- LEASE DATA EXHIBIT -
Lease Agreement Dated: September 17, 1996. This Lease Data Exhibit is attached
to and made a substantive part of the Lease Agreement of
even date.
Landlord: Xxxxxx Properties, a Michigan limited partnership, and Gita Begin,
d/b/a Madison Office Center, 00000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx,
Xxxxxxxx 00000
Tenant: Computer Learning Centers, Inc., a Delaware corporation.
00000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000
Property: 00000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx, XX 00000
Building: Madison Office Center, 00000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx, XX 00000
Demised Premises: Approximately 19,450 Rentable Square Feet, designated as
Suite 100 in the Madison Office Center
Term: Eleven (11) years, beginning on the Commencement Date.
Commencement Date: As determined pursuant to Section 2.1 of the Lease.
Expiration Date: On the last day of the 132nd month of the Lease Term or as
determined in Section 2.2 or 2.3 or pursuant to other
relevant provisions of the Lease.
Basic Rent:
Months of Lease Annual Basic Rent Monthly
TERMS INCLUSIVE PER SQUARE FOOT BASIC RENT
See Schedule 1 to this Lease Data Exhibit for Basic Rent and abatements
Prorata Shares of Operating Expenses Increases and Real Estate Tax Increases
over Base Year: 33 1/3% for the Building as of the date of the Lease Agreement.
Use of Premises: Computer training school and/or related activities or office
use or any other use permitted under applicable law.
Notices shall be addressed to the:
Landlord: Madison Office Center
Attention: Xx. Xxxxx Xxxxxxxx
00000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Tenant: Computer Learning Centers, Inc.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxx X. O'Conor, Esquire
Xxxxxx, Flyer & Xxxxx, P.C.
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Security Deposit: Twenty-two Thousand Nine Hundred Thirty and 88/100 dollars
($22,930.88)
Brokers: Xxxxxxxx Real Estate Group, The Xxxxxx Xxxxxx Company and Barnes,
Morris, Xxxxxx & Xxxxxx
Commission Paid By: Landlord
LANDLORD: Xxxxxx Properties, TENANT: Computer Learning Centers, Inc.,
a Michigan limited a Delaware corporation
partnership
By: By:
Name: Xxxxxx X. Xxxxxx, Trustee Name:
Title: General Partner Title: ________________________________
______________
16
- SCHEDULE 1 TO LEASE DATA EXHIBIT -
BASIC RENT SCHEDULE
Subject to the other provisions of this Lease, the following is the schedule
of Basic Rent for the Demised Premises to be paid by Tenant, commencing with
the Commencement Date:
MONTHS OF LEASE TERM ANNUAL BASIC RENT MONTHLY BASIC ANNUAL BASIC
INCLUSIVE RENTABLE SQUARE FEET RENT RENT
1-48 $14.85 $24,069.38 $288,832.50
49-60 $15.90 $25,771.25 309,255.00
61-72 $16.95 $27,473.13 329,677.50
73-84 $17.41 $28,218.71 338,624.50
85-96 $17.88 $28,980.50 347,766.00
97-108 $18.36 $29,758.50 357,102.00
109-120 $18.86 $30,568.92 366,827.00
121-132 $19.37 $31,395.54 376,746.50
(A) Basic Rent shall xxxxx beginning in the sixth month and extending
for the lesser of (i) one year, or (ii) the number of months obtained by
dividing Tenant's Improvement Costs (as defined below) by $40.50 and
multiplying the result by 12 (the "Abatement Period"). For example, if
Tenant's Improvement Costs total $40.50 or more, the Basic Rent shall xxxxx
for one year. By way of example, if Tenant's Improvement Costs total $35.00
per rentable square foot, the Basic Rent shall xxxxx for 10.37 months (i.e.,
$35.00 divided by $40.50 multiplied by 12). The term "Tenant's Improvement
Costs" shall mean the total out-of-pocket costs per rentable square foot
incurred by Tenant (not including Landlord's contribution thereto) for tenant
improvements within the Demised Premises, not including Tenant's fixtures,
furniture, removable partitions, equipment or any other items which would not
be considered real property.
(B) If Tenant's Improvement Costs are less than $40.50 per rentable
square foot, with the result that the Basic Rent is abated for less than one
year, the Basic Rent per rentable square foot shall be reduced for each year
during the Term of the Lease (but not including any extensions) by $.111/4
multiplied by the number of months less than one year for which the Basic
Rent is abated. For example, if the Basic Rent is abated for only ten months,
the Basic Rent per rentable square foot shall be reduced by $.221/2 (i.e.,
$.111/4 multiplied by 2).
(C) In addition to the abatement of Basic Rent specified above, Basic
Rent shall be abated with respect to 5,000 square feet of rentable space for
the following months during the Term of this Lease: months 1, 6 and 11 of
the first (if not already abated in such months of the first year pursuant to
(A) above), second, third and fourth years, for a total of twelve (12) months.
(D) In addition to the forgoing, and notwithstanding anything to the
contrary in this Lease, Tenant shall rent temporary space in the approximate
amount of 2,499 usable square feet in that part of the Premises outlined in
Exhibit F-1 attached hereto (the "Temporary Space") for a term commencing on
January 2, 1997 and ending February 28, 1997 (the "Temporary Space Term").
Tenant shall have the right to construct a temporary corridor allowing
passage between the Temporary Space and the existing bathrooms on the first
floor, which area is outlined in Exhibit F-2 attached hereto, for use during
the Temporary Space Term. The Basic Rent for the Temporary Space for the
Temporary Term shall be Six Thousand Eight Hundred Seventy-Two and 25/100
($6,872.25) (the "Temporary Basic Rent"), payable in monthly installments of
Two Thousand Two Hundred Ninety and 75/100 ($2,290.75) beginning on January
2, 1997 and thereafter on the first day of the next two (2) calendar months.
The Temporary Basic Rent shall be the only charge to Tenant for the Temporary
Space. Tenant shall not be responsible for any additional Rent (other than
electric charges) for the Temporary Space during the Temporary Term, but
Tenant shall otherwise comply with the other provisions of the Lease to the
extent not inconsistent with the provisions of this Paragraph D. This
Paragraph (D) shall not affect in any way the Commencement Date or the
Expiration Date or otherwise diminish Landlord's obligations under this Lease
or increase Tenant's obligations under this Lease.
-17-
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease"), made this 17th day of September,
1996, by and between XXXXXX PROPERTIES, a Michigan limited partnership, and
GITA BEGIN, d/b/a MADISON OFFICE CENTER (collectively, "Landlord") and
COMPUTER LEARNING CENTERS, INC., a Delaware corporation ("Tenant"). The
Lease Data Exhibit and Schedule 1 thereto are attached hereto and made a
substantive part hereof.
ARTICLE 1
DEMISED PREMISES; RESERVATION OF
SPACE; LANDLORD'S CONSTRUCTION OBLIGATIONS
1.1 PROPERTY. Landlord is the owner of certain land and improvements on
the property set forth on the Lease Data Exhibit (hereinafter referred to as
the "Property"), which is more particularly described in Exhibit A attached
hereto and made a part hereof.
(a) In consideration of the rents, mutual covenants and agreements
hereinafter set forth, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord, for the term and upon conditions hereinafter provided,
the space described in the Lease Data Exhibit (hereinafter referred to as the
"Demised Premises"), which contains the amount of Rentable Square Feet set
forth on the Lease Data Exhibit. The structure in which the Demised Premises
is situated (hereinafter be referred to as the "Building"), together with
certain interior and exterior common and public areas and facilities
(hereinafter referred to as the "Common Areas") for the use in common by
tenants of the Building and the Development (as defined below) and their
employees, guests, customers or agents and invitees; reserving, however, to
Landlord space for necessary pipes and wires leading to and from portions of
the Building not hereby leased, which shall not unreasonably interfere with
Tenant's use of the Demised Premises.
(b) The term "Common Areas", as used in this Lease shall include,
by way of example but not of limitation, all parking areas; driveways,
roadways and access roads; truckways; pedestrian sidewalks; loading docks and
service areas; bermed and/or landscaped and/or planted areas, planter boxes,
and retaining walls; courts and ramps; public restrooms and comfort stations;
exterior lighting facilities; public and traffic control signage; traffic
signals outside of the Development which are maintained by the Development;
utility systems and facilities used for the Development, including storm
water and/or sanitary sewer collection and retention facilities, flashing,
gutters and downspouts; facia and canopy; maintenance and administrative
facilities; and all other areas and improvements which may be provided by
Landlord for the general convenience or use in common of tenants of the
Development and their employees, customers and invitees. The Property, the
Building, and Common Areas are hereinabove and hereinafter collectively
referred to as the "Development".
1.2 RESERVATIONS. Landlord reserves the right at any time and from time
to time: (a) to make changes, alterations, additions, improvements, repairs
or replacements in or to the Building (including the Demised Premises), the
Common Areas, and the Development, including, but not limited to, the street
entrances, parking lots, halls, passages, elevators, escalators and stairways
and other parts of the Building, the Common Areas and the Development, and to
erect, maintain, and use pipes, ducts and conduits in and through the Demised
Premises, the Building, the Common Areas and the Development, all as Landlord
may reasonably deem necessary or desirable, but any such action as it relates
to the use or access to the Demised Premises shall be on a temporary basis
only; provided, however, that there shall be no obstruction of the means of
access to the Demised Premises or unreasonable interference with Tenant or
Tenant's use of, or access to, the Demised Premises; and (b) to eliminate,
substitute and/or rearrange the various buildings, parking areas, and the
Common Areas (which may theretofore have been so designated) as Landlord
deems appropriate in its reasonable judgment; provided, however, that there
shall be no obstruction of the means of or access to the Demised Premises or
unreasonable interference with Tenant or Tenant's use of,or access to, the
Demised Premises. Tenant's nonexclusive right to utilize the Common Areas
shall be in common with Landlord, other tenants and occupants of the
Building, other buildings in the Development, and others to whom Landlord
grants such rights from time to time.
1.3 LANDLORD'S WORK. Landlord shall be responsible for timely
performing the work described on Exhibit B attached hereto and made a part
hereof, which work is hereafter referred to as "Landlord's Work".
1.4 [Intentionally Omitted]
1.5 LANDLORD'S CONSTRUCTION ACTIVITIES. Landlord shall not be liable to
Tenant for loss of or damage to Tenant's property or business from Landlord's
construction activities prior to completion of the Demised Premises. So long
as there is no direct adverse affect upon Tenant, the Demised Premises or
Tenant's access or use of the Demised Premises or Tenant's rights or
obligations under this Lease Agreement, Landlord reserves the right without
recourse or liability to Tenant at any time and from time to time to:
(a) Make or permit changes or revisions in its plan for the
Building, including additions to, subtractions from, rearrangements of,
alteration of, modifications of or supplementation of the building areas,
walkways, parking areas, driveways or other areas.
(b) Construct other buildings or improvements in the Development
and to make alterations thereof or additions thereto and to build additional
stories on the Building or any other buildings and to build additions
adjoining the same.
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(c) To make or permit changes or revisions in the Development,
including additions thereto, and to convey portions of the Development to
others for the purpose of constructing thereon other buildings or
improvements, including additions thereto and alterations thereof.
1.6 COMPLIANCE OF MODIFICATIONS WITH LAWS. Notwithstanding anything
contained in this Article 1 which may be construed to the contrary, if
Landlord shall elect to modify the Development as set forth herein, Landlord
shall comply with all laws applicable to such activities, including providing
required parking facilities.
ARTICLE 1.A
TENANT'S WORK
1.A.1 TENANT IMPROVEMENTS. Except for Landlord's Work to be performed by
Landlord as set forth in Article 1, Tenant shall be responsible for constructing
all tenant improvements within the Demised Premises ("Tenant's Work"). Tenant's
plans and specifications for Tenant's Work, all material changes thereto, and
all contractors who will be employed by Tenant to perform Tenant's Work shall
be subject to prior approval by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. All of Tenant's Work shall be
constructed with new materials, will be of good quality, will comply with all
applicable laws, and will be done free of any construction liens. Tenant will
be responsible for obtaining all required construction permits. Tenant shall
use reasonable efforts to cause its contractors to perform Tenant's Work in
such a manner as will generally not interfere with the use of the Common Areas
by other tenants or their quiet enjoyment of space leased by them.
1.A.2 ACCEPTANCE OF DEMISED PREMISES. Simultaneously herewith, Landlord
has delivered possession of the Demised Premises to Tenant for purposes of
allowing Tenant to proceed with Tenant's Work. No Rent shall be due thereon
until the Commencement Date. Except for Landlord's Work to be performed by
Landlord as set forth in Article 1, Tenant acknowledges that it has accepted
the Demised Premises in an as-is condition.
1.A.3 LIABILITY FOR DAMAGES. Tenant shall be responsible for all damages
to the Building and the Common Areas done by Tenant or by Tenant's contractors
while performing the Tenant's Work. Tenant agrees to indemnify, defend and
hold Landlord harmless from any and all claims, liability and expenses,
including reasonable attorneys' fees, directly resulting from performance by
Tenant or any of Tenant's contractors of the Tenant Work. All of Tenant's
Contractors shall be licensed, and shall carry insurance reasonably
satisfactory to Landlord.
1.A.4 LANDLORD'S CONTRIBUTION. On the Commencement Date, Landlord shall
pay to Tenant as a contribution toward Tenant's cost of construction of Tenant's
Work Two Dollars ($2.00) per rentable square foot of the Demised Premises (the
"Tenant Allowance"). If Landlord shall fail to timely pay the Tenant Allowance
to Tenant, Tenant shall have the right to offset such amount against Basic Rent
and Additional Rent.
ARTICLE 2
TERM
2.1 COMMENCEMENT DATE. The Term of this Lease shall commence on the
first to occur of the following events, which shall hereinafter be called the
"Commencement Date":
(a) The date Tenant or anyone claiming through or under Tenant
first occupies the Demised Premises and opens for business to the public; or
(b) March 1, 1997.
Tenant acknowledges that Tenant is responsible for completion of the Tenant
Improvements within the Demised Premises; accordingly, the Commencement Date
shall not be delayed because of any delay in completion of the Tenant's
Work. However, the Commencement Date shall be delayed if Tenant's occupancy
of the Demised Premises or the opening of its business to the public is
delayed by Landlord either as a consequence of Landlord's failure to complete
the Landlord's Work or otherwise.
2.2 EXPIRATION DATE; TENANT'S TERMINATION RIGHT.
(a) The Term of this Lease shall terminate at twelve o'clock (12:00
a.m.) midnight on the day stated on the Lease Data Exhibit, which date, as
accelerated pursuant to Section 2.2(b) below or delayed pursuant to Section
2.3 below, or as otherwise provided in this Lease, shall be hereinafter
referred to as the "Expiration Date".
(b) Notwithstanding anything to the contrary in this Lease, Tenant
shall have a one (1) time right to cancel this Lease effective on the sixth
(6th) anniversary of the Commencement Date. Tenant may exercise such right
of cancellation by giving written notice to Landlord at least one hundred
eighty (180) days prior to such sixth anniversary. The word "Term" shall
mean the initial eleven (11)-year period of this Lease beginning on the
Commencement Date, unless Tenant exercises its cancellation right, whereupon,
the Term shall be the initial six (6)-year period of this Lease beginning on
the Commencement Date. In the event Tenant exercises its right of
cancellation as described above, the Lease shall terminate automatically on
the sixth anniversary of the Commencement Date, which shall become the
Expiration Date of this Lease; provided, however, that Tenant pays to
Landlord on or before the Expiration Date the amount of One Hundred Ninety
One Thousand Seven Hundred Eighteen Dollars ($191,718) as a termination
payment (the "Termination Payment Amount").
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(c) In addition to the termination right set forth in Section
2.2(b) above, Tenant shall have the right to cancel this Lease effective as
of the "Alternative Cancellation Date" (as defined below) by giving at least
one hundred eighty (180) days' written notice prior to the Alternative
Cancellation Date and paying Landlord the Termination Payment Amount on or
before the Alternative Cancellation Date. For purposes of this Lease, the
"Alternative Cancellation Date" should mean the date which is that number of
days prior to the Sixth Anniversary of this Lease by which the Abatement
Period (as defined in Paragraph B of Schedule 1 to Lease Data Exhibit) is
less than 12 months. For example, if the Abatement Period is ten and
one-half (10- 1/2) months, then the Alternative Cancellation Date shall be
forty-five (45) days prior to the Sixth Anniversary of this Lease.
2.3 DELAY IN DELIVERY OF POSSESSION. If Landlord delays Tenant's
occupancy of the Demised Premises or the opening of its business to the
public, this Lease shall not be void or voidable, and Landlord shall not be
liable to Tenant for any damage resulting from such delay. However, Tenant's
obligation to pay rent shall be suspended and abated until possession of the
Demised Premises is delivered. In the event of such a delay, it is
understood and agreed that the Commencement Date shall also be postponed for
the period of delay caused by Landlord, and the Expiration Date shall be
correspondingly extended.
2.4 WRITTEN CONFIRMATION. Within seven (7) days of the Commencement
Date, Landlord and Tenant will execute Landlord's Acknowledgment and Key
Receipt Form, a copy of which is attached as Exhibit C and made a part
hereof, which shall confirm in writing (i) the Commencement date; and
(ii) Expiration Date (subject to the operation of this Article 2).
ARTICLE 3
RENT
3.1 BASIC RENT. Tenant covenants and agrees to pay Landlord throughout
the Term of this Lease, but subject to adjustments as hereinafter provided,
an annual basic minimum rent (hereinafter referred to as "Basic Rent") in
equal monthly installments as stated in Schedule 1 to the Lease Data Exhibit
in advance on the first day of each calendar month during the Term hereof.
The Basic Rent installment for the first month of the Term hereof shall be
paid at the time of execution and delivery of this Lease.
3.2 PARTIAL MONTH PRORATION. If the Commencement Date and/or the
Expiration Date shall occur on the date other than the first day of any
calendar month, then the monthly Basic Rental for the first and/or last
fractional months of the Term shall be appropriately prorated on the basis of
a three hundred sixty five (365) day year.
3.3 ADDITIONAL RENT. Tenant shall pay as Additional Rent any money and
charges required to be paid by Tenant pursuant to the provisions of this
Lease, whether or not the same may be designated "Additional Rent".
3.4 PAYMENTS OF BASIC RENT. All payments of Basic Rent, Additional Rent
and other payments to Landlord required hereunder shall be made without
demand, deduction or offset (unless otherwise specifically provided herein),
in cash or by check drawn upon a U.S. banking institution payable to
Landlord, and shall be delivered to Landlord at its address set forth in the
Lease Data Exhibit, or to such other party and place as may be designated by
notice in writing from Landlord to Tenant from time to time.
3.5 LATE CHARGES AND INTEREST RATE. Any monthly installments of Basic
Rent and/or Additional Rent, and/or any and all other monies becoming due
hereunder which are not paid by the fifth (5th) day after the due date shall
be subject to a late charge of four (4%) percent of the amount of monies due,
which late charge Landlord and Tenant hereby agree is reasonably related to
the actual costs incurred by Landlord as a result of any late payment.
Interest shall accrue and be payable for any payment that is more than twenty
five (25) days after written notice of default at the rate of eighteen (18%)
percent per annum, computed from the due date. Notwithstanding the
foregoing, Landlord agrees to waive the late charge for two times each
calendar year if Tenant is late in the payment of Basic Rent and/or
Additional Rent but pays the Basic Rent and/or Additional Rent within five
(5) business days after receipt of written notice that the Basic Rent and/or
Additional Rent is late.
3.6 PART PAYMENT NOT PREJUDICIAL. No payment by Tenant or receipt and
acceptance by Landlord of a lesser amount than the Basic Rent, Additional
Rent, or other payments to Landlord required hereunder shall be deemed to be
other than part payment of the full amount then due and payable, nor shall
any endorsement or statement on any check or any letter accompanying any
check, payment of rent or other payment, be deemed an accord and
satisfaction; and Landlord may accept such part payment without prejudice to
Landlord's right to recover the balance due and payable or pursue any other
remedy provided in this Lease.
-20-
ARTICLE 4
ADDITIONAL RENT - OPERATING EXPENSE
INCREASES AND REAL ESTATE TAX INCREASES
4.1 BASE YEAR.
(a) OPERATING EXPENSE INCREASES. For each calendar year during the
Term, commencing with calendar year 1998, Tenant shall pay to Landlord
Tenant's PRO RATA share of the excess, if any, of (i) the Operating Expenses
for such calendar year, over (ii) the Base Year Operating Expenses
("Operating Expense Increases"). For these purposes, the term "Base Year
Operating Expenses" shall mean the Operating Expenses for the calendar year
1997.
(b) INCREASES IN TAXES. For each calendar year during the Term,
commencing with calendar year 1998, Tenant shall pay to Landlord Tenant's PRO
RATA share of the excess, if any, of (i) the Real Estate Taxes levied for the
calendar year over (ii) the Base Year Real Estate Taxes ("Real Estate Tax
Increases"). For purposes of this Lease, "Base Year Real Estate Taxes" shall
mean the aggregate Real Estate Taxes set forth in the tax bills expected to
be issued by the taxing authorities in or about July and December 1997. The
Real Estate Taxes for years subsequent to the Base Year shall be determined
in the same manner as set forth in the preceding sentence for the Base Year
Real Estate Taxes.
4.2 OPERATING EXPENSES AND REAL ESTATE TAXES. For the purposes of this
Article the following terms have the meanings hereinafter set forth:
(a) OPERATING EXPENSES. The term "Operating Expenses" shall mean
the actual reasonable and customary costs (other than "Operating Expense
Exclusions", as defined below) incurred by Landlord with respect to the
operation, maintenance, repair, replacement, protection and administration of
the Building and all equipment serving the Building and/or the Common Areas
of the Development, including but not limited to, water systems and sewers,
as allocated by Landlord in good faith on a fair and reasonable basis,
including, without limitation or duplication, (1) the costs incurred for
electricity, water, and/or any other utility service, and cleaning; rubbish
removal; snow removal; general landscaping maintenance; window washing,
illumination and maintenance of Development signs whether located on or off
the Development if they serve the Property; line painting; holiday
decorations, pest control, reasonable management fees (which shall be at
market rates and on competitive terms and which shall not exceed four percent
(4%) of the gross rents from the Property), protection and security service;
fire, extended coverage, boiler, sprinkler, apparatus, public liability,
property damage and/or other insurance deemed necessary or desirable by
Landlord (including loss of rental income insurance); supplies; wages,
salaries, disability benefits, pensions, hospitalization, retirement plans
and group insurance respecting service and maintenance employees and the
property manager; uniforms and working clothes for such employees and the
cleaning thereof; expenses imposed pursuant to any collective bargaining
agreement with respect to such employees; payroll, social security,
unemployment and other similar taxes with respect to such employees; sales,
use, and other similar taxes; personal property taxes; the cost of
maintaining movable equipment, and any other costs, charges and expenses
which under generally accepted accounting principles and practices, would be
regarded as maintenance and operating expenses, and (2) the costs or portion
thereof of any capital improvements made to the Building or the Common Areas
of the Development by Landlord after the Commencement Date that are intended
to reduce other Operating Expenses (but only to the extent of such reduction)
or made to the Building or Common Areas of the Development by Landlord after
the date of this Lease that are required under any governmental law or
regulation that was not required or applicable at the date of this Lease,
such cost or allocable portion thereof to be amortized over the tax period
applicable to such property. Notwithstanding anything to the contrary
contained in this Lease, Operating Expenses shall not contain any expenses
which have been paid directly to a third party provider by Tenant with
Landlord's consent. Further, Landlord agrees to use reasonable efforts to
incur Operating Expenses only at commercially reasonable rates and upon
competitive and fair terms.
(b) OPERATING EXPENSE EXCLUSIONS. Operating Expenses shall not
mean and shall not include any "Operating Expense Exclusions", which means
the following costs and expenses:
(i) CAPITAL COSTS. All costs of Landlord's Work, all repairs
and improvements constructed in space occupied or to be occupied by Tenant or
other tenants, and all other costs that under generally accepted accounting
principles are properly classified as capital expenditures, to the extent
they upgrade or improve the Building, as opposed to maintaining or repairing
the Development or replacing existing items that have worn out, including,
without limitation, any financing-related fees, costs and expenses, and
professional fees and disbursements incurred in connection therewith, but
Operating Expenses shall include capital improvements that are intended to
reduce other Operating Expenses, subject to the limitations set forth above.
Specifically, Operating Expenses shall not include any costs of compliance
with the laws and other requirements set forth in Paragraph 37.1 below;
(ii) FINANCING COSTS. Any and all of Landlord's payments for
(a) loan principal or interest, together with expenses in connection with
such financing or any refinancing (whether or not secured by a deed of trust
or mortgage) during the Term of this Lease, (b) ground lease rent or rent
paid on any underlying lease, (c) similar payments or (d) any professional
fees associated with any or all of the foregoing (including, without
limitation, fees and costs of appraisers, surveyors, attorneys, etc.);
(iii) PARKING FACILITIES. Any and all of Landlord's expenses
relating to any off-site garage or parking facility or concession serving the
Property, Building or Development; however, Operating Expenses shall include
reasonable costs of operating, cleaning, repairing and maintaining the
surface parking around the Building provided for tenants of the Building;
(iv) LANDLORD'S TAXES; REAL ESTATE TAXES. Any and all of
Landlord's income, excise, franchise taxes, excess profit taxes, taxes on
rents or gross receipts, as well as any and all taxes which do not uniquely
pertain to the Property, the Building or the Development or Tenant's specific
use thereof or similar taxes on Landlord's business; any Real Estate Taxes,
but Operating Expenses shall include any sales or use taxes which may
hereafter be imposed on rents;
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(v) SERVICES. Any and all expenses pertaining to the
following services during the first twelve (12) months of the Term:
correction of HVAC noise levels, replacement of defective and non-working air
handling units, costs related to the performance of Landlord's Work, and all
hook-up, connection or service charges for utilities. After such twelve (12)
month period, such expenses shall be governed by the other provisions of this
Lease;
(vi) SALARIES. Salaries of Landlord's employees who are not
engaged in the day-to-day management and maintenance of the Demised Premises,
including, without limitation, the salaries of employees who are executive
managers, accountants, bookkeepers, receptionists, clerks, marketing
representatives, administrative assistants, secretaries, and brokers;
(vii) OVERHEAD. Any costs of Landlord's overhead and general
administrative expenses;
(viii) ENFORCEMENT COSTS. Any and all of Landlord's costs to
compel full performance under leases with all prior, existing, and
prospective tenants at the Property, the Building or Development, including,
without limitation, all legal fees, costs and expenses to collect rent
arrearages and/or to recover possession (and the cost of any disputes
relating to any such lease or proposed lease);
(ix) LEASING COSTS. Any and all of Landlord's costs to lease
space in the Property, the Building or the Development to all prior, existing
and prospective tenants, including, without limitation, consulting and
marketing fees, advertising or promotional expenses, brokerage commissions,
and/or refurbishment or improvement expenses; costs of preparing, improving
or altering any space in preparation for occupancy of any new or renewal
tenant;
(x) DECORATING COSTS. Costs of renovating, decorating or
redecorating space for tenants, other occupants or prospective tenants or
occupants of the Building or the Development;
(xi) RELATED PARTY FEES. Wages, salaries, fees, and fringe
benefits paid to administrative or executive personnel or officers or
partners of Landlord unless employed at the same competitive rates as would
be paid to independent contractors; any other Operating Expenses representing
an amount paid to a related corporation, entity, or person that is in excess
of the amount that would be paid in the absence of such relationship;
(xii) DEPRECIATION AND AMORTIZATION. Any charge for
depreciation or amortization of the Building, the Property or the Development
or equipment and any interest or other financing charge;
(xii) UNRELATED ELECTRIC. The cost of any electric current
furnished to the Demised Premises or any rentable area of the Property, the
Building or the Development for purposes other than the operation of the
Property, the Building or the Development, equipment and machinery and the
lighting of public toilets, stairways, shaftways, and Building machinery or
fan rooms;
(xiv) BUILDING DEFECTS. The cost of correcting defects in the
construction of the Property, the Building or the Development or in the
Building equipment (including latent or concealed defects), except that
conditions (not occasioned by construction defects) resulting from ordinary
wear and tear will not be deemed defects for the purpose of this category;
(xv) CASUALTY AND CONDEMNATION COSTS. The cost of any repair
or other work made by Landlord because of the total or partial destruction of
the Property, the Building or the Development or the condemnation of a
portion of any of the foregoing;
(xvi) COSTS OTHERWISE RECOVERED. The cost of any items for
which Landlord is reimbursed by insurance or otherwise compensated by parties;
(xvii) ADDITIONS. The cost of any additions or capital
improvements to the Property, the Building or the Development subsequent to
the date of original construction, except for such capital improvements as
are expressly permitted elsewhere in this Lease in connection with the
reduction of Operating Expenses;
(xviii) BUILDING UPGRADES. The cost of any repairs,
alterations, additions, changes, replacements, and other items that under
generally accepted accounting principles are properly classified as capital
expenditures to the extent they upgrade or improve the Building as opposed to
replace existing items that have worn out;
(xix) INITIAL CONSTRUCTION COSTS. The cost of initial
construction of the Building and Development, and the cost of all Landlord's
work to prepare the Building and Development for Tenant's occupancy,
including, without limitation, the cost of Landlord's Work;
(xx) LANDLORD'S COMPLIANCE COSTS. The cost of overtime or
other expense to Landlord in curing its defaults or performing work expressly
provided in this Lease to be borne at Landlord's expense; amounts paid
(including interest) on account of or to cure violations of statutes, laws,
notes, or ordinances by Landlord or any part of the Property or Building and
any costs or expenses resulting from Landlord's violation of any agreement to
which it is a party;
(xxi) BAD DEBT COSTS. Any and all collection costs, including
legal fees and bad debt losses or reserves;
(xxii) INFLATED AND EXCESSIVE COSTS. Any otherwise
permissible fees or costs, to the extent in excess of prevailing and
competitive rates;
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(xxiii) RECORDATION AND TRANSFER FEES. Any documentary
transfer or recordation taxes imposed in connection with this Lease or any
other lease or the sale or transfer of the Property, the Building or the
Development;
(xxiv) TRAFFIC STUDIES, MISCELLANEOUS, ETC. Any (a) traffic
studies, (b) marketing studies, or (c) contributions to civic organizations;
(xxv) VIOLATIONS. Costs incurred by reason of the violation
by Landlord or any other tenant of the Building and/or the Development of any
building code or other governmental rule or requirement or the terms and
conditions of any lease pertaining to the Property, the Building or the
Development;
(xxvi) ARTWORK. The acquisition cost of any artwork, such as
sculptures or paintings, used to decorate the Building and/or the
Development, but the costs of cleaning, maintaining, insuring and providing
security for such artwork are included in Operating Expenses; and
(xxvii) INTEREST, FINES, ETC. Interest, fines or penalties
due to late payment of Real Estate Taxes or Operating Expenses.
(c) The Term "Real Estate Taxes" shall mean all real estate taxes
and assessments, general or special, levied or imposed by any taxing
authority having jurisdiction with respect to the Property, the Building and
the Common Areas of the Development and the Property or taxes which may be
levied in substitution of real property taxes, except Other Taxes as
specifically defined in subparagraph (d) below. There shall be no pass
through of any real estate taxes due to a reassessment of the Property, the
Building or the Development or any part thereof occasioned by the sale of any
of the foregoing or any party thereof or transfer of any interest in the same
or any ownership of the same.
(d) The term "Other Taxes" shall mean all taxes payable by Landlord
(other than taxes included with Real Estate Taxes) whether or not now
customary or within the contemplation of the parties hereto: (i) upon,
measured by or reasonably attributable to the cost or value of Tenant's
equipment, furniture, fixtures and other personal property located in the
Demised Premises, the Building, or in the Common Areas of the Development or
by the cost or value of any leasehold improvements made in or to the Demised
Premises, the Building, or the Common Areas of the Development, by or for
Tenant other than the building standard tenant improvements made by Landlord
regardless of whether title to such improvements shall be in Tenant or
Landlord; or (ii) upon or with respect to the maintenance, alteration or
repair of the Demised Premises, the Building and the Common Areas of the
Development or any portion thereof. Tenant shall reimburse Landlord within
fifteen (15) days of written demand for any and all "Other Taxes" payable by
Landlord. In the event that it shall not be lawful for Tenant so to
reimburse Landlord, the Basic Rental payable to Landlord under this Lease
shall be revised to net to Landlord the same Basic Rental after imposition of
any such tax upon Landlord as would have been payable to Landlord prior the
imposition of any such tax.
4.3 MONTHLY INSTALLMENTS. Prior to the beginning of each calendar year
of the Term beginning with 1998, or as soon as practicable thereafter,
Landlord shall give Tenant written notice of Landlord's estimate of Tenant's
PRO RATA share of Operating Expense Increases and Real Estate Tax Increases
for the ensuing year. On or before the first (1st) day of each month during
such ensuing calendar year, Tenant shall pay Landlord one-twelfth (1/12) of
such estimated amounts, provided that until such notice is tendered to Tenant
with respect to the ensuing year, Tenant shall continue to pay any amount
then currently payable pursuant to this Lease.
Landlord shall, within the period of one hundred twenty (120) days after
the close of each calendar year, provide Tenant a statement, which shall be a
line item statement, certified by an officer of Landlord as true, correct and
complete by Landlord, of such year's actual Base Year Operating Costs,
Operating Costs, Base Year Real Estate Taxes and Real Estate Taxes and
Tenant's PRO RATA share of Operating Expense Increases and Real Estate Tax
Increases. In the event Landlord fails to deliver such a statement in a
timely manner, and shall thereafter fail to deliver it within forty-five (45)
days of written notice of such failure (and time shall be of the essence),
Landlord and Tenant expressly acknowledge and agree that Tenant shall not
have any liability to Landlord with respect to such calendar year for any
Operating Cost Increases or Real Estate Tax Increases in excess of payments
made during such calendar year that has elapsed. If on the basis of any such
statement, Tenant owes an amount that is more than the estimated payments
made during any year, Tenant shall pay the deficiency to Landlord within
fifteen (15) business days after Tenant's receipt of such statement. If
Tenant owes an amount that is less than the estimated payments made during
any year, Landlord shall credit such excess amount against the next
payment(s) due from Tenant for Operating Expense Increases and Real Estate
Tax Increases.
4.4 ADJUSTMENT UPON EXPIRATION OR TERMINATION OF LEASE. If the
Expiration Date or termination date of this Lease shall not coincide with the
end of a tax and/or calendar year, Tenant's obligation to pay Operating
Expense Increases and Real Estate Tax Increases under this Article 4 for the
final period of the Lease shall survive the expiration of the Term of this
Lease. Tenant's liability shall be prorated on the basis of the number of
days in such final period of the Term bears to 365.
4.5 EXPENSES AND/OR TAX CONTESTS - ADJUSTMENT AND REFUNDS. Reasonable
expenses incurred by Landlord in obtaining or attempting to obtain a
reduction of any Real Estate Taxes shall be added to and included in the
amount of any such Real Estate Taxes. Real Estate Taxes which are contested
by Landlord shall nevertheless be included for purposes of the computation of
the liability of Tenant under paragraph 4.1 hereof, provided, however, that
in the event that Tenant shall have paid any amount of Additional Rent
pursuant to this Article 4 and Landlord shall thereafter receive a refund of
any portion of any Real Estate Taxes on which payment shall have been based,
Landlord shall promptly credit to Tenant the appropriate portion of such
refund or, if the Term of the Lease has ended, shall promptly pay Tenant such
amount by check. Landlord shall have no obligation to contest, object, or
litigate the levying or imposition of any Real Estate Taxes and may settle,
compromise, consent to, waive or otherwise determine in its reasonable
discretion any Real Estate Taxes without consent or approval of Tenant.
Tenant shall cooperate with Landlord in obtaining or attempting to obtain
such a reduction, provided that such cooperation (i) shall be at the expense
of Landlord and (ii) shall not expose Tenant to any liability.
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4.6 EXPENSE CAP. For purposes of computing Tenant's PRO RATA share of
Operating Expense Increases, any increases in aggregate Controllable
Operating Expenses (as defined below) which exceed five percent (5%) per year
on a cumulative basis over the Term shall not be included in Tenant's
Operating Expense Increases. As used herein, the term "Controllable
Operating Expenses" means those Operating Expenses which are generally
negotiable by Landlord, such as management fees, landscaping fees, and other
fees payable under short-term contracts. "Controllable Operating Expenses"
would not include such costs as (by way of example only, and not of
limitation) utilities charges, Real Property Taxes, fees and costs payable
under long term contracts (I.E., contracts not expiring in less than one
year), insurance premiums, and similar expenses.
4.7 AUDIT RIGHT. Tenant shall have the right (for a period of
twenty-four (24) months after receipt of each Landlord's statement delivered
to Tenant pursuant to Section 4.3, but in all events such audit right shall
be exercised, if at all, not later than six [6] months after the Expiration
Date) at reasonable times and upon reasonable notice to Landlord, at Tenant's
expense, to inspect Landlord's books records pertaining to Operating Expenses
for each year of the Term. If after such inspection Tenant disputes any
Operating Expense Increases charged to Tenant, then Tenant shall be entitled
to retain a national, independent certified public accountant to audit and/or
review Landlord's books and records pertaining to the Development to
determine the proper amount of Tenant's Prorata Share of Operating Expense
Increases. If such audit reveals that Landlord has overcharged Tenant, then
within five (5) days after the results of such audit are made available to
Landlord, Landlord shall reimburse Tenant the amount of such overcharge. If
such audit reveals that Landlord has undercharged Tenant, then within five
(5) days after the results of such audit are made available to Landlord,
Tenant shall reimburse Landlord the amount of such undercharge. Tenant shall
pay all costs of such audit, unless the results thereof reveal that Tenant
was overcharged by more than three percent (3%) of Tenant's PRO RATA share,
in which case Landlord shall reimburse Tenant for all costs thereof within
thirty (30) days after Landlord's receipt of the audit results. Any such
inspection or audit shall take place at the office of Landlord's management
company where the books concerning the Property, the Building or the
Development are regularly kept, during regular business hours, and upon no
less than five (5) business days' prior written notice.
4.8 GROSS-UP OF OPERATING EXPENSES. In the event the average occupancy
level of the Property, the Building or the Development for calendar year 1997
or for any subsequent calendar year is not 100% full occupancy, then the
actual Operating Expenses for each such year for the purpose of determining
any Operating Expense Increase after the Base Year, shall be deemed to have
been the actual Operating Expenses which would have been incurred had the
Property, the Building or the Development been 100% occupied during the Base
Year and each subsequent calendar year. The same methodology shall be used
each year for determining the expenses which would have been incurred had the
Property, the Building or the Development been 100% occupied during that year.
ARTICLE 5
UTILITIES AND SERVICES; INTERRUPTION
5.1 SERVICES.
(a) BUILDING SERVICES. Throughout the Term, Landlord agrees that
the Building will be maintained in a manner similar to that of comparable
suburban Detroit office buildings which are maintained by third party
managers, and that, subject to Unavoidable Delays , it will furnish, or cause
to be furnished, the following services: (1) normal and usual electricity
for lighting purposes and the operation of Tenant's business equipment; (2)
adequate supplies for toilet rooms located in the Common Areas and in the
Demised Premises (if any); (3) cleaning and janitorial services after
business hours on Business Days in accordance with common standards; (4) hot
and cold running water in the toilet rooms located in the Common Areas and in
the Demised Premises; (5) heating, ventilating and air-conditioning to the
Demised Premises between the hours of 7:00 A.M. and 11:00 P.M. on Business
Days and between the hours of 9:00 A.M. and 1:00 P.M. on Saturdays unless
Saturday is a Legal Holiday; (6) automatically operated elevator service 24
hours a day, seven (7) days a week; (7) all electric bulbs and fluorescent
tubes in light fixtures in the Common Areas and in building standard light
fixtures in the Demised Premises; (8) a security access system for the
Building; and (9) twelve (12) keys to the Building and the Demised Premises
at no cost to Tenant, but all additional cards and keys, including
replacements for lost cards and keys, shall be issued only upon the payment
of a reasonable cost for each additional card or key. The term "Business
Days" shall mean all days except Saturdays, Sundays and Legal Holidays. The
term "Legal Holidays" shall mean New Years Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. The term "Unavoidable
Delays" shall mean delays caused by strikes, acts of God, lockouts, labor
difficulties, riots, explosions, sabotage, accidents, shortages or inability
to obtain labor or materials, legal requirements, governmental restrictions,
enemy action, civil commotion, fire or other casualty or similar causes
beyond the reasonable control of Landlord or Tenant, as the case may be.
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(b) AFTER-HOURS HEATING AND AIR-CONDITIONING. Landlord shall
provide heat and air-conditioning at times in addition to those specified
above of subparagraph (a) at Tenant's expense, reasonably promptly after
notice given to the building manager. Landlord shall have the right
throughout the Term to charge Tenant for after-hours use of heat and
air-conditioning; provided that such charge shall be limited to the actual
cost of heating fuel and electricity (based on the actual usage and demand
charge (if applicable)) and the actual cost of labor charges incurred by
Landlord to provide the after-hours service which would not have been
incurred except for Tenant's request for after-hours service. If the same
after-hours service is also requested by other tenants in the Building whose
heat and air conditioning is provided by the same system, the charge
therefore to each tenant requesting such after-hours service shall be a
pro-rated amount based upon the square footage of the premises of all tenants
requesting after-hours service. Tenant shall provide notice to Landlord by
3:00 P.M. on any business day on which it will need after hours heat and air
conditioning, and by 3:00 P.M. on the business day prior to any Saturday,
Sunday or holiday (which shall include holidays as defined above and any
other day with respect to which Landlord notifies Tenant that Landlord will
not be open for business) for which after hours heat and air conditioning
will be required.
5.2 ADDITIONAL UTILITY MATTERS. Landlord has installed a separate meter
to monitor Tenant's electricity usage in the Demised Premises. Tenant shall
be fully and solely responsible for all charges for electric services to the
Demises Premises. Tenant shall promptly pay in full directly to any utility
company or municipal authority providing utility service all charges
therefor. Tenant shall submit evidence of payment thereof to Landlord within
ten (10) days of written request. In the event Tenant fails to comply with
the terms of this paragraph, Landlord shall have the right, after notice of
default to Tenant and expiration of any applicable cure period, to any and
all remedies provided herein, and at law including, but not limited to, the
right to pay the utility company or municipal authority on behalf of Tenant,
which payment shall be thereafter deemed Additional Rent, as provided herein,
which was due and payable to Landlord on the date of Landlord's payment on
Tenant's behalf.
5.3 UTILITY SERVICES. Landlord shall provide utility service to the
Building and the Common Areas of the Development. Landlord shall further
maintain and repair the exterior walls, roof, foundation and structure itself
of the Building, the mechanical, plumbing and electrical and other operating
systems equipment servicing the Building, in good order and condition, and
the costs of such utility service, maintenance and repair, shall be included
in Operating Expenses, except for the costs to repair any damages occasioned
by the acts or omissions of Tenant, the cost of which Tenant shall pay to
Landlord in full upon written demand.
5.4 INTERRUPTION OF SERVICES. Landlord shall not be in default under
this Article 5, or be liable for any damages directly or indirectly resulting
from, nor shall the rental herein reserved be abated by reason of:
(a) The installation, use or interruption of use of any equipment
in connection with the furnishing of any of the foregoing services; or
(b) Failure to furnish or delay in furnishing any such services
when such failure or delay is caused by accident or any condition beyond the
reasonable control of Landlord or by making of necessary repairs or
improvements to the Demised Premises, the Building, or the Development;
(c) Any limitation, curtailment, rationing or restriction on the
use of water, electricity, steam, gas or any other form of energy serving the
Demised Premises, the Building, or Development.
Landlord shall use reasonable efforts diligently to remedy any interruption
of the furnishing of such services.
5.5 UNAVOIDABLE DELAYS; LIMITATION OF LIABILITY. If, by reason of the
occurrence of unavoidable delays due to disturbances, Acts of God,
governmental restrictions, strikes, labor disturbances, shortages of
materials or supplies or for any other cause or event beyond Landlord's
reasonable control, Landlord is unable to furnish or is delayed in furnishing
any service required to be furnished by Landlord under this Lease, or is
unable to perform or make or is delayed in performing or making any
installations, decorations, repairs, alterations, additions, or improvements,
whether required to be performed or made under this Lease, or is unable to
fulfill or is delayed in fulfilling any of Landlord's other obligation under
this Lease, no constructive eviction in whole or in part shall be deemed to
have occurred, nor shall, except as provided below, Tenant be entitled to any
abatement or diminution of rental or other charges due hereunder or relieved
from any of its obligations under this Lease, Landlord or its agents shall
not have any liability to Tenant by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business.
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5.6 ABATEMENT OF RENT. Notwithstanding any of the provisions of this
Lease (including the other provisions of this Article 5) to the contrary, if,
because of Landlord's failure to provide any of the services described in
this Lease or as a result of Landlord's performance of repairs or maintenance
to the Demised Premises or Building or Common Areas of the Development, or
for any other reason (other than a fire or casualty), (i) all or a part of
the Demised Premises becomes untenantable because of Landlord's actions or
omissions (and not because of a public utility provider's actions or
omissions), and (ii) Tenant is unable to use all or such part of the Demised
Premises for its purposes for either a continuous period of five (5)
consecutive Business Days or a period of any seven (7) Business Days in any
thirty (30) consecutive day period, Tenant shall be entitled to a
proportionate abatement of Rent for the period of time, commencing with the
later of (i) said fifth Business Day or seventh Business Day, as the case may
be, or (ii) the date on which Tenant gives Landlord oral or written notice of
its intention to xxxxx Rent pursuant to this Article, based on the extent to
which the Demised Premises are not usable, in whole or in part, by Tenant in
the conduct of its business. If (i) at least thirty percent (30%) of the
Demised Premises becomes untenantable or fifty percent (50%) of Tenant's
computer classrooms become untenantable because of Landlord's actions or
omissions (and not because of a public utility provider's actions or
omissions), and (ii) Tenant is unable to use all of the Demised Premises for
its purposes for a period of seven (7) consecutive Business Days, Tenant
shall be entitled to terminate this Lease by written notice given to Landlord
on or before the 30th day after the date on which the Demised Premises became
untenantable. The term "untenantable" shall mean not reasonably capable of
being used for the conduct of Tenant's business. If at least thirty percent
(30%) of the Demised Premises or fifty percent (50%) of the computer
classrooms of the Demised Premises is affected, and, as a result, all of the
Demised Premises is not reasonably capable of being used for the conduct of
Tenant's business, the entire Demised Premises shall be deemed untenantable.
ARTICLE 6
ASSIGNMENT AND SUBLETTING
6.1 TRANSFER; NOTICE; NO WAIVER IMPLIED.
(a) Except as permitted in this Paragraph 6.1, Tenant shall not
assign, sublet, transfer, mortgage or encumber (hereinafter collectively
"Assignment") this Lease, in whole or in part, without obtaining the prior
written consent of Landlord, which shall not be unreasonably withheld,
conditioned or delayed; nor shall any Assignment of this Lease be effectuated
by operation of law or otherwise without the prior written consent of
Landlord, which consents shall not be unreasonably withheld, conditioned or
delayed. The consent by Landlord to any Assignment, to any party, shall not
be construed as a waiver or release of Tenant from the terms of any covenants
or obligations under this Lease, nor shall the collection or acceptance of
rent from any such assignee, transferee, subtenant or occupant constitute a
waiver of, or release of Tenant from, any covenant or obligation contained in
this Lease. Consent by Landlord to one or more Assignments of this Lease
shall not be deemed to be a waiver of the requirement for Landlord's consent
to any future Assignment. Effective upon an Event of Default (as defined
below) by Tenant, Tenant assigns to Landlord the rent due from any assignee,
transferee, subtenant, or occupant of Tenant and authorizes each such person
to pay said rent directly to Landlord, which right shall not affect or limit
any other remedies available to Landlord under this Lease or as provided by
law.
(b) Notwithstanding the provision of Paragraph 6.1(a) above, Tenant
may assign this Lease or sublet the Demised Premises or any portion thereof,
without Landlord's consent, to any Affiliate of Tenant, provided that in the
event of an Assignment, such entity assumes the obligations of Tenant
hereunder. Tenant shall immediately notify Landlord of any such assignment or
subletting under the terms of this Article 6. Any issuance of stock by
Tenant or any sale of stock by shareholders of Tenant shall not be deemed a
transfer of this Lease. The term "Affiliate" shall mean, when used with
respect to a Person, any corporation, partnership, joint venture, trust or
individual controlled by, under common control with, or which controls such
Person (the term "control" for these purposes shall mean the ability, whether
by the ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to make
management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to
remove and then select a majority of those individuals exercising managerial
authority over an entity, and control shall be conclusively presumed in the
case of the ownership of more than fifty percent (50%) of the equity
interests). The term "Person" shall mean a natural person, a partnership, a
corporation and any other form of business or legal association or entity.
Tenant shall continue to be liable for all of its obligations hereunder,
despite any assignment permitted under this Section 6.1(b).
6.2 ASSIGNMENTS WITHOUT CONSENT. In the event of any Assignment without
Landlord's written consent, notwithstanding any other right or remedy
Landlord may have under this Lease, but in addition thereto, Landlord shall
have the right to immediately terminate this Lease and/or to re-enter and
repossess the Demised Premises, and Landlord's right to damages shall survive
and Tenant shall in no way be released from any of its obligations under this
Lease.
ARTICLE 7
USE OF DEMISED PREMISES, ETC.
7.1 TENANT'S COVENANTS; RISK OF USE. Tenant covenants to use the
Demised Premises only for the purpose set forth in the Lease Data Exhibit and
for no other purposes whatsoever. All property of any kind which may be on
Demised Premises shall be at the sole risk of Tenant or those claiming
through or under Tenant. Tenant shall not do or permit to be done in or
about the Demised Premises, nor bring or keep or permit to be brought or kept
therein, anything which is prohibited by or will in any way conflict with any
law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated, or which is prohibited by the
standard form of fire insurance policy, or will in any way increase the
existing rate of any fire or other insurance upon the Building or the
Development or any of its contents, or cause a cancellation of any insurance
policy covering the Building, the Development, or any part thereof or any of
its contents, or adversely affect or interfere with any services required to
be furnished by Landlord to Tenant, or to any other tenants or occupants of
the Building and/or the Development, or with the proper and economical
rendition of any such service. Tenant shall not do or permit anything to be
done in or about the Demised Premises which will in any way obstruct the
rights of other tenants of the Building and/or the Development or injure or
annoy them, or use or allow the Demised Premises to be used for any unlawful
or objectionable purpose, nor shall Tenant maintain or permit any nuisance
in, on or about the Demised Premises and/or the Development, or commit or
suffer to be committed any waste in, on or about the Demised Premises and/or
the Development. If anything done, omitted to be done or suffered to be done
by Tenant, or kept or suffered by Tenant to be kept in, upon or about the
Demised Premises and/or the Development, shall cause the rate of fire or
other insurance on the Building, and/or the Development, by companies
acceptable to Landlord to be increased beyond the rate from time to time
applicable to Building and/or the Development, Tenant shall pay the amount of
any such increase to Landlord upon written demand.
7.2 FLOOR LOADS. Tenant shall not place a load upon any floor of the
Demised Premises exceeding the floor load per square foot area which it was
designed to carry and which is allowed by law. Landlord reserves the right
to prescribe the weight and position of all safes and building system
mechanical equipment. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient in Landlord's judgment to
absorb and prevent vibration noise and annoyance, and otherwise to avoid
damage to the Building.
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ARTICLE 8
DEFAULTS/REMEDIES
8.1 EVENTS OF DEFAULT. Each of the following events (hereinafter
referred to as an "Event of Default") shall be a default hereunder by Tenant
and a breach of this Lease:
(a) NONPAYMENT OF RENT. If Tenant shall violate any covenant or
agreement providing for the payment of Basic Rent or Additional Rent, and
such violation shall continue uncured for five (5) business days after
Tenant's receipt of written notice specifying such default in reasonable
detail.
(b) PROHIBITED TRANSFERS. If tenant shall assign, transfer,
encumber, sublet or permit the use of the Demised Premises by others except
in a manner permitted in Article 6 and such default continues for twenty-one
(21) days after Tenant's receipt of written notice specifying such default in
reasonable detail.
(c) BANKRUPTCY OR INSOLVENCY. If Tenant shall be adjudicated a
bankrupt, whether voluntarily or involuntarily, or make any general
assignment for the benefit of creditors, or voluntarily takes any action to
subject it to or is involuntarily subject to, any Insolvency, Receivership or
Bankruptcy Act.
(d) APPOINTMENT OR RECEIVER OR TRUSTEE. If a receiver or trustee
shall be appointed for, or to take possession of, all or a substantial part
of the property or Tenant or Tenant's leasehold interest.
(e) [Intentionally Omitted]
(f) ATTACHMENT, EXECUTION. If there be any attachment, execution
or other judicial seizure of all or a substantial part of the assets of
Tenant or Tenant's leasehold, where such attachment, execution or seizure is
not discharged or bonded off within thirty (30) days.
(g) [Intentionally Omitted]
(h) OTHER DEFAULT. If Tenant shall breach or fail to fulfill any
of the other covenants and conditions of this Lease and such breach and/or
failure, as the case may be, shall continue for thirty (30) days after
Tenant's receipt of written notice thereof from Landlord to Tenant specifying
such default in reasonable detail.
8.2 LANDLORD REMEDIES. If any one or more of the Events of Default
shall occur and continue, then Landlord shall have the following remedies:
(a) Landlord at any time after the Event of Default, at Landlord's
option, may give to Tenant seven (7) days' notice of termination of this
Lease, and in the event such notice is given, this Lease shall come to an end
and expire (whether or not the Term shall have commenced) upon the expiration
of such seven (7) days, but Tenant shall remain liable for damages as
provided in this Lease.
(b) Either with or without terminating this Lease, Landlord may
immediately or at any time after the Event of Default or after the date upon
which this Lease shall expire, reenter the Demised Premises or any part
thereof if and to the extent permitted under applicable laws, either by
summary proceedings or by any other applicable action or proceeding, or
otherwise (without being liable to indictment, prosecution or damages
therefore), and may repossess the Demised Premises and remove any and all of
Tenant's property and effects from the Demised Premises.
(c) Either with or without terminating this Lease, Landlord may
relet the whole or any part of the Demised Premises from time to time, either
in the name of Landlord or otherwise, to such tenant or tenants for such term
or terms ending before, on or after the Expiration Date, at such rental or
rentals and upon such other conditions, which may include concessions and
free-rent periods, as Landlord, in its reasonable judgement, may determine.
Landlord shall have a duty and obligation to use commercially reasonable
efforts to mitigate damages resulting from Tenant's breach. In the event of
any such reletting, Landlord shall not be liable for the failure to collect
any rental due upon any such reletting, and no such failure shall operate to
relieve Tenant of any liability under this Lease or otherwise to affect any
such liability; and Landlord may make such repairs, replacements,
alterations, additions, improvements, decorations and other physical changes
in and to the Demised Premises, as Landlord, in its reasonable judgment,
considers advisable or necessary in connection with any such reletting or
proposed reletting, without relieving Tenant of any liability therefore or
otherwise affecting any liability under this Lease.
(d) Landlord shall have the right to recover the rental and all
other amounts payable by Tenant hereunder as they become due (unless and
until Landlord has terminated this Lease) and all other damages incurred by
Landlord as a result of an Event of Default.
(e) The remedies provided for in this Lease are in addition to any
other remedies available to Landlord at law or in equity statute or otherwise.
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8.3 TERMINATION UPON DEFAULT. Upon termination of this Lease by
Landlord, Landlord shall be entitled to recover from Tenant as liquidated
damages the aggregate of: (a) the worth at the time of award of the unpaid
rental which had been earned at the time of termination; (b) the worth at the
time of award of the amount by which the unpaid rental which would have been
paid exceeds the then reasonable rental value of the Demised Premises during
such period; and (c) the worth at the time of the award of the amount by
which the unpaid rental for the balance of the Term of this Lease after the
time of award exceeds the reasonable rental value of the Demised Premises for
such period. In no event will Tenant be liable for consequential or punitive
damages. The "worth at the time of award" of the amounts referred to in
clauses (a) and (b) above is computed from the date such rent was due or
would have been due, as the case may be, by allowing interest at the rate of
(2%) percent in excess of the prime rate of NBD Bank (the "NBD Rate"). The
"worth at the time of award" of the amount referred to in clause (c) above is
computed by discounting such amount at the NBD Rate. Further, the term
"unpaid rental" as used in this paragraph shall include all Basic Rent and
increases there to, and Additional Rent, as these terms are defined in this
Lease.
8.4 LANDLORD'S LIEN FOR RENT; WAIVER OF EXEMPTIONS. Landlord shall have
a lien for payment of the rent aforesaid upon all of the goods, wares,
chattel, fixtures, furniture and other personal property of Tenant which may
be in or upon the Demised Premises, Tenant hereby specifically waiving any
and all exemptions allowed by law; and such lien may be enforced in any other
lawful manner at the option of the Landlord following an Event of Default.
8.5 BANKRUPTCY.
(a) In the event that Tenant shall be adjudicated or declared
bankrupt under, or if any proceedings are filed by or against Tenant under
the Bankruptcy Code or any similar provisions of any future federal
bankruptcy law, then and in any such event, Landlord may at its option
terminate this Lease and all rights of Tenant hereunder, by giving to Tenant
notice in writing of the election of Landlord to so terminate, in which event
this Lease shall cease and terminate with the same force and effect as though
the date set forth in said notice was the date originally set forth herein
and fixed for the expiration of the Term and Tenant shall vacate and
surrender the Demised Premises but shall remain liable to the full extent
permitted by law.
(b) If as a matter of law Landlord has no right on the bankruptcy
of Tenant to terminate this Lease, then if Tenant, as debtor, or its trustee,
wishes to assume or assign this Lease, in addition to curing to adequately
assuring the cure of all defaults existing under this Lease of Tenant's part
on the date of filing of the proceedings (such assurances being defined
below), Tenant as debtor, or its trustee, must also furnish adequate
assurance of future performance under this Lease (as defined below).
Adequate assurance of curing defaults means the posting with Landlord of a
sum in cash sufficient to defray the costs of such a cure. Adequate
assurance of future performance under this Lease means posting a deposit
equal to three (3) months' rent including all other charges payable by Tenant
hereunder, and in the case of an assignee, assuring Landlord that the
assignee is financially capable of assuming this Lease, and that its use of
the Demised Premises will be as provided in Article 7.1 of this Lease and for
no other use. In a reorganization under Chapter 11 of the Bankruptcy Code,
the debtor or trustee must assume this Lease or assign it within one hundred
twenty (120) days from the filing of the proceeding or he shall be deemed to
have rejected and terminated this Lease. In a proceeding under Chapter 7 of
the Bankruptcy Code, the debtor or trustee must assume this Lease or assign
it within sixty (60) days from the filing of the proceeding or he shall be
deemed to have rejected and terminated this Lease.
(c) In the event that this Lease is assumed by a bankruptcy trustee
appointed for Tenant or by Tenant as Debtor-In-Possession and thereafter
Tenant is liquidated or files a subsequent Petition for reorganization or
adjustment of debts under Chapters 11 or 13 of the Bankruptcy Code, then, and
in either of such events, Landlord may, at its option, terminate this Lease
and all rights of Tenant hereunder, by this Lease and by giving Tenant
written notice of its election to so terminate no later than thirty (30) days
after the occurrence of either of such events.
(d) When, pursuant to the Bankruptcy Code, a trustee or
Debtor-In-Possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Demised Premises of any portion thereof, such
charges shall not be less than the Basic Rent as defined in the Lease and
other monetary obligations of Tenant for the payment of Real Estate Tax
Increases and Operating Expense Increases.
(1) Neither Tenant's interest in the Lease, nor any lesser
interest of Tenant herein, nor any estate of Tenant hereby created, shall
pass to any trustee, receiver, assignee for the benefit of creditors, or any
other person or entity, or otherwise by operation of law under the laws of
any state having jurisdiction of the person or property of the Tenant unless
Landlord shall consent to such transfer in writing. No acceptance by
Landlord of rent or any other payments from any such trustee, receiver,
assignee, person or other entity shall be deemed to have waived, nor shall it
waive, the need to obtain Landlord's consent or Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without
such consent.
(2) In the event the estate of Tenant created hereby shall be
taken in execution or other process of law, or if Tenant shall be adjudicated
insolvent pursuant to the provisions of any state having jurisdiction ("State
Law"), or any similar provisions of any future federal bankruptcy law, or if
a receiver or trustee of the property of Tenant shall be appointed under
State Law by reason of Tenant's insolvency or inability to pay its debts as
they become due or otherwise, or if any assignment shall be made of Tenant's
property for the benefit of creditors under State Law; then and in any such
event Landlord may, at its option, terminate this Lease and all rights of
Tenant hereunder by giving Tenant written notice of the election to so
terminate within thirty (30) days after the occurrence of such event.
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ARTICLE 9
REPAIRS AND ALTERATIONS
9.1 TENANT RESPONSIBILITIES. Except as otherwise provided in this
Lease, Tenant shall maintain and repair the Demised Premises under its
control. Tenant shall not perform any acts or carry on any practices which
may injure the Building and/or the Common Areas or the Development or be a
nuisance or menace to other tenants in the Building and/or Common Areas or
the Development. Tenant shall keep the Demised Premises under its control
clean and free from excess rubbish and dirt at all times, and it is further
agreed that in the event Tenant shall not comply with these provisions,
Landlord may enter upon said Demised Premises and have such excess rubbish,
dirt and ashes removed at Tenant's expense. Said charges shall be paid to
Landlord by Tenant within ten (10) days of Tenant's receipt of written notice
and a xxxx and Landlord shall have all remedies provided in this Lease in the
event of Tenant's failure to pay beyond any applicable cure period.
9.2 ADDITIONAL IMPROVEMENTS. Tenant shall not make or suffer to be made
any alternations, additions or improvements to or on the Demised Premises or
any part thereof, or attach any fixtures or equipment thereto, without first
obtaining Landlord's written consent, which shall not be unreasonably
withheld, conditioned or delayed. All such alterations, additions and
improvements shall be performed by contractors and subject to conditions
reasonably approved by Landlord. All such alterations, additions, and
improvements, including improvements which are part of Tenant's Work, shall
become the property of Landlord upon their installation and/or completion and
shall remain on the Demised Premises upon the expiration or termination of
this Lease without compensation to Tenant. Provided, however, that
notwithstanding anything to the contrary in this Lease, Tenant shall be
entitled to remove its trade fixtures, personal property, business machinery
(including computers and telephone systems) at the end of the Term. If any
such alterations or additions are made without Landlord's consent, Landlord
may correct or remove the same, and Tenant shall pay all costs of such
correction or removal.
9.3 CONDITION AND REPAIR OF DEMISED PREMISES. Except as otherwise
provided in this Lease, Tenant shall keep the Demised Premises and every part
thereof in good condition and repair, Tenant hereby waiving all rights to
make repairs at the expense of Landlord or in lieu thereof to vacate the
Demised Premises as provided by any law, statute or otherwise now or
hereinafter in effect. All repairs made by or on behalf of Tenant shall be
made and performed in such manner as Landlord may reasonably designate, by
contractors or mechanics approved by Landlord and all applicable laws and
governmental regulations. Landlord has no obligation and has made no promise
to alter, remodel, improve, repair, decorate or paint the Demised Premises or
any part thereof, and no representatives respecting the condition of the
Demised Premises, the Building, and/or the Development have been made by
Landlord to Tenant except as expressly set forth in this Lease.
ARTICLE 10
SURRENDER AND RESTORATION
10.1 TENANT TO REMOVE, SURRENDER; LANDLORD'S RIGHTS TO CURE, SELL.
Tenant agrees to remove from the Demised Premises, at the expiration or other
termination of this Lease, all goods and effects, personal property and trade
fixtures of Tenant, and to surrender possession of the Demised Premises and
all other fixtures and furnishings connected therewith in good repair, order
and condition in all respects, subject to reasonable wear and use thereof
excepted. If Tenant shall fail to perform any of the foregoing obligations,
Landlord is authorized to do so on Tenant's behalf and to sell such articles
and effects left on the Demised Premises as may be saleable. The proceeds of
any such sale shall be applied toward the expenses thus incurred, and the
balance toward any outstanding obligations of Tenant, or damages caused by
Tenant, or as otherwise set forth in this Lease. Tenant agrees to promptly
pay any balance owing to Landlord which may still exist under such
application of proceeds.
ARTICLE 11
INSURANCE AND INDEMNIFICATION/SUBROGATION
11.1 INDEMNIFICATION AND TENANT'S INSURANCE. Tenant hereby waives all
claims against Landlord for damage to any property or injury or death of any
person in, upon or about the Demised Premises and the Common Areas of the
Development arising at any time and from any cause other than solely by
reason of the negligence or willful wrongful act of Landlord, its employees
or contractors. Tenant shall hold Landlord harmless and hereby indemnifies
Landlord from any and all causes of action, fines, penalties, actual damages,
losses, liabilities, judgments, and expenses (including, without limitation,
actual attorneys' fees and courts costs, and all other reasonable costs and
expenses incurred by Landlord from the first notice that any claim or demand
is to be made or may be made hereby) arising from the use of the Demised
Premises and Common Areas of the Development by Tenant to the extent not
covered by insurance, except such as is caused solely by the gross negligence
or willful act of Landlord, its contractors, employees and agents. The
provisions of this Paragraph 11.1 shall survive the expiration or termination
of this Lease with respect to any damage, injury or death occurring prior to
such expiration or termination.
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11.2 TENANT'S LIABILITY INSURANCE. Tenant shall procure and keep in
effect comprehensive general liability insurance including contractual
liability, with the minimum limits of liability of Two Million
($2,000,000.00) Dollars per occurrence for bodily injury or death, and
property damage. Such insurance shall name Landlord as an additional named
insured, shall specifically include the liability assumed hereunder by
Tenant, and shall provide that it is primary insurance and not excess over or
contributory with any other valid, existing applicable insurance in force for
or on behalf of Landlord, and shall provide that Landlord shall receive
thirty (30) days' notice from the insurer prior to any cancellation or
reduction of coverage.
11.3 TENANT'S FIRE INSURANCE. Tenant shall procure and keep in effect
fire insurance (including standard extended coverage endorsement perils, all
risk perils and leakage from fire protective devices) for the full
replacement cost of Tenant's trade fixtures, equipment, personal property and
the leasehold improvements.
11.4 INSURANCE POLICIES AND CERTIFICATES. Tenant shall deliver policies
of the insurance required pursuant to Sections 11.2 and 11.3 hereof or
certificates thereof to Landlord on or before the Commencement Date, and
thereafter at least thirty (30) days before the expiration dates of expiring
policies.
11.5 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive any
and all rights of recovery against each other, or against the officers,
employees, agents or representatives of the other for loss of or damage to
its property or the property of others under its control, if such loss or
damage is covered by any insurance policy in force (whether or not described
in this Lease) at the time of such loss or damage. Upon obtaining the
policies of insurance described herein, Landlord and Tenant shall give notice
to the insurance carrier or carriers of the foregoing mutual waiver of
subrogation.
11.6 LANDLORD'S INSURANCE. Landlord shall, throughout the Term of this
Lease, procure and maintain insurance with commercially reasonable coverage
of the Common Areas and the Building and the Development against fire and
extended coverage in the amount of full replacement value of the structure
and such other risks may be included at the discretion of Landlord. Landlord
shall, throughout the Term of this Lease, procure and maintain comprehensive
general liability insurance with respect to the Building and the Common Areas
of the Development with limits of at least $2,000,000.00 on a combined single
limit basis.
ARTICLE 12
LANDLORD'S RIGHT OF ACCESS
12.1 ENTRY BY LANDLORD. Landlord and its designees may enter the Demised
Premises at reasonable hours and after reasonable written notice to (a)
inspect the same, (b) during the last six (6) months of the Term, exhibit the
same to prospective purchasers, lenders or tenants, (c) determine whether
Tenant is complying with all of its obligations hereunder, (d) supply other
services to be provided by Landlord to Tenant hereunder, (e) post notices of
nonresponsibility, and (f) make repairs required of Landlord under the
provisions hereof or repairs to any adjoining space or utility services, or
to make repairs alterations or improvements to any other portion of the
Building; provided however, that all such work shall be done as promptly as
reasonably possible and shall be performed in a way so as to avoid
interference with or disruption of Tenant's use of the Demised Premises and
the operation of its business. Tenant hereby waives any claim for damages
for any injury or inconvenience to or interference with Tenant's business,
any loss of occupancy or quiet enjoyment of the Demised Premises or any other
loss occasioned by such entry.
12.2 EMERGENCY ACCESS. Landlord shall have the right to use any and all
means which Landlord may deem proper to open doors to the Demised Premises in
an emergency in order to obtain entry to Demised premises, and any entry to
the Demised Premises obtained by Landlord by any of said means, or otherwise,
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into or a detainer of the Demised Premises or an eviction,
actual or constructive, of Tenant from the Demised Premises, or any portion
thereof.
ARTICLE 13
CASUALTY CLAUSE
13.1 PARTIAL ABATEMENT RENT; REPAIR; OPTION TO TERMINATE. In the event
that the Demised Premises or any part thereof, or the Common Areas of the
Development are damaged or destroyed by fire, earthquake or Act of God, or
other casualty so as to render the Demised Premises wholly or partially unfit
for use and occupancy by Tenant, then Landlord will proceed at its expense
and as expeditiously as may be practicable, but not later than ninety (90)
days after the date of the casualty, to complete the repair of such damage.
If, because of the substantial extent of the damage or destruction, Landlord
should decide not to repair or restore the Demised Premises or the Building
or the Common Areas of the Project, at Landlord's sole option, Landlord may
terminate this Lease forthwith by giving Tenant a written notice of its
intention to terminate within thirty (30) days after the date of the
casualty. This Lease shall remain in full force and effect except that an
abatement of Basic Rent and Additional Rent shall be allowed Tenant for so
much of the Demised premises as shall be rendered unusable by Tenant in the
conduct of its business during the time such part is so unusable.
13.2 REPAIR AFTER CASUALTY. If the Demised Premises are to be repaired
under this Article 13, Landlord shall repair at its cost any injury or damage
to the Property, the Building and the Development and the tenant improvements
and other improvements in the Demised Premises to be constructed or installed
by Landlord as set forth in the Landlord's Work Exhibit. Tenant shall be
solely responsible for its personal property in the Demised Premises and
shall obtain insurance covering the same pursuant to Article 11.
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ARTICLE 14
EMINENT DOMAIN
14.1 EMINENT DOMAIN. If all or any part of the Demised Premises shall be
taken as a result of the exercise of the power of eminent domain, this Lease
shall terminate as to the part so taken as of the date of taking, and in the
case of a partial taking, Tenant shall have the right to terminate this Lease
as to the balance of the Demised Premises by written notice to the other
within thirty (30) days after such date; provided, however, that a condition
to the exercise by Tenant of such right to terminate shall be that that
portion of the Demised Premises taken shall be of such extent and nature as
substantially to handicap, impede or impair Tenant's use of the balance of
the Demised Premises. In the event of any taking, Landlord shall be entitled
to any and all compensation, damages, income, rent, awards, or any interest
therein whatsoever which may be paid or made in connection therewith, and
Tenant shall have no claim against Landlord for the value of any unexpired
Term of this Lease. Tenant shall have the right to seek such awards,
compensations and damages so long as the same do not reduce the award payable
to Landlord. In the event of a partial taking of the Demised Premises which
does not result in a termination of this Lease, the rental thereafter to be
paid shall be reduced on a per square foot basis.
ARTICLE 15
SUBORDINATION CLAUSE
15.1 LEASE SUBORDINATE TO MORTGAGES; TENANT TO EXECUTE INSTRUMENTS.
Subject to the other provisions of this Article 15, Landlord reserves the
right to subordinate this Lease at all times to the lien of any mortgage or
mortgages hereafter placed upon Landlord's interest in the Building and/or
the Development. Provided Tenant executes and delivers an acceptable form of
non-disturbance agreement, this Lease shall become subject and subordinate at
all times to the lien of any mortgage, deed of trust, any ground or
underlying lease, or other encumbrance or encumbrances, which may at any time
hereafter be made a lien upon the Building of which the Demised Premises are
a part or upon Landlord's interest therein. Upon Tenant's execution and
delivery of an acceptable non-disturbance agreement, Tenant shall execute and
deliver such instrument or instruments subordinating this Lease to the lien
of any such mortgage, deed of trust, ground lease or other encumbrance or
encumbrances by any mortgagee or party secured or proposed mortgage or party
secured or proposed to be secured.
15.2 NON-DISTURBANCE AGREEMENT REQUIRED. Notwithstanding anything to the
contrary in this Lease, the subordination of this Lease is expressly
conditioned upon Landlord delivering to Tenant a fully signed non-disturbance
agreement in a form reasonably satisfactory to Tenant from all holders of
liens and ground leases or other interests in the Building, the Development
and/or the Demised Premises. Furthermore, Landlord shall provide Tenant a
fully signed non-disturbance agreement in a form reasonably satisfactory to
Tenant as a condition to requiring Tenant to subordinate its leasehold
interest in the Demised Premises to any ground leases and financing liens
affecting the Building, the Development and/or the Demised Premises.
ARTICLE 16
TENANT HOLDING OVER
16.1 MONTH-TO-MONTH. If Tenant shall not immediately surrender
possession of the Demised Premises at the termination of this Lease, Tenant
shall be deemed to be occupying the Demised Premises under a tenancy from
month-to-month, subject to all the terms and conditions of this Lease,
including, but not limited to, the obligation to pay Basic Rent and
Additional Rent, except that Basic Rent shall be increased to one and
one-half (1-1/2) times the rate of Basic Rent set out in this Lease, which
sum shall be paid to Landlord in advance prior to each and every month of the
month-to-month tenancy being effectuated; however, unless and until, Landlord
shall accept such increased Basic Rent from Tenant, Landlord shall continue
to be entitled to retake or recover possession of the Demised Premises as
hereinbefore provided in the case of default on the part of Tenant. If
Landlord does accept said increased Basic Rent from Tenant, then said
month-to-month tenancy may be terminated by either Landlord or Tenant upon
thirty (30) days' notice to the other, in accordance with Michigan law.
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ARTICLE 17
LIMITATIONS ON LIABILITY OF LANDLORD
17.1 LIMITATION OF LIABILITY. In the event the Landlord hereunder or any
successor owner of the Building shall sell or convey the Building and/or the
Development, all liabilities and obligations on the part of the original
Landlord or such successor owner under this Lease accruing thereafter shall
terminate, and thereupon all such liabilities and obligations shall be
binding upon the new owner. Tenant shall attorn to such new owner.
17.2 LIABILITY FOR DAMAGE TO DEMISED PREMISES. Landlord shall not be
responsible or liable to Tenant, except as otherwise provided in this Lease,
for any loss or damage that may be occasioned by or through the acts or
omissions of persons occupying adjoining areas or any part of the area
adjacent to or connected with the Demised Premises or any part of the
Building or the Development or for any loss or damage resulting to Tenant or
its property from burst, stopped or leaking water, gas, sewer or steam pipes,
or from theft or a failure of the security systems in the Demised Premises or
the Building or the Development, or for any damage or loss of property within
the Demised Premises, the Building, or the Development from any cause other
than solely by reason of the negligence or willful wrongful act of Landlord,
and no such occurrence shall be deemed to be an actual or constructive
eviction from the Demised Premises or result in an abatement of rental,
except as otherwise provided in this Lease.
17.3 LANDLORD'S BREACH. If Landlord shall fail to perform any covenant,
term or condition of this Lease upon Landlord's part to be performed, and, if
as a consequence of such default, Tenant shall recover a money judgment
against Landlord, such judgment, except as otherwise provided in this
Paragraph 17.3, shall be satisfied only against the right, title and interest
of Landlord in the Demised Premises, the Building and the Development or any
part thereof and out of rents or other income from the Demised Premises, the
Building and the Development or any part thereof receivable by Landlord, or
from the proceeds of disposition of the Demised Premises, the Building and/or
the Development receivable by Landlord, or disposition of all or any part of
Landlord's right, title and interest in the Demised Premises, the Building
and the Development or any part thereof, and Landlord shall not be liable for
any deficiency in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).
ARTICLE 18
ESTOPPEL CERTIFICATE
18.1 CERTIFICATE OF VALIDITY AND STATUS OF LEASE. At any time and from
time to time but no later than ten (10) business days after written request
by Landlord, Tenant shall promptly execute, acknowledge and deliver to
Landlord, a certificate indicating (a) that this Lease in unmodified and in
full force and effect (or, if there have been modifications, that this Lease
is in full force and effect, as modified and stating the date and nature of
each modification), (b) the date, if any to which rental and other sums
payable hereunder have been paid, (c ) that no notice has been received by
Tenant of any default which has not been cured, except as to defaults
specified in said certificate, and (d) such other matters as may be
reasonably requested by Landlord. Any such certificate may be relied upon by
any prospective purchaser, mortgagee or beneficiary under any deed or trust
of the Building, the Development or any part thereof.
ARTICLE 19
NO LIGHT, AIR OR VIEW EASEMENT
19.1 NO SCENIC VIEW. Any diminution or shutting off of light, air or
view by any structure which may be erected adjacent to the Building shall in
no way affect this Lease or impose any liability on Landlord.
ARTICLE 20
ATTORNEYS' FEES
20.1 RECOVERY OF ATTORNEYS' FEES. If as a result of any breach or
default in the performance of any of the provisions of this Lease by Tenant
Landlord uses the services of an attorney in order to secure compliance with
such provisions or recover damages therefor, or to terminate this Lease or
evict Tenant, Tenant shall reimburse Landlord upon demand for reasonable
attorney's fees and expenses so incurred by Landlord, provided that if Tenant
shall be the prevailing party in any legal action brought by Landlord against
Tenant, upon rendering of a final non-appealable judgment, Tenant shall be
entitled to recover for the fees and expenses of its attorneys in such amount
as the court may adjudge reasonable. If as a result of any breach or default
in the performance of any of the provisions of this Lease by Landlord, Tenant
uses the services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease, and
Tenant is the prevailing party in the litigation, then, as part of the
judgment rendered in such litigation, Tenant shall be entitled to
reimbursement for reasonable attorneys' fees and expenses incurred by Tenant,
provided that Tenant shall not be entitled to collect such attorneys' fees
and expenses until the judgement becomes final and non-appealable, and (ii)
if Landlord shall be the prevailing party in any legal action brought by
Tenant against Landlord, upon rendering of a final non-appealable judgment,
Landlord shall be entitled to recover for the fees and expenses of its
attorneys in such amount as the court may adjudge reasonable.
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ARTICLE 21
WAIVER
21.1 NO WAIVER BY LANDLORD. The waiver by Landlord of any agreement,
condition or provision herein contained shall not be deemed to be a waiver of
any subsequent breach of same or any other agreement, condition or provision
herein contained, nor shall any custom or practice which may grow up between
the parties in the administration of the terms hereof be construed to waive
or to lessen the right of Landlord to insist upon the performance by Tenant
of the provisions hereof in strict accordance with said terms. The
subsequent acceptance of rental hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any agreement, condition or
provision of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rental.
21.2 WAIVER OF TRIAL BY JURY. Landlord and Tenant hereby waive trial by
jury in any action, proceeding, or counterclaim brought by Landlord or Tenant
against the other on any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, the use
or occupancy of the Demised Premises, the Common Areas and the Development by
Tenant or any person claiming through or under Tenant, any claim of injury or
damage, and any emergency or other statutory remedy. If Landlord commences
any summary or other proceeding for nonpayment of rent or the recovery of
possession of the Demised Premises, Tenant shall not interpose any
counterclaim of whatever nature or description in any such proceeding, unless
the failure to raise the same would constitute a waiver thereof.
ARTICLE 22
COMPLETE AGREEMENT
22.1 LEASE IS ENTIRE AGREEMENT. This Lease represents the entire
agreement between Landlord and Tenant regarding all issues incident to
Tenant's tenancy. There are no oral agreements between Landlord and Tenant
affecting this Lease, and this Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and
understandings, if any, between Landlord and Tenant. There are no
representations between Landlord and Tenant other than those contained in
this Lease. No alteration, amendment, change, and/or modification of this
Lease shall be binding upon Landlord or Tenant unless reduced to writing and
executed by both Landlord and Tenant.
ARTICLE 23
CORPORATE AUTHORITY
23.1 TENANT'S AUTHORIZED TRANSACTION. Tenant hereby warrants that Tenant
is an existing corporation, that Tenant is qualified to do business in
Michigan, that the corporation has full right and authority to enter into
this Lease, and that each and all of the persons signing on behalf of the
corporation are authorized to do so.
ARTICLE 24
NOTICES
24.1 NOTICES PARTIES' ADDRESSES. All notices, consents, requests,
demands, designations or other communications which may or are required to be
given by either party to the other hereunder shall be in writing and shall be
deemed to have been duly given upon the first to occur of personal delivery
(including by facsimile), actual receipt, or three (3) days after deposit in
the United States mail, certified or registered, postage prepaid, and
addressed as follows: to Tenant and its counsel at the addresses set forth in
the Lease Data Exhibit, or to such other place as Tenant may from time to
time designate in a notice to Landlord; to Landlord at the address set forth
in the Lease Data Exhibit, or to such other place as Landlord may from time
to time designate in a notice to Tenant and its counsel.
ARTICLE 25
INABILITY TO PERFORM
[Intentionally Deleted]
ARTICLE 26
COVENANT OF QUIET ENJOYMENT; NON-COMPETITION
26.1 PEACEFUL ENJOYMENT OF PREMISES. Upon Tenant paying the rental and
other charges due hereunder and performing all of Tenant's obligations under
this Lease, Tenant shall peacefully and quietly enjoy the Demised Premises
during the Term of this Lease, subject, however, to the provisions of this
Lease.
26.2 NON-COMPETITION. Landlord agrees that no competing computer school
or computer training facility shall occupy space within the Property or the
Building or the Development.
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ARTICLE 27
SUCCESSORS IN INTEREST
27.1 LEASE BINDING UPON SUCCESSORS. This Lease shall likewise be binding
upon and shall inure to the benefit of parties hereto and their respective
heirs, personal representatives, successors and assigns.
ARTICLE 28
SIGN/ADVERTISING AWNING; ROOFTOP TELECOMMUNICATION DEVICE
28.1 SIGNS, ETC. So long as Tenant occupies the entire first floor of
the Building, Tenant shall have the sole right at Tenant's cost to install a
sign on the west side of the Building facing the I-75 Expressway. Such sign
shall comply with all applicable laws, and Tenant shall be responsible for
obtaining all required permits. Upon termination of this Lease, Tenant shall
remove the sign. Tenant shall be responsible for all damage caused to the
Building or the Demised Premises by the sign or its installation or removal.
Tenant shall also be permitted to install a sign on or near its door to the
Demised Premises. If Tenant's students or invitees experience difficulty in
locating and proceeding directly to the Demised Premises from the parking
lot, Landlord and Tenant shall discuss and negotiate in good faith regarding
the location of any additional directional signs (pointing the way to the
Demised Premises) in the parking lot area which may be desirable, which signs
shall be subject to Landlord's approval, not be unreasonably withheld,
conditioned or delayed; any such additional signage shall be at Tenant's sole
cost and expense. Except as hereinabove specifically permitted, no sign
and/or advertising display relative to Tenant or Tenant's business shall be
displayed in and about the Demised Premises, Building, and/or the Development.
28.2 TELECOMMUNICATION DEVICE. Tenant shall have the right, exercisable
at any time(s) during the Term of this Lease, to install a roof-mounted
telecommunication device (such as a satellite dish or other such device) on
the Building, subject to Landlord's approval which shall not be unreasonably
withheld, conditioned or delayed. Tenant shall comply with all applicable
Federal, state and local laws in the installation and operation of any such
telecommunication device. On or before the Expiration Date, Tenant shall
remove any such telecommunication device and repair any damage to the
Building resulting from such removal.
ARTICLE 29
COMPLIANCE WITH LEGAL REQUIREMENTS
29.1 COMPLIANCE. Subject to the other provisions of this Lease, Tenant
shall promptly comply with all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force and with the requirements of any board of fire underwriters or other
similar body now or hereafter constituted, with any occupancy certificate or
directive issued pursuant to any law by any public officer, insofar as any of
the foregoing relate to or affect Tenant's use or occupancy of the Demised
Premises, excluding requirements of structural or other changes not related
or affected by improvements made by or for Tenant or not necessitated by
Tenant's act.
ARTICLE 30
RULES
30.1 RULES. Tenant shall faithfully observe and comply with the rules
and regulations attached hereto and made a part hereof as Exhibit D and,
after notice thereof, all reasonable modifications thereof and additions
thereto from time to time promulgated in writing by Landlord. In the event
of any inconsistency between such rules and regulations (including any
modifications thereof) and this Lease, this Lease shall prevail. Landlord
shall enforce compliance with such rules by other tenants but Landlord shall
not be responsible to Tenant for damages occasioned by the nonperformance by
any other tenant or occupant of the Building or the Development of any of
such rules and regulations.
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ARTICLE 31
LANDLORD'S RIGHT TO CURE DEFAULTS
31.1 LANDLORD'S CURE. All covenants, terms and conditions to be
performed by Tenant under any of the provisions of this Lease shall be at its
sole cost and expense and without any abatement of rental. If Tenant shall
fail to pay to any person other than Landlord any sum of money required to be
paid by it hereunder, Landlord may but shall not be obligated so to do, and
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as in this Lease provided. All sums so paid by Landlord and all
necessary incidental costs shall be deemed Additional Rent hereunder and
shall be payable to Landlord on demand. Landlord shall have the same rights
and remedies in the event of the nonpayment thereof by Tenant as in the case
of default by Tenant in the payment of Basic Rent.
ARTICLE 32
CONSTRUCTION LIENS
32.1 DISCHARGE OF LIENS. Any construction lien filed against the Demised
Premises, the Building and/or the Development for work claimed to have been
done or materials claimed to have been furnished to Tenant shall be
discharged by Tenant within ten (10) business days thereafter. The bonding
of such lien by a reputable casualty or insurance company reasonably
satisfactory to Landlord shall be deemed the equivalent of a discharge of any
such lien. Should any action, suit, or proceeding be brought upon any such
lien for the enforcement or foreclosure of the same, Tenant shall defend
Landlord therein, by counsel reasonably satisfactory to Landlord, and pay any
damages and satisfy and discharge any judgment entered therein against
Landlord.
ARTICLE 33
NO MERGER
33.1 NO MERGER INTENDED. The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation hereof, shall not work as a merger, and
shall, at the option of Landlord, terminate all or any existing subleases or
subtenancies, or may at the option of Landlord, operate as an assignment to
it of any or all such subleases or subtenancies.
ARTICLE 34
ABANDONMENT
34.1 ABANDONMENT OF DEMISED PREMISES. If Tenant shall abandon or
surrender the Demised Premises without the payment of rent due to such date,
or be dispossessed by process of law or otherwise, any personal property
belonging to Tenant and left on the Demised Premises shall be deemed to be
abandoned, or at the option of Landlord, may be removed by Landlord at
Tenant's expense.
ARTICLE 35
SECURITY DEPOSIT
35.1 SECURITY DEPOSIT REQUIREMENTS. Upon the execution of this Lease,
Tenant has deposited with Landlord a security deposit in the amount set forth
on the Lease Data Exhibit. The deposit shall be held by Landlord as security
for the faithful performance by Tenant of all of the provisions of this Lease
to be performed or observed by Tenant. Upon the occurrence and during the
continuance of an Event of Default by Tenant hereunder, Landlord may, but
shall have no obligation to, use, apply or retain all or any portion of the
deposit for the payment of any sum to which Landlord may become obligated by
reason of Tenant's Event of Default, or to compensate Landlord for any loss
or damage which Landlord may suffer thereby. If Landlord so uses or applies
all or any portion of the deposit, Tenant shall, within ten (10) days after
demand therefore, deposit cash with Landlord in an amount sufficient to
restore the deposit to the full amount thereof. Landlord may commingle the
deposit with its other funds, and shall not be required to account for any
interest earned thereon. If an Event of Default by Tenant does not exist at
the termination or expiration of the Term, the deposit or so much thereof as
has not theretofore been applied by Landlord, shall be returned, with payment
of interest for its use, to Tenant (or, if applicable, to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the Term, and
after Tenant has vacated the Demised Premises. No trust relationship is
created herein between Landlord and Tenant with respect to the security
deposit.
ARTICLE 36
PARKING
36.1 PARKING REQUIREMENTS.
(a) Tenant shall have the non-exclusive right in common with
Landlord, other tenants, their guests and invitees, to the use of ten (10)
parking spaces per 1,040 rentable square feet of the Demised Premises
(including any Expansion Space [as defined below]). Such parking shall be
provided by Landlord to Tenant for Tenant's benefit during the Term
(including any extensions and renewals thereof) without any charge therefor.
The total cost of parking is included in Basic Rent. Such parking shall be
in the parking lot which is part of the Development, but Landlord reserves
the right to designate, and to change from time to time, the location of
those parking spaces. Landlord guarantees the availability of the full
amount of parking spaces at all times through the Term. Such parking spaces
will be subject to such reasonable rules and/or regulations which may from
time to time be established by Landlord. Landlord shall have the right from
time to time to change the arrangement of the parking areas and to change
routes, provided the Demised Premises are adequately served by the new routes
and arrangements. Tenant shall not be required to pay any parking fees
(other than Operating Expense Increases) for use of the parking spaces.
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(b) Landlord shall provide ten (10) reserved parking spaces
immediately in front of the entrance to the Building, which shall be included
in the parking spaces to be provided under Paragraph 36.1(a).
(c) The spaces referred to in Paragraph 36.1(a) and 36(b) shall be
provided in the parking area described in Exhibit E, attached hereto and made
a part hereof (which exhibit shall be amended to include any Expansion
Space), but as indicated in Section 36.1(a), Landlord reserves the right to
change the location of any spaces referred to therein (but not the location
of the ten (10) spaces referred to in Section 36.1(b)). Each of the ten (10)
reserved parking spaces shall be marked by Landlord, at Landlord's expense,
in paint or with a sign, as "RESERVED FOR COMPUTER LEARNING CENTERS, INC."
or, at Tenant's request, as "VISITORS TO COMPUTER LEARNING CENTERS, INC."
Tenant shall have the right during the Term to require Landlord, at Tenant's
expense, to change the designations on the space to refer to specific
officers or offices.
(d) If Tenant exercises its right to lease Expansion Space (as
defined below) pursuant to Section 40 below, Landlord may satisfy part or all
of its parking obligations under Section 40.5 and this Section 36 by
providing off-site parking at (i) the property near the Building known as the
Abbey Theatre or (ii) other property owned by Landlord, provided such
property shall be no further from the Demised Premises than the Abbey Theatre
site.
ARTICLE 37
LANDLORD'S REPRESENTATIONS AND COVENANTS
37.1 LANDLORD'S REPRESENTATIONS, ETC. Landlord represents, warrants and
covenants to Tenant that as of the date of this Lease and as of the
Commencement Date:
(a) The Demised Premises (including all bathrooms therein if
required by any governmental authorities), the access thereto, the Common
Areas (including all bathrooms therein) located on the first floor and the
parking areas comply in all respects with (i) The Americans with Disabilities
Act ("ADA") and the requirements of the Barrier Free Design Division, Bureau
of Construction Codes, Michigan Department of Labor (the "Michigan Disability
Requirements"), (ii) all applicable laws, regulations and legal requirements
(other than the ADA and the Michigan Disability Requirements), including,
without limitation, all environmental, health and safety laws, and that there
are no hazardous or dangerous materials within the Demised Premises, the
Building, the Common Areas or the Development.
(b) All existing base building systems and all existing work and
equipment in the Demised Premises are in good and sound working condition;
(c) All existing property, structures, alterations and improvements
in the Demised Premises, the Building, the Common Areas and the Development
are in good condition suitable for use by Tenant; and
(d) All the systems, equipment, property and structures referred to
in clauses (b) and (c) above are in compliance with all applicable codes and
other legal requirements insofar as they relate to the Demised Premises and
Tenant's use or occupancy of the same.
(e) Landlord owns the Demised Premises, the Building, the Common
Areas and the Development free and clear of any and all liens, ground leases
or other financing encumbrances.
ARTICLE 38
MISCELLANEOUS
38.1 BINDING EFFECT. The term "Tenant" shall include legal
representatives, successors and assigns. All covenants herein made binding
upon Tenant shall be construed to be equally applicable to and binding upon
its agents, employees and others claiming the right to be in the Demised
Premises or in the Building through or under Tenant.
38.2 USE OF BUILDING NAME, ETC. Tenant shall not, without the consent of
Landlord, use the name of the Development or the Building for any purpose
other than as the address of the business to be conducted by Tenant in the
Demised Premises. Landlord reserves the right to change the name of the
Development or the Building as it deems appropriate from time to time.
38.3 SEVERABILITY. If any provisions of this Lease shall be determined
to be illegal or unenforceable, such determination shall not affect any other
provisions of this Lease and all such other provisions shall remain in full
force and effect.
38.4 GOVERNING LAW, ETC.
(a) This Lease shall be governed by and construed pursuant to the
laws of the State of Michigan.
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(b) Any action brought to enforce or interpret this Lease shall be
brought in the court of appropriate jurisdiction in Oakland County, Michigan.
Should any provision of this Lease require judicial interpretation, it is
agreed that the court interpreting or considering the same shall not apply
the presumption that the terms hereof shall be more strictly construed
against a party by reason of the rule or conclusion that a document should be
construed more strictly against the party who itself or through its agent
prepared the same, it being agreed that all parties hereto have participated
in the preparation of this Lease and that legal counsel was consulted by each
party hereto before the execution of this Lease.
(c) Notwithstanding anything in this Lease to the contrary, this
Lease is subject to, and its effectiveness is conditioned upon, Tenant
obtaining all required Federal, state and local educational and business
licenses, permits and approvals.
38.5 REPRESENTATION REGARDING BROKERS. Tenant and Landlord each
represents and warrants to the other that it has dealt with no broker or
agent in connection with the negotiations or the consummation of this Lease
or any arrangements with respect thereto except for the Brokers as set forth
in the Lease Data Exhibit. Landlord and Tenant each agree to indemnify and
hold harmless the other against and from all liabilities and expenses
(including, without limitation, counsel fees and disbursements in defending
against such liabilities) which may accrue by reason of, on account of, or
growing out of, or resulting from a breach by Tenant or Landlord of such
warranty and representation.
38.6 EXHIBITS. Exhibits A -F are attached hereto are incorporated herein
by reference and made a substantive part hereof, with the same effect as if
fully set out in this Lease.
38.7 REQUIREMENT OF REASONABLENESS. Neither Landlord nor Tenant shall
unreasonably withhold, condition or delay their consent or approval to any
request for which the other party's consent or approval is required hereunder.
ARTICLE 39
HAZARDOUS MATERIAL
39.1 ENVIRONMENTAL LAWS
(a) MUTUAL COVENANTS.
(i) Landlord, in connection with the Building and the Demised
Premises, and Tenant, in connection with its use of the Demised Premises
after the date hereof, shall comply with all Federal, state, county and local
statutes, ordinances, regulations and requirements and common law theories
respecting Hazardous Materials (as defined below) including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended 42 U.S.C. Sec. 1801, ET. SEQ.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sec. 1801, ET. SEQ.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sec. 6901, ET. SEQ.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. Sec. 1251, ET.
SEQ.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
Sec. 651, ET. SEQ.; the Emergency Planning and Community Right-to-Know Act,
42 U.S.C. Sections 11001, ET. SEQ., otherwise known as the Superfund
Amendments and Reauthorization Act of 1986; the Clean Air Act, 42 U.S.C. Sec.
4701, ET. SEQ.; the Clean Water Act, 33 U.S.C. Sections 1251, ET. SEQ.; the
Toxic Substances control Act, 15 U.S.C. Sections 2601, ET. SEQ.; the Solid
Waste Disposal Act, 42 U.S.C.A. Sections 6901 to 6991; and the Clean Air Act,
42 U.S.C.A. Sections 7401 to 7642, as the same may be amended from time to
time and all regulations and requirements promulgated thereunder or in
connection therewith which affect the Property, the Building, the Development
or the Demised Premises (collectively, the "Environmental Laws").
(ii) Neither Landlord nor Tenant shall, intentionally or
unintentionally, use the Property, the Building or the Demised Premises, or
any portion thereof, or cause or allow the Property, the Building or the
Demised Premises, or any portion thereof, to be used to receive garbage,
refuse or waste, whether or not hazardous, or for the storage, deposit,
disposal, treatment, transport, generation, refinement, processing, recycling
or sale of any toxic, dangerous or hazardous materials, including petroleum,
petroleum products, flammable explosives, radioactive materials, asbestos or
any materials containing asbestos, polychlorinated biphenyls, urea
formaldehyde or any pollutant or toxic or hazardous waste or substance,
regulated, prohibited, restricted, or controlled by any applicable Federal,
state, county or local statutes, laws, regulations, rules, ordinances or
codes relating to environmental matters, including, by way of illustration
and not by way of limitation, the Environmental Laws or any substance or
material on the Demised Premises determined by a duly constituted authority
to be capable of posing a risk to the health and safety of persons
(collectively, the "Hazardous Materials").
(iii) Landlord and Tenant shall promptly supply each other with
(i) any notices, correspondence, and/or submissions made by Landlord or
Tenant to any governmental authority that requires submissions of any
information concerning environmental matters, Hazardous Materials or other
wastes or substances in any way pertaining to the Property, the Building, the
Demised Premises or the Development, and (ii) all documents, reports,
directives and correspondence provided by such authority to Landlord or
Tenant in any way pertaining to the Property, the Building, the Demised
Premises or the Development. Landlord and Tenant shall also promptly furnish
to each other true and complete copies of all sampling and test results that
either party may obtain from samples and tests taken from, at and/or around
the Demised Premises.
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(b) LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord hereby
represents and warrants to Tenant that the Property, the Building, the
Demised Premises and the Development fully comply with all Environmental Laws
and that Landlord has no knowledge of any past or present violation of any
Environmental Law relating to the Property, the Building, the Demised
Premises or the Development, or any part thereof, nor the existence, whether
occurring in the past or at the present time, of Hazardous Materials on or
about the Property, the Building, the Demised Premises or the Development or
adjacent properties. Landlord discloses that certain panels on the third
floor exterior wall of the Building contain non-friable asbestos, but
Landlord represents that such panels now comply, and covenants that in the
future will continue to comply, with all applicable laws. Further, Landlord
covenants that such panels shall be removed at Landlord's sole cost and
expense if at any time such panels do not comply, with all applicable laws.
Provided, however, that if such panels do not interfere with Tenant's use or
occupancy of the Demised Premises, Landlord shall have the right to contest
diligently and in good faith and in accordance with all applicable laws any
determination by any governmental agency that such panels should be removed
from the Building and, upon a final non-appealable judicial or administrative
determination that such panels should be removed, Landlord shall immediately
remove the same.
(c) LANDLORD'S INDEMNIFICATION OF TENANT. Landlord shall
indemnify, defend and hold harmless Tenant from any and all liabilities,
losses, cost and damages, including, but not limited to, Tenant's reasonable
attorneys' fees, that Tenant may incur as a result of Landlord's breach of
any provision of this Article 39. Such indemnification shall include any
liability occasioned by any action or inaction on the part of Landlord,
including, but not limited to, Landlord's execution of a sales agreement for
the Building, or any part thereof, any change in ownership of the Building,
or any part thereof, initiation of bankruptcy proceedings, Landlord's
financial reorganization or the sale of substantially all of Landlord's
assets.
(d) TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall indemnify,
defend and hold harmless Landlord from any and all liabilities, losses, cost
and damages, including, but not limited to, Landlord's reasonable attorneys'
fees, that Landlord may incur because of Tenant's breach of the provisions of
this Article 39.
39.2 INDOOR AIR QUALITY PROBLEMS.
(a) The Landlord acknowledges and agrees that if poor indoor air
quality ("IAQ") causes Tenant to vacate the Demised Premises because Tenant
determines, based on the report of a qualified independent engineer, that the
IAQ is unsafe, unhealthy, overly pungent, or odorous, or generally considered
unacceptable for office space, and such condition continues for more than
seven (7) business days after Tenant delivers written notice to Landlord of
such problem, all rent under this Lease shall be abated for the period of
time that it takes for Landlord to remedy the IAQ problem and for Tenant to
resume normal occupancy and use of the Demised Premises. Landlord shall also
promptly reimburse Tenant for all of its costs and expenses incurred as a
result of such a disturbance, including, without limitation, moving and
temporary relocation costs suffered by Tenant as a result of such IAQ
problems which are not covered by Tenant's insurance.
(b) If Landlord is unable to cure the IAQ problem, based on the
report of a qualified independent engineer, within thirty (30) days from the
date that Tenant delivers written notice to Landlord of such problem, Tenant
shall have the right, exercisable at its option, to terminate this Lease and
hold Landlord liable for damages resulting from the IAQ problem.
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ARTICLE 40
TENANT'S EXPANSION RIGHTS
40.1 EXPANSION SPACE. Tenant shall have the first right of offering on any
space contiguous to the Demised Premises becoming available in the Building
during the Term of this Lease (an "EXPANSION SPACE").
40.2 AVAILABILITY NOTICE, ETC. Landlord shall give Tenant a notice (an
"AVAILABILITY NOTICE") of the availability of any Expansion Space becoming
available in the Building before offering the Expansion Space to third parties.
In the Availability Notice, Landlord shall designate the Expansion Space
available to be leased, and include a basic floor plan designating the Expansion
Space. Tenant shall have the right to lease the Expansion Space, on the terms
set forth in this Section, by giving Landlord a notice at any time between (i)
the date on which Landlord gives Tenant the Availability Notice and (ii) the
tenth (10th) business day (or third (3rd) business day if Tenant has had the
Availability Notice for at least thirty (30) days) after the date on which
Landlord gives Tenant a notice (the "PROSPECT NOTICE") stating that, unless
Tenant exercises its right to lease the Expansion Space pursuant to this
Paragraph within ten (10) (or three (3) if applicable) business days, Landlord
will extend a written proposal to lease the Expansion Space to a third party
prospect (the "PROSPECT"), who shall be identified by name in the copy of the
Prospect Notice sent to Tenant's counsel (but not Tenant's copy of the Prospect
Notice) listed below Tenant's name and address on the Lease Data Exhibit or any
other counsel designated by Tenant. If Tenant does not exercise its right to
lease the Expansion Space within ten (10) (or three (3) if applicable) Business
Days after it receives the Prospect Notice, Tenant shall have no further rights
with respect to such Expansion Space, except as expressly provided below, and
Landlord shall be free, for a period of one year after the date on which
Landlord gives Tenant the Prospect Notice, to offer all or part of the Expansion
Space to, and to enter into one or more lease(s) for such Expansion Space with,
any one or more third parties, regardless of whether or not such third party was
named in the Prospect Notice. If Landlord has not entered into one or more
leases with one or more third parties for all of the Expansion Space, then, upon
the expiration of the one (1) year period, Landlord may not offer the Expansion
Space (or so much of it as remains available) to third parties without first
giving Tenant an Availability Notice and giving Tenant the right to lease the
Expansion Space (or so much of it as remains available) upon all of the terms of
this Paragraph.
40.3 SUBSEQUENT OFFERING. If Tenant does not exercise its right to lease
an Expansion Space, and if, pursuant to the terms of this Paragraph, Landlord
enters into one or more leases for all or part of the Expansion Space, then each
space subject to such a lease shall be considered a separate Expansion Space
when each such space again becomes available, and Landlord shall not be able to
offer all or any part of the Expansion Space to any third party without again
giving Tenant an Availability Notice and giving Tenant the right to lease the
Expansion Space upon all of the terms of this Paragraph.
40.4 TENANT IMPROVEMENT ALLOWANCE. Tenant shall pay, in the manner in
which it pays Basic Rent and Additional Rent for the Demised Premises, Basic
Rent and Additional Rent for the then existing Demised Premises for the
Expansion Space. Landlord shall provide a tenant improvement allowance at the
rate of $2.00 per rentable square feet, payable upon the commencement of the
Term for the Expansion Space. There shall be no free-rent or rent abatement for
the Expansion Space.
40.5 AMENDMENT. If Tenant exercises its right to lease an Expansion Space,
Landlord and Tenant shall each execute an amendment to this Lease incorporating
such Expansion Space into this Lease and into the Demised Premises on the same
terms and for the same Term set forth in this Lease (including this Section).
Such amendment shall provide that Tenant shall commence to pay rent on such
Expansion Space upon the earlier to occur of (i) Tenant's occupancy and opening
to the public for the conduct of business or (ii) one hundred fifty (150) days
after the date when Landlord receives Tenant's notice of its exercise of its
right to lease an Expansion Space. Landlord shall prepare such amendment and
deliver the same to Tenant for its review within seven (7) business days of
Tenant's exercise of its right to lease an Expansion Space. If Tenant exercises
its right to lease an Expansion Space, Tenant will receive additional parking
spaces in the ratio set forth in Section 36.1 above at no charge to Tenant
(other than any Operating Expense Increases) in accordance with Article 36
above.
40.6 TIME OF ESSENCE. Time shall be of the essence in connection with all
of Tenant's and Landlord's obligations and rights under this Lease, including
Tenant's exercise of its expansion rights under this Section.
ARTICLE 41
OPTION TO RENEW
41.1 RENEWAL OPTIONS. Tenant shall have the option to renew the initial
Term of this Lease (the "Initial Term") for two (2) additional periods of five
(5) years each (each of such additional periods being hereinafter referred to as
a "Renewal Period"). Each renewal option shall be exercisable by Tenant by
giving notice of the exercise of such renewal option to Landlord at least 270
days before the expiration of the initial Term, in the case of the first renewal
option, or at least 270 days before the expiration of the first Renewal Period,
in the case of the second renewal option, except that if the Basic Rent per
square foot for the first lease year in a Renewal Period has not been determined
by the last day on which the renewal option for such Renewal Period must be
exercised in accordance with the procedure set forth in Paragraph 41.4 below,
the period of time within which Tenant may exercise the renewal option for such
Renewal Period shall be extended until 15 days after the determination of the
Base Rent per square foot for the first lease year in such Renewal Period. Time
shall be of the essence in connection with Tenant's exercise of the renewal
options. Tenant may not exercise the renewal option for the second Renewal
Period unless Tenant has previously exercised the renewal option for the first
Renewal Period in accordance with the provisions of this paragraph. Tenant may
not exercise the option for a Renewal Period if, at the time Tenant purportedly
exercises its option or on the last day of the initial Term, in the case of the
first renewal option, or the last day of the first
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Renewal Period, in the case of the second renewal option, an Event of Default
has occurred and is continuing. If (i) the last day on which Tenant has the
right to exercise the renewal option (the "Last Exercise Date") occurs less
than 270 days before the expiration of the initial Term, in the case of the
first renewal option, or less than 270 days before the expiration of the
first Renewal Period, in the case of the second renewal option, and (ii)
Tenant does not exercise the renewal option, the Term shall be extended until
the last day of the month in which the 270th day after the Last Exercise Date
occurs. For purposes of determining the Basic Rent payable during the
extension provided by the preceding sentence, the Base Rent per square foot
shall be the fair rental value of the Demised Premises as actually determined
by the procedure described in Paragraph 41.4 below with respect to the
Renewal Period for which Tenant did not exercise its renewal option, and such
amount shall be paid by Tenant without the need for any amendment to this
Lease and as fully as if such amount were set forth in this Lease. If Tenant
timely exercises the options to renew this Lease in accordance with the
provisions of this Article, then the Term shall be extended accordingly.
Except as otherwise expressly provided in this Article, each Renewal Period
shall be upon the same terms, covenants and conditions set forth in this
Lease with respect to the initial Term and Tenant's obligations to pay
Operating Expense Increases and Real Estate Tax Increases shall continue
without interruption during each Renewal Period, except that there shall be
no renewal options after the second Renewal Period. All references in this
Lease to the "Term" shall include each Renewal Period for which Tenant shall
have effectively exercised its renewal option.
41.2 RENT PER SQUARE FOOT DURING RENEWAL PERIODS. If Tenant exercises the
renewal option provided by Paragraph 41.1 to extend the initial Term for a
Renewal Period, the Basic Rent per square foot for each lease year in the
Renewal Period shall be ninety-five percent (95%) of an amount equal to the fair
rental value (per square foot) of the Demised Premises for its then use as of
the date of Tenant's notice of its desire to extend the term of this Lease as
determined by mutual agreement between Landlord and Tenant or by one or more
commercial real estate brokers in the manner provided in Paragraph 41.4. The
Basic Rent shall increase three percent (3%) each calendar year.
Notwithstanding the foregoing or anything to the contrary in this Lease
(including this Section 41.2), the fair rental value during each Renewal Period
shall not exceed (i) in the case of the first Renewal Period, one hundred
thirty-five percent (135%) of the Basic Rent in the last year of the initial
eleven (11) year Term plus the amount of the Operating Expense Increase and Real
Estate Tax Increase in such last year of the initial eleven (11) year Term and
(ii) in the case of the second Renewal Period, one hundred thirty-five percent
(135%) of the Basic Rent in the last year of the first Renewal Period.
41.3 BASE YEAR OPERATING EXPENSES AND BASE REAL ESTATE TAXES DURING RENEWAL
PERIOD. For each calendar year ending during the Renewal Period, the Base Year
Operating Expenses shall be an amount equal to the Operating Expenses for the
calendar year ending after the commencement of the Renewal Period and the Base
Year Real Estate Taxes shall be the Real Estate Taxes for the calendar year
ending after the commencement of the Renewal Period.
41.4 METHOD OF DETERMINING RENT PER SQUARE FOOT. If Tenant desires to
exercise the renewal option provided by Paragraph 41.1 to extend the initial
Term for a Renewal Period, and if Landlord and Tenant are unable mutually to
agree on the Base Rent per square foot of the first lease year in such Renewal
Period at least 270 days before the end of the last lease year in the initial
Term, in the case of the first renewal option or at least 270 days before the
end of the last lease year in the first Renewal Period, in the case of the
second renewal option, Tenant shall notify Landlord of its desire to determine
the Rent per square foot pursuant to this paragraph not more than 270 days and
not less than 235 days before the end of the last lease year in the initial Term
or the last lease year in the first Renewal Period, as the case may be, and in
such notice Tenant shall designate the broker appointed by it. The giving of
such notice shall not constitute an exercise of the option by Tenant. Within 20
days thereafter, Landlord shall, by notice to Tenant, designate a second broker.
If Landlord does not so designate a second broker within the 20-day period, the
first broker appointed by Tenant shall proceed to make his valuation, in which
case the fair rental value of the Demised Premises for the first Lease Year in
the Renewal Period shall be the amount determined by the first broker. Each
broker shall make an independent determination of the fair rental value of the
Demised Premises for the first lease year in the applicable Renewal Period. If
the two (2) brokers so appointed agree on the fair rental value of the Demised
Premises within 15 days after the appointment of the second broker, the fair
rental value of the Demised Premises for the first lease year in the applicable
Renewal Period shall be the amount determined by them. If the two (2) brokers
so appointed do not agree on the fair rental value of the Demised Premises
within 15 days after the appointment of the second broker, but if the difference
between the fair rental value determined by each broker is not more than ten
percent (10%) of the higher of the two determinations, the fair rental value of
the Demised Premises for the first Lease Year in the applicable Renewal Period
shall be an amount equal to the quotient obtained by dividing the sum of the
fair rental values determined by the brokers by two (2). If the two brokers so
appointed do not agree on the fair rental value of the Demised Premises, and if
the difference between the fair rental value determined by each Broker is more
than ten percent (10%) of the higher of the two determinations, the two (2)
brokers shall jointly appoint a third broker. If the two (2) brokers so
appointed shall be unable, within 15 days after the appointment of the second
broker, either (i) to agree on the fair rental value of the Demised Premises (or
to disagree on such value with a difference of less than ten percent (10%) of
the higher of the two determinations or (ii) to agree on the appointment of a
third broker, they shall give written notice of such failure to agree to the
parties, and, if the parties fail to agree upon the selection of a third broker
within 10 days after the brokers appointed by the parties give such notice, then
within 10 days thereafter either of the parties upon notice to the other party
may request such appointment by the then President of the Michigan Board of
Realtors (or any organization successor thereto), or in his failure to act, may
apply for such appointment to the Chief Judge of the Oakland County (Michigan)
Circuit Court. If a third broker is appointed, he shall make his valuation
within 15 days after his appointment and the fair rental value of the Demised
Premises for the first Lease Year in the applicable Renewal Period shall be an
amount equal to the quotient obtained by dividing the sum of the fair rental
values determined by the two (2) brokers who were closest to each other in
amount, by two (2).
-40-
41.5 QUALIFICATIONS OF BROKERS AND METHOD OF VALUATION. Each broker
appointed pursuant to Paragraph 41.4 shall be an individual of recognized
competence who has had a minimum of ten (10) years' experience in the leasing of
commercial office space in the suburban Detroit area. All valuations of the
fair rental value of the Demised Premises shall be in writing and shall be
expressed in terms of an annual rent per square foot of rentable area. Each
broker shall determine the fair rental value of the Demised Premises, as a
whole, based upon the Building and the Demised Premises being used for its then
present use as of the date of Tenant's notice of its desire to extend the Term
of this Lease and on the basis of all relevant factors affecting such fair
rental value (but, in all events, based upon the Building and the Demised
Premises being used only for its then present use), including the increase in
the Base Year Operating Expenses and Base Year Real Estate Taxes for the Renewal
Period to reflect the actual Operating Expenses for the calendar year ending
during the calendar year in which the Renewal Period commences and the actual
Real Estate Taxes for the calendar year ending during the calendar year in which
the Renewal Period commences. The party appointing each broker shall be
obligated, promptly after receipt of the valuation report prepared by the broker
appointed by such party, to deliver a copy of such valuation report to the other
party in the manner provided elsewhere in this Lease for the giving of notices.
If a third broker is appointed, the third broker shall be directed, at the time
of his appointment, to deliver copies of his valuation report, promptly after
its completion, to Landlord and Tenant in the manner provided elsewhere in this
Lease for the giving of notices.
41.6 EXPENSE OF BROKERS. The expenses of each of the first two (2) brokers
appointed pursuant to Paragraph 41.4 shall be borne by the party appointing such
broker. The expense of the third broker appointed pursuant to Paragraph 41.4
shall be paid one-half by Landlord and one-half by Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD:
XXXXXX PROPERTIES, a Michigan
limited partnership
_________________________ By:___________________________
Witness Name: Xxxxxx X. Xxxxxx
Title: General Partner
_________________________ ______________________________
Witness Gita Begin
TENANT:
COMPUTER LEARNING CENTERS, INC.,
a Delaware corporation
_________________________ By:___________________________
Witness Name:_________________________
Title:________________________
-41-
-42-
INDEX
PAGE
Article 1 Demised Premises; Reservation of Space;
Landlord's Right of Construction.................................1
1.1 Property.........................................................1
1.2 Reservations.....................................................1
1.3 Landlord's Work..................................................2
1.4 [Intentionally Omitted]..........................................2
1.5 Landlord's Construction Activities...............................2
1.6 Compliance of Modifications with Laws............................2
Article 1.A Tenant's Work....................................................2
1.A.1 Tenant Improvements.........................................2
1.A.2 Acceptance of Demised Premises..............................2
1.A.3 Liability for Damages.......................................2
1.A.4 Landlord's Contribution.....................................3
Article 2 Term.............................................................3
2.1 Commencement Date................................................3
2.2 Expiration Date; Tenant's Termination Right......................3
2.3 Delay in Delivery of Possession..................................4
2.4 Written Confirmation.............................................4
Article 3 Rent.............................................................4
3.1 Basic Rent.......................................................4
3.2 Partial Month Proration..........................................4
3.3 Additional Rent..................................................4
3.4 Payments of Basic Rent...........................................4
3.5 Late Charges and Interest Rate...................................4
3.6 Part Payment Not Prejudicial.....................................4
Article 4 Additional Rent - Operating Expense Increases and Real Estate Tax
Increases........................................................5
4.1 Base Year........................................................5
4.2 Operating Expenses and Real Estate Taxes.........................5
4.3 Monthly Installments.............................................9
4.4 Adjustment Upon Expiration or Termination of Lease...............9
4.5 Expenses and/or Tax Contests - Adjustments and Refunds...........9
4.6 Expense Cap......................................................9
4.7 Audit Right.....................................................10
4.8 Gross-Up of Operating Expenses..................................10
Article 5 Utilities and Services; Interruption............................10
5.1 Services........................................................10
5.2 Additional Utility Matters......................................11
5.3 Utility Services................................................11
5.4 Interruption of Services........................................11
5.5 Unavoidable Delays; Limitation of Liability.....................12
5.6 Abatement of Rent...............................................12
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Article 6 Assignment and Subletting.......................................12
6.1 Transfer; Notice; No Waiver Implied.............................12
6.2 Assignments Without Consent.....................................13
Article 7 Use of Demised Premises, Etc....................................13
7.1 Tenant's Covenants; Risk of Use.................................13
7.2 Floor Loads.....................................................14
Article 8 Defaults/Remedies...............................................14
8.1 Events of Default...............................................14
8.2 Landlord Remedies...............................................14
8.3 Termination Upon Default........................................15
8.4 Landlord's Lien for Rent; Waiver of Exemptions..................15
8.5 Bankruptcy......................................................15
Article 9 Repairs and Alterations.........................................17
9.1 Tenant Responsibilities.........................................17
9.2 Additional Improvements.........................................17
9.3 Condition and Repair of Demised Premises........................17
Article 10 Surrender and Restoration.......................................17
10.1 Tenant to Remove, Surrender; Landlord's Rights to Cure, Sell....17
Article 11 Insurance and Indemnification/Subrogation.......................18
11.1 Indemnification and Tenant's Insurance..........................18
11.2 Tenant's Liability Insurance....................................18
11.3 Tenant's Fire Insurance.........................................18
11.4 Insurance Policies and Certificates.............................18
11.5 Waiver of Subrogation...........................................18
11.6 Landlord's Insurance............................................18
Article 12 Landlord's Right of Access......................................19
12.1 Entry by Landlord...............................................19
12.2 Emergency Access................................................19
Article 13 Casualty Clause.................................................19
13.1 Partial Abatement Rent; Repair; Option to Terminate.............19
13.2 Repair After Casualty...........................................19
Article 14 Eminent Domain..................................................19
14.1 Eminent Domain..................................................19
Article 15 Subordination Clause............................................20
15.1 Lease Subordinate to Mortgages; Tenant to Execute Instruments...20
15.2 Non-Disturbance Agreement Required..............................20
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Article 16 Tenant Holding Over.............................................20
16.1 Month-to-Month..................................................20
Article 17 Limitations on Liability of Landlord............................21
17.1 Limitation of Liability.........................................21
17.2 Liability for Damage to Demised Premises........................21
17.3 Landlord's Breach...............................................21
Article 18 Estoppel Certificate............................................21
18.1 Certificate of Validity and Status of Lease.....................21
Article 19 No Light, Air or View Easement..................................21
19.1 No Scenic View..................................................21
Article 20 Attorneys' Fees.................................................22
20.1 Recovery of Attorneys' Fees.....................................22
Article 21 Waiver..........................................................22
21.1 No Waiver by Landlord...........................................22
21.2 Waiver of Trial by Jury.........................................22
Article 22 Complete Agreement..............................................22
22.1 Lease is Entire Agreement.......................................22
Article 23 Corporate Authority.............................................23
23.1 Tenant's Authorized Transaction.................................23
Article 24 Notices.........................................................23
24.1 Notices Parties' Addresses......................................23
Article 25 Inability to Perform............................................23
[Intentionally Deleted]
Article 26 Covenant of Quiet Enjoyment; Non-Competition....................23
26.1 Peaceful Enjoyment of Premises..................................23
26.1 Non-Competition.................................................23
Article 27 Successors in Interest..........................................23
27.1 Lease Binding Upon Successors...................................23
Article 28 Sign/Advertising Awning; Rooftop Telecommunication Device.......23
28.1 Signs, Etc......................................................23
28.2 Telecommunication Device........................................24
-45-
Article 29 Compliance with Legal Requirements..............................24
29.1 Compliance......................................................24
Article 30 Rules...........................................................24
30.1 Rules...........................................................24
Article 31 Landlord's Right to Cure Defaults...............................24
31.1 Landlord's Cure.................................................24
Article 32 Construction Liens..............................................25
32.1 Discharge of Liens..............................................25
Article 33 No Merger.......................................................25
33.1 No Merger Intended..............................................25
Article 34 Abandonment.....................................................25
34.1 Abandonment of Demised Premises.................................25
Article 35 Security Deposit................................................25
35.1 Security Deposit Requirements...................................25
Article 36 Parking.........................................................26
36.1 Parking Requirements............................................26
Article 37 Landlord's Representations and Covenants........................26
37.1 Landlord's Representations, Etc.................................26
Article 38 Miscellaneous...................................................27
38.1 Binding Effect..................................................27
38.2 Use of Building Name, Etc.......................................27
38.3 Severability....................................................27
38.4 Governing Law...................................................27
38.5 Representation Regarding Brokers................................27
38.6 Exhibits........................................................28
38.7 Requirement Reasonableness......................................28
Article 39 Hazardous Material..............................................28
39.1 Environmental Laws..............................................28
39.2 Indoor Air Quality Problems.....................................29
Article 40 Tenant's Expansion Rights.......................................30
40.1 Expansion Space.................................................30
40.2 Availability Notice, etc........................................30
40.3 Subsequent Offering.............................................30
40.4 Tenant Improvement Allowance....................................30
40.5 Amendment.......................................................30
40.6 Time of Essence.................................................31
Article 41 Option to Renew.................................................31
41.1 Renewal Options.................................................31
41.2 Rent per Square Foot During Renewal Periods.....................31
41.3 Base Year Operating Expenses and Base Real Estate
Taxes During Renewal Period...................................32
41.4 Method of Determining Rent per Square Foot......................32
41.5 Qualifications of Brokers and Method of Valuation...............33
41.6 Expense of Brokers..............................................33
-46-
-47-
EXHIBITS
Lease Data Exhibit
A Legal Description
B Description of Landlord's Work
C Landlord's Acknowledgement and Key Receipt Form
D Rules and Regulations
E Description of Parking
F Temporary Space and Corridor
-48-
FIRST AMENDMENT TO
LEASE AGREEMENT
This First Amendment to Lease Agreement ("First Amendment") is made and
entered into on October 14, 1996 by and between XXXXXX PROPERTIES, a Michigan
limited partnership, and GITA BEGIN, d/b/a/ MADISON OFFICE CENTER (collectively,
"Landlord") and COMPUTER LEARNING CENTERS, INC., a Delaware corporation
("Tenant").
RECITALS:
Simultaneously herewith, the parties hereto have entered into a Lease
Agreement ("Lease Agreement") relating to certain space in an office building
located in Madison Heights, Michigan. The parties hereto wish to amend Section
40.5 of the Lease Agreement as herein set forth.
NOW THEREFORE, the parties hereto agree as follows:
1. Section 40.5 of the Lease Agreement is hereby amended to read in
its entirety as follows:
"40.5 Amendment. If Tenant exercises its right to lease an Expansion
Space, Landlord and Tenant shall each execute an amendment to this
Lease incorporating the Expansion Space into this Lease and into the
Demised Premises on the same terms and for the same Term set forth in
this Lease (including this Section). Such amendment shall provide
that Tenant shall commence to pay rent on such Expansion Space upon
the earlier to occur of (i) Tenant's occupancy and opening to the
public for the conduct of business, or (ii) one hundred fifty (150)
days after the date when Landlord receives acknowledgement of Tenant's
exercise of its right to lease an Expansion Space. Landlord shall
prepare such amendment and deliver the same to Tenant for its review
within seven (7) business days of Tenant's exercise of its right to
lease an Expansion Space. If Tenant exercises its right to lease
Expansion Space containing in the aggregate not more than 10,000
rentable square feet, Tenant will receive additional parking spaces in
the ratio set forth in Section 36.1 above at no charge to Tenant
(other than any Operating Expense Increases) in accordance with
Article 36 above. If Tenant exercises its right to lease Expansion
Space containing in the aggregate more than 10,000 rentable square
feet, Tenant will receive additional parking spaces with respect to
the first 10,000 rentable square feet as set forth in the preceding
sentence. In addition, Landlord will:
(i) provide to Tenant on the parking lot which is part
of the Development one (1) additional parking
space for each additional 225 of Expansion Space
in excess of 10,000 rentable square feet at no
charge to Tenant (other than any Operating Expense
Increases) in accordance with Article 36 above;
and
(ii) will use its best efforts to provide an additional
1.16 parking spaces for each additional 225
rentable square feet of Expansion Space in excess
of 10,000 rentable square feet off site at no
charge to Tenant (other than any Operating Expense
Increases) in accordance with Article 36 above."
Although Landlord is committing itself to use best efforts to provide additional
parking spaces as set forth in clause (ii) above (if Tenant leases more than
10,000 square feet of Expansion Space), Landlord shall be under no obligation to
enter into agreements with third parties to provide such parking except on
terms, and for monetary consideration, that are commercially reasonable in
Landlord's reasonable judgment, and unless Tenant approves those agreements with
the third parties and agrees to pay one-half of the cost of providing such
parking.
2. Except as herein specifically set forth, all of the terms and
conditions of the Lease Agreement are hereby ratified and confirmed and shall
continue in full force and effect.
3. This First Amendment may be executed in separate counterparts, each of
which shall be binding and fully effective when one or separate copies have been
signed by each of the parties hereto.
-49-
IN WITNESS WHEREOF, the parties hereto have executed the First Amendment as
of the day and year first above written.
LANDLORD:
XXXXXX PROPERTIES, a Michigan
limited partnership
________________________ By:___________________________
Witness Name: Xxxxxx X. Xxxxxx
Title: General Partner
_________________________ ______________________________
Witness Gita Begin
TENANT:
COMPUTER LEARNING CENTERS, INC.,
a Delaware corporation
__________________________ By:___________________________
Witness Name: Xxxxxxx X. Xxxxxxxx
Title: VP-CFO
-50-
SECOND AMENDMENT TO
LEASE AGREEMENT
This Second Amendment to Lease Agreement ("Second Amendment") is made and
entered into on October 23, 1996 by and between XXXXXX PROPERTIES, a Michigan
limited partnership, and GITA BEGIN, d/b/a/ MADISON OFFICE CENTER (collectively,
"Landlord") and COMPUTER LEARNING CENTERS, INC., a Delaware corporation
("Tenant").
RECITALS:
The parties hereto have entered into a Lease Agreement ("Lease Agreement")
relating to certain space in the Madison Office Center located in Madison
Heights, Michigan. The parties hereto wish to add additional leased space under
the Lease Agreement as herein set forth.
NOW THEREFORE, the parties hereto agree as follows:
1. Tenant shall lease from Landlord and Landlord shall lease to Tenant Suites
215 and 223 (Exhibit "A") in the Madison Office Center collectively
consisting of approximately 0000 Xxxxxxxx Xxxxxx Feet (hereinafter known as
the "Temporary Space").
2. The Initial Term of the Lease for the Temporary Space shall be from October
23, 1996 through December 31, 1996 and thereafter shall continue on a
month-to-month basis.
3. Tenant shall accept the Temporary Space in as is broom clean condition.
4. The rent for the period from October 23 through 31, 1996 shall be Seven
Hundred Seventy Seven and 28/100 Dollars ($777.28) and thereafter the rent
shall be Two Thousand Six Hundred Twenty Six and 92/100 Dollars ($2,626.92)
per month. The rents stated herein are full gross rents and shall include
all charges for utilities, maintenance of Landlord's property, the real
estate property taxes and the real estate insurance. The rents stated
herein do not include charges for communications such as telephones, fax
machines or computer modems and do not include any charges for tenant
improvements such as paint and carpet.
5. Except as herein specifically set forth, all of the terms and conditions of
the Lease Agreement are hereby ratified and confirmed and shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
all as of the day and year first above written.
LANDLORD:
XXXXXX PROPERTIES, a Michigan
limited partnership
________________________ By:___________________________
Witness Name: Xxxxxx X. Xxxxxx
Title: General Partner
_________________________ ______________________________
Witness Gita Begin
TENANT:
COMPUTER LEARNING CENTERS, INC.,
a Delaware corporation
__________________________ By:___________________________
Witness Name: Xxxxxxx X. Xxxxxxxx
Title: VP-CFO
-51-
