SUBLEASE
THIS SUBLEASE is made and entered into this ____ day of March, 1997, by
and between COMARK, INC., an Illinois corporation, having an address at 000
Xxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 ("Sublessor") and MICROWAREHOUSE,
INC., a Delaware corporation, having an address at 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000 ("Sublessee").
I. RECITALS
A. Sublessor is the lessee under that certain Lease dated March 29, 1991
(the "Underlying Lease"), made by and between Sublessor, as tenant, and American
National Bank and Trust Company of Chicago, not individually but solely as
Trustee under Trust Agreement dated March 29, 1991 and known as Trust Number
113698-08 ("Lessor"), as landlord, relating to certain premises commonly known
as 000 Xxxxxxxx Xxxxx and 000 Xxx Xxxxx, Xxxxxxxxxxxx, DuPage County, Illinois
(the "Leased Premises") and situated in the Xxxxxxxxx Corporate Center (the
"Center"). The Underlying Lease was amended by a First Amendment to Lease dated
as of November 18, 1991, made by and between Sublessor, as tenant, and Lessor,
as landlord (the "First Amendment"). The Underlying Lease and the First
Amendment are hereinafter sometimes collectively referred to as the "Lease". A
true and complete copy of the Lease is attached hereto as Exhibit A.
B. Sublessee has requested that Sublessor sublease to Sublessee a portion
of the Leased Premises comprised of 21,939 square feet of office space commonly
known as 000 Xxxxxxxx Xxxxx, as more particularly identified on Exhibit B
attached hereto (the "Sublease Space"). Sublessor has agreed to lease the
Sublease Space to Sublessee on the terms and conditions set forth herein.
II. SUBLEASE
(a) Sublessor hereby sublets to Sublessee, and Sublessee hereby subleases
from Sublessor, the Sublease Space. Sublessee shall have the right to use in
common with Sublessor the hallways and other access ways to the Sublease Space.
Sublessee shall accept the Sublease Space in the condition existing on the date
of this Sublease. All capitalized terms used in this Sublease and not otherwise
defined herein shall have the meanings ascribed to such terms in the Lease.
(b) Sublessee shall use the Sublease Space for general office purposes
only.
(c) Sublessee shall also be given use of all modular furniture currently
in the Sublease Space, provided that Sublessee shall acquire no interest in said
modular furniture and said modular furniture shall be returned to Sublessor in
good condition (ordinary wear and tear excepted) upon the expiration or earlier
termination of this Sublease.
III. TERMS
The terms of this Sublease shall be as follows:
A. Fixed Rent. The rental for the Sublease Space shall be THIRTEEN AND
NO/100 DOLLARS ($13.00) per square foot or TWO HUNDRED EIGHTY FIVE THOUSAND TWO
HUNDRED SEVEN AND NO/100 DOLLARS ($285,207) per annum ("Base Rent"). The Base
Rent for the period commencing on March 14, 1997 and expiring March 31, 1997
shall be NINE THOUSAND FOUR HUNDRED THIRTY FIVE AND/NO 100 DOLLARS (($9435.00).
The Base Rent shall increase by 40/100 Dollars ($.40) per square foot on January
1, 1998 and again on January 1, 1999. During the first ten (10) months of the
term of this Sublease, the Base Rent shall be reduced to ONE HUNDRED NINETY FIVE
AND NO/100 DOLLARS ($195,000), as follows:
Lease Year Annual Rent Monthly Rent
---------- ----------- ------------
4/1/97 - 12/31/97 $195,000.00 $16,250.00
1/1/98 - 12/31/98 $293,982.60 $24,498.55
1/1/99 - 11/17/99 $302,758.20 $25,229.85
The Base Rent shall be payable in monthly installments, in advance, as set forth
above, on or before the first day of each month of the term of this Sublease,
payable to Sublessor at Comark, Inc., 000 Xxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxx Xxxxxxx, or at such other place as Sublessor may from
time to time designate by written notice to Sublessee.
B. Additional Rent. In addition to the Base Rent payable by Sublessee
under this Sublease, Sublessee shall also pay the following expenses under the
Lease: (i) fifty percent (50%) of the cost of all summer landscaping; (ii) fifty
percent (50%) of the cost of lawn irrigation maintenance; (iii) all water bills
levied against the Leased Premises, except when lawn irrigation is underway, in
which case Sublessee shall pay fifty percent (50%) of the water bills; (iv) all
electricity expenses over and above the sum of SEVEN HUNDRED AND NO/100 DOLLARS
($700.00) incurred on a monthly basis; (v) seventy-five percent (75%) of all gas
expenses on a monthly basis; (vi) the cost of preventative maintenance for all
heating and air-conditioning units in the Sublease Space; and (vii) all other
maintenance and operational costs and expenses chargeable to Sublessor, as
tenant, under the Lease and attributable to the Sublease Space (collectively,
the "Additional Rent"). Sublessor shall submit
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written invoices to Sublessee requesting payment of all or any portion of the
Additional Rent. Sublessee shall pay all Additional Rent within ten (10) days
from the effective date of Sublessor's invoice for the same. In the event that
Sublessor receives any refund of Additional Rent under the Lease or otherwise,
with respect to amounts paid by Sublessee for the Sublease Space, as provided
herein, then Sublessor shall promptly remit all such refunds to Sublessee. In
the event the remainder of the Leased Premises (excluding the Sublease Space) is
sublet to a third party, Sublessor and Sublessee agree to amend this Additional
Rent provision to reflect the presence of another sublessee.
C. Payment of Rent. All Base Rent and Additional Rent shall be paid by
Sublessee, in lawful money of the United States of America, without any set-off
or deduction whatsoever. All Base Rent and Additional Rent not paid when due
shall bear interest from the date due until paid at the default rate set forth
in Section 3.4 of the Lease.
D. Taxes. Included in the Base Rent of THIRTEEN AND NO/100 DOLLARS per
square foot ($13.00) is the sum of THREE AND NO/100 DOLLARS ($3.00) per square
foot ("Tax Rent") for all taxes, as "Taxes" is defined in Article VI of the
Lease, which Taxes are allocable to the Sublease Space ("Sublease Taxes"). In
the event the Tax Rent is insufficient to pay the Sublease Taxes or, in the
alternative, the Tax Rent collected is in excess of the Sublease Taxes, the
parties shall adjust the Tax Rent accordingly based on the real estate tax xxxx
issued for the immediately preceding year.
E. Term of Sublease. The term of this Sublease shall commence on March 14,
1997 and shall expire November 17, 1999, unless sooner terminated or as
otherwise provided herein.
F. Services. All services to which Sublessor is entitled under the Lease,
with respect to the Sublease Space, shall in turn be furnished to Sublessee by
Sublessor, but only to the extent such services are actually furnished by Lessor
to Sublessor. Sublessee shall pay to Sublessor all costs described in Section
8.1 of the Lease. If Lessor fails to provide any services to the Sublease Space
which Lessor is required to furnish to such space, as provided by the terms of
the Lease, then, upon written notice by Sublessee to Sublessor of such failure,
Sublessor shall, at Sublessee's expense (and using attorneys provided by
Sublessee), exercise its rights and remedies against the Lessor as provided in
the Lease or, to the extent such rights and remedies are not set forth in the
Lease, such rights and remedies as are otherwise available against Lessor in
equity or at law.
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IV. NO ASSIGNMENT
Sublessee shall not sublet or assign this Sublease in whole or in part
without the prior written consent of Sublessor and Lessor.
V. NO ALTERATIONS
Except as otherwise expressly provided in this Section V, Sublessee shall
not alter, remodel or change the Sublease Space without the prior written
consent of Sublessor which consent shall not be unreasonably withheld or
delayed. Notwithstanding anything in the preceding sentence to the contrary,
Sublessee shall be permitted, without obtaining Sublessor's consent, to (i)
paint and recarpet the Sublease Space, hang art work and shelving on the walls
thereof (provided that Sublessee shall at its expense repair all damage to such
walls caused by the removal of any such items), and to otherwise decorate the
Sublease Space, and (ii) install cabling and wiring in the Sublease Space;
provided however, that in no event shall Sublessee undertake any actions
pursuant to clause (i) or clause (ii) above in violation of Article XX of the
Lease. Any alterations so made by Sublessee shall, at the option of Sublessor,
remain at the end of the term of this Sublease and become the property of
Sublessor or Lessor, as the case may be, or be removed by Sublessee at the
expense of Sublessee so as to restore the Sublease Space to the condition
required by Section VII of this Sublease.
VI. WAIVER AND INDEMNITY.
A. Except as otherwise set forth herein, Sublessor and its partners,
affiliates, officers, directors, agents, servants and employees shall not be
liable for any damage either to person, property or business or resulting from
the loss of use thereof sustained by Sublessee or by other persons as a result
of or in any way related to (i) the condition (structural or otherwise) of the
Center or any part thereof; (ii) the occurrence of any accident or event in or
about the Center, including the Sublease Space; or (iii) the act or neglect of
Lessor, or of any tenant or occupant of the Center or of any other person,
unless caused by (y) the negligence or wilful misconduct of Sublessor or its
agents, employees or contractors or (z) the breach of this Sublease by
Sublessor. This provision shall apply particularly, but not exclusively, to
damage caused by gas, electricity, snow, ice, frost, steam, sewage, sewer gas or
odors, fire, water or by the bursting or leaking of pipes, faucets, sprinklers,
plumbing fixtures and windows, and, except as provided above, shall apply
without distinction as to the person whose act or neglect was responsible for
the damage and shall apply whether the damage was due to any of the causes
specifically enumerated above or to some other cause of an entirely different
kind. Sublessee further agrees that all
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personal property upon the Sublease Space, or upon loading docks, receiving and
holding areas, or freight elevators of the Center, shall be at the risk of
Sublessee only, and that Sublessor shall not be liable for any loss or damage
thereto or theft thereof, unless caused by the negligence or wilful acts of
Sublessor, its agents, contractors or employees or by Sublessor's breach of this
Sublease. Without limitation of any other provisions hereof, but subject to the
provisions of Section XIII hereof, Sublessee agrees to defend, protect,
indemnify and save harmless Sublessor and its partners, affiliates, officers,
agents, servants and employees from and against all liability to third parties
arising out of Sublessee's use of the Sublease Space, this Sublease or the acts
or omissions of Sublessee or its servants, agents or employees.
Sublessor shall indemnify and hold harmless Sublessee from and against all
liability to third parties arising out of events described in subsection (y) or
(z) of the immediately preceding paragraph.
B. The indemnity contained in this Section VI shall survive the expiration
or termination of this Sublease.
VII. SUBLEASE SPACE AND SURRENDER OF SUBLEASE SPACE.
Sublessee shall maintain the Sublease Space, during the term of this
Sublease, in good condition and repair, ordinary wear and fire and other
casualty (including acts of God) insured against by Sublessor excepted, failing
which Sublessor may restore the Sublease Space to such condition and Sublessee
shall pay Sublessor the cost thereof; provided that nothing contained in the
preceding clause shall be construed to require Sublessee to (i) remove any
fixtures, alterations or other improvements contained in the Sublease Space on
the date of this Sublease, or (ii) repair any damage to or violation of the
Sublease Space which exists on the date of this Sublease. Upon the expiration or
termination of this Sublease or termination of Sublessee's right of possession
of the Sublease Space, Sublessee shall return the Sublease Space to Sublessor in
the condition existing as of the commencement of this Sublease, provided,
however, that if Sublessee is not then in default, Sublessee may remove personal
property installed by Sublessee. Such removals shall be done in a good and
workmanlike manner and Sublessee shall restore the Sublease Space to a
tenantable condition. In the event possession of the Sublease Space is not
promptly delivered to Sublessor, or if Sublessee shall fail to remove all of
Sublessee's personal property, as aforesaid, Sublessor may remove any of such
property therefrom without any liability to Sublessee. All such property which
may be removed from the Sublease Space by Sublessor shall be conclusively
presumed to have been abandoned by Sublessee and title thereto shall pass to
Sublessor without any cost or credit therefor and Sublessor may,
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at its option and at Sublessee's expense, store or dispose of such property.
If Sublessee retains possession of the Sublease Space, or any part
thereof, after the expiration or termination of this Sublease (whether by lapse
of time or otherwise), Sublessee shall pay to Sublessor, during each month or
portion thereof for which Sublessee shall retain possession of the Sublease
Space or any part thereof, an amount as Rent equal to 150% of one-twelfth of the
Base Rent and 100% of one-twelfth of the Additional Rent paid by Sublessee
during the previous year herein provided. The provisions of this Section VII
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Sublessor provided herein or at law.
VIII. DUTIES OF SUBLESSEE
A. Sublessee acknowledges that this Sublease, in all terms and respects,
is subject to the provisions of the Lease; unless otherwise expressly modified
herein.
B. By executing this Sublease and to the extent applicable to the Sublease
Space and the Term of this Sublease, Sublessee agrees to be bound by the same
obligations and duties as govern Sublessor's conduct, as tenant, under the Lease
(unless such obligations and duties have been expressly modified by the terms of
this Sublease), Sublessee shall have the same rights and remedies available to
Sublessor, as tenant, under the Lease, and Sublessee agrees to perform all of
the covenants and honor all of the restrictions imposed on Sublessor, as tenant,
under the Lease.
C. By executing this Sublease, to the extent applicable to the Sublease
Space and the Term of this Sublease, Sublessor agrees to be bound by the same
obligations and duties as govern Lessor's conduct, as Landlord, under the Lease,
Sublessor shall have the same rights and remedies available to Lessor under the
Lease (including without limitation rights and remedies in the event of a
default under this Sublease or the Lease), and, subject to any limitations
expressly set forth in this Sublease, Sublessor agrees to perform all of the
covenants and honor all of the restrictions imposed on Lessor, as Landlord,
under the Lease.
D. The provisions of the Lease are by this reference incorporated into and
made a part of this Sublease as if reproduced in full herein, except that (i)
the following provisions of the Underlying Lease shall not be applicable with
respect to this Sublease: Articles I, II, III, V, VI, VII, XVI, XXIII, XXIV,
XXV, together with Section 8.2 and Exhibit A, and (ii) the following provisions
of the First Amendment shall not be applicable with respect to this Sublease:
Sections 3, 4 and 5.
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E. Sublessee covenants and warrants that Sublessee shall do no act which
would be a violation of the Lease and agrees to hold harmless, indemnify and, at
Sublessor's election, defend Sublessor (with counsel reasonably acceptable to
Sublessor) against all liability (including, without limitation, attorneys' fees
and costs) for any such act performed by Sublessee or Sublessee's agents,
employees or invitees or for any tortious or negligent act on the part of
Sublessee or Sublessee's agents, employees or invitees.
IX. NOTICE
Any notice to be given hereunder shall be deemed given and delivered when
given personally or on the second day from the date of mailing in a properly
addressed envelope, with postage prepaid, by United States certified mail.
Notices to the parties shall be addressed as follows:
Sublessor: Comark, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to: Xxxxxxx X. Xxxxxx
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Sublessee: Microwarehouse, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxx
X. SUBLESSOR'S REPRESENTATIONS AND COVENANTS
Sublessor hereby represents and warrants to Sublessee that the Lease is in
full force and effect without default on the part of Sublessor. Sublessor
covenants and warrants to Sublessee that Sublessor (i) will comply in all
material respects with all of the terms and provisions of the Lease, and (ii)
will not default in any obligation of Sublessor under the terms of the Lease
during the term of this Sublease. Sublessor further covenants and warrants to
Sublessee that Sublessor will not voluntarily enter into any agreement with the
Lessor which would result in the termination of the Lease prior to the
termination of this Sublease. Sublessor acknowledges and agrees that,
notwithstanding any other provisions contained in the Lease or in this Sublease,
Sublessee shall not have any liability with respect to any matter for the period
prior to the date possession of the Sublease Space is tendered to Sublessee,
including, without limitation, (i) the condition of the Sublease Space
(including any damage thereto and all latent defects), and (ii)
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any acts or omissions of Sublessor, including the failure by Sublessor to
perform any of its covenants and agreements contained in the Lease.
XI. UNTENANTABILITY AND EMINENT DOMAIN
Sublessee shall have the right to terminate this Sublease following the
occurrence of a fire or casualty or condemnation only to the extent that
Sublessor would have the right to terminate the Lease under Articles XIV and XV
thereof. Sublessee will give Sublessor prompt written notice of any termination
of this Sublease pursuant to the rights granted to Sublessee in this Paragraph
XI.
XII. BROKERS
Sublessee represents that Sublessee has not dealt with any broker, in
connection with this Sublease, and that insofar as Sublessee knows, no brokers
(other than Sublessor's broker disclosed below) negotiated this Lease or are
entitled to any commissions in connection therewith. Sublessee agrees to
indemnify, defend and hold Sublessor and its employees, agents, their officers
and partners, harmless from and against any claims, costs or liabilities arising
out of Sublessee's breach of this representation.
Sublessor represents that Sublessor has dealt with (and only with) Xxxxx &
Xxxxx, as Sublessee's sole broker, in connection with this Sublease, and that
insofar as Sublessor knows, no other brokers (other than Sublessee's broker
disclosed above) negotiated this Sublease or are entitled to any commissions in
connection therewith. Sublessor shall pay to such named brokers any commissions
which may be due in connection with this Sublease pursuant to separate
agreements with such brokers. Sublessor agrees to indemnify, defend and hold
Sublessee and its partners, employees, agents, their officers and partners,
harmless from and against any claims, costs or liabilities arising out of
Sublessor's breach of this representation.
The indemnities contained in this Paragraph XII shall survive the
termination of this Sublease.
XIII. SUBLESSEE'S INSURANCE.
Sublessee shall maintain at all times during the Term, fire and extended
coverage insurance insuring the leasehold improvements installed in the Sublease
Space, at Sublessee's sole cost and expense, and Sublessee's office furniture,
equipment and supplies. Sublessee shall also maintain, at all times during the
Term, commercial general liability insurance, insuring Sublessee against any
loss, liability or damage on, about, or relating to the Sublease Space, or any
portion thereof, and
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naming Sublessor as an additional insured, with limits of not less than
$1,000,000 for any single incident and not less than $3,000,000 in the
aggregate. Said policy of general liability insurance may not be terminated or
amended without thirty days prior written notice to Sublessor. Within ten days
of execution of this Sublease, Sublessee shall deliver to Sublessor certificates
evidencing its compliance with the insurance requirements set forth in this
Section XIII.
XIV. SECURITY DEPOSIT.
As additional security for the full and prompt performance by Sublessee of
all of its obligations hereunder, Sublessee shall pay to Sublessor upon
Sublessee's execution of this Sublease, a security deposit in the amount of
$25,229.85, which sum may be applied by Sublessor for the purpose of curing any
default or defaults of Sublessee under this Sublease. Sublessee shall pay to
Sublessor as security, on request by Sublessor, any amounts so used by
Sublessor. Sublessor shall not pay any interest on the security deposit and the
security deposit may be commingled by Sublessor or other funds of Sublessor. If
Sublessee has not defaulted hereunder or if Sublessor has not applied said sum
to said default, then said security deposit or any portion thereof not so
applied by Sublessor shall be paid to Sublessee within forty-five (45) days
after the expiration of this Sublease and the vacation of the Sublease Space by
Sublessee (unless Sublessee continues to occupy the Sublease Space pursuant to
Section XVIII hereof). The security deposit shall not be deemed an advance
payment of Base Rent or measure of damages for any default by Sublessee under
this Sublease, nor shall it be a bar or defense to any action which Sublessor
may at any time institute against Sublessee.
XV. STANDARDS FOR CONSENT AND APPROVAL.
The parties to this Sublease each agree that where the consent or approval
(whether written or otherwise) of a party hereto is required in connection with
any matter set forth herein, then such consent or approval shall not be
unreasonably withheld, conditioned or delayed; provided, however, that the
provisions of this Section XV shall not apply to the provisions of Section IV
hereof.
XVI. LANDLORD'S CONSENT.
Sublessor and Sublessee mutually agree and acknowledge that the consent of
Lessor to this Sublease is required and that this Sublease shall not commence or
be in full force and effect until such consent is obtained.
XVII. SIGNAGE.
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Sublessee may install signage on or about the Sublease Space, subject to
the provisions of the Lease and further subject to all applicable laws.
XVIII. RENEWAL OPTION.
Article XXIII of the Underlying Lease grants Sublessor, as tenant, the
option to extend the Term of the Lease, subject to and on the conditions set
forth in said Article XXIII (the "Renewal Option"). Sublessor hereby grants to
Sublessee an option to cause Sublessor to exercise the Renewal Option, subject
to the following:
(a) Sublessee shall give Sublessor written notice of its intent to cause
Sublessor to exercise the Renewal Option no later than thirteen (13) months
prior to the expiration of the original Term or the First Renewal Term, as
applicable;
(b) Sublessee shall be in full compliance with this Sublease and with the
Lease, as it may apply to the Sublease Space;
(c) Sublessee shall agree to amend the definition of "Sublease Space" to
include the Leased Premises, in its entirety, and this Sublease shall be amended
so that all costs and expenses (including, without limitation, all rent due and
owning under the Lease), imposed on Sublessor, as tenant, under the Lease, shall
become the sole responsibility and obligation of Sublessee;
(d) Sublessee shall deliver to Sublessor an irrevocable stand-by letter of
credit for the discounted value of the Lease for the First Renewal Term and the
Second Renewal Term; and
(e) The option granted herein is subject to the terms of Article XXIII of
the Underlying Lease.
XVIV. PARKING.
The Sublessee shall have access to 125 parking spaces, 76 of which shall
be to the immediate south-southeast of the Sublease Space and 49 of which shall
be in the northwest parking lot, all as indicated on Exhibit C attached hereto.
XVV. SUBLESSOR'S WORK.
Sublessor covenants and agrees to
(a) steam clean the carpeting on the west side of the Sublease Space, at
Sublessor's sole cost and expense;
(b) paint the west side of the Sublease Space, at a cost to borne equally
by Sublessor and Sublessee;
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(c) assist Sublessee in its application for various permits, provided that
Sublessor shall not incur any expense in so assisting Sublessee and further
provided that Sublessor makes no representations or warranties of any kind in
connection with such assistance.
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IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
March __, 1997.
SUBLESSOR:
COMARK, INC.
By ____________________________
Its: ____________________
SUBLESSEE:
MICROWAREHOUSE, INC.
By ____________________________
Its: ____________________
Agreed to, consented to and acknowledged by the undersigned as of the
_____ day of __________, 1997.
AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, as Trustee, under Trust
Agreement dated 3/29/91 and known as
Trust Number 113698-08
By_________________________
Its:__________________
2/6/97
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EXHIBIT A
THE LEASE
EXHIBIT B
THE SUBLEASE SPACE
EXHIBIT C
PARKING
