LEASE
THIS LEASE is made as of June 30, 1998 between PW INVESTMENT LLC, a
Wisconsin limited liability company ("Landlord") and TRAK INTERNATIONAL, INC., a
Delaware corporation("Tenant").
DATA SHEET
The following terms shall have the meanings set forth in this section,
unless otherwise specifically modified elsewhere in this Lease:
(1) "Facility": Approximately 63,800 square foot office/manufacturing
facility located at 000 Xxxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxx consisting of
the Building and the Land, as set forth in Exhibit A.
(2) "Land": The real property on which the Building is situated consisting
of approximately 4 acres and an additional nine (9) acres located to the south
of the Facility, more particularly described in Exhibit A.
(3) "Building": The approximately 63,800 rentable square foot building
situated on the Land.
(4) "Premises": The area outlined on the Floor Plan of the Building
attached as Exhibit B. For purposes of this Lease, the Premises shall be deemed
to contain 44,800 rentable square feet of space (32,000 square feet of
manufacturing space and 12,800 square feet of office space).
(5) "Commencement Date": July 15, 1998 or such earlier or later date as
provided in Section 2.2.
(6) "Expiration Date": July 14, 2002, unless otherwise extended or
terminated as provided in this Lease.
(7) "Term": Four (4) years from the Commencement Date, as may be extended
or terminated as provided in this Lease. Tenant shall have two (2) options to
extend the Term for three (3) years each following the Expiration Date.
(8) "Permitted Uses": Manufacturing and testing of construction equipment
and related accessories, service training and product display and general
office.
(9) "Base Rent": "Base Rent": $219,350.00 per year, payable in equal
monthly installments of $18,279.16 in advance, adjusted as provided in this
Lease.
(10) "Tenant's Percentage": 88.19%.
(11) "Security Deposit": $0.
(12) Addresses for notices, consents, and payments:
Landlord: Tenant:
PW Investment LLC TRAK International, Inc.
c/o Xxxx Xxxxx Real Estate Corp. d/b/a Compact Technologies
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000 Xxxx Xxxxxxxxxx, Xxxxxxxxx 00000
-1-
Article 1. PREMISES
1.1 Demise. Landlord leases to Tenant and Tenant rents from Landlord the
Premises and the Land, for the Term and in accordance with the provisions of
this Lease.
1.2 Landlord's Title; Covenant of Quiet Enjoyment. Landlord warrants that
it owns the Facility free and clear of any easements or other encumbrances or
restrictions that might impair Tenant's rights under this Lease. As long as no
uncured Event of Default (defined below) exists and the Lease is in full force,
Landlord covenants that Tenant shall peaceably and quietly enjoy the Premises
free from any claims of Landlord or persons claiming through Landlord, subject
to the provisions of the Lease.
1.3 Utilities. Tenant shall pay for all utilities or services furnished to
the Premises or used by Tenant, including water, sewer, gas, electricity, fuel,
light, heat, power and cable television, whether determined by separate metering
(which Landlord may provide at Landlord's option and expense) or billed by
Landlord to Tenant as Tenant's Share of Operating Expenses. Landlord shall not
be liable for any interruption or failure in the supply of utilities to the
Premises. To the extent Tenant has control of the thermostat regulating the
level of heat in the Premises, Tenant shall maintain a sufficient level of heat
in the Premises to prevent freezing and other damages to the Premises and the
Facility.
1.4 Signs. Tenant may, at Tenant's expense, install and maintain one sign
at the entry to the Premises identifying Tenant and any other permitted
occupants as the occupants of the Premises. The appearance and location of the
sign must conform, in Landlord's reasonable judgment, with Facility standards.
Installation and maintenance of the sign shall be subject to the provisions
governing improvements and alterations to the Premises below. Landlord approves
Tenant's signs in existence as of the date of this Lease.
1.5 Common Areas. Tenant's use and occupancy of the Premises shall include
the reasonable nonexclusive use of the "Common Areas," defined as the parking
areas, service roads, sidewalks, landscaped areas, lobbies, atriums, elevators,
stairways, corridors, restrooms and other areas so designated by Landlord within
the Facility. Tenant shall not encumber or obstruct the Common Areas, nor allow
them to be obstructed or encumbered, nor place anything in the Common Areas
without Landlord's prior consent.
1.6 Facility Systems. Landlord may install, use, maintain, repair and
replace pipes, cables, conduits, plumbing, vents and telephone, electric and
other wires and other items in the Premises to the extent Landlord deems
appropriate for the proper operation and maintenance of the Facility. Except in
the case of an emergency, Landlord shall give Tenant at least 24 hours prior
notice to the installation, maintenance, repair or replacement of facility
systems pursuant to this Section 1.6 and Landlord shall use its best efforts to
complete such work without material interruption of Tenant's operations.
1.7 No Easements. No implied easements are granted by this Lease. Landlord
may close any portion of Building or Land areas to the extent as may, in
Landlord's opinion, be necessary to prevent a dedication of or accrual of rights
in those areas to any person or the public.
1.8 Landlord's Access. Landlord shall have access to the Premises at all
reasonable times on 24 hours prior notice, and at any time in an emergency, for
-2-
inspection, showing for lease or sale, performing maintenance and repairs and
for all other purposes contemplated elsewhere in this Lease.
Article 2. TERM
2.1 Commencement Date. The Term shall begin on the Commencement Date
specified in the Data Sheet. This Lease shall be null and void if Landlord fails
to purchase the Premises and Land and obtain all necessary governmental
approvals of the Permitted Uses on or before July 31, 1998.
2.2 Delayed or Early Possession.
(a) If Landlord fails to deliver possession by the Commencement Date
set forth in the Data Sheet, Tenant's obligation to pay Base Rent and Additional
Rent (defined below; referred to collectively with Base Rent as "Rent") shall
not commence until possession is delivered. However, this Lease shall remain in
full force and the Expiration Date shall not be modified. Landlord shall not be
subject to any claims or liability for failure to deliver possession of the
Premises on the Commencement Date set forth in the Data Sheet.
(b) If Tenant is given and accepts possession of the Premises before
the Commencement Date set forth in the Data Sheet, the Term and all Tenant's
obligations under this Lease shall begin on the date possession is accepted, but
the Expiration Date shall not be modified.
2.3 Expiration Date. The Term of this Lease shall end on the Expiration
Date specified in the Data Sheet.
2.4 Options to Extend. Tenant shall have two (2) options to extend the Term
for a period of three (3) years each. Tenant shall exercise its options to
extend by providing Landlord with written notice at least six (6) months prior
to the expiration of the then current Term. The Term, if extended, shall be on
the same terms and conditions set forth in this Lease, including annual
adjustment to Base Rent and Additional Rent.
2.5 Rent Prorations. In any partial month or year during the Term, or if
Tenant is unable to operate its business in the Premises in the manner and on
each day as required under this Lease due to fire or other casualty or
condemnation of any part of the Facility, Rent for the partial month, year or
the time affected by Tenant's inability to operate shall be prorated on a daily
basis.
Article 3. USE
3.1 Permitted Uses. Tenant shall use the Premises only for Permitted Uses
and for no other purpose without Landlord's prior consent, which may be withheld
in Landlord's reasonable discretion.
3.2 Exclusive Uses. Landlord may grant other occupants of the Facility
exclusive rights to engage in particular uses at the Facility, provided such
uses do not impair the Permitted Uses granted to Tenant pursuant to this Lease.
3.3 Compliance with Law, Etc. Tenant shall not commit at the Facility or
permit on the Premises any (a) violation of law (including, without limitation,
the Americans With Disabilities Act) or private restriction; (b) public or
private nuisance; (c) act or condition in the Premises that would invalidate or
conflict with
-3-
any insurance policy covering the Facility, the Premises or property in either
or make insurance unavailable or more expensive; (d) waste; or (e) other act or
thing that could injure the reputation of the Facility or disturb any other
occupant of the Facility.
3.4 Signs. Tenant shall not place on the Premises signs, lettering,
displays, advertising or pictures visible from outside the Premises (including
on windows or doors) without Landlord's prior approval, which shall not be
unreasonably withheld.
3.5 Locks. Tenant shall not change any locks in the Premises without
Landlord's prior consent. This provision shall not apply to Tenant's safes or
other areas maintained by Tenant for the safety and security of money,
securities, negotiable instruments, confidential business information, trade
secrets and practices or other valuables.
3.6 Floor Loads. Tenant shall not use the Facility in any manner that would
exceed recommended floor load limits.
3.7 Notice of Conditions. Landlord gives Tenant exclusive control of the
Premises and shall have no obligation to inspect the Premises. Tenant shall
promptly report to Landlord any defective condition in the Facility known to
Tenant. If Tenant fails to report any known defective condition, Tenant shall be
responsible to Landlord for any liability or expense (including reasonable
attorney's fees) incurred by Landlord that would not have been incurred had
Tenant promptly reported the defective condition to Landlord.
Article 4. BASE RENT
4.1 Base Rent. Tenant shall pay to Landlord, without set off, deduction or
demand, Base Rent, as adjusted from time to time, in monthly installments in
advance on or before the first day of each month.
4.2 Base Rent Adjustment. Commencing on July 15, 2000 and the same day each
year thereafter (each an "Adjustment Date"), including any extension of time,
Base Rent shall be adjusted to be an annual amount equal to the Base Rent
payable by Tenant immediately preceding the Adjustment Date plus three percent
(3%) of the Base Rent then in effect.
Article 5. ADDITIONAL RENT
5.1 Definition of "Taxes".
(a) For purposes of this Lease, "Taxes" shall mean the following
items:
(1) General real estate taxes relating to the
Facility.
(2) Installments of special assessments, including
interest, relating to the Facility, in the
smallest annual amount permitted to be paid by law
or Landlord's mortgage lender or ground lessor.
(3) Personal property taxes relating to Landlord's
fixtures at the Facility or Landlord's personal
property used in connection with operation or
maintenance of the Facility.
-4-
(4) Landlord's expenses for professional and other
services (including but not limited to fees and
expenses of consultants, attorneys, appraisers and
experts) in connection with efforts to secure
lowered real estate tax assessments on the
Facility or to resist increased assessments.
(b) Notwithstanding the foregoing definition,
(1) If any component of Taxes payable during any
calendar year relates to a period in excess of
twelve calendar months, the prorated portions
applicable to the excess periods shall be included
in Taxes for the years to which they relate rather
than the current year.
(2) Taxes shall not include any income, excess
profits, franchise, estate, inheritance,
succession, capital levy or transfer taxes, except
to the extent any of these taxes are imposed in
lieu of real estate or other ad valorem taxes.
(3) Taxes shall not include any utility connection
charges or special assessments the amount of which
is based on the use of the Premises, the number or
sizes of utility meters dedicated to the Premises
or any other characteristic specific to the
Premises rather than to the Building, the Land or
the Facility as a whole. Tenant shall pay 100% of
all such sums to Landlord as Additional Rent as
provided below.
5.2 Definition of "Operating Expenses".
(a) For purposes of this Lease, "Operating Expenses" shall mean all
expenses incurred by Landlord with respect to the ownership and operation of the
Facility as determined by Landlord in accordance with accounting principles
consistently followed. The term includes, but is not limited to, the following
expenses:
(1) Premiums for fire, extended coverage and general
liability insurance required of Landlord under
this Lease.
(2) Costs of services, supplies and materials incurred
in connection with and cleaning, maintenance,
repairs, redecorating, utilities and other
services provided by Landlord under this Lease, to
the extent not separately charged to occupants of
the Facility, excluding Tenant Improvements to be
completed by Landlord under this Lease.
(3) Electricity, telephone, cable, water, sewer, gas
and other fuel, air conditioning and other utility
charges, all to the extent provided and not
separately paid by occupants of the Facility
directly to the utility providers.
(4) Expenses allocated to the Facility under easement
agreements, service or operating agreements,
declarations, covenants or other instruments
providing for sharing of facilities or payment for
services.
-5-
(5) Reasonable charges to amortize, over their
reasonable life on a straight line basis, any and
all improvements or alterations to the Facility,
or equipment installed in it, solely for the
purpose of reducing Operating Expenses or
complying with legal or insurance requirements
that were not mandatory as of the Commencement
Date.
(6) The total cost, including compensation and fringe
benefits, of Landlord's employees whose duties are
connected with the operation and maintenance of
the Facility (but only for the portion of their
time allocable to work related to the Facility).
(7) Management fees equal to two percent (2%) of gross
collections for the Premises (Base and Additional
Rent).
(b) Notwithstanding the foregoing definition, Operating Expenses shall
not include the following expenses:
(1) Taxes, as defined above.
(2) Costs paid to Landlord's affiliates to the extent
they exceed competitive levels.
(3) Costs of any capital improvement to the Facility
or depreciation allowance or expense, except as
specifically included above.
(4) Costs of repairing or replacing any items covered
by insurance or warranty, to the extent insurance
or warranty proceeds are made available to
Landlord to pay the costs.
(5) Costs of leasing, procuring or renovating space
for occupants of the Facility.
(6) Legal expenses incident to enforcement of any
lease.
(7) Interest and principal payments on any loan or
ground rental payments.
(8) Reserves for future expenses.
(9) Bad debt expenses or reserves.
(10) Costs related to any refinancing or sale of the
Facility.
(11) Costs in connection with any dispute relating to
Landlord's title to the Facility.
(12) Costs resulting from Landlord's or its agents'
negligence, violation of law, violation of any
lease in the Facility or failure to pay any xxxx
before delinquency.
-6-
(c) If Landlord selects the accrual method of accounting rather than
the cash method for operating expense purposes, Operating Expenses shall be
deemed to have been paid when accrued.
5.3 Payment. Tenant shall pay as "Additional Rent," without set off,
deduction or demand, Tenant's Percentage of Taxes, Tenant's Percentage of
Operating Expenses and all other amounts permitted to be imposed against Tenant
under any other provision of this Lease concurrently with the next succeeding
installment of Base Rent following notice of the amount of the Additional Rent,
unless a different time for payment is specified in this Lease.
5.4 Estimate. Before the Commencement Date and during December of each year
during the Term or as soon afterward as is practicable, Landlord shall notify
Tenant of Landlord's estimate of the Additional Rent payable to Landlord under
this Article during the first year and for the following year of the Term,
respectively. On or before the first day of each month after each notice, Tenant
shall pay to Landlord 1/12th of the estimated Additional Rent for that year. If
notice is not given when required, Tenant shall continue to pay on the basis of
the prior estimate until the first day of the month after the month in which
notice is given, at which time Tenant shall pay any shortage, or receive a
credit for any overage, arising from the payments that should have been made
according to the new estimate. If at any time it appears to Landlord that the
Additional Rent payable for the current year will vary from Landlord's estimate,
Landlord shall notify Tenant of Landlord's revised estimate for that year, and
Tenant's subsequent payments during that year shall be based on the revised
estimate.
5.5 Annual Adjustment.
(a) Within 90 days after the end of each year during the Term or as
soon afterward as is practicable, Landlord shall notify Tenant of the total
Additional Rent payable to Landlord under this Article for that year. If the
Additional Rent payable exceeds the Additional Rent paid by Tenant, Tenant shall
pay the excess to Landlord within 30 days after Landlord's notice. If the
Additional Rent owed is less than the Additional Rent paid, Landlord shall
credit the overpayment toward the next accruing Rent.
(b) Tenant may, by notice to Landlord within 30 days after Landlord's
notice of Additional Rent, require an audit of Landlord's books and records
relating to Additional Rent for the preceding calendar year. Landlord shall have
the option of either providing Tenant with an audit prepared by an independent
certified public accountant or allowing Tenant access to Landlord's books and
records for purposes of performing the audit. If the audit indicates Landlord
has overstated Additional Rent by more than 5%, Landlord shall pay the cost of
the audit. Otherwise, Tenant shall pay the cost of the audit, provided that if
more than one occupant of the Facility has requested an audit, the cost shall be
divided among Tenant and the other occupants in proportion to their Percentage
Interests.
5.6 Other Adjustments.
(a) Whenever the Facility is not 100% occupied during any part of any
calendar year during the Term, Tenant's Percentage as to that part of the year
shall be adjusted to the ratio the rentable square footage of the Premises bears
to the greater of (1) the total average rentable area leased (pursuant to leases
under which the term has commenced) in the Facility for that year, or (2) 95% of
the total average rentable area of the Facility for that year.
-7-
(b) Whenever the Facility is not 100% occupied during any part of any
calendar year, the components of Taxes and Operating Expenses that vary in
relation to the level of occupancy of the Facility shall be "grossed up" as to
that part of the year so that Tenant is allocated its proportionate share of
actual Taxes and Operating Expenses.
(c) Whenever Landlord receives a property tax credit or reduced
assessment on the Facility during any part of any calendar year during the Term,
and the credit or reduction is granted under any law providing favorable tax
treatment for another tenant or tenant(s) of the Facility, Tenant's Percentage
of Excess Taxes shall be based on what Taxes would have been without the credit
or reduction.
(d) Notwithstanding anything in this Article to the contrary, Landlord
may specially assess Tenant for cost of additional electricity, utilities,
services or other items of Taxes or Operating Expenses (and shall accordingly
reduce the total amount of Taxes or Operating Expenses on which Tenant's
Percentage of Taxes or Tenant's Percentage of Operating Expense is calculated)
to the extent Tenant's use or consumption of these items warrants such an
assessment.
(e) Tenant's Percentage shall be equitably adjusted in the event of a
change in the number of rentable square feet of space in the Facility or in the
Premises.
5.7 Tenant's Personal Property Taxes. Tenant shall pay prior to delinquency
all taxes imposed on Tenant's improvements, fixtures or personal property in the
Premises. Tenant shall request a separate assessment and billing for these
taxes. If taxing authorities include in calculating Taxes on the Facility the
value of any property belonging to Tenant, Tenant shall pay all Taxes
attributable to that property directly to the taxing authorities; provided such
payment is not a duplication of Taxes separately billed and paid by Tenant.
5.8 Extension. Landlord's failure to notify Tenant of an amount due from
Tenant under this Article shall not be a waiver of Landlord's right to collect
that amount, but shall only extend the time for Tenant's payment to a date
allowing Tenant the period of time otherwise allowed for making the payment had
Landlord notified Tenant on time.
Article 6. INSURANCE, RELEASES, AND INDEMNIFICATIONS
6.1 Definitions. As used in this Article and elsewhere in this Lease:
(a) A party's "Indemnitees" are (1) its shareholders, members,
partners, venturers, beneficiaries or other principals, and (2) its directors,
officers, managers, trustees, employees, agents and other persons authorized to
act on its behalf; and
(b) A party's "Users" are (1) its Indemnitees, (2) its customers,
business associates and other invitees and licensees, and (3) in the case of
Tenant, its subtenants, and in the case of Landlord, its lessees (other than
Tenant) and their subtenants.
6.2 Landlord's Insurance.
(a) Landlord shall keep the Facility insured for Landlord's own
benefit in an amount equal to the Facility's replacement value (excluding
deductibles,
-8-
co-insurance and foundation, grading and excavation costs) against loss or
damage by fire, windstorms, hail, explosion, vandalism, malicious mischief,
civil commotion and such other risks and coverages, including rental
interruption insurance, as are now or may in the future be customarily covered
with respect to buildings and improvements similar in construction, general
location, use, occupancy and design to the Facility ("Comparable Properties").
(b) Landlord shall maintain, for its benefit and the benefit of its
managing agent (if any), general public liability insurance against claims for
personal injury, death or property damage occurring at the Facility.
(c) These insurance provisions shall not limit or modify Tenant's
obligations under any provision of this Lease. All insurance premiums paid by
Landlord with respect to the Facility shall be considered "Operating Expenses."
6.3 Tenant's Insurance.
(a) Tenant shall at its expense keep all machinery, equipment,
furniture, fixtures, personal property and business interests located at the
Premises and not belonging to Landlord insured for Tenant's benefit, in an
amount equal to the lesser of their full replacement value or insurable value,
against loss or damage by fire and such other risks as are now or may in the
future be customarily insured against by tenants in Comparable Properties
including, without limitation, windstorms, hail, explosions, vandalism, theft,
malicious mischief, civil commotion, water damage, sprinkler leakage and such
other coverage as Landlord or Tenant may deem appropriate or necessary.
(b) Tenant shall at its expense maintain general public liability
insurance for the mutual benefit of Landlord, mortgagees of the Facility,
Landlord's managing agent (if any) and Tenant against claims for personal
injury, death or property damage (including contractual liability coverage
applicable to this Lease and insuring Tenant's indemnification obligations
provided for below) occurring at the Premises, to the limits of at least
$2,000,000 in respect to the injury or death to a single person, at least
$2,000,000 in respect to any one accident and at least $5,000,000 in respect to
any property damage.
(c) Insurance policies maintained pursuant to this section shall be
written by companies reasonably satisfactory to Landlord that are licensed or
authorized to do business and in good standing in the state where the Facility
is located and have a rating issued by an insurance rating organization
(including, without limitation, A.M. Best & Company) of not less than the
second-best rating. The certificates evidencing such insurance, and renewals or
replacements at least 30 days before expiration of coverage, shall be delivered
to Landlord with evidence satisfactory to Landlord that the premiums have been
paid. The policies shall not be terminable without 30 days prior written notice
to Landlord. Any such coverage shall be deemed primary to any liability coverage
secured by Landlord.
6.4 Releases.
(a) Insurance policies maintained pursuant to this Article for loss or
damage by fire or other risks shall permit releases of liability as provided
below and include waiver of subrogation clauses as to Tenant and Landlord
respectively. Landlord and Tenant waive and release and discharge each other
from all claims or demands arising out of damage to destruction or loss of use
of property caused by fire or other casualty arising due to any act or omission
of the other or its Users and agree to look
-9-
only to their respective insurance coverages in the event of such a loss.
Notwithstanding the foregoing releases, if any damage to the Facility results
from any act or omission of Tenant or its Users and any of Landlord's loss is
deductible, Tenant shall pay to Landlord the deductible amount (not to exceed
$5,000 per event). This paragraph shall not affect Tenant's repair obligations
under other provisions of this Lease.
(b) Except for claims arising out of Landlord's or its User's
intentional acts or omissions, to the extent not prohibited by law, Tenant
waives all claims, and Landlord and its Indemnitees shall not be liable to
Tenant, for damage during the Term to Tenant's property or business, including
consequential damages, occurring at the Facility. This paragraph shall apply
especially, but not exclusively, to damage caused by water, snow, frost, steam,
refrigerators, sprinkling devices, air conditioning apparatus, excessive heat or
cold, falling plaster, broken glass, sewage, gas, odors, noise, bursting or
leaking of pipes or plumbing fixtures or the flooding of basements or other
subsurface areas and shall apply equally whether damage results from the
negligent acts or omissions of Landlord's Users or any other persons and whether
damage results from any of the foregoing causes or otherwise.
(c) All property in the Facility belonging to Tenant or its Users
shall be at Tenant's sole risk. Except for the intentional acts of omissions of
Landlord or its Users, Landlord shall not be liable for damage, theft or loss
affecting this property and Tenant shall defend and indemnify Landlord and its
Indemnitees against claims and liability for injuries to this property.
(d) Landlord does not warrant that any of the services Landlord may
supply will be free from interruption and these services are subject to all
laws, ordinances, regulations and guidelines of governmental authorities. Tenant
acknowledges that any one or more of these services may be suspended by reason
of accident, repairs, alterations, improvements or causes beyond Landlord's
reasonable control. Any such interruption of service shall not be deemed an
eviction or disturbance of Tenant's use and possession of the Premises or any
part of it or render Landlord liable to Tenant for damages by abatement of Rent
or relieve Tenant from performance of its obligations under this Lease.
6.5 Indemnifications.
(a) Subject to Paragraph (c), Tenant shall indemnify Landlord and
Landlord's Indemnitees against any and all damages claimed to be suffered by
third parties (including reasonable attorneys' fees and all other costs and
liabilities incurred in connection with any action or proceeding brought with
respect to such a claim) arising from any (1) default by Tenant under this
Lease, (2) condition inconsistent with any representation or warranty made by
Tenant under this Lease, except to the extent caused by Landlord or its Users,
(3) act or negligence by Tenant or its Users, or (4) accident, injury or damage
in or about the Premises or the Facility to the extent caused by Tenant or its
Users. If an action or proceeding is brought against Landlord or any of its
Indemnitees with respect to such a claim, Tenant, on notice from Landlord, shall
resist or defend the action or proceeding by counsel reasonably satisfactory to
Landlord.
(b) Subject to Paragraph (c), Landlord shall indemnify Tenant and
Tenant's Indemnitees against any and all damages claimed to be suffered by third
parties (including reasonable attorneys' fees and all other costs and
liabilities incurred in connection with any action or proceeding brought with
respect to such a claim) arising from any (1) default by Landlord under this
Lease, (2) condition
-10-
inconsistent with any representation or warranty made by Landlord under this
Lease, except to the extent caused by Tenant or its Users, (3) act or negligence
by Landlord or its Users, or (4) accident, injury or damage in or about the
Facility to the extent caused by Landlord or its Users. If an action or
proceeding is brought against Tenant or any of its Indemnitees with respect to
such a claim, Landlord, on notice from Tenant, shall resist or defend the action
or proceeding by counsel reasonably satisfactory to Tenant.
(c) Whenever Landlord and Tenant are jointly responsible (whether with
each other or with others) for damages suffered by a third party, their
indemnification obligations under this Section shall be limited to their
respective percentages of responsibility for the damages.
(d) These indemnification obligations do not apply to the extent
Landlord and Tenant have released each other from claims elsewhere in this
Lease.
(e) These indemnification obligations shall survive expiration or
earlier termination of this Lease.
Article 7. HAZARDOUS MATERIALS
7.1 Definitions. For purposes of this Lease:
(a) "Hazardous Material" is used in its broadest sense and means any
asbestos, petroleum based products, pesticides, paints and solvents,
polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium compounds and
other chemical products and any substance or material defined or designated as a
hazardous or toxic substance, material, waste, or other similar term, by any
Environmental Law.
(b) "Environmental Law" is used in its broadest sense and means any
federal, state, or local statute, ordinance, regulation, or court or
administrative order affecting the Facility presently in effect or promulgated
in the future, as amended from time to time, regulating hazardous or toxic
substances, including but not limited to the following statutes:
(1) Resource Conservation and Recovery Act of 1976, 42
U.S.C.ss.6901 et seq.
(2) Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 40 U.S.C.ss.1801 et
seq.
(3) Clean Air Act, 42 U.S.C. xx.xx. 74017626.
(4) Water Pollution Control Act (Clean Water Act of
1977), 33 U.S.C.ss.1251 et seq.
(5) Insecticide, Fungicide and Rodenticide Act
(Pesticide Act of 1987), 7 U.S.C.ss.135 et seq.
(6) Toxic Substances Control Act, 15 U.S.C.ss.2601 et
seq.
(7) Safe Drinking Water Act, 42 U.S.C.ss.300(f) et
seq.
(8) National Environmental Policy Act (NEPA) 42
U.S.C.ss.4321 et seq.
-11-
(9) Refuse Act of 1899, 33 U.S.C.ss.407 et seq.
7.2 Tenant's Covenants. Tenant shall not cause or permit any Hazardous
Material to be brought on, kept, stored or used in or about the Facility by
Tenant or its Users, unless the Hazardous Material is necessary for Permitted
Uses and will at all times be used, kept, stored and disposed of in a manner
that complies at all times with all Environmental Laws and will not create an
undue risk to other occupants of the Building, giving consideration to the
nature of the Building. Tenant shall promptly notify Landlord of any possible
contamination of the Facility that becomes known to Tenant. Tenant shall
indemnify and hold Landlord harmless from and against any and all claims,
actions, damages, liabilities and costs (including reasonable attorneys' fees)
incurred by Landlord or its agents arising out of or from the contamination by
Hazardous Materials of the Premises or Facility or violation of Environmental
Laws which is permitted or caused by Tenant, its agents or invitees after the
date of this Lease, except to the extent such contamination or violation is
caused by Landlord, its agents or third parties.
7.3 Remediation. In addition to Tenant's other obligations under this
Lease, if the presence of any Hazardous Material at the Facility caused or
permitted by Tenant results in any contamination of the Facility or the
violation of law, Tenant shall be responsible for the cost of all actions
necessary to return the Facility to the condition existing prior to the
introduction of the Hazardous Material or the violation of law. Landlord shall
have the option of taking such actions at Tenant's expense or requiring Tenant
to do so itself. If Landlord requires Tenant to take any such action, any work
required on the Facility shall be treated as if it were an alteration to the
Facility subject to Article 9 below. Further, Tenant shall on demand pay
Landlord the amount, if any, by which the Facility's value has decreased as a
result of the contamination or violation. Tenant's obligations under this
Paragraph shall survive expiration or earlier termination of this Lease.
7.4 Representation by Landlord. Landlord represents that to Landlord's
knowledge, without independent investigation, the Premises and the Facility are
free from contamination by Hazardous Materials. Landlord shall not cause or
permit any Hazardous Material to be brought on, kept, stored or used in or about
the Facility in violation of any Environmental Laws. Landlord shall indemnify
and hold Tenant harmless from and against any and all claims, actions, damages,
liabilities and costs (including reasonable attorneys' fees) incurred by Tenant
or its agents arising out of or from the contamination by Hazardous Materials of
the Premises or Facility or violation of Environmental Laws which occurred prior
to the date of this Lease, except to the extent such contamination or violation
was caused by Tenant or its agents.
Article 8. MAINTENANCE AND REPAIRS
8.1 Facility. Landlord shall maintain the exterior and structural
components of the Facility (including heating, air conditioning, electrical and
plumbing systems), the Common Areas and any signage shared by Tenant and others
in good order and repair and in compliance with applicable law. Landlord may,
upon reasonable prior notice (except in the case of an emergency, no notice
shall be required), temporarily close off Common Areas or entries to the
Facility or temporarily suspend services or amenities to facilitate maintenance
and repair work. Landlord shall schedule and perform maintenance and repairs so
as to minimize interference with Tenant's use of the Premises.
8.2 Premises. Tenant shall at its expense keep the Premises and Tenant's
signage (if any) in as good order, condition and repair as existed when the
Tenant
-12-
Improvements were completed, reasonable wear and tear and damage from casualties
against which Landlord is required to insure excepted. Notwithstanding any
provisions of this Lease to the contrary, unless caused by a casualty against
which Landlord is required to insure, Tenant shall at its expense promptly
repair to Landlord's satisfaction all damage to the Facility caused by any act
or omission of Tenant or its Users. All repairs shall be in quality and class at
least equal to the original work and shall comply with all applicable laws.
8.3 Refuse. Tenant shall keep the Premises clean inside and out and remove
all refuse resulting from Tenant's operations. Tenant shall segregate refuse as
Landlord may reasonably require for recycling purposes, keep it in covered
containers and have it removed regularly to designated areas at the Facility.
Article 9. IMPROVEMENTS AND ALTERATIONS
9.1 Consent Required. Tenant shall not make any improvements or alterations
to the Premises ("Work") without Landlord's prior consent, which shall not be
unreasonably withheld. Landlord may condition its consent on its receipt of
copies of contracts, plans, specifications, permits and licenses, and on third
party indemnifications, performance bonds and evidence of insurance reasonably
satisfactory to Landlord. Tenant shall defend and indemnify Landlord against any
and all claims and liability connected with the Work.
9.2 Labor. All Work shall be done by contractors or mechanics reasonably
satisfactory to Landlord. Tenant shall do no Work of a nature or in a manner
likely to result in a labor dispute or materially interfere with operation of
the Facility.
9.3 Compliance and Quality. All Work shall comply with all applicable laws
and insurance requirements (including, without limitation, worker's compensation
insurance laws and requirements) and shall be performed in a good and
workmanlike manner. All materials shall be new and of at least as good a quality
as those installed in the Premises on the Commencement Date. Tenant shall permit
Landlord to inspect construction operations in connection with the Work.
Landlord's approval and inspection of the Work shall not constitute an
assumption of responsibility for the accuracy and sufficiency of Tenant's plans
and specifications, or their compliance, or the compliance of any Work, with
applicable law, all of which shall be entirely Tenant's responsibility.
9.4 Expenses. Tenant shall pay the cost of all Work and the cost of
restoring the Facility to the condition that existed before commencement of the
Work. On completion of the Work, Tenant shall furnish Landlord with contractor's
affidavits, full and final lien waivers and receipted bills covering all labor
and materials.
9.5 Liens. Tenant shall notify all contractors that their lien rights
attach only to Tenant's interest in the Premises, and Landlord shall be entitled
to post a notice in the Premises to that effect during any Work. Tenant shall
cause to be discharged or bonded over, within 10 business days after filing, any
construction lien claim filed against the Facility for work or materials claimed
to have been performed for or furnished to or on behalf of Tenant.
9.6 Title to Improvements. All improvements constructed by Tenant on the
Premises shall be Landlord's property.
9.7 Removal of Improvements. Landlord, by notice to Tenant, may require
Tenant to remove at Tenant's expense (1) at any time, any improvements made by
Tenant in the
-13-
Premises and not included in Tenant's Improvements or consented to by Landlord
pursuant to this Article; (2) on termination of this Lease or Tenant's right of
possession, any improvements made by Landlord or Tenant whose removal is
necessary to permit releasing; and (3) in either case, to repair any damage
caused by installation or removal; provided, however, Tenant may remove only
those items specified in Landlord's notice and any items that are Tenant's
property.
9.8 Survival of Obligations. Tenant's obligations under this Article shall
survive expiration or earlier termination of this Lease.
Article 10. ASSIGNMENT AND SUBLETTING
10.1 Notice to Landlord. Tenant may, with Landlord's prior consent, (a)
assign this Lease or any interest under it by voluntary act, operation of law or
otherwise; (b) sublet the Premises or any part of it; or (c) permit the use of
the Premises by any parties other than Tenant, its previously approved assignees
and subtenants and these parties' Users. Tenant shall notify Landlord of
Tenant's intent, as of a stated date (the "Transfer Date") at least 30 days
after notice, to assign this Lease or sublet part or all of the Premises for the
balance or part of the Term. Tenant's notice shall state the consideration for
and all other terms of the proposed assignment or sublease and the name and
address of the proposed assignee or subtenant and shall include a complete copy
of the proposed assignment or sublease.
10.2 Landlord's Consent. Landlord's consent to a proposed assignment or
subletting may be withheld in Landlord's reasonable discretion. If Landlord does
not consent within 10 business days after Tenant's notice, Landlord's consent
shall be deemed withheld.
10.3 Recapture. Landlord may, by notice to Tenant within 10 business days
after Tenant's notice of a proposed assignment or subletting, recapture the
space described in Tenant's notice and terminate this Lease with respect to the
recaptured space as of the Transfer Date. If this Lease is terminated with
respect to less than the entire Premises, Rent shall be equitably adjusted as of
the date of recapture with due consideration of the size, location, type and
quality of the part of the Premises remaining after recapture.
10.4 Landlord's Expenses. Tenant shall promptly on demand pay Landlord's
reasonable attorneys' fees and other expenses incident to a review of any
documentation related to any proposed assignment or sublease. If this Lease is
terminated as to all or any part of the Premises pursuant to this Article,
Tenant shall at its expense discharge any commission due and owing as a result
of any proposed assignment or subletting, whether or not the applicable part of
the Premises is recaptured and rented by Landlord to the proposed occupant or
anyone else.
10.5 Deemed Assignments. An assignment within the meaning of this Article
shall be deemed to have occurred on a cumulative Change in Ownership (defined
below) of more than 50% of the equity interests in Tenant since the date of this
Lease or on a sale of all or substantially all of Tenant's assets, regardless of
whether such sale includes an assignment of Tenant's rights under this Lease or
a sublease of the Premises. "Change in Ownership" means (a) if Tenant is a
partnership (which term shall include joint ventures) or limited liability
company, any change in the partners or members of Tenant, or (b) if Tenant is a
corporation whose outstanding voting stock is not listed on a recognized
securities exchange, any transfer of the shares of stock of Tenant. However, a
Change in Ownership does not include changes in partners or members
-14-
or transfers of stock for estate planning purposes to a family member, a trust,
a family partnership, or any similar estate planning transfer.
10.6 No Release. Tenant and any and all guarantors of this Lease shall
remain fully liable under this Lease and their guaranties, respectively, despite
any sublease or assignment.
10.7 Documentation. Subtenants shall agree in a form reasonably
satisfactory to Landlord to comply with this Lease to the extent of the space
sublet. Tenant shall deliver to Landlord promptly an executed copy of each
sublease or assignment and an agreement of compliance by each subtenant.
Landlord's consent to any assignment or sublease shall not be a waiver of
Landlord's rights under this Article as to any subsequent assignment or
sublease.
10.8 Financing Statements. Tenant shall not enter into, execute, or deliver
any financing statement or security agreement that can be given priority over
any mortgagee given by Landlord or its successors.
10.09 Effect of Noncompliance. Any sale, assignment, mortgage, transfer or
sublease of the Premises by Tenant not in compliance with this Article shall be
void.
Article 11. DAMAGE
11.1 Repairs. If damage to the Facility renders a material part of the
Premises unusable for Permitted Uses and the damage can be substantially
repaired within 120 days using standard working methods, then unless this Lease
is terminated pursuant to this Article, Landlord shall promptly and diligently
(and in any event no later than 120 days after the date of the damage) restore
the damaged areas (excluding any improvements not included in the Tenant
Improvements) to substantially the same condition that existed before the
damage. If the damage was not caused or contributed to by any act or omission of
Tenant or its Users, Rent shall be apportioned on a daily and square footage
basis and abated proportionately until repairs are completed. If Landlord does
not timely complete repairs, Tenant may terminate this Lease by notice to
Landlord within 30 days after the deadline for completion, unless repairs are
completed before notice of termination. However, Tenant may not terminate this
Lease if its willful misconduct caused the damage unless Landlord is not
promptly and diligently repairing the Facility.
11.2 Termination.
(a) Either party may terminate this Lease if damage to the Facility
renders a material part of the Premises unusable for Permitted Uses and the
damage cannot be substantially repaired within 120 days using standard working
methods.
(b) Landlord may also terminate this Lease, provided Landlord also
terminates all similarly affected leases in the Facility, if (1) more than 33%
of the Facility is damaged and Landlord elects not to repair the damage; (2) a
mortgagee of the Facility does not allow adequate insurance proceeds to repair
damage to the Facility; (3) damage to the Facility is not covered by insurance
Landlord is required to maintain under this Lease; (4) Landlord in good xxxxx
xxxxxxx its insurance claims relative to the damage for less than the amount
required to make repairs; or (5) the Facility is damaged during the last 12
months of the Term.
(c) To terminate the Lease under this Section, a party must notify the
other party within 30 days after discovery of the event allowing termination and
before
-15-
the damage is repaired, specifying a termination date at least 30 but not more
than 60 days after the notice date.
Article 12. EMINENT DOMAIN
12.1 Definition. "Taken" means acquisition by the power of eminent domain
or any similar governmental power or any other acquisition in lieu of
condemnation.
12.2 Termination.
(a) If the entire Premises, or portions of the Facility sufficient to
render the entire Premises unusable for Permitted Uses, are permanently taken,
this Lease shall terminate as of the date title vests in the condemning
authority or the date the Premises become unusable, whichever occurs first.
(b) If any part of the Facility is permanently taken and Landlord
elects to restore the Facility in a manner that materially alters the Premises,
Landlord or Tenant may terminate this Lease. If sufficient portions of the
Facility are permanently taken so as to materially interfere with Tenant's use
of the Premises for Permitted Uses, Tenant may terminate this Lease. To
terminate the Lease under this Paragraph, a party must notify the other party
within 30 days after the date title vests in the condemning authority,
specifying the termination date at least 30 but not more than 60 days after the
notice date.
12.3 Damages. All damages awarded for any taking of the fee and leasehold
interests in the Facility shall belong to Landlord. Tenant may prove in any
proceedings and receive a separate award for any other condemnation awards
available under applicable law.
12.4 Restoration. If a partial taking of the Facility occurs and this Lease
is not terminated pursuant to this Article, Rent and Tenant's Percentage shall
be adjusted based on the remaining size, character, and value of the Premises
and the Facility and Landlord shall restore the Facility (excluding any
improvements in the Premises that are not included in the Tenant Improvements)
as nearly as reasonably possible to a complete architectural unit with all due
diligence, but only to the extent of available condemnation proceeds.
Article 13. MORTGAGEES AND PURCHASERS
13.1 Priority. Tenant's rights under this Lease are and shall always be
subordinate to any and all mortgages, deeds of trust, ground leases and other
security instruments (each a "Mortgage") now or in the future encumbering the
Facility or any part of it and to amendments, replacements, renewals and
extensions of Mortgages, provided that Tenant's use and occupancy of the
Premises shall not be disturbed by any mortgagee, trustee, ground lessor or
other secured party (each a "Mortgagee") under any Mortgage as long as no
uncured Event of Default (defined below) exists and the Lease is in full force.
This clause shall be selfoperative and no further instrument of subordination
shall be required, but Tenant shall execute such further assurance, containing
such reasonable provisions, as Landlord or any Mortgagee may request. Any
Mortgagee may elect that this Lease shall have priority over its Mortgage and on
notification of this election by a Mortgagee to Tenant, this Lease shall be
deemed to have such priority whether the Lease is dated before or after the date
of the Mortgage.
-16-
13.2 Estoppel Certificates. Tenant shall, from time to time on Landlord's
written request, execute, acknowledge and deliver to Landlord or its designee a
written certification stating: (a) the date this Lease was executed and the date
it expires; (b) the date Tenant entered into occupancy of the Premises; (c) the
amounts of each component of Rent and any Security Deposit and the date to which
each component of Rent has been paid; (d) that this Lease is unmodified and in
full force and effect (or if modified that the Lease as modified is in full
force and effect and stating the modifications); (e) that Landlord is not in
default under this Lease (or if in default the specific nature of the default);
and (f) other matters as may be reasonably requested by Landlord or any
Mortgagee or prospective purchaser of the Facility. Tenant shall modify the
foregoing certification to reflect accurately the status of this Lease. Any
prospective purchaser or Mortgagee may rely on any certification delivered
pursuant to this paragraph. If Tenant fails to respond within 10 business days
after request by Landlord for a certification, Tenant shall be conclusively
deemed to have admitted the accuracy of any information Landlord supplies to a
prospective purchaser or Mortgagee to the effect that this Lease is in full
force and effect, that there are no uncured defaults in Landlord's performance,
that any Security Deposit is as stated in this Lease and that not more than one
month's Base Rent has been paid in advance, unless Landlord has actual knowledge
to the contrary.
13.3 Mortgagee's Right to Cure. Provided a Mortgagee notifies Tenant in
writing of its address, Tenant shall give the Mortgagee, by certified or
registered mail, a copy of any notice of default served on Landlord and agrees
that the Mortgagee may, but need not, cure any such defaults.
13.4 Transfer of Landlord's Interest. If Landlord's interest in the
Facility or any part of it is transferred (other than transfers for security
purposes only, but including transfers via foreclosure), Landlord shall have no
responsibility for the Landlord's obligations accruing after the transfer, and
the transferee shall have no responsibility for Landlord's obligations accruing
before the date of transfer, including liability for any Security Deposit
(unless the transferee receives a credit from Landlord for any Security
Deposit). Tenant shall attorn in writing to the transferee, provided the
transferee assumes, in writing, the future Landlord's obligations under the
Lease.
Article 14. ADDITIONAL OBLIGATIONS OF LANDLORD
14.1 Compliance with Law, Etc. Landlord shall ensure that the Facility
complies with applicable laws, private restrictions and insurance requirements,
provided that if any noncompliance is caused by Tenant or its Users, Tenant
shall pay the cost of eliminating the noncompliance.
14.2 Services. Landlord shall provide the following services to Tenant:
(a) Air conditioning and heating service for comfortable occupancy of
the Premises.
(b) Electricity consistent with the electricity provided to comparable
properties used for purposes similar in nature to the Permitted Uses.
(c) Water for drinking, lavatory and toilet purposes from the regular
Building supply through existing fixtures (or fixtures installed by Tenant with
Landlord's prior consent) at temperatures in accordance with applicable law.
-17-
(d)Maintenance of exterior plantings and removal of snow, ice, debris
and unsafe conditions from the exterior of the Facility and the adjacent
sidewalks.
(e) Sewer service for sewage emanating from plumbing fixtures located
in the Premises.
14.3 Tenant Improvements. Landlord shall complete the improvements
described on the attached Exhibit C ("Tenant Improvements") within 30 days after
the Commencement Date.
Article 15. RIGHTS RESERVED TO LANDLORD
Landlord reserves the following rights exercisable without notice or
liability to Tenant and without effecting a constructive or actual eviction or
disturbance of Tenant's use or possession or giving rise to any claim for set
off or abatement of Rent:
15.1 Identification of Facility. Except as otherwise provided elsewhere in
this Lease, to change the name, address, number or designation by which the
Facility is commonly known.
15.2 Service Contractors. To reasonably restrict and control any service in
or to the Premises including, but not limited to, provision of sign painting and
lettering.
15.3 Control of Facility. Provided Tenant's access to and use of the
Premises for Permitted Uses is not materially impaired, to reduce, increase,
enclose or otherwise change the size, number and location of buildings, layout
and nature of the Facility and the other tenancies, premises and buildings
included in the Facility, construct additional buildings and additions to any
building, increase the size of the Facility by adding parcels of land to it,
create additional rentable areas through use or enclosure of Common Areas or
otherwise, convey portions of the Facility and reduce the size or restrict
Tenant's use of the Common Areas.
Article 16. SURRENDER OF PREMISES
16.1 Condition of Premises.
(a) Tenant shall notify Landlord at least 30 days before vacating the
Premises to arrange for a joint inspection of the Premises. If Tenant fails to
give notice and arrange an inspection, Landlord's inspection after Tenant
vacates the Premises shall be conclusively deemed correct for purposes of
determining Tenant's responsibility for repairs to the Premises.
(b) On or before the Expiration Date or the date of earlier
termination of this Lease, Tenant shall, at its expense, remove all property
owned by or in the custody of Tenant from the Premises; all property not timely
removed shall be deemed abandoned at Landlord's option. Tenant appoints Landlord
its agent to remove its property from the Premises on termination of this Lease
and to cause transportation and storage of Tenant's property for Tenant's
benefit, all at Tenant's sole cost and risk, and Landlord shall not be liable
for any damage to or loss or theft of any of the property.
(c) On the Expiration Date or on earlier termination of this Lease,
Tenant shall peaceably surrender the Premises in good order and in a condition
-18-
consistent with Tenant's repair obligations under this Lease, and shall
surrender at the place then fixed for payment of Rent all keys for the Premises
and shall inform Landlord of combinations of any vaults, locks and safes left at
the Premises.
(d) Tenant shall reimburse Landlord on demand for any expenses
incurred by Landlord with respect to removal, transportation or storage of
abandoned property or with respect to restoring the Premises to the condition
required on surrender.
16.2 Holdover.
(a) If Tenant remains in possession of the Premises after expiration
or earlier termination of this Lease without the execution of a new lease, but
with Landlord's consent, Tenant shall be deemed to be occupying the Premises
from monthtomonth, subject to all the provisions of this Lease as applicable to
a monthtomonth tenancy, except that Landlord may adjust Base Rent according to
Landlord's then current rental rate schedule for new tenants in the Facility.
(b) If Tenant remains in possession of the Premises after expiration
or earlier termination of this Lease without the execution of a new lease and
without Landlord's consent, Tenant shall be deemed to be occupying the Premises
without claim of right and Tenant shall pay Landlord for all costs or liability
resulting from delay in surrendering the Premises (including, without
limitation, claims made by any succeeding tenants and reasonable attorneys' fees
in connection with those claims) and in addition shall pay for each day of
occupancy an amount equal to double the daily rate of Rent immediately preceding
the holdover.
Article 17. DEFAULT AND REMEDIES
17.1 Default By Tenant.
(a) Each of the following events is an "Event of Default":
(1) Tenant fails to pay to Landlord any payments due under
this Lease when due and nonpayment continues for 10
business days after notice from Landlord.
(2) Tenant fails to perform any of Tenant's other
obligations under this Lease and nonperformance
continues for 30 days after notice from Landlord,
provided that if the nonperformance cannot be cured
within 30 days, the cure period shall be extended for
as long as reasonably necessary as long as Tenant is
diligently pursuing cure.
(3) This Lease or any of Tenant's rights under it is levied
on under any attachment or execution and the attachment
or execution is not vacated within 30 days.
(4) Tenant or any guarantor of this Lease dies, is
dissolved or becomes the subject of a petition in
bankruptcy or insolvency or for liquidation,
reorganization or involuntary dissolution or for the
appointment of a receiver or trustee of all or any of
its property (which such petition or appointment is not
dismissed or vacated within thirty (30) days) or makes
an assignment for the benefit of its creditors or
petitions for or enters into an arrangement with its
creditors.
-19-
(5) Tenant vacates or abandons the Premises for 30
consecutive days.
(b) If an event occurs that, with the giving of notice and the passage
of time, would be an Event of Default, Landlord may, without notice and in
addition to all other rights and remedies available to Landlord by law or other
provision of this Lease, exercise any or all of the following remedies:
(1) If any Rent is not paid on time, charge Tenant 5% of
the amount of the overdue payment as liquidated damages
for Landlord's extra expense in handling the past due
account.
(2) If any other obligation is not performed on time,
without waiving or releasing Tenant from any
obligations, perform the obligation for the account and
at the expense of Tenant.
(3) Restrain by injunction the attempted or threatened
violation of this Lease.
(c) If an Event of Default occurs, Landlord may, in addition to all
other rights and remedies available to Landlord by law or other provision of
this Lease, exercise any or all of the following remedies:
(1) Take any of the actions specified in paragraph (b)
above, to the extent not already taken.
(2) Restrain by injunction the violation of this Lease.
(3) Without legal process or notice to Tenant (except to
the extent required by applicable law), immediately
reenter the Premises, and remove all persons and
property.
(4) Terminate this Lease and recover from Tenant all unpaid
Rent, with interest at the rate set forth below; and
the present value of the excess (if any) of the Rent
for the rest of the Term over the fair market rental
value of the Premises for the rest of the Term,
discounted at 2.0% below the publicly announced prime
rate of interest at Landlord's then current depository
institution.
(d) Tenant waives any and all rights of redemption or reinstatement
granted by law if Tenant is declared in default and given notice of termination
or evicted or dispossessed for any cause or if Landlord obtains possession of
the Premises by reason of Tenant's violation of this Lease or otherwise.
(e) Tenant shall indemnify Landlord against all damages Landlord may
incur by reason of termination of this Lease including, but not limited to, loss
or diminution of rents; costs of recovering, restoring, and repairing the
Premises; and costs of renting the Premises to another tenant (including
brokers' commissions, reasonable attorneys' fees, and rent concessions).
17.2 Default by Landlord.
(a) If Landlord fails to perform any of Landlord's obligations under
this Lease and nonperformance continues for 30 days after notice from Tenant,
Landlord shall
-20-
be in default, and Tenant may (but shall not be required) to cure the default.
If Tenant exercises this right, Landlord shall reimburse Tenant on demand for
reasonable costs incurred by Tenant in curing the default. This right shall be
in addition to any other right or remedy Tenant has by law, except the right to
terminate this Lease, which Tenant waives.
(b) Anything in this Lease to the contrary notwithstanding, Landlord's
obligations, representations and warranties in this Lease are not personal
obligations, representations and warranties or binding on any of Landlord's
assets except Landlord's interest in the Facility, as it may from time to time
be encumbered. No personal liability arising from this Lease or Landlord's
obligations under it shall be asserted or enforceable against Landlord or its
partners, coventurers, shareholders, directors or officers or their respective
heirs, legal representatives, successors or assigns.
17.3 Interest. Any amounts owing from one party to the other under this
Lease and not paid within any applicable grace period after the date due shall
bear interest from the date due until paid at the lesser of (a) 4% over the
publicly announced prime rate of interest at Landlord's then current depository
institution, if different), adjusted from time to time as this prime rate
changes or (b) the highest rate of interest permitted in the state where the
Facility is located for similar obligations.
17.4 Attorneys' Fees. In any litigation or alternative dispute resolution
brought by reason of an alleged default under this Lease, the losing party shall
pay court (or alternative forum) costs and all the other party's expenses,
including reasonable attorneys' fees (including allocated costs of in-house
attorneys, if any).
17.5 Forbearance. A party's failure to insist on the strict performance of
any of the other's obligations under this Lease, or to exercise any option under
this Lease, shall not be deemed to be a waiver of the obligation or option,
regardless, with respect to Landlord, of Landlord's knowledge of the preceding
breach at the time of acceptance of Rent.
17.6 Waiver of Jury Trial and Counterclaims. The parties waive trial by
jury in any action, proceeding or counterclaim brought by either of them against
the other (except for personal injury or property damage) on all matters
connected with this Lease, their relationship as landlord and tenant, Tenant's
use or occupancy of the Premises and any statutory or other remedy. Tenant shall
not interpose any noncompulsory counterclaims in a summary proceeding or other
action based on termination or holdover.
17.7 No Accord and Satisfaction. No payment or receipt by either party of a
lesser amount than the monetary obligations due under this Lease shall be deemed
to be other than on account of the earliest obligations due, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and either party may accept any
check or payment without prejudice to its right to recover the balance of the
obligations or pursue any other remedy. No receipt for money from any person
after termination of this Lease, service of any notice, commencement of any suit
or final judgment for possession of the Premises shall reinstate, continue or
extend the Term or affect any such notice, demand or suit or imply consent for
any action for which a party's consent is required, unless specifically agreed
by that party in writing. Any amounts received by either party may be allocated
to any specific amounts due from the other as the recipient determines.
-21-
Article 18. TENANT'S OPTION TO PURCHASE AND RIGHTS OF FIRST REFUSAL
18.1 Option to Purchase. Upon providing Landlord one (1) year prior written
notice, Tenant shall have the option to purchase the Facility at the expiration
of the then current Term upon the following terms and conditions:
(a) The purchase price shall be an amount equal to the average net
operating income for the Facility over the term of the Lease divided by a
capitalization rate of eleven percent (11%).
(b) Landlord shall convey the Facility by Warranty Deed, excepting
from the warranty of title only municipal and zoning ordinances and agreements
entered under them, recorded easements for the distribution and utilities and
municipal services, recorded building and use restrictions and covenants,
general taxes levied in the year of closing, installments of special assessments
due after the date of closing, rights of parties in possession of any part of
the Facility, matters that would be disclosed by a survey of the Facility and
matters that are Tenant's responsibility under this Lease ("Permitted
Encumbrances").
(c) Except for compliance with Landlord's maintenance and repair
obligations under this Lease (if any), Landlord shall be deemed to have made no
warranties or representations with respect to the physical condition of the
Facility in connection with the conveyance. Tenant acknowledges that Landlord
would not have agreed to the purchase price set forth above except in connection
with an "as is" sale, and that its rights under this Lease shall provide
sufficient opportunity to examine the physical condition of the Facility.
(d) Closing of the conveyance of the Facility pursuant to this option
shall occur within 60 days after the expiration of the then current Term. In
addition to the Warranty Deed described above, Landlord shall execute any and
all documents necessary to record the Deed and such documents as may be
necessary to cause Tenant's title insurance company to insure against matters
that are not Permitted Encumbrances, including matters covered by "gap" title
insurance. To the extent they do not accrue to Tenant under this Lease, all
income and expenses in connection with the Facility shall be prorated as of the
closing date. Landlord shall pay the real estate transfer fee on the conveyance,
any and all obligations resulting in encumbrances on title that are not
Permitted Encumbrances, and the recording and filing fees for instruments
eliminating any and all such encumbrances. Except as otherwise may be agreed,
Tenant shall pay the recording fees for the Deed, all title insurance charges,
and all costs of any other due diligence performed by Tenant (including the
costs of any survey, inspection, or environmental assessment).
18.2 Right of First Refusal and Commitment to Lease.
(a) Except during the last year of the Term, as may be extended from
time to time, provided Tenant is not in default and this Lease is in full force,
whenever Landlord receives a bona fide offer to lease the 19,000 square feet of
available space located in the mezzanine of the Building, Landlord shall offer
the space to Tenant on the terms and conditions contained in this Lease, except
the rental rate shall be the lesser of (1) $1.00 per square foot on a triple net
basis, or (2) the rental rate contained in the offer. Tenant shall have 10
business days from receipt of Landlord's notice within which to notify Landlord
of its acceptance of the offer.
(b) Provided Tenant is not in default and this Lease is in full force,
upon vacation by the current tenant Garden Way, Inc. Tenant on the terms and
conditions
-22-
contained in this Lease, except the rental rate shall be $4.00 per square foot
on a triple net basis.
Article 19. MISCELLANEOUS PROVISIONS
19.1 No Reservation. Submission of this Lease for examination does not
constitute a reservation or option to lease the Premises. This Lease becomes
effective as a lease only on execution and delivery by Landlord and Tenant.
Landlord's employees and agents have no authority to make or agree to make a
lease or other agreement.
19.2 Persons Bound. This Lease binds and benefits Landlord and Tenant and
their successors and assigns. If multiple parties execute this Lease as Tenant,
their liability shall be joint and several.
19.3 Interpretation.
(a) This Lease shall be interpreted according to and governed by the
internal laws of the state in which the Facility is located.
(b) Captions to the Articles and Sections of this Lease are not a part
of the Lease and shall have no effect on the interpretation of any part of it.
(c) The relationship of Landlord and Tenant created by this Lease
shall not constitute or be construed as a partnership, principalagent
relationship, joint venture or other cooperative enterprise.
(d) If any provision of this Lease is proven to be illegal or
unenforceable, it shall be deemed modified to the minimum extent and for the
minimum amount of time necessary to eliminate the illegality or
unenforceability. If the intent of any provision of this Lease specifically
indicates, the parties' respective obligations under such provision shall
survive expiration or earlier termination of the Lease.
(e) This Lease contains all agreements between Landlord and Tenant
relating to its subject matter. Any and all prior agreements or understandings
are superseded. Each party acknowledges that neither the other party nor its
agents have made any promises or representations in connection with this Lease
except as set forth in this Lease and agrees that no claim or liability shall be
asserted for, and neither party shall be liable for, breach of any promise or
representation not stated in this Lease.
19.4 Managing Agent. Landlord's rights and remedies under this Lease or
provided by law may be executed in Landlord's own name or in the name of its
managing agent (if any) and all legal proceedings for the enforcement of rights
or remedies may be commenced and prosecuted to final judgment and execution in
Landlord's own name or in the name of its managing agent.
-23-
19.5 Dates; Force Majeure.
(a) Whenever this Lease requires payment of money on demand or without
specifying a deadline, payment shall be required by the next date an installment
of Rent is due or within 10 business days, whichever is later.
(b) Whenever this Lease requires performance of an obligation other
than payment of money on demand or without specifying a deadline, performance
shall be required within 30 days, or within a reasonable time if such
performance cannot be accomplished within 30 days.
(c) Except where otherwise indicated, time is of the essence of this
Lease. However, if weather conditions, natural disaster, fire, war, civil
unrest, labor unrest, or similar circumstances beyond a party's reasonable
control prevent timely performance of an obligation other than payment of money,
the time for performance shall be extended by the amount of time performance is
prevented.
19.6 Authority. Each party warrants that it has the power and authority to
enter into this Lease, and shall furnish to the other on reasonable demand
evidence of this power and authority.
19.7 Memorandum. Either party shall, at the request of the other, execute a
recordable memorandum of this Lease, to be prepared and recorded at the expense
of the requesting party.
19.8 Brokers. Each party warrants that it has not engaged any broker,
finder or other person (except as previously disclosed in writing, if any) who
would be entitled to any commission or fees in respect of the negotiation,
execution or delivery of this Lease. Each party shall be solely responsible for
compensating its own broker (if any), and shall defend and indemnify the other
against any claims, expenses or liabilities incurred by the other as a result of
any brokerage arrangements or agreements made or alleged to have been made by or
on behalf of the indemnifying party.
19.9 Early Termination; Amendment. Whenever any provision of this Lease
terminates the Lease before the Expiration Date, or changes any other provision
of the Lease, the termination or change shall promptly be confirmed by written
agreement between Landlord and Tenant. However, until the parties execute such
an agreement, the Lease shall nevertheless be deemed terminated or amended.
Otherwise, this Lease may not be modified except in writing signed by Landlord
and Tenant, and by an mortgagee of the Facility if the mortgagee so requires.
19.10 Notices and Consents. All notices and consents required or permitted
under this Lease must be in writing served either personally, by registered or
certified mail, postage prepaid, or by overnight courier service, and shall be
deemed given when personally delivered, postmarked or given to the courier
service. The parties' respective addresses for notices, consents, and payments
are set forth in the Data Sheet. Either party may change its address for
notices, consents and payments at any time by notice to the other.
-24-
19.11 Exhibits. The following Exhibits are attached to and by reference
incorporated in this Lease:
(a) Exhibit A: Site Plan of Facility/Legal Description of Land
(b) Exhibit B: Floor Plan of Premises
(c) Exhibit C: Description of Tenant Improvements
LANDLORD: TENANT:
PW INVESTMENT, LLC TRAK INTERNATIONAL, INC.
By: Xxxx Xxxxx Real Estate Corp.,
Manager By: /s/ Xxxxxx X. Xxxxx
---------------------------
By: /s/ Xxxx X. Xxxxx
---------------------------- Attest: /s/ Xxxxxxxx Xxxxxx
Xxxx X. Xxxxx, President -----------------------
-25-
