this Lease:
(a) construction and installation of a heavy vehicle (including
tracked vehicles) test track, including but not limited to
the track itself, a test slope and a fording tank.
(b) installation of suitable signage throughout the Premises and
along the highway frontage, including directional signage and
signage identifying occupancy of the Premises by Harsco and its
BMY-Combat Systems Operating Division.
14. UTILITIES. Harsco covenants and agrees to pay all bills which may
be incurred for water, sewer, electricity, refuse removal and other utilities
consumed by Harsco at the Premises during the Term, and Harsco does hereby
release Lessor from any damage which may result by reason of failure of the
supply of any utility or utilities. Should Harsco fail to pay any bills as
aforesaid, Lessor shall have the right to pay the same and any such amount
paid by Lessor shall be chargeable by Lessor to Harsco as additional rent.
Lessor shall cause all utilities serving the Premises to be separately
metered for the Premises, to the exclusion of any other property or user, and
to be billed directly to Harsco. This shall include, but not be limited to
water, sewer, gas, electricity and refuse removal. Harsco agrees to
establish separate accounts for such utilities.
15. INSURANCE. Harsco shall, at Harsco's sole cost and expense, obtain,
maintain and keep in full force and effect during the Term the following
insurance:
A. 'All risk' property insurance which shall insure the Premises
(including any improvements made by Harsco under paragraph 13 hereof) against
fire, storm, theft, vandalism, malicious mischief, sprinkler leakage and such
additional perils as are now or hereafter may be, included in a standard
extended coverage endorsement from time to time in general use in the
Commonwealth of Pennsylvania. Such insurance shall name Lessor as the
primary insured and shall name Harsco as an additional insured, as its
interest may appear. Said policy or policies shall insure the improvements
at the Premises on a replacement cost basis for their full insurable value.
Losses under said policy or policies shall be payable to Lessor. The
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policy shall include an undertaking by the insurer to notify Lessor and
Harsco in writing not less than thirty (30) days prior to any material
change, cancellation or other termination thereof. Such policy shall contain
a deductible in an amount determined by Harsco in Harsco's reasonable
judgment, which shall be subject to Lessor's reasonable approval. At
commencement of this Lease, Harsco shall deliver to Lessor a certificate of
insurance evidencing compliance with the requirements of this paragraph and a
true, accurate and complete copy of the policy. Harsco shall pay all of the
premiums for such insurance, and shall submit to Lessor such proof of payment
of the premiums as may be reasonably requested by Lessor. At no time shall
Harsco be required to provide insurance or any evidence of insurance or to
pay any premiums for any insurance for any period of time following the
effective date of any termination of this Lease by Harsco, or following the
then effective termination or expiration date of the Term. If requested by
Lessor, Harsco will name Lessor's first mortgagee, if any exists at
commencement of this Lease or at any subsequent time, as a loss payee on such
policy of all risk property insurance, under a standard mortgagee clause and
as such mortgagee's interest shall appear. Without incurring any additional
insurance obligation whatsoever to Lessor, Harsco shall maintain all risk
property insurance acceptable to Harsco on its personal property and any
property of others in its care, custody and control, and shall insure its
business interruption exposures at the Premises. No party other than Harsco
shall have any interest in or standing under such personal property and
business interruption insurance, whether or not such insurance is carried or
provided under the same policy to be provided by Harsco insuring the Premises.
B. Comprehensive general liability insurance coverage to include
personal injury, broad form property damage, operations hazard and any
additional coverages desired by Harsco, naming Harsco as the insured and
Lessor as an additional insured, in an amount per occurrence of not less than
One Million and 00/100 ($1,000,000.00) Dollars combined single limit, bodily
injury and property damage coverage. At commencement of this Lease, Harsco
shall deliver to Lessor a certificate evidencing the maintenance of such
liability insurance, which certificate shall include an undertaking by the
insurer to notify Lessor and Harsco in writing not less than thirty (30) days
prior to any material change, cancellation or other termination thereof.
Harsco may obtain any of the insurance required of Harsco with a deductible
or retention deemed reasonable by Harsco.
C. Worker's compensation insurance in form and in an amount as
required by the law of the Commonwealth of Pennsylvania, or alternatively, a
self insurance program selected and maintained by Harsco in compliance with
Pennsylvania law.
All insurance policies required pursuant to this paragraph 15 shall be
taken out with insurers rated B+ or better by A. M. Best Company, of Oldwick,
New Jersey, and who are licensed to do business in the Commonwealth of
Pennsylvania.
In the event Harsco fails to provide any of the insurance Harsco is
required to provide Lessor under this paragraph 15, this shall constitute a
default under this Lease and shall entitle Lessor to the same remedies as for
nonpayment of rent. In the event Harsco fails to make timely payment of any
premiums, for the insurances required herein, Lessor shall have the option to
pay
7
the premiums and to be promptly reimbursed for such premiums paid by Harsco.
Any amounts so paid by Lessor shall be deemed additional rent.
Lessor and Harsco each hereby release the other from any and all
liability or responsibility for any direct or consequential loss, injury or
damage to the Premises, or its contents caused by fire or any other casualty
during the Term, even if such fire or other casualty may have been caused by
the negligence (but not the willful act) of the other party or a party for
whom such party may be responsible. Inasmuch, as the above mutual waivers
may preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), Lessor and Harsco
hereby agree, if required by the policies of insurance required to be
maintained by Harsco under this paragraph 15, to give written notice of the
terms of said mutual waivers, and to have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance
coverage by reason of such waiver.
16. TAXES. Lessor agrees to pay, during the discount period for each
tax, all real property taxes legally levied, assessed, charged or imposed
upon the Premises by North Union Township, the County of Fayette and Laurel
Highlands School District during the Term. The county and township real
property taxes shall be considered payable for a calendar year of January 1st
to December 31st, and the school real property taxes shall be considered
payable for a fiscal year of July 1st to June 30th. Harsco shall reimburse
Lessor for One Hundred (100%) Percent of the discount amount of all such real
property taxes. Harsco shall make such payments within thirty (30) days
following Harsco's receipt from Lessor of a paid receipt for each tax. If at
any time during the Term, the current tax bill paid by Lessor covers periods
before commencement of the Lease or after the then effective termination date
of the Lease, Harsco's obligation for reimbursement of taxes shall be
prorated on a per diem basis, based on the applicable tax years stated above
and based on the number of days in the Term which are within the tax year for
which any tax bill has been paid by Lessor.
In the event Harsco fails to reimburse Lessor for any taxes as provided
herein, this shall constitute a default under this Lease and shall entitle
Lessor to the same remedies as for nonpayment of rent.
17. INDEMNIFICATION. Harsco covenants and agrees that Harsco will bear,
pay and discharge, when and as the same become due and payable, all judgments
and lawful claims for damages or otherwise against Lessor arising from or in
any way connected with Harsco's use or occupancy of the Premises, and that
Harsco will assume the burden and expense of defending all such law suits and
actions, whether brought before or after the expiration of this Lease, and
will protect, indemnify and save harmless Lessor by reason of or on account
of the use or misuse of the Premises, or any part thereof, by Harsco due to
the negligence of Harsco or Harsco's agents, servants, employees, but not by
reason of or on account of the negligence of Lessor or Lessor's agents,
servants or employees in and about the Premises or in any manner pertaining
to the Premises.
18. DESTRUCTION OF PREMISES - RESTORATION. If, at any time during the
term of this Lease, the Premises are completely or partially destroyed, or
rendered completely
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or partially inaccessible or unusable, by fire, storm or other casualty,
Lessor shall restore the Premises, exclusive of Harsco's personal property
and trade fixtures but inclusive of improvements, additions and alterations
to the Premises made by Harsco in accordance with the terms of this Lease, to
substantially the same condition as existed immediately prior to the damage
by casualty. Unless Harsco terminates this Lease, as hereinafter provided,
Lessor shall be obligated to apply any proceeds obtainable under the
insurance to be provided by Harsco under paragraph 15 of this Lease to
restoration of the Premises, to the extent said insurance proceeds are
attributable to claims for damages to the Premises. Harsco shall have the
option to terminate this Lease upon thirty (30) days notice to Lessor if
completion of restoration of the Premises by Lessor requires or can be
determined by Harsco to require more than ninety (90) days. During
restoration of the Premises, this Lease shall continue if not terminated by
Harsco as aforesaid, but the rent payable by Harsco shall be abated or
reduced to the extent and for such period of time that the Premises or any
portion thereof are not usable by Harsco for the purposes for which the
Premises have been leased.
19. CONDEMNATION OF PREMISES. If the Premises are completely taken in
condemnation by any government or other entity possessing and exercising
powers in the nature of eminent domain (including instances where the
Premises are transferred in lieu of condemnation), this Lease shall terminate
on the effective date of the taking. The taking shall be deemed to have
become effective when Harsco no longer has legal or physical possession of
the Premises or any portion thereof, whichever first occurs. If any portion
of the Premises is taken in condemnation, this Lease shall remain in effect
as to the remaining portion of the Premises, except that Harsco shall have
the option to terminate this Lease if the remaining portion of the Premises
(including the means of access to the Premises and areas not occupied by
building improvements and used for access, parking, storage and similar uses)
is deemed unsuitable by Harsco, in Harsco's sole discretion, for Harsco's
continued operation of its business on the Premises. Harsco may exercise
this option to terminate this Lease by giving written notice to Lessor at any
time which is within thirty (30) days before or after the effective date of
the taking. In such case, this Lease shall terminate on the date Harsco
gives notice to Lessor. If, after a partial condemnation of the Premises,
Harsco does not terminate this Lease, the rent payable by Harsco shall be
abated or reduced to the extent and for such period of time that the portion
of the Premises taken in condemnation is not usable by Harsco. Lessor shall
notify Harsco within three (3) business days of receipt by Lessor of any
notice of condemnation (including any preliminary notice). The entire
condemnation award shall belong to and be paid to Lessor, except that Harsco
shall receive from the award the following:
(a) The sum attributable to any improvements or alterations made to
the Premises by Harsco at Harsco's expense, which improvements
or alterations Harsco has the right to remove from the Premises
pursuant to this Lease but elects not to remove, if any;
(b) The sum attributable to that portion of the award constituting
Harsco's relocation costs, if included in the award; and
(c) Any special damages which by their nature are awardable only to
Harsco
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as lessee and would not, under any circumstances or
under any provisions of this Lease, be awarded to Lessor.
In the event of any condemnation, Harsco shall be permitted to file a
separate claim for any award that may be obtainable by Harsco under the terms
of this Lease, or otherwise.
20. INSPECTION. Lessor and Lessor's authorized agents shall, upon
forty-eight (48) hours prior verbal notice to Harsco's manager in charge of
the Premises, have the right to enter upon the Premises during Harsco's
ordinary business hours to examine the same for any purpose whatsoever,
including determining compliance by Harsco with Harsco's obligations under
this Lease.
21. ASSIGNMENT. Accept as hereinafter provided, Harsco may not assign
this Agreement of Lease or sublet the Premises, or any part thereof, without
the prior written consent of Lessor, which consent shall not be unreasonably
withheld by Lessor. Lessor has been advised by Harsco that Harsco is
presently negotiating with FMC Corporation to establish a joint venture,
partnership or other similar legal entity to combine and jointly operate
certain defense contracting businesses of Harsco's BMY-Combat Systems
Division and certain defense contracting business of FMC Corporation. Lessor
agrees that Harsco shall have the unrestricted right to assign this Lease and
all of Harsco's rights and obligations concerning the Premises and this Lease
to any such joint venture, partnership or other legal entity. Such
assignment shall include all options for renewal terms and all options to
purchase the Premises contained in this Lease. Such assignment shall be
effective immediately upon notice thereof by Harsco to Lessor, and shall
operate as a complete assumption by the new entity of all of Harsco's
obligations as the lessee party under this Lease. If requested by Harsco,
Lessor shall execute, at the time of closing by Harsco and FMC of the
transaction creating such new entity, a complete novation of this lease which
shall effectively substitute the new entity for Harsco as the lessee party
under this Lease, and shall ratify all of the then existing terms and
conditions of this Lease.
22. DEFAULT BY HARSCO. It is hereby expressly understood and agreed
that if Harsco shall:
(a) default in the payment on the date when due of rent, additional
rent, insurance, real property taxes, utilities or any other
monetary obligation of Harsco hereunder; or
(b) desert or vacate the Premises; or
(c) default in the performance of any material term, condition or
covenant of this Agreement of Lease; or
(d) neglect to materially comply with any of the statues,
ordinances, rules, orders, regulations and requirements of the
federal, state and local governments, or of any and all of their
departments and bureaus, applicable to Harsco's activities at
the Premises, except where such compliance is Lessor's
obligation under this Lease; or
10
(e) file a petition in bankruptcy or be adjudicated a bankrupt or
insolvent by any court, or make an assignment for the benefit
of creditors, or take advantage of any insolvency act, or if a
receiver or trustee in bankruptcy or a receiver of Harsco's
property shall be appointed;
Then, upon the occurrence of any one of the above defaults and following
fifteen (15) days written notice of default under subparagraph (a) above or
following twenty (20) days written notice of any other default provided
herein from Lessor to Harsco (which notice shall specify the default relied
upon by Lessor) without cure of the default by Harsco within said fifteen
(l5) or twenty (20) day period, whichever is applicable:
(a) it shall be lawful for Lessor to terminate this Lease and to
re-enter the Premises and to repossess, enjoy and have the use
of same, with force or otherwise;
(b) the rent reserved herein for the full remaining Term of the
Lease shall become immediately due and payable, and Lessor
may proceed to collect same, together with any other sums
due and payable by Harsco under this Lease, by any lawful means,
subject only to any mitigation of damages which may be
accomplished by Lessor through reletting of the Premises; and
(c) Harsco shall be deemed in default hereunder for the purpose of
an action in ejectment by Lessor.
If any default by Harsco, other than default in any payment under
subparagraph (a) above, is of such nature that it cannot reasonably be
completely cured within the aforesaid twenty (20) day period, then Harsco
shall not be deemed in default so long as Harsco commences cure of the
default within said twenty (20) day period and thereafter diligently and
continuously pursues cure of such default.
23. ENVIRONMENTAL. Lessor represents and warrants to Harsco that after
reasonable and prudent investigation by Lessor and to the best of Lessor's
knowledge, information and belief, the Premises, including the ground or
soil, the ground water and the improvements located thereon, contain no
hazardous, toxic or otherwise regulated materials, substances or wastes in
quantities or concentrations which require clean up or any remedial action
whatsoever under any federal, state or local law, statute, regulation or
ordinance having as its subject environmental protection or the regulation of
hazardous or toxic substances, materials or wastes, including petroleum
products and derivatives, fractions or components thereof, (hereinafter
called, respectively, 'contamination' and 'applicable environmental laws').
In the event contamination is found, at any time, to exist at the Premises in
violation of applicable environmental laws from any cause other than the
operations or activities of Harsco at the Premises during the Term, whether
or not the contamination was regulated or deemed contamination at the
commencement of this Lease, Harsco, upon written notice to Lessor, may
terminate this Lease, effective sixty (60) days following said notice unless
within said sixty (60) days said contamination is completely removed or
corrected so as to make the Premises in full
11
compliance with applicable laws and regulations, in which event said
termination notice becomes null and void and ineffective. Lessor shall
indemnify, defend and hold harmless Harsco from and against any and all
claims, suits, administrative actions or proceedings, fines, penalties,
damages, costs, and losses and other expenses, including attorneys fees and
court costs, and expenses of relocating Harsco's operations or activities
imposed on or suffered at any time by Harsco or Lessor as a result of the
presence, at any time, of contamination at the Premises in violation of
applicable environmental laws from any cause other than Harsco's own
operations or activities at the Premises during the Term, or as the result of
any legal or administrative action or proceeding instituted by any party,
including any government or government agency at any time which is based on
the presence, at any time, of contamination at the Premises in violation of
applicable environmental laws from causes alleged or determined to be other
than Harsco's own operations or activities at the Premises during the Term.
This indemnification shall include, without limitation, the costs of any
investigation, testing, cleanup or other remedial measures, and Lessor shall
be liable to Harsco for the aforesaid losses.
Lessor represents and warrants to Harsco that after reasonable
investigation by Lessor and to the best of Lessor's knowledge, information
and belief that: (i) there are no underground or aboveground storage tanks
(as defined in or regulated under any applicable local, state or federal law,
ordinance, statute or regulation) located in or on the Premises, except those
identified, described or referred to in a certain environmental site
assessment concerning 'Fruehauf Corporation Leased Properties', performed by
Eastern Technical Associates under issue date February 19, 1992 for The
Greater Uniontown Industrial Fund ('Environmental Study'), which was prepared
in connection with acquisition of the Premises by Lessor, and a copy of which
was delivered to Harsco by Lessor prior to execution of this Leases; and (ii)
the improvements located on the Premises do not contain any building
materials or components which incorporate asbestos of a kind or type or in
such condition that requires any type of remedial work, including but not
limited to repair, removal or sealing, under any applicable federal, state or
local statutes, laws, ordinances and regulations concerning in any manner the
regulation of asbestos, asbestos safety and exposure to asbestos. If
storage tanks are found to exist at the Premises during the Term, or if
asbestos of type, kind or in a condition requiring remediation as aforesaid
is found to exist at the Premises during the Term, Lessor shall promptly
comply with any and all applicable federal, state or local statutes, laws,
ordinances and regulations concerning same. Such compliance shall be at
Lessor's expense. Lessor shall indemnify defend and hold harmless Harsco
from and against any such costs of compliance and from and against any and
all claims, suits, administrative proceedings, fines, penalties, costs,
losses, damages and other expenses, including claims for exposure to asbestos
by third parties or employees and attorney's fees and court costs, and
expenses of relocating Harsco's operations imposed on or suffered at any time
by Harsco as the result of the presence of such storage tanks or asbestos.
In the event that Harsco performs any work at the Premises under paragraph 13
of this Lease which disturbs any asbestos materials incorporated into the
improvements at the Premises in a manner and to the extent that remediation,
as described above, of such asbestos is required, then such remediation of
any portion of such asbestos actually disturbed by Harsco shall be performed
by Harsco at Harsco's sole cost and expense. Harsco, however, shall not be
obligated to perform such remediation if: (i) Lessor failed to disclose the
presence of such asbestos at the Premises at the time of execution of this
Lease in a manner or under
12
circumstances which would represent a violation of Lessor's aforesaid
representation and warranty concerning asbestos, or (ii) the need for such
remediation is due primarily to deteriorating condition of the materials or
components containing the asbestos, or to Harsco's ordinary plant operations
at the Premises, rather than to any such work performed by Harsco.
Harsco covenants and agrees not to store, use, dump or dispose of any
hazardous or toxic substances on the Premises in any manner which may cause
the Premises to be in violation of any applicable environmental law or
regulation. Harsco hereby indemnifies and holds Lessor harmless and agrees to
defend Lessor from and against any claims or actions and for the cost of
removal thereof arising from any hazardous or toxic substances introduced to
the Premises as a result of Harsco's occupancy of the Premises. 'Hazardous
substances' include 'hazardous waste' and 'hazardous substances' as defined
by applicable federal and state statutes or regulations. It understood that,
subject to compliance with applicable environmental laws and to Harsco's
obligation of indemnification hereunder, Harsco shall be permitted to use,
store and generate any hazardous substances which are necessary to the
conduct of Harsco's business operations at the Premises.
The representations, warranties and covenants of indemnification
contained in this paragraph are deemed material and continuing and are
intended to survive termination of this Lease.
Lessor hereby authorizes Harsco and its agents, consultants and
contractors to perform, at Harsco's expense and at any time, any
environmental studies of the Premises deemed necessary by Harsco to
establish, for its own purposes, the condition of the Premises at
commencement of this Lease or thereafter during the Term with respect to
environmental compliance. Such environmental studies may include, at
Harsco's option, intrusive studies. If Harsco performs any intrusive
environmental studies, Harsco shall be responsible for returning the Premises
to substantially the same physical condition as the condition existing before
such activities were performed. Harsco agrees to give prior written notice to
Lessor that it intends to perform such environmental studies of the Premises,
and further agrees to deliver to Lessor copies of all reports generated as a
result of any such environmental studies. Lessor shall deliver to Harsco,
before commencement of this Lease, true and complete copies of any
environmental studies, evaluation reports, remedial action recommendations,
proposals for environmental remediation work or reports of completed
environmental remediation work concerning the Premises in possession of
Lessor.
In addition to Harsco's above-mentioned right to terminate this Lease and
subject to the sixty (60) day cure period set forth herein, Harsco shall also
have the right to exclude any area or areas of the Premises subject to the
contamination from active use, occupancy or maintenance by Harsco under this
Lease. Harsco may so exclude any such contaminated portions of the Premises
by providing written notice thereof to Lessor. Upon request of Harsco,
Lessor agrees to execute an addendum to this Lease identifying any excluded
areas and acknowledging that Harsco has chosen not to occupy and use such
areas and that Harsco shall have no maintenance obligation or other
responsibility for such areas. Harsco shall not, however, have the right to
reduction or abatement of rent on account of exclusion of any portion of the
Premises from occupancy by
13
Harsco through Harsco's decision under this paragraph 23. At Harsco's option
and expense, Harsco may also physically secure any excluded areas by
installing fencing or other physical barriers. At Lessor's option, any such
fencing or physical barriers shall be removed by Harsco at termination of
this Lease.
24. OPTION TO PURCHASE. Lessor hereby grants to Harsco the exclusive
and irrevocable option to purchase the Premises, which may be exercised by
Harsco at any time during the initial three (3) year Term of the Lease, but
shall be effective only on any of the anniversary dates of this Lease
occurring during said three (3) year Term, namely, October 31, 1994, October
31, 1995 or October 31, 1996. Under this option to purchase, the purchase
price for the Premises shall be: (i) One Million Five Hundred Thousand and
00/100 ($1,500,000.00) Dollars if Harsco gives notice during the first year
of the initial Term and exercises the option effective October 31, 1994; or
(ii) One Million Three Hundred Thousand and 00/100 ($1,300,000.00) Dollars,
if Harsco gives notice during the second year of the initial Term, and
exercises the option effective October 31, 1995; or (iii) One Million One
Hundred Thousand and 00/100 ($1,100,000.00) Dollars, if Harsco gives notice
during the third year of the initial Term and exercises the option effective
October 31, 1996. Harsco may exercise the option by giving written notice
thereof to Lessor at any time during the initial three (3) year Term of the
Lease. Within thirty (30) days following Harsco's notice of exercise of the
option to purchase, the parties shall execute a written agreement of sale of
the Premises, which shall be prepared by Harsco and shall be subject to the
approval of Lessor as to compliance with the terms and conditions contained
in this paragraph 24, and shall include the following terms and other terms
which are deemed necessary and are mutually approved by the parties and which
are not inconsistent therewith:
(a) Closing to be held at the Premises or at another mutually
convenient location on or before a date which is thirty
(30) days following the effective date of Harsco's notice of
exercise of the option, which effective date is the anniversary
date of this Lease next immediately subsequent to the date the
notice exercising the option to purchase is delivered to Lessor.
(b) Conveyance by special warranty deed of good and marketable fee
simple title to the Premises (which shall also be insurable by
a title insurance company selected by Harsco at regular rates),
free and clear of liens and encumbrances and subject only to
applicable zoning and land use laws and ordinances and to
easements, conditions, restrictions and reservations of record,
none of which shall, in Harsco's reasonable judgment, impair
the use or value of the Premises as an industrial facility or
threaten the continued use and existence of any improvement on
the Premises.
(c) State and local Realty Transfer Taxes to be paid in equal shares
by the parties.
(d) Payment of the purchase price in full in the form of immediately
available United States funds at closing.
14
(e) Harsco to remain liable for the payment of rent and other sums
payable under this Lease on a per diem basis through the date of
closing.
(f) Lienable municipal utilities and real property taxes to be
prorated between the parties as of the date of closing, with
county and township taxes to be prorated on a calendar year basis
and school taxes to be prorated on the basis of a July 1st to
June 30th fiscal year. Provided however, all such utilities
and taxes for which Harsco is obligated under this Lease to pay
during the Term of this Lease shall continue to represent
obligations of Harsco.
(g) The deed to be prepared at Lessor's expense, with Harsco to pay
for recording of the deed.
(h) At Harsco's option and expense, a current survey of the Premises
may be made and the legal description in the deed of conveyance
shall conform to such survey.
If Harsco exercises its rights to any one or more of the four one (1)
year extension terms provided for in paragraph 5 of this Lease, the exclusive
and irrevocable option to purchase granted under this paragraph 24 shall be
available to Harsco during the extended term of this Lease. The purchase
price at any time during any of the extension terms shall be One Million One
Hundred Thousand ($1,100,000.00) Dollars. Harsco may give notice of exercise
of the option to purchase at any time during any extension term. As provided
hereinabove, Harsco and Lessor shall execute a contract of sale including the
above specified terms within thirty (30) days following Harsco's notice of
exercise of the option to purchase. Said contract of sale shall also provide
that closing of the purchase and sale shall be held on or before a date which
is sixty (60) days following the date of Harsco's notice of exercise of the
option to purchase. On and after November 1, 1996, which is the beginning of
the first available extension term and so long as Harsco has exercised an
extension term which is then effective, and even if the Lease is not then in
the last of the extension terms which has been exercised by Harsco, there
shall be no restriction whatsoever on the date, effective date and closing
date of and under Harsco's exercise of the option to purchase. At all such
times, Harsco, having exercised the option to purchase, shall be entitled to
close the transaction within sixty (60) days following its notice of exercise
of the option, without restriction or limitation to any particular dates or
anniversary dates occurring during any of the extension terms.
In all cases of purchase of the Premises by Harsco, this Lease shall
terminate on the date of closing.
25. NON-LIMITATION OF REMEDIES. The rights and remedies granted to
Lessor in this Lease, or otherwise existing at law or equity, may be
exercised concurrently, successively, or in the alternative, at Lessor's
discretion.
26. WAIVER OF BREACH. No waiver of a breach of any of the covenants or
conditions of this Agreement of Lease shall be construed to be a waiver of
any succeeding breach
15
of the same or any other covenant or condition.
27. NOTICE. All notices required or permitted to be given under this
Lease shall be given by United States certified mail, postage prepaid, with
return receipt requested, addressed to the proper party, at the following
addresses, or at such other address either party shall provide in a notice
complying with this Paragraph:
IF TO HARSCO: HARSCO CORPORATION
350 POPLAR CHURCH ROAD
CAMP HILL, PA 17011
ATTN: DEREK C. HATHAWAY, PRESIDENT AND CHIEF OPERATING
OFFICER
IF TO LESS0R: BRIER HILL STEEL COMPANY, INC.
P.O. BOX 76
BROWNSVILLE, PA 15417
ATTN: JAMES R. SNYDER, VICE PRESIDENT
All such notices shall be effective upon receipt or ninety six (96) hours
following their deposit in the United States certified mail, as above
provided, whichever first occurs.
28. SURRENDER OF PREMISES. Upon the expiration or earlier termination
of this Lease, Harsco shall return the Premises to Lessor in substantially
the same condition as the Premises were at the commencement of this Lease,
ordinary wear and tear excepted. All fixtures, equipment, and improvements
(except for Harsco's trade fixtures and equipment) attached to or built into
the Premises by or for Harsco, shall be and remain the property of Lessor.
Harsco shall remove Harsco's personal property and trade fixtures and
equipment, and shall repair any damages to the Premises caused by removal of
trade fixtures and equipment attached to or built into the Premises.
29. TIME IS OF THE ESSENCE. Time is agreed by Lessor and Harsco to be
of the essence of each provision of this Lease.
30. GOVERNING LAW. The construction of this Lease and the rights and
remedies of Lessor and Harsco, shall be governed by the laws of the
Commonwealth of Pennsylvania. This Lease shall be interpreted as if drafted
jointly by and for the parties, and not as if drafted solely or primarily by
or for either party.
31. SEVERABILITY. If any Term or provision of this Lease or application
thereof to any person or circumstance be held invalid, the remainder of the
terms or provisions of this Lease shall not be affected thereby and, to this
end, the parties hereto agree that the terms and provisions of this Lease are
severable.
32. ENTIRE AGREEMENT. This Lease constitutes the sole and only
agreement of
16
the parties hereto and supersedes any prior understandings or written or oral
agreements between the parties respecting the within subject matter.
33. MODIFICATION. No amendment, modification, alteration or rescission
of the terms hereof shall be binding, unless the same be in writing, dated
subsequent to the date hereof and duly executed by the parties hereto.
34. SUCCESSOR'S BOUND. The provisions of this Agreement of Lease shall
be binding upon and inure to the benefit of the respective successors and
assigns of Lessor and Harsco.
35. RECORDING. At the request of either party, the other party agrees
to execute and acknowledge a memorandum of this Lease, and cooperate in
recording of the same in the public real estate records of Fayette County,
Pennsylvania. Any such memorandum shall be in a form mutually satisfactory to
Lessor and Harsco and shall include appropriate notice that Harsco holds
options to purchase the Premises under this Lease and to extend the Term.
The costs of preparing the memorandum and recording same shall be paid by the
party requesting its execution and recording. Upon expiration or termination
of this Lease, Harsco shall, upon request by Lessor, execute and acknowledge
a recordable document giving appropriate notice of termination of this Lease
and extinguishment of Harsco's option to purchase the Premises.
IN WITNESS WHEREOF, Lessor and Harsco, intending to be legally bound,
have executed this Lease on the day and year first above written.
ATTEST: LESSOR:
BRIER HILL STEEL COMPANY
/s/ Authorized Signatory BY: /s/ James R. Snyder
----------------------------- ---------------------------------
ATTEST: HARSCO CORPORATION
/s/ Paul C. Coppock BY: /s/ Derek C. Hathaway
----------------------------- ---------------------------------
Paul C. Coppock Derek C. Hathaway
V.P., General Counsel & Secretary President & Chief Operating
Officer
17
LEASE NOVATION AGREEMENT
THIS AGREEMENT is entered into by and between
Harsco Corporation, a Delaware Corporation with offices at 350 Poplar
Church Road, Carnp Hill, Pennsylvania 17011-8888 (hereinaher called
'Harsco'), and
Brier Hill Steel Company, Inc., a Pennsylvania Corporation, having offices
at P.O. Box 386, Route 40, Brier Hill, Pennsylvania 15415 (hereinafter
called 'Lessor'), and
United Defense, L.P., a Delaware limited partnership, with offices at P.O.
Box 15512, York, Pennsylvania, 17405-1512.
WHEREAS, on 1 November 1993, Harsco and Lessor entered into a lease of
certain property located in North Union Township, Fayette County, consisting
of 40.94 acres of land, which premises are more fully described in the said
lease (hereinafter called the 'Lease'), and
WHEREAS, pursuant to paragraph 21 of the Lease, Harsco has now assigned the
Lease to an entity consisting of Harsco's BMY-Combat Systems and FMC
Corporation's defense contracting business, and
WHEREAS, the parties to the Lease now wish to effect a novation, as required
by paragraph 21,
NOW THEREFORE, the parties hereto agree as follows:
1. Harsco hereby fully and completely delegates its duties and assigns its
rights and obligations under the Lease to United Defense, L.P. and, as a
consequence, hereby relinquishes any and all rights or benefits arising
thereunder.
2. United Defense, L.P. acknowledges and accepts Harsco's delegation and
assignment of the Lease and agrees to perforrn all Harsco's obligations
and accepts all Harsco's liabilities thereunder.
3. Lessor hereby acknowledges and accepts said delegation and assignrnent and
remises, releases and quit claims Harsco from any further duties,
obligations or liabilities of any kind under the Lease.
4. Delete from the preamble the reference to 'Harsco Corporation, a Delaware
Corporation, having offices at 350 Poplar Church Road, Camp Hill,
Pennsylvania, 17011,' and substitute therefor, 'United Defense, L.P., a
Delaware limited partnership, with offices at One Wolps Church Road, York,
Pennsylvania 17405-1512.'
5. The parties hereto agree that all rents already paid under the Lease shall
be credited to United Defense, L.P., and that United Defense, L.P. shall
be liable only for the
outstanding balance of rents owed and payable under paragraph 4 of the
Lease for the remainder of the Term and for the term of any options
executed by United Defense, L.P., as provided for in paragraph 5 of
the Lease.
6. Delete all references thereafter to 'Harsco' and substitute therefor
'United Defense, L.P.'
7. Paragraph 27, Notices, is hereby modified as follows: delete the reference
to Harsco and substitute therefor, 'United Defense, L.P., P.O. Box 15512,
York, PA 17405-1512, ATTN: Legal Department.'
8. All other provisions of the Lease shall remain unchanged.
9. This Agreement and the statements, terms and conditions contained herein
shall inure to the benefit of, and may be relied upon by, each of the
three parties hereto, together with their respective legal representatives,
successors and permitted assignees, and shall be binding upon the three
parties hereto, and their respective legal representatives, heirs,
personal representatives, successors and assigns.
10. The Lease and this Agreement together contain the entire understanding of
the parties with respect to the subject matter hereof and supersede any
prior understanding or written or oral agreements by and between the three
parties hereto.
HARSCO CORPORATION ATTEST:
By:/s/ Authorized Signatory /s/ Authorized Signatory
---------------------------- ---------------------------
BRIER HILL STEEL COMPANY, INC. ATTEST:
By:/s/ James R. Snyder /s/ Authorized Signatory
---------------------------- ---------------------------
UNITED DEFENSE, L.P. ATTEST:
By:/s/ Authorized Signatory /s/ Authorized Signatory
---------------------------- ---------------------------
LEASE MODIFICATION
THIS AGREEMENT made and entered into this 17 day of June 1996, BY AND BETWEEN
United Defense, L.P. (hereinafter referred to as 'United Defense, L.P.'),
a Delaware limited partnership, with offices at P.O. Box 15512, York,
Pennsylvania 17405-1512, and
Brier Hill Steel Company, Inc. (hereinafter referred to as 'Lessor'),
whose address is P.O. Box 386, Route 40, Brier Hill, Pennsylvania 15415.
WITNESSETH:
WHEREAS, on l November 1993, Harsco Corporation (hereinafter 'Harsco') and
Lessor entered into a Lease of certain property located in North Union
Township, Fayette County, consisting of 40.94 acres of land, which Premises
are more fully described in the said lease (hereinafter called the 'Lease');
and
WHEREAS, in or about March of 1994, Harsco, Lessor and United Defense, L.P.
entered into a Lease Novation Agreement, whereby Lessor consented to Harsco's
assignment of the Lease to United Defense, L.P. in substitution for Harsco;
and
WHEREAS, in the Summer of 1995, Lessor added approximately one thousand six
hundred square feet to the existing improvements on the Premises, as a result
of which on October l, l995 United Defense, L.P. started paying Lessor, and
Lessor started accepting from United Defense, L.P., a total monthly rent of
$24,025.33; and
WHEREAS, United Defense, L.P. and Lessor now wish to amend and modify the
said Lease to reflect the aforesaid increase in the square footage of total
manufacturing space under roof at the Premises; and
WHEREAS, United Defense, L.P. and Lessor also wish to amend and modify the
said Lease further to reflect their desire to increase the number of one year
lease renewal options available to United Defense, L.P. from four separate
one year options to seven separate one year options at a new rental rate per
square foot; and
WHEREAS, United Defense, L.P. and Lessor also wish to amend and modify the
said Lease further to reflect their desire to increase the number of options
to purchase to Premises to match the increased number of lease renewal
options;
NOW THEREFORE, United Defense, L.P. and Lessor agree as follows:
1. Delete the nurnber '175,000' between the words 'containing' and 'square
feet' in the tenth line of the opening recitation on page one of the
Lease, and insert in lieu thereof the number '176,600'.
2. Delete the number, 'Eight Hundred and Forty Thousand and 00/100
($840,000.00) Dollars' in paragraph 4, 'RENT' and insert in lieu thereof,
'Eight Hundred Forty-Eight Thousand Nine Hundred Ninety-Five and 88/100
($848,995.88) Dollars'.
3. Insert in the first sentence of paragraph 4, 'RENT', after the phrase,
'. . . in the amount of Twenty Three Thousand Three Hundred Thirty Three
and 33/100 ($23,333.33) Dollars each, . . .' the following, '. . . from
November 1, 1993 through September 1, 1995, and in the amount of Twenty
Four Thousand Twenty-Five and 33/100 ($24,025.33) Dollars each, from
October 1, 1995 through October 1, 1996, . . .'
4. Delete paragraph 5, 'OPTION TO RENEW', and substitute in lieu thereof the
following new paragraph 5:
'Provided United Defense, L.P. is not in default hereunder, Lessor hereby
extends to United Defense, L.P. seven (7) separate options to extend and
renew this Lease for seven (7) separate, additional terms for one (1) year
each, at the identical terms and provisions set forth herein, except that the
rent shall be as hereinafter set forth in Table I. If United Defense, L.P.
chooses to exercise any of such options, United Defense, L.P. must do so by
written notice given to Lessor no less than sixty (60) days prior to
expiration of the Term or any then effective renewal term of this Lease.
Subject only to the giving of timely notice to Lessor, United Defense, L.P.
shall be permitted to exercise its option at any time for any number of the
consecutive renewal terms permitted hereunder. For instance, United
Defense, L.P. may deliver a notice specifically exercising both the first and
second renewal terms at any time on or before sixty (60) days prior to
expiration of the first year of the Term. Each permitted renewal term shall
run from November 1 of the applicable year to October 31 of the following
year. The rent reserved for each one (1) year renewal term shall be as
follows in Table I, and shall be payable without demand in advance, in the
monthly installments stated hereinbelow. Such rental installments shall be
paid on the first day of each and every month during any renewal term.
References hereinafter to 'the term' shall include, if applicable, any of the
renewal terms which have been exercised and obtained by United Defense, L.P.
under this paragraph.
'Lease rates for the option terms, if exercised, are as follows:
Table I
Option Annual Rate/ Monthly
Number Lease Term Sq. Foot Annual Rent* Installment
1 1 Nov 96 - 31 Oct 97 $1.75 $309,050.00 $25,754.17
2 1 Nov 97 - 31 Oct 98 $1.75 $309,050.00 $25,754.17
3 1 Nov 98 - 31 Oct 99 $1.90 $333,540.00 $27,961.67
4 1 Nov 99 - 31 Oct 00 $1.90 $333,540.00 $27,961.67
5 1 Nov 00 - 31 Oct 01 $1.90 $333,540.00 $27,961.67
6 1 Nov 01 - 31 Oct 02 $2.00 $353,200.00 $29,433.33
7 1 Nov 02 - 31 Oct 03 $2.00 $353,200.00 $29,433.33
*The 'Annual Rent' is the product of the 'square feet' stated in paragraph 1
of the Lease, times the 'Annual Rate/Sq Foot' stated in Table I of the Lease.
5. In paragraph 24, 'OPTION TO PURCHASE', insert the following words or
phrases in the provision beginning near the bottom page 17 of the Lease,
which provision opens with the words, 'If United Defense, L.P. exercises
its rights to any one or more . . .'
a. Between the words 'the' and 'four' in the first sentence (page
17) insert the word 'first', such that the provision shall read, in
part, '. . . one or more of the first four one (1) year extension
terms . . .'
b. Between the words 'the' and 'extension' in the second sentence
(page 18) insert the words 'first four', such that the provision
shall read, in part, '. . . at any time during any of the first four
extension terms . . .'
c. Between the second and the third sentences insert the following
sentences:
'If United Defense, L.P. exercises its rights to any one or more
of the next three one (1) year extension terms provided for in
paragraph 5 of this Lease, the exclusive and irrevocable option to
purchase granted under this paragraph 24 shall be available to United
Defense, L.P. during the extended term of this lease. The purchase
price at any time during any of the next three extension terms shall
be One Million Three Hundred Fifty Thousand ($1,350,000.00) Dollars.'
d. At the end of paragraph 24, 'OPTION TO PURCHASE', insert the
following Table II:
Table II
If Option to Purchase is The Purchase Price for the
Exercised During Lease Term Premises shall be
Basic Term Year 1 1 Nov 93 - 31 Oct 94 $1,500,000.00
Basic Term Year 2 1 Nov 94 - 31 Oct 95 $1,300,000.00
Basic Term Year 3 1 Nov 95 - 31 Oct 96 $1,100,000.00
Option Term 1 1 Nov 96 - 31 Oct 97 $1,100,000.00
Option Term 2 1 Nov 97 - 31 Oct 98 $1,100,000.00
Option Term 3 1 Nov 98 - 31 Oct 99 $1,100,000.00
Option Term 4 1 Nov 99 - 31 Oct 00 $1,100,000.00
Option Term 5 1 Nov 00 - 31 Oct 01 $1,350,000.00
Option Term 6 1 Nov 01 - 31 Oct 02 $1,350,000.00
Option Term 7 1 Nov 02 - 31 Oct 03 $1,350,000.00
IN WITNESS WHEREOF, the parties intending to be legally bound have executed
this Agreement by signing below.
BRIER HILL STEEL COMPANY, INC. UNITED DEFENSE, L.P.
/s/ James R. Snyder /s/ Peter C. Woglom
------------------------------ ----------------------------------------
Name Name
Vice President V.P. & G.M. UDLP Ground Systems Division
------------------------------ ----------------------------------------
Title Title
June 4, 1996 June 17, 1996
------------------------------ ----------------------------------------
Date Date
/s/ Authorized Signatory /s/ Authorized Signatory
------------------------------ ----------------------------------------
Attest Attest
40.94 Acres of Land (North Union Township, PA) Lease - Brier Hill Steel Co. and Harsco Corp.
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