EXHIBIT 10.36
LEASE AGREEMENT
BETWEEN XXXXX DEVELOPMENT CORPORATION
AND
ASSOCIATES HOUSING FINANCE, LLC
LEASE AGREEMENT
by and between
XXXXX DEVELOPMENT CORPORATION,
a Georgia corporation
("Landlord")
and
ASSOCIATES HOUSING FINANCE, LLC,
a Delaware limited liability company
("Tenant")
dated
September 10, 1998
for
Suite Number 100
containing
50,000 square feet of Rentable Floor Area
TABLE OF CONTENTS
Page
1. Certain Definitions................................................ 1
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2. Lease of Premises.................................................. 2
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3. Term............................................................... 3
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4. Possession......................................................... 3
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5. Rental Payments.................................................... 4
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6. Base Rental........................................................ 5
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7. Additional Rental.................................................. 5
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8. Operating Expenses................................................. 7
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9. Tenant Taxes; Rent Taxes........................................... 10
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10. Payments.......................................................... 10
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11. Late Charges...................................................... 10
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12. Use Rules......................................................... 10
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13. Alterations....................................................... 11
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14. Repairs........................................................... 11
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15. Landlord's Right of Entry......................................... 12
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16. Insurance......................................................... 12
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17. Waiver of Subrogation............................................. 14
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18. Default........................................................... 14
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19. Waiver of Breach.................................................. 17
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20. Assignment and Subletting......................................... 17
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21. Destruction....................................................... 19
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22. Landlord's Lien................................................... 20
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23. Services by Landlord.............................................. 20
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24. Attorneys' Fees................................................... 20
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25. Time.............................................................. 20
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26. Subordination and Attornment...................................... 20
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27. Estoppel Certificates............................................. 21
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28. Cumulative Rights................................................. 22
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29. Holding Over...................................................... 22
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30. Surrender of Premises............................................. 22
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31. Notices........................................................... 23
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32. Damage or Theft of Personal Property.............................. 23
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33. Eminent Domain.................................................... 23
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34. Parties........................................................... 24
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35. Liability of Tenant............................................... 25
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36. Force Majeure..................................................... 25
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37. Landlord's Liability.............................................. 25
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38. Landlord's Covenant of Quiet Enjoyment............................ 25
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39. First Month's Rent................................................ 26
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40. Hazardous Substances.............................................. 26
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41. Submission of Lease............................................... 27
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42. Severability....................................................... 27
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43. Entire Agreement................................................... 27
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44. Headings........................................................... 28
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45. Broker............................................................. 28
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46. Governing Law...................................................... 28
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47. Special Stipulations............................................... 28
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48. Authority.......................................................... 28
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49. Financial Statements............................................... 29
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Exhibit "A" - Special Stipulations
Exhibit "A-1" - Floor Plan Showing Refusal Space
Exhibit "B" - Floor Plan
Exhibit "C" - Supplemental Notice
Exhibit "D" - Construction Obligations
Exhibit "D-1" - Preliminary Plans - Base Building
Exhibit "D-2" - Base Building vs. Tenant Improvement Matrix
Exhibit "D-3" - Coordination of Layout Work by Landlord
Exhibit "E" - Building Standard Services
Exhibit "E-1" - Cleaning and Janitor Services
Exhibit "F" - Legal Description
Exhibit "G" - Rules and Regulations
Exhibit "H" - Guaranty
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LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease"), is made and entered into this 10 day of
September, 1998, by and between Landlord and Tenant.
W I T N E S S E T H:
- - - - - - - - - -
1. Certain Definitions. For purposes of this Lease, the following terms
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shall have the meanings hereinafter ascribed thereto:
(a) Landlord: Xxxxx Development Corporation, a Georgia corporation
(b) Landlord's Address:
Delivery:
c/x Xxxxx Management Company, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Mail:
c/x Xxxxx Management Company, Inc.
X.X. Xxx 000000
Xxxxxxxx, Xxxxxxx 00000-0000
(c) Tenant: Associates Housing Finance, LLC, a Delaware limited
liability company
(d) Tenant's Address:
Delivery:
Associates Housing Finance, LLC
000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Corporate Properties
Mail:
Associates Housing Finance, LLC
x/x Xxxxxxxxxx Xxxxxxxxxxx xx Xxxxx Xxxxxxx
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attn: Corporate Properties
(e) Xxxxxxxx Xxxxxxx:
XxxxxxXxxxx Xxxxxxxx Xxxx
______ XxxxxxXxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(f) Suite Number: 100
(g) Rentable Floor Area of Demised Premises:
50,000 square feet, subject to the provisions of Article 2 hereof
(h) Rentable Floor Area of Building:
71,400 square feet
(i) Lease Term: Eighty-four (84) months. The Lease Term is subject to
extension as provided in Special Stipulations paragraph 1.
(j) Base Rental Rate: Twelve and No/100 Dollars ($12.00) per square
foot of Rentable Floor Area of the Demised Premises for the first twenty-
eight (28) months of the Lease Term, Twelve and 50/100 Dollars ($12.50) per
square foot of Rentable Floor Area of the Demised Premises for the second
twenty-eight (28) months of the Lease Term, and Thirteen and No/100 Dollars
($13.00) per square foot of Rentable Floor Area of the Demised Premises for
the third twenty-eight (28) months of the Lease Term.
(k) Rental Commencement Date: The earlier of (x) the date which is
thirty (30) days after Substantial Completion (as defined in Paragraph 1(i)
of Exhibit "D" attached hereto) or (y) the date upon which Tenant takes
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possession and occupies any portion of the Demised Premises for business
purposes. Occupancy of the Demised Premises for the purpose of installing
voice/data communications, furniture and fixtures shall not be deemed
occupancy for business purposes.
(l) Construction Allowance for initial Demised Premises:
$1,500,000.00 (calculated at the rate of $30.00 per square foot of Rentable
Floor Area of the initial Demised Premises).
(m) First Month's Rent: $50,000.00 (Article 39)
(n) Broker(s): Xxxxx & Xxxxx, Inc. Real Estate
2. Lease of Premises. Landlord, in consideration of the covenants and
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agreements to be performed by Tenant, and upon the terms and conditions
hereinafter stated, does hereby rent and lease unto Tenant, and Tenant does
hereby rent and lease from Landlord, certain premises (the "Demised Premises")
in the single story building (hereinafter referred to as
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"Building") located or to be located on that certain tract of land (the "Land")
more particularly described on Exhibit "F" attached hereto and by this reference
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made a part hereof, which Demised Premises comprise approximately 50,000 square
feet of Rentable Floor Area of the Building and are outlined on the floor plan
attached hereto as Exhibit "B" and by this reference made a part hereof, with no
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easement for light, view or air included in the Demised Premises or being
granted hereunder. The "Project" is comprised of the Building, the Land, the
Building's parking facilities, any walkways, covered walkways or other means of
access to the Building and the Building's parking facilities, all common areas,
including any lobbies or plazas, and any other improvements or landscaping on
the Land. For purposes of this Lease, the usable area of the Demised Premises
shall be determined in accordance with the American National Standard Method of
Measuring Floor Area in Office Buildings, ANSI Z65.1-1996 published by the
Building Owners and Managers Association International. The Rentable Floor Area
of the Demised Premises for purposes of this Lease shall be the product of the
usable area of the Demised Premises multiplied by 1.05. Likewise, the Rentable
Floor Area of the Building shall be the product of the usable area of the
Building multiplied by 1.05. Landlord and Tenant will cause their architects to
make physical measurements of the Demised Premises and the Building, and the
Rentable Floor Area of the Demised Premises and the Rentable Floor Area of the
Building will be adjusted based upon such physical measurements.
3. Term. The term of this Lease ("Lease Term") shall commence on the
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date first hereinabove set forth, and, unless sooner terminated as provided in
this Lease, shall end on the expiration of the period designated in Article 1(i)
above, which period shall commence on the Rental Commencement Date, unless the
Rental Commencement Date shall be other than the first day of a calendar month,
in which event such period shall commence on the first day of the calendar month
following the month in which the Rental Commencement Date occurs. Promptly
after the Rental Commencement Date Landlord shall send to Tenant a Supplemental
Notice in the form of Exhibit "C" attached hereto and by this reference made a
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part hereof, specifying the Rental Commencement Date, the date of expiration of
the Lease Term in accordance with Article 1(i) above and certain other matters
as therein set forth. If for any reason whatsoever (other than delays caused by
Tenant), Substantial Completion does not occur on or before January 1, 2000,
Tenant's sole right and remedy shall be to terminate this Lease upon ten (10)
days written notice to Landlord, without incurring any liability to Landlord;
provided, however, that this Lease shall not terminate if Substantial Completion
occurs during such ten (l0) day period.
4. Possession. The obligations of Landlord and Tenant with respect to
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the Building and the initial leasehold improvements to the Demised Premises are
set forth in Exhibit "D" attached hereto and by this reference made a part
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hereof. Taking of possession by Tenant shall be deemed conclusively to
establish that Landlord's construction obligations with respect to the Demised
Premises have been completed in accordance with the plans and specifications
approved by Landlord and Tenant and that the Demised Premises, to the extent of
Landlord's construction obligations with respect thereto, are in good and
satisfactory condition. Within thirty (30) days after the date of Substantial
Completion, Tenant shall have the right to prepare and provide to Landlord a
list of incomplete or defective Punch List Items, all of which shall be promptly
repaired and/or completed by Landlord at its sole cost and expense in a
commercially reasonable time, and, for a period of one (1) year following the
date
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of Substantial Completion, Tenant shall have the right to notify Landlord of its
discovery of latent defects in the Base Building Work and Layout Work all of
which shall be promptly repaired and/or completed by Landlord in a commercially
reasonable time at its sole cost and expense. Except for such punch list items
so specified by Tenant within said thirty (30) day period, and except for such
latent defects specified by Tenant within such one (1) year period, the taking
of possession by Tenant shall be deemed conclusively to establish that
Landlord's construction obligations with respect to the Demised Premises have
been completed in accordance with the plans and specifications approved by
Landlord and Tenant and that the Demised Premises, to the extent of Landlord's
construction obligations with respect thereto, are in good and satisfactory
condition.
5. Rental Payments.
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(a) Commencing on the Rental Commencement Date, and continuing
thereafter throughout the Lease Term, Tenant hereby agrees to pay all Rent
due and payable under this Lease. As used in this Lease, the term "Rent"
shall mean the Base Rental, Tenant's Forecast Additional Rental, Tenant's
Additional Rental, and any other amounts that Tenant assumes or agrees to
pay under the provisions of this Lease that are owed to Landlord, including
without limitation any and all other sums that may become due by reason of
any default of Tenant or failure on Tenant's part to comply with the
agreements, terms, covenants and conditions of this Lease to be performed
by Tenant. Base Rental together with Tenant's Forecast Additional Rental
shall be due and payable in twelve (12) equal installments on the first day
of each calendar month, commencing on the Rental Commencement Date and
continuing thereafter throughout the Lease Term and any extensions or
renewals thereof, and Tenant hereby agrees to pay such Rent to Landlord at
Landlord's address as provided herein (or such other address as may be
designated by Landlord from time to time) monthly in advance. Tenant shall
pay all Rent and other sums of money as shall become due from and payable
by Tenant to Landlord under this Lease at the times and in the manner
provided in this Lease, without demand, set-off or counterclaim except as
expressly set forth in this Lease.
(b) If the Rental Commencement Date is other than the first day of a
calendar month or if this Lease terminates on other than the last day of a
calendar month, then the installments of Base Rental and Tenant's Forecast
Additional Rental for such month or months shall be prorated on a daily
basis and the installment or installments so prorated shall be paid in
advance. Also, if the Rental Commencement Date occurs on other than the
first day of a calendar year, or if this Lease expires or is terminated on
other than the last day of a calendar year, Tenant's Additional Rental
shall be prorated for such commencement or termination year, as the case
may be, by multiplying such Tenant's Additional Rental by a fraction, the
numerator of which shall be the number of days of the Lease Term (from and
after the Rental Commencement Date) during the commencement or expiration
or termination year, as the case may be, and the denominator of which shall
be 365, and the calculation described in Article 7 hereof shall be made as
soon as possible after the expiration or termination of this
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Lease, Landlord and Tenant hereby agreeing that the provisions relating to
said calculation shall survive the expiration or termination of this Lease.
6. Base Rental. From and after the Rental Commencement Date Tenant shall
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pay to Landlord a base annual rental (herein called "Base Rental") for each
Lease Year equal to the Base Rental Rate set forth for such Lease Year in
Article 1(j) above multiplied by the Rentable Floor Area of Demised Premises set
forth in Article 1(g) above. As used in this Lease, the term "Lease Year" shall
mean the twelve month period commencing on the Rental Commencement Date, and
each successive twelve month period thereafter during the Lease Term, except
that if the Rental Commencement Date is not on the first day of a calendar
month, the first Lease Year shall extend through the end of the twelfth month
after the Rental Commencement Date.
7. Additional Rental.
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(a) For purposes of this Lease, "Tenant's Forecast Additional Rental"
shall mean Landlord's reasonable estimate of Tenant's Additional Rental for
the coming calendar year or portion thereof. Landlord's current estimate of
Tenant's Forecast Additional Rental for the first calendar year or partial
calendar year of this Lease is $4.50 per Rentable Square Foot per annum. If
at any time it appears to Landlord that Tenant's Additional Rental for the
current calendar year will vary from Landlord's estimate by more than five
percent (5%), Landlord shall have the right to revise, by notice to Tenant,
its estimate for such year, and subsequent payments by Tenant for such year
shall be based upon such revised estimate of Tenant's Additional Rental.
Failure to make a revision contemplated by the immediately preceding
sentence shall not prejudice Landlord's right to collect the full amount of
Tenant's Additional Rental. Prior to the Rental Commencement Date and
thereafter prior to the beginning of each calendar year during the Lease
Term, including any extensions thereof, Landlord shall present to Tenant a
statement of Tenant's Forecast Additional Rental for such calendar year;
provided, however, that if such statement is not given prior to the
beginning of any calendar year as aforesaid, Tenant shall continue to pay
during the next ensuing calendar year on the basis of the amount of
Tenant's Forecast Additional Rental payable during the calendar year just
ended until the month after such statement is delivered to Tenant.
(b) For purposes of this Lease, "Tenant's Additional Rental" shall
mean for each calendar year (or portion thereof) Tenant's Share of the
Operating Expenses (as defined below) for such calendar year (or portion
thereof). The "Tenant's Share" shall mean seventy and 03/100 percent
(70.03%), determined by dividing 50,000 square feet of Rentable Floor Area
of the Demised Premises by 71,400 square feet of Rentable Floor Area of the
Building. The Tenant's Share shall be adjusted to reflect any change in the
Rentable Floor Area of the Demised Premises or Rentable Floor Area of the
Building. In the event the Building is not fully occupied during any
calendar year, the Operating Expenses which are variable in nature shall be
adjusted for the purposes of determining Tenant's Additional Rental to an
amount that would have been incurred by Landlord for such calendar year if
the Building had been fully occupied during such
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calendar year. Landlord agrees that only Operating Expenses which would
normally vary depending on the amount of space actually occupied in the
Building, such as costs of utilities, supplies and janitorial services,
shall be adjusted in this manner and that fixed expenses which are
unrelated to occupancy levels (such as but not limited to taxes, insurance,
landscaping, parking lot lighting and repairs, elevator service and repair,
window washing and roof repair) shall not be so adjusted. Notwithstanding
anything contained herein to the contrary, in no event shall Tenant's Share
of Operating Expenses for the second or any succeeding calendar year during
the Lease Term exceed what Tenant's Share of Operating Expenses would have
been, had Operating Expenses for the first calendar year during the Lease
Term (as adjusted as provided above) increased for each calendar year
thereafter by five percent (5%) on a compounded annual basis; provided,
however, and notwithstanding the above limitation, for purposes of
determining whether or not the aforesaid limit on increases in Tenant's
Share of Operating Expenses from year to year is exceeded, the components
of Operating Expenses relating to taxes and assessments attributable to the
Project or its operation, utilities costs of the Project and insurance
premiums relating to or payable in connection with the Project shall not be
considered or taken into account in such determination, and there shall be
no limit on the components of Operating Expenses relating to such taxes and
assessments, utilities and insurance premiums for the Project that can be
passed through by Landlord to Tenant as Operating Expenses under this
Lease, except as otherwise expressly provided for in Article 8 of this
Lease.
(c) Within ninety (90) days after the end of the calendar year in
which the Rental Commencement Date occurs and of each calendar year
thereafter during the Lease Term, or as soon thereafter as practicable,
Landlord shall provide Tenant a written statement showing the Operating
Expenses for said calendar year and a statement prepared by Landlord
showing, if necessary, any adjustment to the Operating Expenses to reflect
full occupancy of the Building during such calendar year, and comparing
Tenant's Forecast Additional Rental with Tenant's Additional Rental. In the
event Tenant's Forecast Additional Rental exceeds Tenant's Additional
Rental for said calendar year, Landlord shall credit such amount against
Rent next due hereunder or, if the Lease Term has expired or is about to
expire, refund such excess to Tenant within thirty (30) days after Tenant's
receipt of the statement if Tenant is not in default under this Lease (in
the instance of a default such excess shall be held as additional security
for Tenant's performance, may be applied by Landlord to cure any such
default, and shall not be refunded until any such default is cured). In the
event that the Tenant's Additional Rental exceeds Tenant's Forecast
Additional Rental for said calendar year, Tenant shall pay Landlord, within
thirty (30) days of receipt of the statement, an amount equal to such
difference as shown by such statement. The provisions of this Lease
concerning the payment of Tenant's Additional Rental shall survive the
expiration or earlier termination of this Lease.
(d) For so long as Tenant is not in default under this Lease,
Landlord's books and records pertaining to the calculation of Operating
Expenses for any calendar year within the Lease Term may be audited by
Tenant or its representatives at Tenant's expense, at any time within
twelve (12) months after Tenant's receipt of Landlord's
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statement; provided that Tenant shall give Landlord not less than thirty
(30) days' prior written notice of any such audit; further provided,
however, that the accountant performing such audit shall not be paid any
fee contingent in whole or in part upon the results of such audit or which
is calculated or otherwise based in whole or in part upon the results of
such audit. Prior to the commencement of such audit, Tenant shall cause its
authorized representative to agree in writing for the benefit of Landlord
that such representative will keep the results of the audit confidential
and that such representative will not disclose or divulge the results of
such audit except to Tenant and Landlord and except in connection with any
dispute between Landlord and Tenant relating to Operating Expenses. Such
audit shall be conducted during reasonable business hours at Landlord's
office where Landlord's books and records are maintained. Tenant shall
cause a written audit report, certified in favor of Landlord and Tenant, to
be prepared by its authorized representative following any such audit and
shall provide Landlord with a copy of such report promptly after receipt
thereof by Tenant. If Landlord's calculation of Tenant's Additional Rental
for the audited calendar year was incorrect, then Tenant shall be entitled
to a prompt refund of any overpayment or Tenant shall promptly pay to
Landlord the amount of any underpayment, as the case may be. In the event
such audit discloses an overpayment by Tenant of more than four percent
(4%), then Landlord shall pay the cost of such audit.
8. Operating Expenses.
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(a) For the purposes of this Lease, "Operating Expenses" shall mean
all expenses, costs and disbursements (but not specific costs billed to
specific tenants of the Building) of every kind and nature (subject to the
limitations set forth below), computed on the accrual basis, directly
relating to or incurred or paid in connection with the ownership,
management, operation, repair and maintenance of the Project, including but
not limited to, the following:
(1) wages, salaries and other costs of all on-site and off-site
employees at or below the level of building manager engaged in the
operation, management, maintenance or access control of the Project,
including taxes, insurance and benefits relating to such employees,
allocated based upon the time such employees are engaged directly in
providing such services;
(2) the cost of all supplies, tools, equipment and materials
used in the operation, management, maintenance and access control of the
Project;
(3) the cost of all utilities for the Project, including but not
limited to the cost of electricity, gas, water, sewer services and power
for heating, lighting, air conditioning and ventilating;
(4) the cost of all maintenance and service agreements for the
Project and the equipment therein, including but not limited to security
service, window cleaning, elevator maintenance, HVAC maintenance,
janitorial service, waste recycling service, landscaping maintenance and
customary landscaping replacement;
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(5) the cost of repairs and general maintenance of the Project;
(6) amortization of the cost of acquisition and/or installation
of capital investment items (including security equipment and energy
management equipment), amortized over their respective useful lives, which
are installed for the purpose of reducing operating expenses, promoting
safety, complying with governmental requirements, or maintaining the first-
class nature of the Project;
(7) the cost of casualty, rental loss, liability and other
insurance applicable to the Project and Landlord's personal property used
in connection therewith;
(8) the cost of trash and garbage removal, vermin extermination,
and snow, ice and debris removal;
(9) the cost of legal and accounting services incurred by
Landlord in connection with the management, maintenance, operation and
repair of the Project for the general benefit of tenants of the Project,
excluding the owner's or Landlord's general accounting and fund accounting,
such as partnership statements and tax returns, and excluding services
described in Article 8(b)(14) below;
(10) all taxes, assessments and governmental charges, whether or
not directly paid by Landlord, whether federal, state, county or municipal
and whether they be by taxing districts or authorities presently taxing the
Project or by others subsequently created or otherwise, and any other taxes
and assessments attributable to the Project or its operation (and the
reasonable costs of contesting any of the same), including business license
taxes and fees, excluding, however, taxes and assessments imposed on the
personal property of the tenants of the Project, federal and state taxes on
income, death taxes, franchise taxes, and any taxes (other than business
license taxes and fees) imposed or measured on or by the income of Landlord
from the operation of the Project; and it is agreed that Tenant will be
responsible for ad valorem taxes on its personal property; and
(11) a management fee in the amount of three and one half percent
(3.5%) of the gross rental income from the Project.
(b) For purposes of this Lease, and notwithstanding anything in any
other provision of this Lease to the contrary, "Operating Expenses" shall
not include the following:
(1) the cost of any special build-out work or service performed
for any tenant (including Tenant) at such tenant's cost;
(2) the cost of installing, operating and maintaining any
specialty service, such as a restaurant, cafeteria, retail store, sundry
shop, newsstand, or
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concession, but only to the extent such costs exceed those which would
normally be expected to be incurred had such space been general office
space;
(3) the cost of correcting defects in construction (including,
without limitation, latent defects);
(4) compensation paid to officers and executives of Landlord;
(5) the cost of any items for which Landlord is reimbursed by
insurance, condemnation or otherwise, except for costs reimbursed pursuant
to provisions similar to Articles 7 and 8 hereof;
(6) the cost of any additions, changes, replacements and other
items which are made in order to prepare for a tenant's occupancy;
(7) the cost of repairs incurred by reason of fire or other
casualty;
(8) insurance premiums to the extent Landlord may be directly
reimbursed therefor, except for premiums reimbursed pursuant to provisions
similar to Articles 7 and 8 hereof;
(9) interest on debt or amortization payments on any mortgage or
deed of trust and rental under any ground lease or other underlying lease;
(10) any real estate brokerage commissions;
(11) any advertising expenses incurred in connection with the
marketing of any rentable space;
(12) rental payments for base building equipment such as HVAC
equipment and elevators;
(13) any expenses for repairs or maintenance which are covered by
warranties and service contracts, to the extent such maintenance and
repairs are made at no cost to Landlord;
(14) legal expenses arising out of the construction of the
improvements on the Land or the enforcement of the provisions of any lease
affecting the Land or Building, including without limitation this Lease;
(15) Federal income taxes imposed on or measured by the income of
Landlord from the operation of the Building; and
(16) costs of alterations or additions made for the purpose of
complying with any laws, rules or ordinances in effect prior to the date of
this Lease.
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9. Tenant Taxes; Rent Taxes. Tenant shall pay promptly when due all
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taxes directly or indirectly imposed or assessed upon Tenant's gross sales,
business operations, machinery, equipment, trade fixtures and other personal
property or assets, whether such taxes are assessed against Tenant, Landlord or
the Building. In the event that such taxes are imposed or assessed against
Landlord or the Building, Landlord shall furnish Tenant with all applicable tax
bills, public charges and other assessments or impositions and Tenant shall pay
the same either directly to the taxing authority or, at Landlord's option, to
Landlord (in the event such taxes are paid by Tenant to Landlord, Landlord shall
furnish Tenant with a copy of the paid xxxx or other evidence of the payment of
such taxes by Landlord). In addition, in the event there is imposed at any time
a tax upon and/or measured by the rental payable by Tenant under this Lease,
whether by way of a sales or use tax or otherwise, Tenant shall be responsible
for the payment of such tax and shall pay the same on or prior to the due date
thereof; provided, however, that the foregoing shall not include any
inheritance, estate, succession, transfer, gift or income tax imposed on or
payable by Landlord.
10. Payments. All payments of Rent and other payments to be made to
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Landlord shall be made on a timely basis and shall be payable to Landlord or as
Landlord may otherwise designate in writing. All such payments shall be mailed
or delivered to Landlord's Address designated in Article 1(b) above or at such
other place as Landlord may designate from time to time in writing. If mailed,
all payments shall be mailed in sufficient time and with adequate postage
thereon to be received in Landlord's account by no later than the due date for
such payment.
11. Late Charges. Any Rent or other amounts payable to Landlord under
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this Lease, if not paid by the tenth day after receipt of written notice that
such payment is due, or by the due date specified on any invoices from Landlord
for any other amounts payable hereunder, shall incur a late charge of Fifty
Dollars ($50.00) for Landlord's administrative expense in processing such
delinquent payment and in addition thereto shall bear interest at the rate of
eighteen percent (18%) per annum from and after the due date for such payment.
In no event shall the rate of interest payable on any late payment exceed the
legal limits for such interest enforceable under applicable law.
12. Use Rules. The Demised Premises shall be used for executive, general
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administrative, office space and other similar purposes and no other purposes
and in accordance with all applicable laws, ordinances, rules and regulations of
governmental authorities, all nationally recognized industry standards
applicable to such uses and the Rules and Regulations attached hereto as Exhibit
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"G" and made a part hereof. The occupancy rate of the Demised Premises shall in
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no event be more than such density as shall be permitted under the zoning,
building, health and other laws, rules, ordinances and statutes applicable to
the Demised Premises. Tenant covenants and agrees to abide by the Rules and
Regulations in all respects as now set forth and attached hereto or as hereafter
promulgated by Landlord. Landlord shall have the right at all times during the
Lease Term to publish and promulgate and thereafter enforce such uniformly
applicable rules and regulations or changes in the existing Rules and
Regulations as it may reasonably deem necessary to protect the tenantability,
safety, operation, and welfare of the Demised Premises and the Project. To the
extent of any inconsistency between the Rules and Regulations and this Lease,
this Lease shall control.
10
13. Alterations. Except for any initial improvement of the Demised
-----------
Premises pursuant to Exhibit "D", which shall be governed by the provisions of
-----------
said Exhibit "D", Tenant shall not make, suffer or permit to be made any
-----------
alterations, additions or improvements to or of the Demised Premises or any part
thereof (individually an "Alteration" and any two or more collectively
"Alterations"; Alterations do not include furniture and unattached cubicles), or
attach any fixtures or equipment thereto, without first obtaining Landlord's
written consent, which consent shall not be unreasonably withheld; provided,
however, that Tenant shall have no obligation to obtain Landlord's consent for
any Alteration or related series of Alterations if such Alteration or related
series of Alterations: (i) are nonstructural; (ii) do not cause any violation of
and do not require any change in any certificate of occupancy applicable to the
Building; (iii) do not cause any change in the outside appearance of the
Building, do not weaken or impair the structure of the Building and do not
materially reduce the value of the Demised Premises or the Building or the
Project; (iv) do not affect the proper functioning of the Building equipment;
(v) do not cost in excess of $10,000.00. Whether or not Landlord's consent is
required for any Alteration or Alterations, Tenant shall give Landlord prior
notice of any Alteration or related series of Alterations, and upon completion
of any Alterations (other than decorations), Tenant shall deliver to Landlord
three (3) copies of the "as-built" plans for such Alterations. All such
alterations, additions and improvements shall become Landlord's property at the
expiration or earlier termination of the Lease Term and shall remain on the
Demised Premises without compensation to Tenant.
14. Repairs.
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(a) Landlord shall maintain in good order and repair, subject to
normal wear and tear and subject to casualty and condemnation, the Building
(excluding the Demised Premises and other portions of the Building leased
to other tenants), the Building parking facilities, the public areas, the
landscaped areas, the roof of the Building, the structural floor slab, the
structural portions of the interior and exterior structural walls, and the
base building mechanical, electrical and plumbing systems.. Notwithstanding
the foregoing obligation, to the extent not covered by insurance, the cost
of any repairs or maintenance to the foregoing necessitated by the willful
misconduct or negligence of Tenant or its agents, contractors, employees,
licensees, subtenants or assigns, shall be borne solely by Tenant and shall
be deemed Rent hereunder and shall be reimbursed by Tenant to Landlord upon
demand. Landlord shall not be required to make any repairs or improvements
to the Demised Premises except for any initial improvements to the Demised
Premises pursuant to the provisions of Exhibit "D" and except structural
-----------
repairs necessary for safety and tenantability.
(b) Tenant covenants and agrees that it will take good care of the
Demised Premises and all alterations, additions and improvements thereto
and will keep and maintain the same in good condition and repair, except
for normal wear and tear, using contractors and subcontractors selected by
Tenant and approved by Landlord. Tenant shall at once report, in writing,
to Landlord any defective or dangerous condition known to Tenant. To the
fullest extent permitted by law, Tenant shall not make repairs at the
expense of Landlord or in lieu thereof vacate the Demised Premises
11
notwithstanding any law, statute or ordinance now or hereafter in effect.
Landlord has no obligation and has made no promise to alter, remodel,
improve, repair, decorate or paint the Demised Premises or any part
thereof, except as specifically and expressly herein set forth.
15. Landlord's Right of Entry. Landlord shall retain duplicate keys to
-------------------------
all doors of the Demised Premises and Landlord and its agents, employees and
independent contractors shall have the right to enter the Demised Premises at
reasonable hours to inspect and examine same, to make repairs, additions,
alterations, and improvements, to exhibit the Demised Premises to mortgagees,
prospective mortgagees, purchasers or tenants, and to inspect the Demised
Premises to ascertain that Tenant is complying with all of its covenants and
obligations hereunder; provided, however, that Landlord shall, except in case of
emergency, afford Tenant such prior notification of an entry into the Demised
Premises as shall be reasonably practicable under the circumstances. Landlord
shall be allowed to take into and through the Demised Premises any and all
materials that may be required to make such repairs, additions, alterations or
improvements. During such time as such work is being carried on in or about the
Demised Premises, the Rent provided herein shall not xxxxx, and Tenant shall
have no claim or cause of action against Landlord for damages by reason of
interruption of Tenant's business or loss of profits therefrom because of the
prosecution of any such work or any part thereof provided Landlord shall use all
reasonable efforts in connection with such work to minimize the disruption of
Tenant's business within the Demised Premises. Notwithstanding the foregoing to
the contrary, if Landlord shall fail to use such reasonable efforts and Tenant's
business is disrupted within the Demised Premises on account thereof, and
Landlord fails to use such reasonable efforts within one business day after
actual receipt by Landlord of written notice to Landlord from Tenant specifying
such disruption in reasonable detail, then Base Rental shall xxxxx equitably
with respect to the portion of the Demised Premises affected by such disruption
commencing on the second business day after such actual receipt by Landlord and
continuing thereafter until Landlord shall use all reasonable efforts in
connection with such work to minimize the disruption of Tenant's business within
the Demised Premises.
16. Insurance.
---------
(a) Tenant shall procure at its expense and maintain throughout the
Lease Term a standard form property insurance policy commonly known as all-
risk or "special form" insurance insuring 80% of the full replacement cost
of its furniture, equipment, supplies, and other property owned, leased,
held or possessed by it and contained in the Demised Premises, together
with the excess value of the improvements to the Demised Premises over the
Construction Allowance, and worker's compensation insurance as required by
applicable law. Tenant shall also procure at its expense and maintain
throughout the Lease Term a policy or policies of commercial general
liability insurance, insuring Tenant, Landlord, Landlord's managing agent
and Landlord's mortgagee, if any, as additional insureds, against any and
all liability for injury to or death of a person or persons and for damage
to property occasioned by or arising out of any construction work being
done by Tenant or Tenant's contractors on the Demised Premises, or arising
out of the condition, use or occupancy of the Demised
12
Premises, or in any way occasioned by or arising out of the activities of
Tenant, its agents, contractors or employees in the Demised Premises, or
other portions of the Building or the Project, and of Tenant's guests and
licensees while they are in the Demised Premises, the limits of such policy
or policies to be in combined single limits for both damage to property and
personal injury and in amounts not less than Three Million Dollars
($3,000,000) for each occurrence. Such insurance shall, in addition, extend
to any liability of Tenant arising out of the indemnities provided for in
this Lease. All insurance policies (other than the all-risk or "special
form" insurance set forth above) procured and maintained by Tenant pursuant
to this Article 16 shall name Landlord and any additional parties
designated by Landlord as additional insured. All insurance policies
procured and maintained by Tenant pursuant to this Article 16 shall be
carried with companies licensed to do business in the State of Tennessee
having a rating from Best's Insurance Reports of not less than A-/VII, and
shall be non-cancellable and not subject to material change except after
twenty (20) days' written notice to Landlord. Duly executed certificates of
insurance with respect thereto shall be delivered to Landlord prior to the
date Tenant enters the Demised Premises for the installation of its
improvements, trade fixtures or furniture, and renewals of such policies
shall be delivered to Landlord at least thirty (30) days prior to the
expiration of each respective policy term. Proof of payment of the premium
therefor shall be delivered to Landlord from time to time upon written
request.
(b) Landlord shall procure at its expense (but with the expense to be
included in Operating Expenses as provided in Article 8[a] hereof) and
shall thereafter maintain throughout the Lease Term a policy or policies of
all-risk or "special form" (including rent loss coverage) real and personal
property coverage insurance with respect to the Building including the
leasehold improvements to the Demised Premises, insuring against loss or
damage by fire and such other risks as are from time to time included in a
standard form of all-risk or "special form" policy of insurance available
in the State of Tennessee. Said Building and improvements to the Demised
Premises shall be insured for the benefit of Landlord in an amount not less
than the full replacement costs thereof as determined from time to time by
the insurance company (excluding any costs of replacing leasehold
improvements in the Demised Premises in excess of the Construction
Allowance, and such insurance may provide for a reasonable deductible).
Landlord shall also procure at its expense (but with the expense to be
included in Operating Expenses as provided in Article 8[a] hereof) and
shall thereafter maintain throughout the Lease Term a policy or policies of
commercial general liability insurance insuring against the liability of
Landlord arising out of the maintenance, use and occupancy of the Project,
with limits of such policy or policies to be in combined single limits for
both damage to property and personal injury and in amounts not less than
Three Million Dollars ($3,000,000.00) for each occurrence. Such insurance
required herein shall be issued by an insurance company approved by the
Insurance Commissioner of the State of Tennessee and licensed to do
business in the State of Tennessee. Any insurance required to be carried by
Landlord hereunder may be carried under blanket policies covering other
properties of Landlord and/or its partners and/or their respective related
or affiliated corporations so long as such blanket policies provide
insurance at all times for the Project as required by this Lease. Upon
13
reasonable request from Tenant, Landlord will provide a certificate of
insurance evidencing the maintenance of the insurance required herein.
17. Waiver of Subrogation. Landlord and Tenant shall each have included
---------------------
in all policies of all-risk or "special form" insurance and business
interruption and loss of rents insurance respectively obtained by them covering
the Demised Premises, the Building and contents therein, a waiver by the insurer
of all right of subrogation against the other in connection with any loss or
damage thereby insured against. Any additional premium for such waiver shall be
paid by the primary insured. To the full extent permitted by law, Landlord and
Tenant each waives all right of recovery against the other for, and agrees to
release the other from liability for, loss or damage to the extent such loss or
damage is covered by valid and collectible property insurance in effect at the
time of such loss or damage or would be covered by the property insurance
required to be maintained under this Lease by the party seeking recovery.
18. Default.
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(a) The following events shall be deemed to be events of default by
Tenant under this Lease: (i) Tenant shall fail to pay any installment of
Rent or any other charge or assessment against Tenant pursuant to the terms
hereof within ten (10) business days after receipt by Tenant of written
notice of such failure of payment; (ii) Tenant shall fail to comply with
any term, provision, covenant or warranty made under this Lease by Tenant,
other than the payment of the Rent or any other charge or assessment
payable by Tenant, and shall not cure such failure within thirty (30) days
after receipt by Tenant of written notice thereof; (iii) Tenant or any
guarantor of this Lease shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as they
become due, or shall file a petition in bankruptcy, or shall be adjudicated
as bankrupt or insolvent, or shall file a petition in any proceeding
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, or shall file an answer admitting or fail
timely to contest the material allegations of a petition filed against it
in any such proceeding; (iv) a proceeding is commenced against Tenant or
any guarantor of this Lease seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, and such proceeding shall
not have been dismissed within sixty (60) days after the commencement
thereof; (v) a receiver or trustee shall be appointed for the Demised
Premises or for all or substantially all of the assets of Tenant or of any
guarantor of this Lease and such receiver or trustee shall not have been
dismissed within sixty (60) days after the appointment thereof; (vi) Tenant
shall fail to take possession of the Demised Premises or any portion
thereof as provided in this Lease; (vii) Tenant shall do or permit to be
done anything which creates a lien upon the Demised Premises or the Project
and such lien is not removed or discharged within thirty (30) days after
Tenant receives written notice of the filing thereof (whether from Landlord
or from any other source whatsoever); or (viii) Tenant shall fail to return
a properly executed estoppel certificate to Landlord in accordance with the
provisions of Article 27 hereof within the time period provided for such
return
14
following Landlord's request for same as provided in Article 27 and such
failure continues uncured for ten (10) days following receipt by Tenant of
written notice thereof.
(b) Upon the occurrence of any of the aforesaid events of default,
Landlord shall have the option to pursue any one or more of the following
remedies without any notice or demand whatsoever: (i) terminate this Lease,
in which event Tenant shall immediately surrender the Demised Premises to
Landlord and if Tenant fails to do so, Landlord may without prejudice to
any other remedy which it may have for possession or arrearages in Rent,
enter upon and take possession of the Demised Premises and expel or remove
Tenant and any other person who may be occupying said Demised Premises or
any part thereof, without being liable for prosecution or any claim of
damages therefor; Tenant hereby agreeing to pay to Landlord on demand the
amount of all loss and damage which Landlord may suffer by reason of such
termination, whether through inability to relet the Demised Premises on
satisfactory terms or otherwise; (ii) terminate Tenant's right of
possession (but not this Lease) and enter upon and take possession of the
Demised Premises and expel or remove Tenant and any other person who may be
occupying said Demised Premises or any part thereof, by entry,
dispossessory suit or otherwise, without thereby releasing Tenant from any
liability hereunder, without terminating this Lease, and without being
liable for prosecution or any claim of damages therefor and, if Landlord so
elects, make such alterations, redecorations and repairs as, in Landlord's
judgment, may be necessary to relet the Demised Premises, and Landlord may
relet the Demised Premises or any portion thereof in Landlord's or Tenant's
name, but for the account of Tenant, for such term or terms (which may be
for a term extending beyond the Lease Term) and at such rental or rentals
and upon such other terms as Landlord may reasonably deem advisable, with
or without advertisement, and by private negotiations, and receive the rent
therefor, Tenant hereby agreeing to pay to Landlord the deficiency, if any,
between all Rent reserved hereunder and the total rental applicable to the
Lease Term hereof obtained by Landlord re-letting, and Tenant shall be
liable for Landlord's expenses in redecorating and restoring the Demised
Premises and all costs incident to such re-letting, including broker's
commissions and lease assumptions, and in no event shall Tenant be entitled
to any rentals received by Landlord in excess of the amounts due by Tenant
hereunder; or (iii) enter upon the Demised Premises, without being liable
for prosecution or any claim of damages therefor, and do whatever Tenant is
obligated to do under the terms of this Lease; and Tenant agrees to
reimburse Landlord on demand for any expenses including, without
limitation, reasonable attorneys' fees which Landlord may incur in thus
effecting compliance with Tenant's obligations under this Lease and Tenant
further agrees that Landlord shall not be liable for any damages resulting
to Tenant from such action, except for damage to property or injury to
persons to the extent caused by the gross negligence or willful misconduct
of Landlord. If Landlord shall reenter the Demised Premises and take
possession from Tenant without terminating this Lease, provided that Tenant
has vacated the Demised Premises and is not contesting Landlord's right to
the possession of the Demised Premises, Landlord will use reasonable
efforts to relet the Demised Premises and thereby mitigate the damages
which Landlord shall incur. Tenant hereby agrees that Landlord's agreement
to use
15
reasonable efforts to relet the Demised Premises in order to mitigate
Landlord's damages shall not be deemed to impose upon Landlord any
obligation to relet the Demised Premises (i) for any purpose other than use
permitted under this Lease or (ii) to any Tenant who is not financially
capable of performing the duties and obligations imposed upon Tenant under
this Lease, or (iii) to prefer the Demised Premises over any other space
available in the Building. If this Lease is terminated by Landlord as a
result of the occurrence of an event of default, Landlord may declare to be
due and payable immediately, the present value (calculated with a discount
factor of eight percent [8%] per annum) of the difference between (x) the
entire amount of Rent and other charges and assessments which in Landlord's
reasonable determination would become due and payable during the remainder
of the Lease Term determined as though this Lease had not been terminated
(including, but not limited to, increases in Rent pursuant to this Lease),
and (y) the then fair market rental value of the Demised Premises for the
remainder of the Lease Term. Upon the acceleration of such amounts, Tenant
agrees to pay the same at once, together with all Rent and other charges
and assessments theretofore due, at Landlord's address as provided herein,
it being agreed that such payment shall not constitute a penalty or
forfeiture but shall constitute liquidated damages for Tenant's failure to
comply with the terms and provisions of this Lease (Landlord and Tenant
agreeing that Landlord's actual damages in such event are impossible to
ascertain and that the amount set forth above is a reasonable estimate
thereof).
(c) Pursuit of any of the foregoing remedies shall not preclude
pursuit of any other remedy herein provided or any other remedy provided by
law or at equity, nor shall pursuit of any remedy herein provided
constitute an election of remedies thereby excluding the later election of
an alternate remedy, or a forfeiture or waiver of any Rent or other charges
and assessments payable by Tenant and due to Landlord hereunder or of any
damages accruing to Landlord by reason of violation of any of the terms,
covenants, warranties and provisions herein contained. No reentry or taking
possession of the Demised Premises by Landlord or any other action taken by
or on behalf of Landlord shall be construed to be an acceptance of a
surrender of this Lease or an election by Landlord to terminate this Lease
unless written notice of such intention is given to Tenant. Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an
event of default shall not be deemed or construed to constitute a waiver of
such default. In determining the amount of loss or damage which Landlord
may suffer by reason of termination of this Lease or the deficiency arising
by reason of any reletting of the Demised Premises by Landlord as above
provided, allowance shall be made for the expense of repossession. Tenant
agrees to pay to Landlord all costs and expenses incurred by Landlord in
the enforcement of this Lease, including, without limitation, the fees of
Landlord's attorneys as provided in Article 24 hereof.
(d) The abandonment or vacation of the Demised Premises shall not be
an event of default by Tenant under this Lease, but in the event Tenant
shall abandon or vacate the Demised Premises, unless due to a casualty,
condemnation or remodeling (which remodeling is being diligently
prosecuted), Landlord may, at any time while
16
such abandonment or vacation of the Demised Premises is continuing, notify
Tenant of Landlord's election to terminate this Lease, in which event this
Lease shall terminate on the date so selected by Landlord in Landlord's
written election to terminate this Lease, and on the date so set forth in
Landlord's written election, this Lease shall terminate and come to an end
as though the date selected by Landlord were the last day of the natural
expiration of the Lease Term; provided, however, that no such termination
shall affect or limit any obligations or liabilities of Tenant arising or
accruing under this Lease prior to the effective date of any such
termination; and provided further that Tenant may rescind Landlord's
election by (i) notifying Landlord in writing, within ten (10) days after
receipt of Landlord's written election to terminate this Lease, that Tenant
will reoccupy the Demised Premises for business purposes and (ii) in fact,
so reoccupying the Demised Premises for business purposes within sixty (60)
days thereafter.
19. Waiver of Breach. No waiver of any breach of the covenants,
----------------
warranties, agreements, provisions, or conditions contained in this Lease shall
be construed as a waiver of said covenant, warranty, provision, agreement or
condition or of any subsequent breach thereof, and if any breach shall occur and
afterwards be compromised, settled or adjusted, this Lease shall continue in
full force and effect as if no breach had occurred.
20. Assignment and Subletting. Tenant shall not, without the prior
-------------------------
written consent of Landlord, assign this Lease or any interest herein or in the
Demised Premises, or mortgage, pledge, encumber, hypothecate or otherwise
transfer or sublet the Demised Premises or any part thereof or permit the use of
the Demised Premises by any party other than Tenant. Consent to one or more
such transfers or subleases shall not destroy or waive this provision, and all
subsequent transfers and subleases shall likewise be made only upon obtaining
the prior written consent of Landlord. Without limiting the foregoing
prohibition, in no event shall Tenant assign this Lease or any interest herein,
whether directly, indirectly or by operating of law, or sublet the Demised
Premises or any part thereof or permit the use of the Demised Premises or any
part thereof by any party (i) if the proposed assignee or subtenant is a party
who would (or whose use would) detract from the character of the Building as a
first-class building, such as, without limitation, a dental, medical or
chiropractic office or a governmental office, (ii) if the proposed use of the
Demised Premises shall involve an occupancy rate in excess of the maximum
density permitted under the zoning, building, health and other laws, rules,
ordinances and statutes applicable to the Demised Premises, (iii) if the
proposed assignment or subletting shall be to a governmental subdivision or
agency or any person or entity who enjoys diplomatic or sovereign immunity, (iv)
if such proposed assignee or subtenant is an existing tenant of the Building, or
(v) if such proposed assignment, subletting or use would contravene any
restrictive covenant (including any exclusive use) granted to any other tenant
of the Building or would contravene the provisions of Article 12 of this Lease.
Notwithstanding the foregoing prohibition, Tenant shall have the absolute
right, without the consent of Landlord but with prior notice to Landlord, to
assign this Lease or sublet all or any part of the Demised Premises to an
Affiliate of Tenant (as hereinafter defined), so long as such transaction is not
entered as a subterfuge to avoid the restrictions relating to assignments and
subletting set forth in this Lease. Tenant shall also have the absolute right,
17
without the consent of Landlord but with prior notice to Landlord, to assign
this Lease to another entity in connection with the merger or consolidation of
Tenant and such other entity or to the purchaser or transferee of all or
substantially all of the business and assets of Tenant, provided (i) that the
successor entity, purchaser or transferee shall, as a result of such merger,
consolidation or acquisition, be legally bound to pay the Rent and all other
rentals and charges hereunder, and to observe and perform all of the other
terms, covenants and provisions of this Lease on the part of Tenant to be
observed or performed, (ii) that such successor, purchaser or transferee shall
have a net worth, determined in accordance with generally accepted accounting
principles, which is not less than the net worth of Tenant immediately prior to
such transaction, and (iii) that any such transaction is not entered into as a
subterfuge to avoid the restrictions relating to assignments set forth in this
Lease. No assignment of this Lease or subletting of the Demised Premises shall
relieve Tenant of any of Tenant's obligations or liabilities under this Lease,
and Tenant shall remain fully liable for the faithful performance of all
covenants, terms and conditions hereof on the Tenant's part to be performed. As
used herein, the term "Affiliate of Tenant" shall mean any person, partnership,
corporation, limited liability company or other form of business or legal
association or entity which directly or indirectly controls Tenant or which is
directly or indirectly controlled by or under common control with Tenant (the
term "control" for these purposes shall mean, in the case of a corporation, the
right to exercise, directly or indirectly, more than fifty percent [50%] of the
voting rights attributable to the shares of the controlled corporation, and with
respect to an entity that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of the controlled entity).
Sublessees or transferees of the Demised Premises for the balance of the
Lease Term shall become directly liable to Landlord for all obligations of
Tenant hereunder, without relieving Tenant (or any guarantor of Tenant's
obligations hereunder) of any liability therefor, and Tenant shall remain
obligated for all liability to Landlord arising under this Lease during the
entire remaining Lease Term including any extensions thereof, whether or not
authorized herein. If Tenant is a partnership, a withdrawal or change, whether
voluntary, involuntary or by operation of law, of partners owning a controlling
interest in the Tenant shall be deemed a voluntary assignment of this Lease and
subject to the foregoing provisions. If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant, or the
sale or transfer of a controlling interest in the capital stock of Tenant, shall
be deemed a voluntary assignment of this Lease and subject to the foregoing
provisions. The preceding sentence shall not apply to, and Tenant shall not be
in default under this Paragraph 20 as a result of, an offering of voting stock
to the public pursuant to a registered securities offering, the transfer of
voting stock on a national securities exchange or through the NASDAQ national
market system, or the transfer of voting stock to Tenant's employees pursuant to
a bona fide employee stock ownership plan. If Tenant shall be a corporation
whose stock is publicly traded on a nationally recognized securities exchange
(including the NASDAQ over-the-counter market), then any merger, consolidation
or other similar reorganization of Tenant, or the sale or transfer of a
controlling interest in the voting capital stock of Tenant shall not be deemed
to be an assignment of this Lease. Landlord may, as a prior condition to
considering any request for consent to an assignment or sublease (when
Landlord's consent is required), require Tenant to obtain and submit current
financial statements of any proposed subtenant or assignee. In the event
Landlord consents to an assignment or sublease, Tenant shall reimburse
18
Landlord, not in excess of $1,000.00 per assignment or sublease, for Landlord's
reasonable accounting costs, and reasonable legal fees, actually incurred by
Landlord as a result of the assignment or sublease. Any consideration, in excess
of the Rent and other charges and sums due and payable by Tenant under this
Lease, paid to Tenant by any assignee of this Lease for its assignment, or by
any sublessee under or in connection with its sublease (when Landlord's consent
is required), or otherwise paid to Tenant by another party for use and occupancy
of the Demised Premises or any portion thereof, shall be promptly remitted by
Tenant to Landlord as additional rent hereunder and Tenant shall have no right
or claim thereto as against Landlord. No assignment of this Lease consented to
by Landlord shall be effective unless and until Landlord shall receive an
original assignment and assumption agreement, in form and substance reasonably
satisfactory to Landlord, signed by Tenant and Tenant's proposed assignee,
whereby the assignee assumes due performance of this Lease to be done and
performed for the balance of the then remaining Lease Term of this Lease. No
subletting of the Demised Premises, or any part thereof, shall be effective
unless and until there shall have been delivered to Landlord an agreement, in
form and substance reasonably satisfactory to Landlord, signed by Tenant and the
proposed sublessee, whereby the sublessee acknowledges the right of Landlord to
continue or terminate any sublease, in Landlord's sole discretion, upon
termination of this Lease, and such sublessee agrees to recognize and attorn to
Landlord in the event that Landlord elects under such circumstances to continue
such sublease.
21. Destruction.
-----------
(a) If the Demised Premises are damaged by fire or other casualty,
the same shall be repaired or rebuilt as speedily as practical under the
circumstances at the expense of the Landlord, unless this Lease is
terminated as provided in this Article 21, and during the period required
for restoration, a just and proportionate part of Base Rental shall be
abated until the Demised Premises are repaired or rebuilt.
(b) If the Demised Premises are (i) damaged to such an extent that
repairs cannot, in Landlord's judgment, be completed within one hundred
eighty (180) days after the date of the casualty or (ii) damaged or
destroyed as a result of a risk which is not insured under standard fire
insurance policies with extended coverage endorsement, or (iii) damaged or
destroyed during the last eighteen (18) months of the Lease Term, or if the
Building is damaged in whole or in part (whether or not the Demised
Premises are damaged), to such an extent that the Building cannot, in
Landlord's judgment, be operated economically as an integral unit, then and
in any such event Landlord may at its option terminate this Lease by notice
in writing to the Tenant within sixty (60) days after the date of such
occurrence. If the Demised Premises are damaged to such an extent that
repairs cannot, in Landlord's judgment, be completed within one hundred
eighty (180) days after the date of the casualty or if the Demised Premises
are substantially damaged during the last eighteen (18) months of the Lease
Term, then in either such event Tenant may elect to terminate this Lease by
notice in writing to Landlord within thirty (30) days after the date of
such occurrence. If the Demised Premises are damaged and this Lease is not
terminated by Landlord or Tenant pursuant to this Paragraph 21(b) and the
repairs to the Demised Premises on account of such damage are not completed
within two hundred (200) days after the date of the casualty,
19
then on or before the earlier of the date such repairs are completed or the
date two hundred twenty (220) days after the date of the casualty, Tenant
may elect to terminate this Lease by notice in writing to Landlord. Unless
Landlord or Tenant elects to terminate this Lease as hereinabove provided,
this Lease will remain in full force and effect and Landlord shall repair
such damage at its expense to the extent required under subparagraph (c)
below as expeditiously as possible under the circumstances.
(c) If Landlord should elect or be obligated pursuant to subparagraph
(a) above to repair or rebuild because of any damage or destruction,
Landlord's obligation shall be limited to the original Building and any
other work or improvements which were originally performed or installed at
Landlord's expense as described in Exhibit "D" hereto or with the proceeds
-----------
of the Construction Allowance. If the cost of performing such repairs
exceeds the actual proceeds of insurance paid or payable to Landlord on
account of such casualty, or if Landlord's mortgagee or the lessor under a
ground or underlying lease shall require that any insurance proceeds from a
casualty loss be paid to it, Landlord may terminate this Lease unless
Tenant, within thirty (30) days after demand therefor, deposits with
Landlord a sum of money sufficient to pay the difference between the cost
of repair and the proceeds of the insurance available to Landlord for such
purpose.
22. Landlord's Lien. Intentionally omitted.
---------------
23. Services by Landlord. Landlord shall provide the Building Standard
--------------------
Services described on Exhibit "E" attached hereto and by reference made a part
-----------
hereof.
24. Attorneys' Fees. In the event Landlord or Tenant defaults in the
----------------
performance of any of the terms, agreements or conditions contained in this
Lease and the non-defaulting party places the enforcement of this Lease, or any
part thereof, or the collection of any Rent due or to become due hereunder, or
recovery of the possession of the Demised Premises, in the hands of an attorney,
or files suit upon the same, and should such non-defaulting party prevail in
such suit, the non-prevailing party, to the extent permitted by applicable law,
agrees to pay the prevailing party all reasonable attorney's fees actually
incurred by the prevailing party.
25. Time. Time is of the essence of this Lease and whenever a certain day
----
is stated for payment or performance of any obligation of Tenant or Landlord,
the same enters into and becomes a part of the consideration hereof.
26. Subordination and Attornment.
----------------------------
(a) Existing Security Deeds or Underlying Leases. Landlord represents
--------------------------------------------
and warrants to Tenant that as of the date of this Lease, the Land and
Building are free and clear of any mortgages, deeds to secure debt, deeds
of trust or other such financing instruments (each a "Security Deed") or
any ground or underlying leases.
(b) Subordination. Tenant agrees that upon request from the Landlord,
-------------
from the holder or proposed holder of any Security Deed or from the lessor
or proposed
20
lessor under any underlying lease, Tenant shall execute a subordination,
non-disturbance and attornment agreement ("non-disturbance agreement")
subordinating this Lease to the interest of such holder or lessor and their
respective heirs, successors and assigns. The holder of any such Security
Deed or the lessor under any such underlying lease shall agree in such
nondisturbance agreement that, so long as Tenant complies with all of the
terms and conditions of this Lease and is not in default hereunder beyond
the period of cure of such default as provided herein, such holder or
lessor or any person or entity acquiring the interest of the Landlord under
this Lease as a result of the enforcement of such Security Deed or lease or
deed in lieu thereof (the "Successor Landlord") shall not take any action
to disturb Tenant's possession of the Demised Premises during the remainder
of the Lease Term and any extension or renewal thereof and the Successor
Landlord shall recognize all of Tenant's rights under this Lease, despite
any foreclosure, lease termination or other action by such holder or
lessor, including, without limitation, the taking of possession of the
Demised Premises or any portion thereof by the Successor Landlord or the
exercise of any assignment of rents by the holder or lessor. In any such
non-disturbance agreement, Tenant shall agree to give the holder of the
Security Deed (or, in the case of an underlying lease, the lessor
thereunder) notice of defaults by Landlord hereunder (but only to the
address previously supplied to Tenant in writing) at the same time as such
notice is given to Landlord and time periods to cure such defaults which
are the same as those granted to Landlord hereunder (which time period
shall run from and after such notice is given to such holder or lessor),
and Tenant shall further agree that any Successor Landlord shall not be
personally liable for any accrued obligation of the former landlord, or for
any act or omission of the former landlord, whether prior to or after such
enforcement proceedings, nor be subject to any counterclaims which shall
have accrued to Tenant against the former landlord prior to the date upon
which such party shall become the owner of the Demised Premises. Such non-
disturbance agreement shall also provide for the attornment by Tenant to
the Successor Landlord and shall provide that such Successor Landlord shall
not be (a) subject to any offsets which the Tenant might have against the
former landlord; (b) bound by any Base Rental or any other payments which
the Tenant under this Lease might have paid for more than one (1) month in
advance to any former landlord under this Lease; or (c) bound by any
amendment or modification of this Lease made without the express written
consent of the holder of the Security Deed or lessor under the underlying
lease, as the case may be. Landlord will join in the signing of the non-
disturbance agreement, and such non-disturbance agreement will be in the
form suitable for recording in the deed records of Xxxx County, Tennessee.
(c) Election by Mortgagee. If the holder of any Security Deed or any
---------------------
lessor under a ground or underlying lease elects to have this Lease
superior to its Security Deed or lease and signifies its election in the
instrument creating its lien or lease or by separate instrument recorded in
connection with or prior to a foreclosure, or in the foreclosure deed
itself, then this Lease shall be superior to such Security Deed or lease.
27. Estoppel Certificates. Within ten (10) days after receipt of written
---------------------
request therefor by Landlord (including a copy of the form of estoppel
certificate), Tenant agrees to
21
execute and return to Landlord in recordable form an estoppel certificate
addressed to Landlord, any mortgagee or assignee of Landlord's interest in, or
purchaser of, the Demised Premises or the Building or any part thereof,
certifying (if such be the case) that this Lease is unmodified and is in full
force and effect (and if there have been modifications, that the same is in full
force and effect as modified and stating said modifications); that there are no
defenses or offsets against the enforcement thereof or stating those claimed by
Tenant; and stating the date to which Rent and other charges have been paid.
Such certificate shall also include such other information as may reasonably be
required by such mortgagee, proposed mortgagee, assignee, purchaser or Landlord.
Any such certificate may be relied upon by Landlord, any mortgagee, proposed
mortgagee, assignee, purchaser and any other party to whom such certificate is
addressed. In the event Tenant delivers such estoppel certificate within such
time period, Landlord shall reimburse Tenant, not in excess of $1,000.00 per
estoppel certificate, for Tenant's reasonable administration costs, actually
incurred by Tenant as a result of executing such estoppel certificate.
28. Cumulative Rights. All rights, powers and privileges conferred
-----------------
hereunder upon the parties hereto shall be cumulative to, but not restrictive
of, or in lieu of those conferred by law.
29. Holding Over. If Tenant remains in possession after expiration or
------------
termination of the Lease Term without Landlord's written consent, Tenant shall
become a tenant-at-sufferance, and there shall be no renewal of this Lease by
operation of law. During the period of any such holding over, all provisions of
this Lease shall be and remain in effect except that the monthly rental shall be
125% of the amount of Rent (including any adjustments as provided herein)
payable for the last full calendar month of the Lease Term including renewals or
extensions. The inclusion of the preceding sentence in this Lease shall not be
construed as Landlord's consent for Tenant to hold over.
30. Surrender of Premises. Upon the expiration or other termination of
---------------------
this Lease, Tenant shall quit and surrender to Landlord the Demised Premises and
every part thereof and all alterations, additions and improvements thereto,
broom clean and in good condition and state of repair, reasonable wear and tear
and insured casualty only excepted. Tenant shall remove all personalty and
equipment not attached to the Demised Premises which it has placed upon the
Demised Premises (including but not limited to Tenant's voice and data equipment
and back-up power equipment installed by Tenant at Tenant's cost, trade fixtures
and furniture), and Tenant shall repair all damage to the Demised Premises,
Building or Project caused by the removal of such property. If Tenant shall
fail or refuse to remove all of Tenant's effects, personalty and equipment from
the Demised Premises upon the expiration or termination of this Lease for any
cause whatsoever or upon the Tenant being dispossessed by process of law or
otherwise, such effects, personalty and equipment shall be deemed conclusively
to be abandoned and may be appropriated, sold, stored, destroyed or otherwise
disposed of by Landlord without obligation to account for them. Tenant shall
pay Landlord on demand any and all expenses (net of the net proceeds, if any,
received by Landlord from the sale, if any, of such property or any portion
thereof) incurred by Landlord in the removal of such property, including,
without limitation, the cost of repairing any damage to the Building or Project
caused by the removal of such property and storage charges (if Landlord elects
to
22
store such property). The covenants and conditions of this Article 30 shall
survive any expiration or termination of this Lease.
31. Notices. All notices required or permitted to be given hereunder
-------
shall be in writing and may be delivered by hand delivery to either party or may
be sent by courier or by United States Mail, certified, return receipt
requested, postage prepaid. Any such notice shall be deemed received by the
party to whom it was sent (i) in the case of hand delivery or courier delivery,
on the date of delivery to such party, and (ii) in the case of certified mail,
the date receipt is acknowledged on the return receipt for such notice or, if
delivery is rejected or refused or the U.S. Postal Service is unable to deliver
same because of changed address of which no notice was given pursuant hereto,
the first date of such rejection, refusal or inability to deliver. All such
notices shall be addressed to Landlord or Tenant at their respective address set
forth hereinabove or at such other address as either party shall have
theretofore given to the other by notice as herein provided.
32. Damage or Theft of Personal Property. All personal property brought
------------------------------------
into Demised Premises by Tenant, or Tenant's employees or business visitors,
shall be at the risk of Tenant only, and Landlord shall not be liable for theft
thereof or any damage thereto occasioned by any act of co-tenants, occupants,
invitees or other users of the Building or any other person, unless such theft
or damage is the result of the act of Landlord or its employees and Landlord is
not relieved therefrom by Article 17 hereof. Unless caused by the negligent
acts or omissions of Landlord or its employees, Landlord shall not at any time
be liable for damage to any property in or upon the Demised Premises which
results from power surges or other deviations from the constancy of the
electrical service or from gas, smoke, water, rain, ice or snow which issues or
leaks from or forms upon any part of the Building or from the pipes or plumbing
work of the same, or from any other place whatsoever.
33. Eminent Domain.
--------------
(a) If all or part of the Demised Premises shall be taken for any
public or quasi-public use by virtue of the exercise of the power of
eminent domain or by private purchase in lieu thereof, this Lease shall
terminate as to the part so taken as of the date of taking, and, in the
case of a partial taking, either Landlord or 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 either (i) that more than fifteen percent (15%) of the
Demised Premises was taken or (ii) that the portion of the Demised Premises
taken shall be of such extent and nature as substantially to handicap,
impede or impair, in Tenant's reasonable opinion, Tenant's use of the
balance of the Demised Premises or (iii) that more than fifteen percent
(15%) of the parking spaces for the Building were taken, unless within
thirty (30) days after the date of such Taking Landlord shall notify Tenant
of its intention to replace the parking spaces, and such replacement is
provided within one hundred fifty (150) days of such notice. If title to so
much of the Building is taken that a reasonable amount of reconstruction
thereof will not in Landlord's sole discretion result in the Building being
a practical improvement and reasonably suitable for use for the purpose for
which it is
23
designed, then this Lease shall terminate on the date that the condemning
authority actually takes possession of the part so condemned or purchased.
(b) If this Lease is terminated under the provisions of this Article
33, Rent shall be apportioned and adjusted as of the date of termination.
Tenant shall have no claim against Landlord or against the condemning
authority for the value of any leasehold estate or for the value of the
unexpired Lease Term provided that the foregoing shall not preclude any
claim that Tenant may have against the condemning authority for the
unamortized cost of leasehold improvements, to the extent the same were
installed at Tenant's expense (and not with the proceeds of the
Construction Allowance), or for loss of business, moving expenses or other
consequential damages, in accordance with subparagraph (d) below.
(c) If there is a partial taking of the Building and this Lease is
not thereupon terminated under the provisions of this Article 33, then this
Lease shall remain in full force and effect, and Landlord shall, within a
reasonable time thereafter, repair or reconstruct the remaining portion of
the Building to the extent necessary to make the same a complete
architectural unit; provided that in complying with its obligations
hereunder Landlord shall not be required to expend more than the net
proceeds of the condemnation award which are paid to Landlord.
(d) All compensation awarded or paid to Landlord upon a total or
partial taking of the Demised Premises or the Building shall belong to and
be the property of Landlord without any participation by Tenant. Nothing
herein shall be construed to preclude Tenant from prosecuting any claim
directly against the condemning authority for loss of business, for damage
to, and cost of removal of, trade fixtures, furniture and other personal
property belonging to Tenant, and for the unamortized cost of leasehold
improvements to the extent same were installed at Tenant's expense (and not
with the proceeds of the Construction Allowance). In no event shall Tenant
have or assert a claim for the value of any unexpired term of this Lease.
Subject to the foregoing provisions of this subparagraph (d), Tenant hereby
assigns to Landlord any and all of its right, title and interest in or to
any compensation awarded or paid as a result of any such taking.
34. Parties. The term "Landlord", as used in this Lease, shall include
-------
Landlord and its assigns and successors. It is hereby covenanted and agreed by
Tenant that should Landlord's interest in the Demised Premises cease to exist
for any reason during the Lease Term, then notwithstanding the happening of such
event, this Lease nevertheless shall remain in full force and effect, and Tenant
hereby agrees to attorn to the then owner of the Demised Premises. The term
"Tenant" shall include Tenant and its heirs, legal representatives and
successors, and shall also include Tenant's assignees and sublessees, if this
Lease shall be validly assigned or the Demised Premises sublet for the balance
of the Lease Term or any renewals or extensions thereof. In addition, Landlord
and Tenant covenant and agree that Landlord's right to transfer or assign
Landlord's interest in and to the Demised Premises, or any part or parts
thereof, shall be unrestricted, and that in the event of any such transfer or
assignment by Landlord which includes the Demised Premises, Landlord's
obligations to
24
Tenant thereafter arising hereunder shall cease and terminate, and Tenant shall
look only and solely to Landlord's assignee or transferee for performance of
Landlord's obligations to Tenant thereafter arising hereunder.
35. Liability of Tenant. Tenant hereby indemnifies Landlord from and
-------------------
agrees to hold Landlord harmless against, any and all liability, loss, cost,
damage or expense, including, without limitation, court costs and reasonable
attorney's fees, imposed on Landlord by any person whomsoever, caused in whole
or in part by any negligent act or omission of Tenant, or any of its employees,
contractors, servants, agents, subtenants or assignees, or of Tenant's customers
while such customers are within the Demised Premises, or otherwise occurring in
connection with any default of Tenant hereunder. The provisions of this Article
35 shall survive any termination of this Lease.
36. Force Majeure. In the event of strike, lockout, civil commotion, act
-------------
of God, or any other cause beyond a party's control (collectively "force
majeure") resulting in the Landlord's inability to supply the services or
perform the other obligations required of Landlord hereunder, this Lease shall
not terminate and Tenant's obligation to pay Rent and all other charges and sums
due and payable by Tenant shall not be affected or excused and Landlord shall
not be considered to be in default under this Lease. If, as a result of force
majeure, Tenant is delayed in performing any of its obligations under this
Lease, Tenant's performance shall be excused for a period equal to such delay
and Tenant shall not during such period be considered to be in default under
this Lease with respect to the obligation, performance of which has thus been
delayed.
37. Landlord's Liability. Landlord shall have no personal liability with
--------------------
respect to any of the provisions of this Lease. If Landlord is in default with
respect to its obligations under this Lease, Tenant shall look for satisfaction
of Tenant's remedies, if any, solely to the equity of Landlord in and to the
Building and the Land described in Exhibit "F" hereto and to the proceeds of
-----------
Landlord's insurance policy or policies actually paid to Landlord and not
applied by Landlord by the applicable claim or to the restoration of the
Building as required by the terms of this Lease (unless same are not so applied
because such proceeds are required by the holder of a mortgage to be paid to it
to reduce the debt secured by such mortgage) and to any rent derived from the
Building accruing after the date of a final judgment obtained by Tenant against
Landlord with respect to such default. It is expressly understood and agreed
that Landlord's liability under the terms of this Lease shall in no event exceed
the amount of its interest in and to said Land and Building, the aforedescribed
rent derived from the Building accruing after the date of a final judgment
obtained by Tenant against Landlord with respect to such default, and the
aforedescribed proceeds of insurance. In no event shall any partner of Landlord
nor any joint venturer in Landlord, nor any officer, director or shareholder of
Landlord or any such partner or joint venturer of Landlord be personally liable
with respect to any of the provisions of this Lease.
38. Landlord's Covenant of Quiet Enjoyment. Provided Tenant performs the
--------------------------------------
terms, conditions and covenants of this Lease, and subject to the terms and
provisions hereof, Landlord covenants and agrees to take all necessary steps to
secure and to maintain for the benefit of Tenant the quiet and peaceful
possession of the Demised Premises, for the Lease
25
Term, without hindrance, claim or molestation by Landlord or any other person
lawfully claiming under Landlord.
39. First Month's Rent. Tenant has deposited with Landlord the sum set
------------------
forth in Article 1(m) above. Such amount shall be applied by Landlord to the
first monthly installment(s) of Base Rental and Tenant's Forecast Additional
Rental as they become due hereunder. This Lease shall be of no force or effect
and the sum set forth in Article 1(m) above shall be refunded to Tenant in the
event this Lease has not been executed by Landlord within fourteen (14) days
after counterparts of this Lease fully executed by Tenant have been delivered to
Landlord together with the sum set forth in Article 1(m) above.
40. Hazardous Substances. Tenant hereby covenants and agrees that Tenant
--------------------
shall not cause or permit any "Hazardous Substances" (as hereinafter defined) to
be generated, placed, held, stored, used, located or disposed of at the Project
or any part thereof, except for Hazardous Substances as are commonly and legally
used or stored as a consequence of using the Demised Premises for general office
and administrative purposes (and, if permitted hereunder, medical treatment and
medical laboratory purposes), but only so long as the quantities thereof do not
pose a threat to public health or to the environment or would necessitate a
"response action", as that term is defined in CERCLA (as hereinafter defined),
and so long as Tenant strictly complies or causes compliance with all applicable
governmental rules and regulations concerning the use, storage, production,
transportation and disposal of such Hazardous Substances. For purposes of this
Article 40, "Hazardous Substances" shall mean and include those elements or
compounds which are contained in the list of Hazardous Substances adopted by the
United States Environmental Protection Agency (EPA) or in any list of toxic
pollutants designated by Congress or the EPA or which are defined as hazardous,
toxic, pollutant, infectious or radioactive by any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability (including, without limitation, strict
liability) or standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereinafter in effect
(collectively "Environmental Laws"). Tenant hereby agrees to indemnify Landlord
and hold Landlord harmless from and against any and all losses, liabilities,
including strict liability, damages, injuries, expenses, including reasonable
attorneys' fees, costs of settlement or judgment and claims of any and every
kind whatsoever paid, incurred or suffered by, or asserted against, Landlord by
any person, entity or governmental agency for, with respect to, or as a direct
or indirect result of, the presence in, or the escape, leakage, spillage,
discharge, emission or release from, the Demised Premises of any Hazardous
Substances (including, without limitation, any losses, liabilities, including
strict liability, damages, injuries, expenses, including reasonable attorneys'
fees, costs of any settlement or judgment or claims asserted or arising under
the Comprehensive Environmental Response, Compensation and Liability Act
["CERCLA"], any so-called federal, state or local "Superfund" or "Superlien"
laws or any other Environmental Law); provided, however, that the foregoing
indemnity is limited to matters arising solely from Tenant's violation of the
covenant contained in this Article. The obligations of Tenant under this
Article shall survive any expiration or termination of this Lease.
26
Landlord hereby covenants and agrees that Landlord has not caused or permitted
and shall not cause or permit any Hazardous Substances to be generated, placed,
held, stored, used, located or disposed of at the Project or any part thereof
(excluding, however, the Demised Premises and such other portions of the Project
as are from time to time leased to tenants, but including the "building
standard" work), except for Hazardous Substances as are commonly and legally
used or stored as a consequence of constructing, operating, and maintaining the
Project in accordance with this Lease, and using the Project for general office
and administrative purposes (and, if permitted hereunder, medical treatment and
medical laboratory purposes), but only so long as the quantities thereof do not
pose a threat to public health or to the environment or would necessitate a
"response action", as that term is defined in CERCLA, and so long as Landlord
strictly complies or causes compliance with all applicable governmental rules
and regulations concerning the use, storage, production, transportation and
disposal of such Hazardous Substances. Landlord hereby agrees to indemnify
Tenant and hold Tenant harmless from and against any and all losses,
liabilities, including strict liability, damages, injuries, expenses, including
reasonable attorneys' fees, costs of settlement or judgment and claims of any
and every kind whatsoever paid, incurred or suffered by, or asserted against,
Tenant by any person, entity or governmental agency for, with respect to, or as
a direct or indirect result of, the presence in, or the escape, leakage,
spillage, discharge, emission or release from, the Project of any Hazardous
Substances (including, without limitation, any losses, liabilities, including
strict liability, damages, injuries, expenses, including reasonable attorneys'
fees, costs of any settlement or judgment or claims asserted or arising under
CERCLA, any so-called federal, state or local "Superfund" or "Superlien" laws or
any other Environmental Law); provided, however, that the foregoing indemnity is
limited to matters arising solely from Landlord's violation of the covenant
contained in this Article. The obligations of Landlord under this Article shall
survive any expiration or termination of this Lease.
41. Submission of Lease. The submission of this Lease for examination
-------------------
does not constitute an offer to lease and this Lease shall be effective only
upon execution hereof by Landlord and Tenant.
42. Severability. If any clause or provision of the Lease is illegal,
------------
invalid or unenforceable under present or future laws, the remainder of this
Lease shall not be affected thereby, and in lieu of each clause or provision of
this Lease which is illegal, invalid or unenforceable, there shall be added as a
part of this Lease a clause or provision as nearly identical to the said clause
or provision as may be legal, valid and enforceable.
43. Entire Agreement. This Lease contains the entire agreement of the
----------------
parties and no representations, inducements, promises or agreements, oral or
otherwise, between the parties not embodied herein shall be of any force or
effect. No failure of Landlord to exercise any power given Landlord hereunder,
or to insist upon strict compliance by Tenant with any obligation of Tenant
hereunder, and no custom or practice of the parties at variance with the terms
hereof, shall constitute a waiver of Landlord's right to demand exact compliance
with the terms hereof. This Lease may not be altered, waived, amended or
extended except by an instrument in writing signed by Landlord and Tenant. This
Lease is not in recordable form, and Tenant agrees not to record or cause to be
recorded this Lease or any short form or memorandum thereof.
27
44. Headings. The use of headings herein is solely for the convenience of
--------
indexing the various paragraphs hereof and shall in no event be considered in
construing or interpreting any provision of this Lease.
45. Broker. Tenant represents and warrants to Landlord that (except with
------
respect to any Broker[s] identified in Article 1[n] hereinabove) no broker,
agent, commission salesperson, or other person has represented Tenant in the
negotiations for and procurement of this Lease and of the Demised Premises and
that (except with respect to any Broker[s] identified in Article 1[n]
hereinabove) no commissions, fees, or compensation of any kind are due and
payable in connection herewith to any broker, agent, commission salesperson, or
other person as a result of any act or agreement of Tenant. Tenant agrees to
indemnify and hold Landlord harmless from all loss, liability, damage, claim,
judgment, cost or expense (including reasonable attorneys' fees and court costs)
suffered or incurred by Landlord as a result of a breach by Tenant of the
representation and warranty contained in the immediately preceding sentence or
as a result of Tenant's failure to pay commissions, fees, or compensation due to
any broker who represented Tenant, whether or not disclosed, or as a result of
any claim for any fee, commission or similar compensation with respect to this
Lease made by any broker, agent or finder (other than the Broker[s] identified
in Article 1[n] hereinabove) claiming to have dealt with Tenant.
Landlord represents and warrants to Tenant that (except with respect to any
Broker[s] identified in Article 1[n] hereinabove) no broker, agent, commission
salesperson, or other person has represented Landlord in the negotiations for
and procurement of this Lease and of the Demised Premises and that (except with
respect to any Broker[s] identified in Article 1[n] hereinabove) no commissions,
fees, or compensation of any kind are due and payable in connection herewith to
any broker, agent, commission salesperson, or other person as a result of any
act or agreement of Landlord. Landlord agrees to indemnify and hold Tenant
harmless from all loss, liability, damage, claim, judgment, cost or expense
(including reasonable attorneys' fees and court costs) suffered or incurred by
Tenant as a result of a breach by Landlord of the representation and warranty
contained in the immediately preceding sentence or as a result of Landlord's
failure to pay commissions, fees, or compensation due to any broker who
represented Landlord, whether or not disclosed, or as a result of any claim for
any fee, commission or similar compensation with respect to this Lease made by
any broker, agent or finder (including the Broker[s] identified in Article 1[n]
hereinabove) claiming to have dealt with Landlord.
46. Governing Law. The laws of the State of Tennessee shall govern the
-------------
validity, performance and enforcement of this Lease.
47. Special Stipulations. The special stipulations attached hereto as
--------------------
Exhibit "A" are hereby incorporated herein by this reference as though fully set
-----------
forth.
48. Authority. Each of the persons executing this Lease on behalf of
---------
Tenant does hereby personally represent that Tenant is a duly formed and validly
existing limited liability company and is fully authorized and qualified to do
business in the State of Tennessee, that the
28
limited liability company has full right and authority to enter into this Lease,
and that each person signing on behalf of the limited liability is a manager or
officer of the limited liability company and is authorized to sign on behalf of
and to bind the limited liability company. Upon the request of Landlord, Tenant
shall deliver to Landlord documentation satisfactory to Landlord evidencing
Tenant's compliance with this Article, and Tenant agrees to promptly execute all
necessary and reasonable applications or documents as reasonably requested by
Landlord, required by the jurisdiction in which the Demised Premises is located,
to permit the issuance of necessary permits and certificates for Tenant's use
and occupancy of the Demised Premises.
49. Financial Statements. Upon Landlord's written request therefor, but
--------------------
not more often than once per year, Tenant shall promptly furnish to Landlord
Tenant's most recent annual report (provided, however, if Tenant is not publicly
traded at such time, Tenant shall deliver a financial statement with respect to
Associates First Capital Corporation for its most recent fiscal year prepared in
accordance with generally accepted accounting principles and certified to be
true and correct by Associates First Capital Corporation, which statement
Landlord agrees to keep confidential and not use except in connection with
proposed sale or loan transaction).
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day, month and year first above written.
"LANDLORD":
XXXXX DEVELOPMENT CORPORATION,
a Georgia corporation
By:/s/ Xxx X. Xxxxx
---------------------------------
Its: President
--------------------------------
(CORPORATE SEAL)
"TENANT":
ASSOCIATES HOUSING FINANCE, LLC,
a Delaware limited liability company
By:/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Its: Vice President
By:_________________________________
Its:________________________________
(SEAL)
29
EXHIBIT "A"
-----------
SPECIAL STIPULATIONS
1. EXTENSION OPTIONS.
(a) Tenant is hereby granted options to extend the Lease Term for two (2)
successive additional periods of five (5) years each (each such additional
period being herein referred to as an "Extended Term") by giving written notice
of such extension to Landlord at least nine (9) months prior to the expiration
of the initial Lease Term or the then current Extended Term, as the case may be.
Tenant shall have the right to exercise these options to extend provided that on
the date of such exercise no default or event of default under this Lease then
exists. Each Extended Term shall be upon all of the same terms, covenants and
conditions of this Lease then applicable except that the Base Rental Rate during
the Extended Terms shall be the "Market Rate" (as hereinafter defined), and
except that after the exercise of the option for the first Extended Term, Tenant
shall have only one (1) option to extend, and after the exercise of the option
for the second Extended Term, Tenant shall have no further options to extend the
Lease Term. The term "Lease Term" as used in this Lease shall mean the initial
Lease Term and any Extended Term which may become effective. For purposes of
this Special Stipulation, "Market Rate" shall mean the annual effective rental
rate per square foot of rentable floor area then being charged by landlords
under new leases of office space in the metropolitan Knoxville, Tennessee market
for space similar to the Demised Premises in a building of comparable quality
and with comparable parking and other amenities. In determining the Market Rate,
Landlord and Tenant (and any appraisers, if applicable) shall take into account
the fact that Tenant shall pay Tenant's Share of the Operating Expenses, and
that Tenant's Share of Operating Expenses are subject to a cap as provided in
Article 7(b) hereof. Also, in determining the Market Rental Rate, Landlord and
Tenant (and any appraisers, if applicable) shall compare actual rental rates
only (after making appropriate adjustments resulting from the foregoing facts)
and shall take into consideration any discounts, allowances, free rent,
remodeling credits, construction allowances and other concessions and
inducements granted by other landlords.
(b) Tenant may not assign the options to extend under Special Stipulation
1(a) to any subtenant of the Demised Premises or any assignee of this Lease
other than an "Affiliate" (as hereinafter defined), nor may any such subtenant
or assignee other than an Affiliate exercise the options to extend. "Affiliate"
shall mean an entity which is more than fifty percent (50%) owned, directly or
indirectly, by Tenant, or an entity which directly or indirectly owns more than
fifty percent (50%) of Tenant, or an entity which is more than fifty percent
(50%) owned, directly or indirectly, by an entity which itself owns, directly or
indirectly, more than fifty percent (50%) of Tenant.
(c) In the event that, prior to Tenant's exercise of the applicable option
to extend, and between forty five and seventy five days prior to the date nine
(9) months prior to the expiration of the initial Lease Term or the then current
Extended Term, as the case may be, Tenant gives Landlord written notice
requesting that Landlord provide Tenant with Landlord's good faith estimate of
what the Market Rate for the Demised Premises would be if Tenant
exercised such option to extend, then, within thirty (30) days after such
written notice, Landlord shall notify Tenant in writing of Landlord's good faith
estimate of what the Market Rate for the Demised Premises would be if Tenant
exercised such option to extend. In the event Landlord and Tenant are unable to
agree on the Market Rate for the Demised Premises on or before the first day of
the applicable Extended Term, then, within ten (10) days after that date, each
party shall appoint and employ, at its cost, a real estate appraiser [who shall
be a member of the American Institute of Real Estate Appraisers (MAI) or be a
Counselor of Real Estate (a member of the American Society of Real Estate
Counsellors) and who shall have at least ten (10) years of full-time commercial
appraisal experience in the Knoxville area and who is not affiliated with either
party hereto] to appraise and establish the Market Rate for the Demised
Premises. The two appraisers, thus appointed, shall meet promptly and attempt to
agree on such rate. In the event one party fails to appoint an appraiser, the
other designated appraiser shall independently determine the Market Rate for the
Demised Premises in accordance herewith. If they are unable to agree within
twenty (20) days after the last of them has been appointed, they shall attempt
to agree upon and designate a third appraiser meeting the qualifications set
forth above within ten (10) days after the last date on which the two appraisers
were given to agree. If they are unable to agree on the third appraiser, either
of the parties, after giving five (5) days notice to the other, may apply to the
presiding judge of the Chancery Court of Xxxx County, Tennessee, for the
selection of a third appraiser meeting the qualifications stated above. Each of
the parties shall bear one-half of the cost of the appointment of the third
appraiser, and each of the appraisers shall make a determination of Market Rate
for the Demised Premises. The appraisal that is farthest from the middle
appraisal shall be disregarded and the remaining two appraisals shall be
averaged in order to establish such rate; provided, however, if the low
appraisal and/or the high appraisal are equidistant from the middle appraisal,
all three appraisals shall be averaged. After the Market Rate for the Demised
Premises has been established, the appraisers shall immediately notify the
parties in writing and such Market Rate for the Demised Premises shall be
binding upon the parties for the applicable Extended Term. In the event the
Market Rate for the Demised Premises has not been finally determined by the
appraisers prior to the first day of the Extended Term, Tenant shall pay Base
Rental at the rate in effect immediately prior to the first day of the Extended
Term, with appropriate adjustment to be made within thirty (30) days following
conclusion of the determination of Market Rate.
2. REFUSAL RIGHT. Provided and on the condition that Tenant is not then in
default and no event of default has occurred under this Lease, Tenant shall have
a right of refusal (the "Refusal Right"), subject to and upon the terms and
conditions set forth below, with respect to that certain space in the Building
and designated on Exhibit "A-1" attached hereto and by reference made a part
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hereof (the "Refusal Space"). Prior to entering into a lease with any other
party of any of the Refusal Space, Landlord shall notify Tenant that it intends
to enter into such lease (a "Refusal Notice"). Tenant shall have the right to
exercise its Refusal Right to add the space identified in the Refusal Notice to
the Demised Premises (with such space subject to all the terms and conditions of
this Lease, except as herein expressly provided), by giving notice thereof to
Landlord within ten (10) business days after the date Tenant receives the
Refusal Notice. If Tenant does not so exercise its Refusal Right within such ten
(10) business day period, Landlord shall have the right to lease the Refusal
Space identified in the Refusal Notice free and clear of any further rights of
Tenant under this Special Stipulation 2.
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In the event Tenant exercises its Refusal Right with respect to any Refusal
Space, Landlord and Tenant shall proceed with diligence and continuity to
prepare such Refusal Space for Tenant's occupancy in accordance with the
provisions of this Lease applicable to the initial construction of the Demised
Premises. In the event Tenant exercises a Refusal Right, as of the date (the
"Commencement Date for the applicable Refusal Space") which is the earlier to
occur of (i) the date upon which Tenant occupies such Refusal Space for the
conduct of Tenant's business (for purposes hereof, Tenant shall not be deemed to
be occupying such Refusal Space for the conduct of its business merely by moving
furniture and equipment into such Refusal Space), or (ii) the date seven (7)
days after the date upon which Landlord tenders such Refusal Space to Tenant
after Substantial Completion of construction of such Refusal Space (as defined
in Exhibit "D" attached to this Lease). Effective as of the Commencement Date
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for the applicable Refusal Space, the Base Rental and other charges payable
hereunder shall be increased based upon the number of square feet of Rentable
Floor Area added to the Demised Premises. During the course of construction of
the improvements in such Refusal Space to be constructed pursuant to this
Special Stipulation 2, Landlord shall update Tenant during weekly construction
meetings on the status of construction, the anticipated completion date, and any
delays in such construction. Within ten (10) days after the addition of any
Refusal Space to the Demised Premises, Landlord and Tenant shall enter into an
amendment evidencing the addition, but the failure or refusal of Tenant to enter
into an amendment shall not impair or negate the exercise of the option or
relieve Tenant of any of its obligations with respect to the Refusal Space added
to the Demised Premises.
Notwithstanding the foregoing or any other provision of this Lease to the
contrary, (a) Tenant may not exercise the Refusal Right unless at least forty-
two (42) months shall remain in the initial Lease Term at the time of such
exercise, (b) the Construction Allowance for the Refusal Space shall be the
product of the Rentable Floor Area of the applicable Refusal Space to be added
to the Demised Premises, multiplied by Thirty and No/100 Dollars ($30.00), and
further multiplied by a fraction, the numerator of which is the number of months
remaining in the initial Lease Term following the Commencement Date for the
applicable Refusal Space and the denominator of which is eighty-four (84), and
(c) the space planning allowance for the Refusal Space shall be the product of
the Rentable Floor Area of the applicable Refusal Space to be added to the
Demised Premises, multiplied by Three and No/100 Dollars ($3.00), and further
multiplied by a fraction, the numerator of which is the number of months
remaining in the initial Lease Term following the Commencement Date for the
applicable Refusal Space and the denominator of which is eighty-four (84).
3. PARKING.
(a) Landlord will provide to Tenant, without charge, unassigned parking in
the parking area adjacent to the Building for the Lease Term; provided, however,
that the total parking available for Tenant without charge shall be six (6)
spaces per one thousand (1000) square feet of Rentable Floor Area contained in
the Demised Premises.
(b) Landlord may make, modify and enforce reasonable rules and regulations
relating to the parking of vehicles in the parking areas, and Tenant agrees to
abide by any such
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rules and regulations. Tenant's failure to use commercially reasonable efforts
in good faith to cause Tenant's agents, contractors, employees, licensees,
subtenants, assigns, guests and invitees to abide by any such rules and
regulations after written notice by Landlord to Tenant and expiration of any
applicable cure period, if any, shall constitute a default by Tenant under this
Lease.
(c) If the number of parking spaces available in the Building parking
facilities shall be reduced as a result of a taking by condemnation, Landlord
shall have the right to effect a proportionate reduction in the number of
parking spaces provided to Tenant. However, in the event the number of parking
spaces made available to Tenant shall be reduced for more than six (6) months to
a number which is less than 5.1 parking spaces for every 1,000 square feet of
Rentable Floor Area of the Demised Premises, and provided that Landlord does not
provide comparable parking to the extent of at least 5.1 parking spaces for
every 1,000 square feet of Rentable Floor Area of the Demised Premises within
such six (6) month period, Tenant shall have the right to terminate this Lease
by giving written notice thereof to Landlord.
4. COMMUNICATIONS
(a) Subject to the terms and conditions as described below, Tenant shall
have the right, at Tenant's sole cost and expense, to place on the roof of the
Building a satellite antenna module (the "Antenna") and related hardware and
cabling connected to the Demised Premises. Tenant shall not be charged any rent
or other fees by Landlord in connection with the placement of the Antenna on the
roof. The right of Tenant to install the Antenna is expressly conditioned upon
(i) the receipt by Tenant of the approval of such Antenna by the developer of
CenterPoint Park, and (ii) the Antenna and related hardware and cabling not
damaging or interfering with Landlord's roof warranty, communication devices or
building systems or any antennas and related hardware and cabling which other
tenants of the Building have installed or may install on the roof, and Tenant
hereby covenants and agrees that the Antenna and related hardware and cabling
will not so interfere.
(b) Tenant shall furnish detailed plans and specifications for the Antenna
and related hardware and cabling to Landlord for Landlord's consent, which
consent shall not be unreasonably withheld or delayed, provided Landlord may
condition its consent by requiring that the Antenna be installed in the least
conspicuous of all acceptable locations on which the Antenna might be located
and that all components and elements thereof (except the terminal devices and
structures) be concealed from view from within and without the Building. Upon
the giving of such consent, the Antenna and related hardware and cabling shall
be installed and maintained, at Tenant's sole cost and expense, by a contractor
selected by Tenant and approved by Landlord, such approval not to be
unreasonably withheld or delayed. In the installation of the Antenna and related
hardware and cabling, Tenant shall comply with all applicable laws, codes,
ordinances and building and zoning rules and regulations and keep the Demised
Premises and Building free and clear from liens arising from or related to
Tenant's installation. Tenant shall consult with Landlord's roofing contractor
to ensure that neither the integrity of the roof of the Building, nor Landlord's
roof warranty, shall be negatively affected by the placement and installation of
the Antenna and the walkway referred to in Special
4
Stipulation 4(d) hereof. Tenant shall be entitled to use such portions of the
Building as may be reasonably necessary for the installation, operation and
maintenance of the Antenna and related hardware and cabling, and Tenant shall
have reasonable access to such portions of the Building at all times throughout
the Lease Term for such purposes; provided however, that except for the roof of
the Building, any cables, conduits or other physical connections between the
Antenna and the Demised Premises shall be concealed underground or within
permanent walls, floors, columns and ceilings of the Building and in the shafts
of the Building provided for such installations, not damaging the appearance of
the Building or reducing the usable or rentable space of the Building, and
provided further, that except for the roof and Demised Premises, any
installation or maintenance work performed by Tenant or at Tenant's direction
shall be performed without unreasonably interfering with Landlord's or any other
tenant's use of the Building, and upon completion of such installation and
maintenance (initially and from time to time) Tenant shall restore such portions
of the Building to a condition reasonably comparable to that existing prior to
such installation or maintenance. In addition, Tenant shall paint and maintain
the Antenna in the color designated by Landlord unless such painting would void
the manufacturer's warranty on the Antenna.
(c) Tenant shall be responsible for procuring and paying for all
certificates, licenses, permits or approvals which may be required for the
installation, operation, use and maintenance of the Antenna and related hardware
and cabling, and Landlord shall cooperate with Tenant, at Tenant's sole cost and
expense, in procuring such licenses or permits, to the extent required by
applicable law. Upon receiving a written request by Landlord, Tenant shall
provide Landlord with documentation that Tenant has obtained all such
certificates, licenses, permits and approvals. Landlord makes no warranties
whatsoever as to the permissibility of the Antenna or systems under applicable
laws. The Antenna and related hardware and cabling shall be installed, operated
and maintained by Tenant, at Tenant's sole cost and expense, in such a manner as
not to constitute a nuisance, or unreasonably interfere with the operations of
other tenants of the Building or with the normal use of the area surrounding the
Building by occupants thereof.
(d) Tenant shall be responsible for installing and maintaining a walkway
system to the Antenna in order to protect the roof of the Building. Tenant shall
furnish plans and specifications for such walkway to Landlord for Landlord's
consent, which consent shall not be unreasonably withheld or delayed.
(e) Upon termination or expiration of the Lease, Tenant shall, at Tenant's
sole cost and expense, remove the Antenna and related hardware and cabling
installed by it pursuant to this Special Stipulation 4 and shall repair and
restore the Building to a condition comparable to that existing prior to such
installation, normal wear and tear excepted.
(f) Landlord reserves the right to relocate the Antenna and related
hardware and cabling at Landlord's sole expense, provided such relocation, in
the reasonable opinion of Tenant, shall have no material adverse impact on the
same.
(g) Tenant hereby indemnifies Landlord and agrees to hold Landlord harmless
from and against any and all claims, liability, judgments, damages, cost and
expenses
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(including reasonable attorney's fees) related to, resulting from, arising out
of or caused by the installation, maintenance, operation or removal of the
Antenna and related hardware and cabling. In addition, Tenant shall maintain in
full force and effect throughout the Lease Term public liability, property
damage, fire and extended coverage insurance in an amount sufficient to fully
protect the Antenna and related hardware and cabling from fire or other loss or
damage, as well as contractual insurance in an amount sufficient to fully
protect Landlord from any loss or damage resulting from, arising out of or
caused by the installation, maintenance, operation or removal of the Antenna and
related hardware and cabling or by the exercise of Tenant's rights under this
Special Stipulation 5.
5. BUILDING SIGN
Tenant shall have the right to design and designate the location of one (1)
monument-type sign naming the Building. Landlord shall bear $7,500 of the cost
and Tenant any excess cost of purchasing and installing any monument-type sign.
The cost of maintaining, repairing or replacing said monument-type sign shall be
included within Operating Expenses. The monument-type sign shall be subject to
the prior approval of Landlord as to size, materials, method of lighting and
method of attachment of identification signs, which approval shall not be
unreasonably withheld. Tenant acknowledges that such sign must also comply with,
and shall be installed only if permitted by, applicable laws and regulations of
governmental authorities, and private restrictive covenants applicable to the
Project. So long as Tenant occupies fifty percent (50%) of the Rentable Floor
Area of the Building, Tenant shall have the right to place and maintain its
identification sign in the top position on such monument-type sign. Tenant
agrees that Tenant will not unreasonably withhold its consent to the placement
of up to two (2) additional names of tenants on the monument-type sign. Tenant
shall have the right, at Tenant's sole cost and expense, subject to applicable
laws and regulations of governmental authorities, and private restrictive
covenants applicable to the Project, and subject to the approval by Landlord,
which approval shall not be unreasonably withheld, to install signs on the
exterior of the Building [in the event and for so long as Tenant occupies fifty
percent (50%) or more of the Rentable Floor Area of the Building, Tenant's signs
shall be the only signs on the exterior of the Building (other than directional
signs and signs required by laws, orders, ordinances, rules and regulations)];
all such signs installed by Tenant shall be maintained by Tenant at Tenant's
sole cost and expense.
6. LAND ACQUISITION
The parties acknowledge that Landlord has entered into an agreement for the
purchase of the Land, and the obligations of the parties hereto are conditioned
upon the acquisition of the Land by Landlord on or before September 25, 1998. In
the event the Land is not acquired by Landlord on or before September 25, 1998,
Landlord and Tenant shall each have the right to terminate this Lease by notice
given to the other party on or before October 2, 1998. Landlord shall furnish to
Tenant within thirty (30) days following acquisition of the Land by Landlord a
title insurance policy showing good and marketable title to the Land to be
vested in Landlord, and not subject to any restrictions which would prevent the
Demised Premises from being used for business offices.
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7. YEAR 2000
Landlord agrees that any and all mechanical, digital, electronic or
computerized equipment owned by Landlord which controls, operates and/or
regulates equipment and services applicable to systems which service all or any
one or more of the Demised Premises or the Building or common areas of the
Building (including, but not limited to, elevators, security systems, lighting
systems, heating, ventilating and air conditioning, plumbing, fire and sprinkler
control systems) will not malfunction as a result of date changes in the year
2000 and beyond. In the event Landlord fails to properly and fully restore those
services affected by a year 2000 malfunction, such malfunction shall be an event
of default by Landlord under the Lease and Tenant shall have the right to avail
itself of remedies for such default, as set forth in this Lease. Furthermore,
Landlord agrees to indemnify and hold Tenant harmless from loss, costs, damages
and expenses (excluding consequential damages) incurred by Tenant as a result of
any such equipment and/or computer systems malfunction which materially
adversely affects or impacts Tenant's use and occupancy of the Demised Premises.
8. LANDLORD'S DEFAULT. If Landlord shall default in the performance of any of
its obligations under this Lease, and such default shall continue for thirty
(30) days after notice from Tenant specifying Landlord's default (except that if
such default cannot be cured within said thirty [30] day period, this period
shall be extended for a reasonable additional time, provided that Landlord
commences to cure such default within the thirty [30] day and proceeds
diligently thereafter to affect such cure), Tenant may, without prejudice to any
of its other rights under this Lease, correct or cure such default by Landlord
and invoice Landlord the cost and expenses incurred by Tenant therefor, and
Landlord shall reimburse Tenant within thirty (30) days following receipt of
such invoice. If Landlord shall fail to reimburse Tenant for such cost and
expenses within such thirty (30) day period, Tenant shall have the right to
deduct such cost and expenses from Base Rental thereafter due hereunder,
provided, however, that in the event Landlord notifies Tenant that it disputes
the existence of any such default, during the pendency of such dispute, Tenant
may pay the amount in dispute to an independent escrow agent of its choice to be
held by the agent pending resolution of the dispute. Tenant shall not be deemed
to be in default hereunder by reason of such payment until the dispute is
resolved in favor of Landlord and Tenant fails to cause the agent to pay the
amount determined to be payable to Landlord within ten (10) days after Tenant is
notified of the determination. Tenant and Landlord shall negotiate in good faith
to resolve the dispute by agreement.
9. AIR QUALITY. Landlord agrees that the Building shall comply with all
applicable provisions of the Federal Clean Air Act Amendments of 1990 (the
"Act") and Landlord will take all actions with respect to Building systems and
sub-systems which are necessary to meet the applicable requirements of the Act.
The costs of any modifications, replacements, or repairs to and Building systems
or systems required to comply with the applicable requirements of the Act shall
be included in Operating Expenses and amortized over the useful life thereof
pursuant to Section 8(a)(6) of this Lease. Landlord shall have an Indoor Air
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Quality survey (air quality audit) performed each year by a qualified
environmental engineer. The air quality audit shall test for, at a minimum,
asbestos, molds, fungi, radon, carbon monoxide, carbon dioxide, HCOH, ozone,
formaldehyde, and water tower contaminants, and such other tests as are
recommended for office buildings by the applicable guidelines of the American
Society of Heating and Air-Conditioning Engineers and the United States
Environmental Protection Agency. Copies of the results of such air quality
audits shall be maintained for a minimum of five years (or, if sooner, until the
end of the Term). In the event Tenant shall cause or permit any activity which
shall adversely affect the air quality in the Demised Premises, in the common
area of the Building or in any premises within the Building, Tenant shall be
responsible for all costs of remedying same.
10. LEGAL REQUIREMENTS. Landlord represents and warrants that as of the date
of Substantial Completion, the "building standard" work, the common areas and
exterior entrances to the Building and to the Demised Premises shall be in
compliance in all material respects with all applicable Legal Requirements,
including without limitation the Americans with Disabilities Act. Tenant
represents and warrants that the design and furnishing of the Demised Premises
shall be in compliance in all material respects with all applicable Legal
Requirements, including without limitation the Americans with Disabilities Act.
"Legal Requirements" shall mean (i) all federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances or
recommendations affecting the Demised Premises or the Building or any part
thereof, or the use thereof, including without limitation those which require
repairs to or any structural changes in the Demised Premises or the Building
whether or not any such statutes, laws, rules, orders, regulations, ordinances
or recommendations which may hereafter be enacted involve a change of policy on
the part of the governmental body enacting the same, (ii) all rules, orders and
regulations of the National Board of Fire Underwriters or other bodies
exercising similar functions and responsibilities in connection with the
prevention of fire or the correction of hazardous conditions which apply to the
Demised Premises or the Building, and (iii) the requirements of all policies of
public liability, fire and other insurance which at any time may be in force
with respect to the Demised Premises or the Building.
11. LIENS. Tenant shall not do or permit to be done anything which creates a
lien upon the Demised Premises or the Project. Tenant shall indemnify Landlord
against liability for any and all mechanics' and other liens filed in violation
of the foregoing. Tenant, at its expense, shall procure the discharge of any
such lien within thirty (30) days after the filing thereof against any part of
the Demised Premises or Project. If Tenant fails to discharge any such lien
within such thirty (30) day period, then, in addition to any other right or
remedy, Landlord may discharge the same either by paying the amount claimed to
be due or by deposit or bonding proceedings. Any amount so paid by Landlord, and
all costs and expenses incurred by Landlord in connection therewith, shall be
payable by Tenant upon demand.
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