EXHIBIT 10.41
LEASE AGREEMENT
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THIS LEASE is executed this 23rd day of February, 2000, by and between DUKE-
WEEKS REALTY LIMITED PARTNERSHIP, an Indiana limited partnership ("Landlord"),
and XXXXXXXXXX.XXX, INC., a Delaware corporation ("Tenant")
WITNESSETH:
ARTICLE 1 - LEASE OF PREMISES
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Section 1.01. Basic Lease Provisions and Definitions.
A. Leased Premises (shown outlined on Exhibit A attached hereto and which is
situated on the tract of land described on Exhibit A-1): Crossroads
Business Park, Building 2, 0000 X. Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000 (the
"Building")
B. Rentable Area: approximately 105,600 square feet
Rentable Area of Building: 460,800 square feet
The above square footages shall be deemed correct for all purposes
hereunder.
C. Tenant's Proportionate Share: 22.92% (105,600 / 460,800)
D. Minimum Annual Rent:
Term Minimum Annual Rent
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Year 1 $464,640.00
Year 2 $478,368.00
Year 3 $493,152.00
Year 4 $507,936.00
Year 5 $522,720.00
Year 6 $538,560.00
Year 7 $554,400.00
Year 8 $571,296.00
Year 9 $588,192.00
Year 10 $606,144.00
E. Monthly Rental Installments:
Term Monthly Annual Rent
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Months 1 - 12 $38,720.00 per month
Months 13 - 24 $39,864.00 per month
Months 25 - 36 $41,096.00 per month
Months 37 -48 $42,328.00 per month
Months 49 -60 $43,560.00 per month
Months 61 -72 $44,880.00 per month
Months 73 - 84 $46,200.00 per month
Months 85 - 96 $47,608.00 per month
Months 97 - 108 $49,016.00 per month
Months 109 - 120 $50,512.00 per month
F. Landlord's Share of Expenses: N/A
G. Lease Term: Ten (10) years
H. Commencement Date: June 1, 2000
I. Security Deposit: $500,000.00 Letter of Credit (with reductions as
specified in Article 4 below)
J. Guarantor: None
K. Broker: Duke-Weeks Realty Limited Partnership representing Landlord and
Ernst & Young representing Tenant
L. Permitted Use: Warehousing, storage, distribution, office, product
preparation, grocery store services and liquor sales (provided no retail
customers shall be serviced on site) and related purposes
M. Address for notices:
Landlord: Duke-Weeks Realty Limited Partnership
0000 Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Tenant: XxxxXxxxxx.xxx, Inc.
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
With copies to: XxxxXxxxxx.xxx, Inc.
Attn: Vice President Operations
00000 X.X. Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
and
XxxxXxxxxx.xxx, Inc.
Attn: Legal Department
00000 X.X. Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Address for rental and other payments:
Duke-Weeks Realty Limited Partnership
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Section 1.02. Leased Premises. Landlord hereby leases to Tenant and Tenant
leases from Landlord, under the terms and conditions herein, the Leased
Premises. Landlord and Tenant hereby acknowledge and agree that Tenant shall be
entitled to use the parking area as depicted on Exhibit A-2, but Tenant may
elect to use the parking as depicted on Exhibit A-3 if Tenant obtains approval
of such parking plans from the Village of Romeoville or any other requisite
governmental authority.
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ARTICLE 2 - TERM AND POSSESSION
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Section 2.01. Term. The term of this Lease ("Lease Term") shall be for the
period of time and shall commence on (I) the Commencement Date described in the
Basic Lease Provisions; or (ii) upon such earlier date as Tenant begins conduct
of its business in all or substantially all of the Leased Premises. Upon
delivery of possession of the Leased Premises to Tenant, Tenant shall execute a
letter of understanding acknowledging (i) the Commencement Date of this Lease,
and (ii) that Tenant has accepted the Leased Premises. If Tenant takes
possession of and occupies the Leased Premises, Tenant shall be deemed to have
accepted the Leased Premises and that the condition of the Leased Premises and
the Building was at the time satisfactory and in conformity with the provisions
of this Lease in all respects, except for latent defects which Tenant notifies
Landlord of within eleven (11) months of the Commencement Date. Landlord shall
hold all warranties and causes of action on the construction of the Building and
Leased Premises for Tenant's benefit.
Section 2.02. Construction of Tenant Improvements. Tenant has personally
inspected the Leased Premises and accepts the same "AS IS" without
representation or warranty by Landlord of any kind and with the understanding
that Landlord shall have no responsibility with respect thereto except to
construct in a good and workmanlike manner the improvements designated as
Landlord's obligations in the attached Exhibit B. Landlord hereby agrees to
contribute an amount not to exceed Seven Hundred Thousand Dollars ($700,000.00)
("Landlord's Allowance") toward the cost of the tenant finish improvements. Any
and all costs for tenant finish improvements which exceed Landlord's Allowance
shall be paid by Tenant to Landlord within thirty (30) days of Tenant's receipt
of Landlord's invoice therefor. Any portion of Landlord's Allowance not used
within twelve (12) months of the Commencement Date shall be forfeited. Landlord
and Tenant agree that all work on the initial tenant finish improvements shall
be performed by Duke Construction Limited Partnership (which shall receive an
eight percent (8%) construction management fee) as Landlord's general
contractor. Tenant shall have the right to terminate this Lease if the tenant
finish improvements in the Leased Premises are not substantially complete on or
before September 1, 2000, subject to Tenant caused delays and force majeure.
Section 2.03. Surrender of the Premises. Upon the expiration or earlier
termination of this Lease, Tenant shall immediately surrender the Leased
Premises to Landlord in broom-clean condition and in good condition and repair.
Tenant shall also remove its personal property, trade fixtures and any of
Tenant's alterations (pursuant to Section 7.03) designated by Landlord, promptly
repair any damage caused by such removal, and restore the Leased Premises to the
condition existing upon the Commencement Date, reasonable wear and tear
excepted. If Tenant fails to do so, Landlord may after five (5) days written
notice to Tenant restore the Leased Premises to such condition at Tenant's
expense, Landlord may cause all of said property to be removed at Tenant's
expense, and Tenant hereby agrees to pay all the reasonable costs and expenses
thereby reasonably incurred. All Tenant property which is not removed within ten
(10) days following Landlord's written demand therefor shall be conclusively
deemed to have been abandoned by Tenant, and Landlord shall be entitled to
dispose of such property at Tenant's cost without thereby incurring any
liability to Tenant. The provisions of this section shall survive the expiration
or other termination of this Lease.
Section 2.04. Holding Over. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at one hundred fifty percent (150%) of the
Monthly Rental Installment in effect at the end of the Lease Term, and otherwise
upon the terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent in such event shall not result in a renewal of
this Lease, and Tenant shall vacate and surrender the Leased Premises to
Landlord upon Tenant being given thirty (30) days' prior written notice from
Landlord to vacate whether or not said notice is given on the rent paying date.
This Section 2.04 shall in no way constitute a consent by Landlord to any
holding over by Tenant upon the expiration or earlier
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termination of this Lease, nor limit Landlord's remedies in such event.
ARTICLE 3 - RENT
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Section 3.01. Base Rent. Tenant shall pay to Landlord the Minimum Annual
Rent in the Monthly Rental Installments, in advance, without deduction or offset
unless expressly herein provided, beginning on the Commencement Date and on or
before the first day of each and every calendar month thereafter during the
Lease Term. The Monthly Rental Installment for partial calendar months shall be
prorated.
Section 3.02. Additional Rent. In addition to the Minimum Annual Rent
Tenant shall pay to Landlord for each calendar year during the Lease Term, as
"Additional Rent," Tenant's Proportionate Share of all costs and expenses
reasonably incurred by Landlord during the Lease Term for Real Estate Taxes and
Operating Expenses for the Building and common areas (collectively "Common Area
Charges").
"Operating Expenses" shall mean all of Landlord's reasonable expenses
actually incurred for operation, repair, replacement and maintenance to keep the
Building and common areas in good order, condition and repair, including, but
not limited to, management fees (which shall not exceed three percent (3%) of
the gross revenue of the Building) or administrative fees; utilities; stormwater
discharge fees; license, permit, inspection and other fees; fees and assessments
imposed by any covenants or owners' association; security services; insurance
premiums and deductibles (such deductibles not to exceed Twenty-five Thousand
Dollars ($25,000.00): and maintenance, repair and replacement of the driveways,
parking areas (including snow removal), exterior lighting, landscaped areas,
walkways, curbs, drainage strips, sewer lines, exterior walls, foundation,
structural frame, roof and gutters. The cost of any capital improvement shall be
amortized over the useful life of such improvement (as determined by applying
GAAP), and only the amortized portion shall be included in Operating Expenses.
Notwithstanding the foregoing, in no event shall Tenant be required to expend
more than One Hundred Thousand Dollars ($100,000.00) per Lease year as
reimbursement for correcting latent defects in the construction of the Building.
"Real Estate Taxes" shall include any form of real estate tax or assessment
or service payments in lieu thereof, and any license fee, commercial rental tax,
improvement bond or other similar charge or tax (other than inheritance, income
or estate taxes) imposed upon the Building or common areas (or against
Landlord's business of leasing the Building) by any authority having the power
to so charge or tax, together with reasonable costs and expenses of contesting
the validity or amount of Real Estate Taxes which at Landlord's option,
reasonably exercised, may be calculated as if such contesting work had been
performed on a contingent fee basis (whether charged by Landlord's counsel or
representative; provided, however, that said fees are reasonably comparable to
the fees charged for similar services by others not affiliated with Landlord,
but in no event shall fees exceed thirty-three percent (33%) of the good faith
estimated tax savings). Additionally, Tenant shall pay, prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all personal property of Tenant contained in the Leased Premises.
Operating Expenses and Real Estate Taxes shall not include the following:
(1) payment of principal or interest due under any mortgage or deed of trust;
(2) depreciation allowance of any type; (3) compensation paid to officers of
Landlord or officers of the management agent or anyone else above the level of
asset manager; (4) costs for which Landlord is reimbursed by any other party;
(5) leasing commissions, legal fees and other expenses incurred by Landlord or
agents in connection with negotiations or disputes with tenants or prospective
tenants (other than with Tenant's sublessees or assignees) for the Building; (6)
costs or expenses associated with the enforcement of any leases (other than with
Tenant's sublessees or assignees) by Landlord; (7) costs or fees relating to the
defense of Landlord's title or interest in the real estate containing the
Building, or any part thereof; (8) any costs or expenses
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relating to Landlord's obligations under any workletter to construct Tenant
improvements; (9) allowances, concessions, permits, licenses, inspections or
other costs and expenses incurred in completing, fixturing, renovating or
otherwise improving, decorating or redecorating space for tenants (including
Tenant), prospective tenants or other occupants or prospective occupants of the
Building, or vacant leasable space in the Building, or constructing or finishing
demising walls and public corridors with respect to any such space whether such
work or alteration is performed for the initial occupancy by such tenant or
occupancy thereafter; (10) any cash or other consideration paid by Landlord on
account of, with respect to or in lieu of the tenant work or alteration
described above; (11) Landlord's costs of any services sold or provided to
tenants for which Landlord is entitled to be reimbursed by such tenants under
the Lease with such tenants; (12) expenses in connection with services or other
benefits of a type which are not made available to Tenant but which are provided
to another tenant or occupant; (13) costs incurred due to violation by Landlord
or any tenant of the terms and conditions of any lease; (14) any expense for
Landlord's advertising and promotional program for the Building; (15) any cost
incurred by Landlord or an affiliate of Landlord for the provision of any goods
or services, to the extent such costs exceeds the cost then prevailing in
transactions between unrelated parties; (16) ground rent; (17) legal fees
(except for contesting tax assessments and/or personnel matters relating to
employees of the Building), or other professional or consulting fees (except
such other professional or consulting fees that are directly related to the
maintenance, operation or management of the Building); (18) increased insurance
premiums caused by Landlord's or any tenant's hazardous acts; (19) moving
expense costs of tenants in the Building; (20) costs incurred for any items to
the extent of Landlord's recovery under a manufacturer's, materialman's,
vendor's or contractor's warranty; (21) wages, salaries or other compensation or
benefits for off-site employees applicable to the time spent working on other
buildings, other than the Building and other buildings, a prorated portion of
such employee's salary shall be included in Operating Expenses, as applicable;
(22) costs of acquisition of sculpture, paintings, or other objects of art; (23)
the rent or expenses in lieu of rent for any on-site leasing office of Landlord
in the Building, or of any other space (except the management office serving the
Building) in the Building set aside for storage or other facilities for the
benefit of Landlord; and (24) expenses incurred due to the negligence or
intentional misconduct of Landlord to the extent the same are not reimbursed
through insurance.
Section 3.03. Payment of Additional Rent. Landlord shall reasonably
estimate the total amount of Additional Rent to be paid by Tenant during each
calendar year of the Lease Term, pro-rated for any partial years. Commencing on
the Commencement Date, Tenant shall pay to Landlord each month, at the same time
the Monthly Rental Installment is due, an amount equal to one-twelfth (1/12) of
the estimated Additional Rent for such year. The estimate of Additional Rent
for any given year shall not exceed one hundred five percent (105%) of the
actual amount of Additional Rent from the prior year unless Landlord can
document for Tenant why a greater increase is appropriate. Within one hundred
twenty (120) days after the end of each calendar year, Landlord shall submit to
Tenant a statement of the actual amount of such Additional Rent and within
thirty (30) days after receipt of such statement, Tenant shall pay any
deficiency between the actual amount owed and the estimates paid during such
calendar year. In the event of overpayment, Landlord shall credit the amount of
such overpayment toward the next installments of Minimum Rent.
Tenant shall have the right to inspect such of Landlord's books and records
which contain the Operating Expense information, upon written notice given to
Landlord not later than ninety (90) days following receipt of such statement by
Tenant. If the parties are unable to resolve any disagreement as to the
Operating Expenses by good faith negotiation within ninety (90) days following
Tenant's notice to Landlord, Tenant may, at Tenant's sole cost and expense,
cause a qualified independent certified public accountant designated by Landlord
from a list of not less than five (5) such accountants selected by Tenant (to be
paid on an hourly and not a contingency fee basis) to audit Landlord's records
with respect to the Operating Expenses which audit shall be completed within
sixty (60) days. In the event the audit discloses (i) errors made during the
prior calendar year which, when totaled, clearly indicate that the sum
overcharged to and paid by Tenant, exceeds four percent (4%) of the annual
Operating Expense amount,
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the audit shall be at the expense of Landlord, not to exceed Two Thousand Five
Hundred Dollars ($2,500.00), or (ii) no errors or an error which equals or is
less than four percent (4%) of the annual Operating Expense amount, the audit
shall be at the expense of Tenant.
Section 3.04. Late Charges. Tenant acknowledges that Landlord shall incur
certain additional unanticipated administrative and legal costs and expenses if
Tenant fails to timely pay any payment required hereunder. Therefore, in
addition to the other remedies available to Landlord hereunder, if any payment
required to be paid by Tenant to Landlord hereunder shall become overdue, such
unpaid amount shall bear interest from the due date thereof to the date of
payment at the prime rate (as reported in the Xxxx Street Journal) of interest
("Prime Rate") plus six percent (6%) per annum or the maximum rate permissible
by law. Notwithstanding the foregoing sentence, Landlord shall provide Tenant
with a written courtesy notice of such nonpayment and Tenant shall have an
additional five (5) days to cure such nonpayment before Landlord imposes such
late charge; provided, however, that Landlord shall not be required to give such
courtesy notice more than one (1) time with respect to any particular
nonpayment, nor more than two (2) times in any consecutive twelve (12) month
period with respect to any nonpayments in the aggregate.
ARTICLE 4 - SECURITY DEPOSIT
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Tenant, within ten (10) days of the date hereof, shall deposit with
Landlord the Security Deposit in the form of a letter of credit ("Letter of
Credit") which is attached hereto as Exhibit C, as security for the performance
by Tenant of all of Tenant's obligations contained in this Lease. In the event
of Default by Tenant, Landlord may apply all or any part of the Security Deposit
to cure all or any part of such Default; and Tenant agrees to promptly, upon
demand, deposit such additional sum with Landlord as may be required to maintain
the full amount of the Security Deposit. All sums held by Landlord pursuant to
this section shall be without interest accruing to either party. At the end of
the Lease Term, provided that there is then no uncured Default, Landlord shall
return the Security Deposit to Tenant within thirty (30) days.
The Letter of Credit shall be in the amount of Five Hundred Thousand
Dollars ($500,000.00) and shall be held by Landlord as security for the full and
faithful performance by Tenant of all of the terms, conditions and covenants
contained in the Lease on the part of Tenant to be performed, including but not
limited to the payment of rent. In the event of a Default by Tenant in the
payment of rent or performance or observance of any of the other terms,
conditions or covenants of this Lease, Landlord may, at its option and without
notice to Tenant (except as otherwise required under the Lease), draw upon the
Letter of Credit and apply all or any part thereof to payment of rent or to cure
any such default; and if Landlord does so, Tenant shall, upon request, deposit
with Landlord the amount so applied so that Landlord will have on hand at all
times during the Lease Term the full amount of the Letter of Credit. The Letter
of Credit shall be renewed on an annual basis. If Tenant has not renewed the
Letter of Credit at least thirty (30) days prior to the expiration date thereof,
Landlord may immediately draw upon the Letter of Credit and hold the cash
proceeds in lieu thereof. All sums held by Landlord pursuant to this Article 4
shall be without interest.
Notwithstanding anything contained herein to the contrary, absent two (2)
events of Default in any calendar year, the amount of the Letter of Credit shall
be decreased during the Lease Term per the following schedule:
Months from Minimum Amount Available Percentage Decrease from
Commencement Date under Letter of Credit Previous Year
---------------------- ------------------------ ------------------------
Months 1 - 12 $500,000.00 $ 0.00
Months 13 - 24 $450,000.00 $ 50,000.00
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Months 25 - 36 $400,000.00 $ 50,000.00
Months 37 - 48 $350,000.00 $ 50,000.00
*Months 49 - 60 $250,000.00 $100,000.00
Months 61 -72 $150,000.00 $100,000.00
Months 73 - 120 $ 50,000.00 $100,000.00
* Provided Tenant satisfies the following financial condition:
Tangible Net Worth: $50,000,000.00
Current Ratio: 2
Earnings before interest, taxes, depreciation and amortization for fiscal
year is positive.
Letter of Credit reductions shall be subject to the absence of any uncured
events of Default. Specifically, failure to pay Base Rent and Additional Rent is
an event of Default which shall void or modify the reduction in the Letter of
Credit. Any monetary Default in a twelve (12) month period or three (3) events
of non-monetary Default in a year will cause the Letter of Credit to remain at
the then current level but still maintain the ability to reduce in subsequent
years starting in the immediately following year.
ARTICLE 5 - USE
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Section 5.01. Use of Leased Premises. The Leased Premises are to be used by
Tenant solely for the Permitted Use and for no other purposes without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.
Section 5.02. Covenants of Tenant Regarding Use. Tenant shall (i) use and
maintain the Leased Premises and conduct its business thereon in a safe,
reputable and lawful manner, (ii) comply with all laws, rules, regulations,
orders, ordinances, directions and requirements of any governmental authority or
agency, now in force or which may hereafter be in force, including without
limitation those which shall impose upon Landlord or Tenant any duty with
respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, and (iii) comply with and
obey all reasonable directions of the Landlord, including any reasonable and
non-discriminatory rules and regulations that may be adopted by Landlord from
time to time after written notice. Landlord warrants and agrees to not adopt
changes to the rules and regulations that would materially and adversely impact
Tenant's use of the property, in Tenant's reasonable judgment. Tenant shall not
do or permit anything to be done in or about the Leased Premises or common areas
which constitutes a nuisance or which interferes with the rights of other
tenants or unreasonably injures them (e.g. creating noxious fumes which permeate
the space occupied by other tenants). Landlord shall not be responsible to
Tenant for the nonperformance by any other tenant or occupant of the Building of
its lease or of any rules and regulations. Tenant shall not overload the floors
of the Leased Premises beyond the maximum load specifications supplied to Tenant
by Landlord as part of the approval process. All damage to the floor structure
or foundation of the Building due to improper positioning or storage of items or
materials exceeding Landlord's floor loading specifications as supplied to
Tenant as part of the plan approval process shall be repaired by Landlord at the
sole expense of Tenant, who shall reimburse Landlord within thirty (30) days
after written notice. Tenant shall not use the Leased Premises, or allow the
Leased Premises to be used, for any purpose or in any manner which would
invalidate any policy of insurance now or hereafter carried on the Building or
increase the rate of premiums payable on any such insurance policy unless Tenant
reimburses Landlord as Additional Rent for any increase in premiums charged.
Landlord hereby acknowledges that the Permitted Use as of the Commencement Date
does not invalidate any insurance policy or increase the rate of premiums
payable on any such insurance policy.
Section 5.03. Landlord's Rights Regarding Use. In addition to the rights
specified elsewhere in this Lease, Landlord shall have the following rights
regarding the use of the Leased Premises or the
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common areas, each of which may only be exercised following prior notice to
Tenant's director of operations at the Leased Premises except in the event of an
emergency in which case no notice shall be required, to Tenant, but without
liability (other than for the negligent or intentional acts or omissions of
Landlord, its agents, officers, employees, and other representatives to Tenant)
(a) Landlord may install such signs, advertisements, notices or tenant
identification information as it shall deem necessary or proper; (b) Landlord
shall have the right at any time to control, change or otherwise alter the
common areas as it shall deem necessary or proper provided Tenant's access and
use of the Leased Premises is not materially affected; and (c) Landlord or
Landlord's agent shall be permitted to inspect or examine the Leased Premises at
any reasonable time upon twenty-four (24) hours prior notice to Tenant's
director of operations at the Leased Premises (except in an emergency when no
notice shall be required), and Landlord shall have the right to make any repairs
to the Leased Premises which Landlord reasonably deems are necessary for its
preservation; provided, however, that any repairs made by Landlord shall be at
Tenant's expense, except as provided in Section 7.02 hereof. Such entry shall
not constitute an eviction of Tenant nor a termination of this Lease, nor
entitle Tenant to any abatement of rent therefor.
ARTICLE 6 - UTILITIES AND SERVICES
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Tenant shall obtain in its own name and pay directly to the appropriate
supplier the cost of all utilities and services serving the Leased Premises.
However, if any services or utilities are jointly metered with other property,
Landlord shall make a reasonable determination of Tenant's proportionate share
of the cost of such utilities and services (at rates that would have been
payable if such utilities and services had been directly billed by the utilities
or services provided to Tenant) and Tenant shall pay such share to Landlord
within thirty (30) days after receipt of Landlord's written statement. Landlord
shall not be liable in damages or otherwise for any failure or interruption of
any utility or other building service and no such failure or interruption shall
entitle Tenant to terminate this Lease or withhold sums due hereunder. In the
event of utility "deregulation", Landlord may choose the service provider, but
the amount payable by Tenant for such deregulated utilities shall not exceed the
amount Tenant would otherwise pay if it were able to select its own service
provider.
ARTICLE 7 - MAINTENANCE AND REPAIRS
-----------------------------------
Section 7.01. Tenant's Responsibility. During Lease Term, Tenant shall, at
its own cost and expense, maintain the Leased Premises in good condition,
regularly servicing and promptly making all repairs and replacements thereto,
including but not limited to the electrical systems, heating and air
conditioning systems, plate glass, floors, windows and doors, sprinkler and
plumbing systems, and shall obtain a preventive maintenance contract on the
heating, ventilating and air-conditioning systems, and provide Landlord with a
copy thereof. The preventive maintenance contract shall meet or exceed
Landlord's reasonable and standard maintenance criteria (as attached to this
Lease as Exhibit D), and shall provide for the inspection and maintenance of the
heating, ventilating and air conditioning system on not less than a semi-annual
basis. Any 1-IVAC unit installed by Tenant for the exclusive use of the Leased
Premises shall be maintained by Tenant in its own discretion, but at all times
in a safe manner so as not to damage the Building or its other tenants.
Section 7.02. Landlord's Responsibility. During the term of this Lease,
Landlord shall maintain in good condition and repair, and replace as necessary,
the roof, exterior walls, foundation and structural frame of the Building and
the parking and landscaped areas, the costs of which shall be included in
Operating Expenses; provided, however, that to the extent any of the foregoing
items require repair because of the negligence, misuse, or default of Tenant,
its employees, agents, customers or invitees, Landlord shall make such repairs
solely at Tenant's expense.
Section 7.03. Alterations. Tenant shall not permit alterations in or to the
Leased Premises unless and until the plans have been approved by Landlord in
writing. Notwithstanding anything contained herein
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to the contrary, Tenant shall have the right, at Tenant's sole cost and expense,
without Landlord's consent, and in compliance with all other provisions of this
section, to make any non-structural, alterations to the Leased Premises which do
not materially impact the Building's mechanical or electrical systems, do not
adversely affect the Building's appearance or value, and the aggregate cost of
which does not exceed Fifty Thousand Dollars ($50,000.00) in any given year,
provided that Tenant gives Landlord fifteen (15) business days prior written
notice of any such alterations, along with copies of all plans and
specifications relating thereto. As a condition of such approval, to be given if
at all, concurrently with such approval notice, Landlord may require Tenant to
remove the alterations and restore the Leased Premises upon termination of this
Lease; otherwise, all such alterations (excepting Tenant's trade fixtures,
equipment, furniture and personal property) shall at Landlord's option become a
part of the realty and the property of Landlord, and shall not be removed by
Tenant. Tenant shall ensure that all alterations shall be made in accordance
with all applicable laws, regulations and building codes, in a good and
workmanlike manner and of quality equal to or better than the original
construction of the Building. No person shall be entitled to any lien derived
through or under Tenant for any labor or material furnished to the Leased
Premises, and nothing in this Lease shall be construed to constitute a consent
by Landlord to the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged or bonded
over of record within thirty (30) days after filing. Tenant shall indemnify
Landlord from all costs, losses, expenses and attorneys' fees in connection with
any construction or alteration and any related lien except to the extent due
directly to the negligent or intentional acts or omissions of Landlord, its
agents, officers, employees and other representatives.
ARTICLE 8 - CASUALTY
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Section 8.01. Casualty. In the event of total or partial destruction of the
Building or the Leased Premises by fire or other casualty, Landlord agrees to
promptly restore and repair same; provided, however, Landlord's obligation
hereunder shall be limited to the reconstruction of such of the tenant finish
improvements as were originally required to be made by Landlord, if any. Rent
shall proportionately xxxxx during the time that the Leased Premises or part
thereof are unusable because of any such damage. Notwithstanding the foregoing,
if the Leased Premises are (i) so destroyed that they cannot be repaired or
rebuilt within one hundred eighty (180) days from the casualty date; or (ii)
destroyed (i.e. damage costing in excess of Twenty-five Thousand Dollars
($25,000.00) to repair) by a casualty which is not covered by the insurance
required hereunder or, if covered, such insurance proceeds are not released by
any mortgagee entitled thereto or are insufficient to rebuild the Building and
the Leased Premises; then, in case of a clause (i) casualty, either Landlord or
Tenant may, or, in the case of a clause (ii) casualty, then Landlord may, upon
thirty (30) days' written notice to the other party, terminate this Lease with
respect to matters thereafter accruing. Such notice is to be given within thirty
(30) days after such casualty, otherwise the parties shall Immediately commence
and thereafter diligently pursue to completion, their respective repair and
restoration obligations. Notwithstanding any other provision hereof, if casualty
occurs during the last six (6) months of the Lease Term, including option
periods that have been exercised and the loss is in excess of Five Hundred
Thousand Dollars ($500,000.00), either party may terminate this Lease upon
thirty (30) days notice provided such notice is given within thirty (30) days of
the date of casualty. In the event of a clause (ii) casualty, Tenant shall have
the option of putting up its own funds to repair damage in excess of Twenty-five
Thousand Dollars ($25,000.00) in which event Landlord may not elect to terminate
this Lease.
Section 8.02. All Risk Coverage Insurance. During the Lease Term, Landlord
shall maintain all risk coverage insurance on the full replacement value of the
Building (with a deductible not to exceed Twenty-five Thousand Dollars
($25,000.00), but shall not protect Tenant's property on the Leased Premises;
and, notwithstanding the provisions of Section 9.01, Landlord shall not be
liable for any damage to Tenant's property, regardless of cause, including the
negligence of Landlord and its employees, agents and invitees. Tenant hereby
expressly waives any right of recovery against Landlord for damage to any
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property of Tenant located in or about the Leased Premises, however caused,
including the negligence of Landlord and its employees, agents and invitees.
Notwithstanding the provisions of Section 9.01 below, Landlord hereby expressly
waives any rights of recovery against Tenant for damage to the Leased Premises
or the Building which is insured against under Landlord's all risk coverage
insurance. All insurance policies maintained by Landlord or Tenant as provided
in this Lease shall contain an agreement by the insurer waiving the insurer's
right of subrogation against the other party to this Lease.
ARTICLE 9 - LIABILITY INSURANCE
-------------------------------
Section 9.01. Tenant's Responsibility. Landlord shall not be liable to
Tenant or to any other person for (i) damage to property or injury or death to
persons due to the condition of the Leased Premises, the Building or the common
areas, or (ii) the occurrence of any accident in or about the Leased Premises or
the common areas, or (iii) any act or neglect of Tenant or any other tenant or
occupant of the Building or of any other person, unless such damage, injury or
death is directly and solely the result of Landlord's negligence; and Tenant
hereby releases Landlord from any and all liability for the same. Tenant shall
be liable for, and shall indemnify and defend Landlord from, any and all
liability for (i) any act or neglect of Tenant and any person coming on the
Leased Premises or common areas by the license of Tenant, express or implied,
(ii) any damage to the Leased Premises, and (iii) any loss of or damage or
injury to any person (including death resulting therefrom) or property occurring
in, on or about the Leased Premises, regardless of cause, except for any loss or
damage covered by Landlord's all risk coverage insurance as provided in Section
8.02 and except for that caused solely and directly by Landlord's negligence.
This provision shall survive the expiration or earlier termination of this
Lease.
Section 9.02. Tenant's Insurance. Tenant shall carry general public
liability and property damage insurance, issued by one or more insurance
companies acceptable to Landlord, with the following minimum coverages:
A. Worker's Compensation: minimum statutory amount.
B. Commercial General Liability Insurance, including blanket, contractual
liability, broad form property damage, personal injury, completed operations,
products liability, and fire damage: Not less than $2,000,000 Combined Single
Limit for both bodily injury and property damage.
C. All Risk Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage
insurance, if applicable, for the full cost of replacement of Tenant's property.
D. Business interruption insurance.
The insurance policies shall protect Tenant and Landlord as their interests may
appear, naming Landlord and Landlord's managing agent and mortgagee as
additional insureds, and shall provide that they may not be canceled on less
than thirty (30) days' prior written notice to Landlord. Tenant shall furnish
Landlord with Certificates of Insurance evidencing all required coverages on or
before the Commencement Date. If Tenant fails to carry such insurance and
furnish Landlord with such Certificates of Insurance after a request to do so,
Landlord may obtain such insurance and collect the cost thereof from Tenant.
ARTICLE 10 - EMINENT DOMAIN
---------------------------
If all or any substantial part of the Building or common areas shall be
acquired by the exercise of eminent domain, Landlord may terminate this Lease by
giving written notice to Tenant on or before the date that actual possession
thereof is so taken to be effective as of the date that actual possession
thereof is so taken. If all or any part of the Leased Premises shall be acquired
by the exercise of eminent domain so that the Leased Premises become, in
Tenant's reasonable opinion, unusable by Tenant for the Permitted
-10-
Use, Tenant may terminate this Lease as of the date that actual possession
thereof is so taken by giving written notice to Landlord. All damages jointly
pursued by Landlord and Tenant awarded shall belong to Landlord; provided,
however, that Tenant is entitled to pursue for its sole benefit all claims for
loss of business, costs of dislocation and relocation and any other lawful
claim, and in such reasonable amounts as reasonably determined if such amount is
not subtracted from Landlord's award. Landlord hereby agrees that any award
given to Landlord expressly to compensate Tenant for any damages shall be paid
to Tenant.
ARTICLE 11 - ASSIGNMENT AND SUBLEASE
------------------------------------
Tenant shall not assign this Lease or sublet the Leased Premises in whole
or in part without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied (provided that it shall not be
unreasonable for Landlord to withhold or deny its consent with respect to any
proposed assignment or subletting to a third party that is already a tenant in
the Building. Landlord hereby acknowledges and agrees that stock transfers
(IPO's, private placements, stock option plans, transfers between shareholders,
public offerings following IPO, etc.) shall not be considered an assignment and
will not require Landlord's consent. In the event of any assignment or
subletting, Tenant shall remain primarily liable hereunder, and any extension,
expansion, rights of first offer, rights of first refusal or other options
granted to Tenant under this Lease shall be rendered void and of no further
force or effect. The acceptance of rent from any other person shall not be
deemed to be a waiver of any of the provisions of this Lease or to be a consent
to the assignment of this Lease or the subletting of the Leased Premises.
Landlord hereby agrees to consent to an assignment to a purchaser of
substantially all of Tenant's assets on the Leased Premises provided the
Purchaser continues to operate in the Leased Premises and acquires such assets
in its operation. Without in any way limiting Landlord's right to refuse to
consent to any assignment or subletting of this Lease, Landlord reserves the
right to refuse to give such consent if in Landlord's opinion (i) the Leased
Premises are or may-be in any way adversely affected; (ii) the financial worth
of the proposed assignee or subtenant and Tenant are insufficient to meet the
obligations hereunder. Landlord further expressly reserves the right to refuse
to give its consent to any subletting if the proposed rent is publicly
advertised to be less than the then current rent for similar premises in the
Building. Tenant agrees to reimburse Landlord for reasonable accounting and
attorneys' fees incurred in conjunction with the processing and documentation of
any such requested assignment, subletting or any other hypothecation of this
Lease or Tenant's interest in and to the Leased Premises in an amount not to
exceed Two Thousand Dollars ($2,000.00).
Without Landlord's consent, Tenant may assign its leasehold interest to:
(a) a parent, subsidiary, sibling or affiliate corporation, controlling,
controlled by or under common control with, Tenant; (b) a successor corporation
related to Tenant by merger, consolidation, non-bankruptcy reorganization or
government action; or (c) a purchaser of substantially all of Tenant's assets
located in the Leased Premises. In addition, restrictions on transfer do not
apply to the sale or other transfer of Tenant's capital stock including: (i)
any transfer in connection with the merger, consolidation or non-bankruptcy
reorganization; (ii) any transaction related to a public sale; (iii) any
transfer of any sale of stock amongst existing shareholders; or (iv) any
activity in any company stock option programs.
The assignee or sublessee under clause (b) and (c) above shall have minimum
net worth equal to the lesser of (1) One Hundred Million Dollars
($100,000,000.00) or (2) Tenant at the time of the assignment or sublease.
Landlord consents to Tenant's re-incorporation in any state provided there
is not a material change in the assets, liability or capital structure of the
Tenant.
ARTICLE 12 - TRANSFERS BY LANDLORD
----------------------------------
Section 12.01. Sale of the Building. Landlord shall have the right to sell
the Building at any time
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during the Lease Term, subject only to the rights of Tenant hereunder; and such
sale shall operate to release Landlord from liability hereunder after the date
of such conveyance so long as (a) new owner shall assume all of Landlord's on-
going obligations and liabilities under this Lease from and after the date of
such conveyance and (b) Landlord has delivered to such new owner the Security
Deposit and all other amounts owed by Landlord to Tenant as of the date of such
conveyance. Landlord shall remain liable to Tenant for any obligations arising
prior to the date of conveyance not assumed by the new owner.
Section 12.02. Subordination and Estoppel Certificate. Landlord shall have
the right to subordinate this Lease to any mortgage presently existing or
hereafter placed upon the Building by so declaring in such mortgage, provided
that the mortgagee provides Tenant with a standard nondisturbance agreement.
Within ten (10) days following receipt of a written request from Landlord,
Tenant shall execute and deliver to Landlord, without cost, any reasonable
instrument which Landlord deems necessary or desirable to confirm the
subordination of this Lease and an estoppel certificate in such form as Landlord
may reasonably request certifying (i) that this Lease is in full force and
effect and unmodified or stating the nature of any modification, (ii) the date
to which rent has been paid, (iii) that there are not, to Tenant's knowledge,
any uncured defaults or specifying such defaults if any are claimed, and (iv)
any other matters or state of facts reasonably required respecting the Lease,
provided such are factually accurate. Such estoppel may be relied upon by
Landlord and by any purchaser or mortgagee of the Building. Notwithstanding the
foregoing, if the mortgagee shall take title to the Leased Premises through
foreclosure or deed in lieu of foreclosure, Tenant shall be allowed to continue
in possession of the Leased Premises as provided for in this Lease so long as
Tenant shall not be in default.
ARTICLE 13 - DEFAULT AND REMEDY
---------- ------------------
Section 13.01. Default. The occurrence of any of the following shall be a
"Default":
(a) Tenant fails to pay any Monthly Rental Installment or Additional Rent
within five (5) days after the same is due, or Tenant fails to pay any other
amounts due Landlord from Tenant within ten (10) days after the same is due.
Notwithstanding the foregoing sentence, Landlord shall provide Tenant with
a written courtesy notice of such nonpayment and Tenant shall have an additional
five (5) days to cure such nonpayment before Landlord exercises its remedies
hereunder; provided, however, that Landlord shall not be required to give such
courtesy notice more than one (1) time with respect to any particular
nonpayment, nor more than two (2) times in any consecutive twelve (12) month
period with respect to any nonpayments in the aggregate.
(b) Tenant fails to perform or observe any other term, condition, covenant
or obligation required under this Lease for a period of thirty (30) days after
written notice-thereof from Landlord; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are reasonably required
to cure, then such default shall be deemed to have been cured if Tenant
commences such performance within said thirty-day period and thereafter
diligently completes the required action within a reasonable time.
(c) Tenant shall assign or sublet all or a portion of the Leased Premises
in contravention of the provisions of Article 11 of this Lease.
(d) All or substantially all of Tenant's assets in the Leased Premises or
Tenant's interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency or for reorganization or arrangement is filed
by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant is insolvent and unable to pay its
debts as they become due; Tenant makes a general assignment for
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the benefit of creditors; Tenant takes the benefit of any insolvency action or
law; the appointment of a receiver or trustee in bankruptcy for Tenant or its
assets if such receivership has not been vacated or set aside within thirty (30)
days thereafter; or, involuntary dissolution or other termination of Tenant's
corporate charter if Tenant is a corporation, except as provided in Article 11.
Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall
have the following rights and remedies, in addition to those allowed by law or
in equity (but shall not break the law in exercising such remedies), any one or
more of which may be exercised without further notice to
Tenant:
(a) Landlord may apply the Security Deposit or re-enter the Leased Premises
and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action.
(b) Landlord may terminate this Lease or, without terminating this Lease,
terminate Tenant's right to possession of the Leased Premises as of the date of
such Default, and thereafter (i) neither Tenant nor any person claiming under or
through Tenant shall be entitled to possession of the Leased Premises, and
Tenant shall immediately surrender the Leased Premises to Landlord; and (ii)
Landlord may re-enter the Leased Premises and dispossess Tenant and any other
occupants of the Leased Premises by any lawful means and may remove their
effects, without prejudice to any other remedy which Landlord may have. Upon the
termination of this Lease, Landlord may declare the present value (discounted at
the Prime Rate) of all rent which would have been due under this Lease for the
balance of the Lease Term to be immediately due and payable, whereupon Tenant
shall be obligated to pay the same to Landlord, together with all loss or damage
which Landlord may sustain by reason of Tenant's default ("Default Damages"),
which shall include without limitation expenses of preparing the Leased Premises
for reletting, demolition, repairs, tenant finish improvements, brokers'
commissions and attorneys' fees, it being expressly understood and agreed that
the liabilities and remedies specified in this subsection (b) shall survive the
termination of this Lease.
(c) Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part thereof for a term different from that which
would otherwise have constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained herein, whereupon Tenant
shall be immediately obligated to pay to Landlord as liquidated damages the
present value (discounted at the Prime Rate) of the difference between the rent
provided for herein and that provided for in any lease covering a subsequent re-
letting of the Leased Premises, for the period which would otherwise have
constituted the balance of the Lease Term, together with all of Landlord's
Default Damages.
(d) Landlord may xxx for injunctive relief or to recover damages for any
loss resulting from the Default.
(e) If Landlord terminates this Lease or Tenant's right to possession,
Landlord's duty to mitigate its damages under this Lease shall be as follows:
(1) Landlord shall be required only to use reasonable efforts to mitigate, which
shall not exceed such efforts as Landlord generally uses to lease other space in
the Building, (2) Landlord will not be deemed to have failed to mitigate if
Landlord leases any other portions of the Building before reletting all or any
portion of the Leased Premises, and (3) Landlord shall not be deemed to have
failed to mitigate if it incurs costs and expenses for repairs, maintenance,
changes, alterations and improvements to the Leased Premises (whether to prevent
damage or to prepare the Leased Premises for reletting), brokerage commissions,
advertising costs, attorneys' fees, any economic incentives given to replacement
tenants, and costs of collecting rent from replacement tenants. In recognition
that the value of the Building depends on the rental rates and terms of leases
therein, Landlord's rejection of a prospective replacement tenant based on an
offer of rentals below Landlord's
-13-
published rates for new leases of comparable space at the Building at the time
in question, or at Landlord's option, below the rates provided in this Lease, or
containing terms less favorable than those contained herein, shall not give rise
to a claim by Tenant that Landlord failed to mitigate Landlord's damages.
Section 13.03. Landlord's Default and Tenant's Remedies. Landlord shall be
in default if it fails to perform any term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after written notice
thereof from Tenant to Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is such that it cannot
reasonably be, performed within thirty days, such default shall be deemed to
have been cured if Landlord commences such performance within said thirty-day
period and thereafter diligently undertakes to complete the same. Upon the
occurrence of any such default, Tenant may xxx for injunctive relief or to
recover damages for any loss directly resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset or xxxxx any
sums due hereunder. Tenant may "self help" in the event Landlord fails to cure
any default after notice and opportunity to cure and such default renders the
Leased Premises "untenantable" (meaning that Tenant is unable to use such space
in the normal course of its business). Tenant may make any such minor repairs as
are necessary to make the Leased Premises tenantable, but may not withhold,
offset or xxxxx any sums due hereunder.
Section 13.04. Limitation of Landlord's Liability. If Landlord shall fail
to perform any term, condition, covenant or obligation required to be performed
by it under this Lease and if Tenant shall, as a consequence thereof, recover a
money judgment against Landlord, Tenant agrees that it shall look solely to
Landlord's right, title and interest in and to the Building, any income derived
from the Building, any insurance proceeds received by Landlord in regard to the
Building, any security deposits held by Landlord, any letter of credit proceeds
held by Landlord and any condemnation proceeds held by Landlord for the
collection of such judgment; and Tenant further agrees that no other assets of
Landlord shall be subject to levy, execution or other process for the
satisfaction of Tenant's judgment.
Section 13.05. Nonwaiver of Defaults. Neither party's failure or delay in
exercising any of its rights or remedies or other provisions of this Lease shall
constitute a waiver thereof or affect its right thereafter to exercise or
enforce such right or remedy or other provision. No waiver of any default shall
be deemed to be a waiver of any other default. Landlord's receipt of less than
the full rent due shall not be construed to be other than a payment on account
of rent then due, nor shall any statement on Tenant's check or any letter
accompanying Tenant's check be deemed an accord and satisfaction. No act or
omission by Landlord or its employees or agents during the Lease Term shall be
deemed an acceptance of a surrender of the Leased Premises without an
accompanying written agreement, and no agreement to accept such a surrender
shall be valid unless in writing and signed by Landlord.
Section 13.06. Attorneys' Fees. If either party Defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the non-defaulting party obtains a
judgment against the defaulting party, then the defaulting party agrees to
reimburse the non-defaulting party for reasonable attorneys' fees and costs
incurred in connection therewith.
ARTICLE 14 - LANDLORD'S RIGHT TO RELOCATE TENANT
---------- -----------------------------------
[Intentionally Omitted.]
ARTICLE 15-TENANT'S RESPONSIBILITY REGARDING
------------------- ------------------------
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.
--------------------------------------------
Section 15.01. Definitions.
a. "Environmental Laws" - All present or future federal, state and
municipal laws,
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ordinances, rules and regulations applicable to the environmental and ecological
condition of the Leased Premises, the rules and regulations of the Federal
Environmental Protection Agency or any other federal, state or municipal agency)
or governmental board or entity having jurisdiction over the Leased Premises.
b. "Hazardous Substances" - Those substances included within the
definitions of "hazardous substances," "hazardous materials," "toxic substances"
"solid waste" or "infectious waste" under Environmental Laws.
Section 15.02. Compliance. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws including any notice from any source
issued pursuant to the Environmental Laws or issued by any insurance company
which shall impose any duty upon Tenant with respect to the use, occupancy,
maintenance or alteration of the Leased Premises whether such, notice shall be
served upon Landlord or Tenant.
Section 15.03. Restrictions on Tenant. Tenant shall operate its business
and maintain the Leased Premises in compliance with all Environmental Laws.
Tenant shall not cause or permit the use, generation, release, manufacture,
refining, production, processing, storage or disposal of any Hazardous
Substances on, under or about the Leased Premises, or the transportation to or
from the Leased Premises of any Hazardous Substances, except as necessary and
appropriate for its Permitted Use in which case the use, storage or disposal of
such Hazardous Substances shall be performed in compliance with the
Environmental Laws and the highest standards prevailing in the industry.
Section 15.04. Notices, Affidavits, Etc. Tenant and Landlord shall each
immediately notify the other of (i) any violation by Tenant or Landlord, their
employees, agents, representatives, customers, invitees or contractors of the
Environmental Laws on, under or about the Leased Premises, or (ii) the presence
or suspected presence of any Hazardous Substances on, under or about the Leased
Premises and shall immediately deliver to the other any notice received by
Tenant or Landlord relating to (i) and (ii) above from any source. Tenant shall
execute affidavits, representations and the like within five (5) days of
Landlord's request therefor concerning Tenant's best knowledge and belief
regarding the presence of any Hazardous Substances on, under or about the Leased
Premises.
Section 15.05. Landlord's Rights. Landlord and its agents shall have the
right, but not the duty, upon reasonable advance notice (except in the case of
emergency when no notice shall be required) to inspect the Leased Premises and
conduct tests thereon to determine whether or the extent to which there has been
a violation of Environmental Laws by Tenant or whether there are Hazardous
Substances on, under or about the Leased Premises. In exercising its rights
herein, Landlord shall use reasonable efforts to minimize interference with
Tenant's business but such entry shall not constitute an eviction of Tenant, in
whole or in part, and Landlord shall not be liable for any interference, loss,
or damage to Tenant's property or business caused thereby.
Section 15.06. Tenant's Indemnification. Tenant shall indemnify Landlord
and Landlord's managing agent from any and all claims, losses, liabilities,
costs, expenses and damages, including attorneys' fees, costs of testing and
remediation costs, incurred by Landlord in connection with any breach by Tenant
of its obligations under this Article 15. The covenants and obligations under
this Article 15 shall survive the expiration or earlier termination of this
Lease.
Section 15.07. Landlord's Representation. Notwithstanding anything
contained in this Article 15 to the contrary, Tenant shall not have any
liability to Landlord under this Article 15 resulting from any conditions
existing, or events occurring, or any Hazardous Substances existing or
generated, at, in, on, under or in connection with the Leased Premises prior to
the Commencement Date of this Lease or any contamination caused by another
tenant of the Building except to the extent Tenant exacerbates the same.
-15-
Section 15.08. Landlord's Representation and Indemnification. Landlord
represents and warrants that, to the best of Landlord's actual knowledge,
without independent investigation, as of the date of execution of this Lease,
there are no Hazardous Substances in, on or about the Leased Premises or
Building in violation of the Environmental Laws and that Landlord is not in
receipt of any notice concerning the Building with respect to any such violation
or enforcement action, pending or threatened, of the Environmental Laws.
Landlord shall indemnify and hold Tenant harmless from and against any and all
remediation claims, loss, liability, costs, expenses or damage, including
attorneys' fees, incurred by Tenant to the extent (i) arising from the presence
of any Hazardous Substances existing in, under or in connection with the Leased
Premises as of the Commencement Date, or (ii) caused directly by Landlord's use
or disposal of any Hazardous Substances in, on or about the Building or the
Leased Premises in violation of Environmental Laws.
ARTICLE 16 - MISCELLANEOUS
--------------------------
Section 16.01. Benefit of Landlord and Tenant. This Lease shall inure to
the benefit of and be binding upon Landlord and Tenant and their respective
successors and assigns.
Section 16.02. Governing Law. This Lease shall be governed in accordance
with the laws of the State where the Building is located.
Section 16.03. Guaranty. [Intentionally Omitted.]
Section 16.04. Force Majeure. Landlord and Tenant (except with respect to
the payment of any monetary obligation) shall be excused for the period of any
delay in the performance of any obligation hereunder when such delay is
occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies. Each party agrees to make commercially
reasonable efforts to mitigate the damages caused by any such force majeure
event.
Section 16.05. Examination of Lease. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.
Section 16.06. Indemnification for Leasing Commissions. The parties hereby
represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Lease are the Brokers. Each party shall
indemnify the other from any and all liability for the breach of this
representation and warranty on its part and shall pay in the event of a breach
of this representation and warranty any compensation to any other broker or
person who may be entitled thereto.
Section 16.07. Notices. Any notice required or permitted to be given under
this Lease or by law shall be deemed to have been given if it is written and
delivered in person or by overnight courier or mailed by certified mail, postage
prepaid, to the party who is to receive such notice at the address specified in
Article 1. If delivered in person, notice shall be deemed given as of the
delivery date. If sent by overnight courier, notice shall be deemed given as of
the first business day after sending. If mailed, the notice shall be deemed to
have been given on the date that is three business days after mailing. If sent
by facsimile, the notice shall be deemed received as of the date shown on the
facsimile confirmation sheet. Either party may change its address by giving
written notice thereof to the other party.
Section 16.08. Partial Invalidity: Complete Agreement. If any provision of
this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions shall remain in full force and effect. This Lease represents the
entire agreement between Landlord and Tenant covering everything agreed upon or
understood in this transaction. There are no oral promises, conditions,
representations, understandings,
-16-
interpretations or terms of any kind as conditions or inducements to the
execution hereof or in effect between the parties. No change or addition shall
be made to this Lease except by a written agreement executed by Landlord and
Tenant.
Section 16.09. Financial Statements. During the Lease Term and any
extensions thereof, Tenant shall provide to Landlord within thirty (30) days
after Landlord's written request therefor, a copy of Tenant's most recent
audited financial statements (which request shall not be made more than once per
year) prepared as of the end of Tenant's fiscal year. Such financial statements
shall be signed by Tenant who shall attest to the truth and accuracy of the
information set forth in such statements. All financial statements provided by
Tenant to Landlord hereunder shall be prepared in conformity with generally
accepted accounting principles, consistently applied. Landlord hereby agrees to
use commercially reasonable efforts to keep Tenant's financial statements
confidential and will only provide copies to Landlord's auditors, financial
analysts and mortgagees.
Section 16.10. Representations and Warranties. The undersigned represent
and warrant that (i) such party is duly organized, validly existing and in good
standing (if applicable) in accordance with the laws of the state under which it
was organized; and (ii) the individual executing and delivering this Lease has
been properly authorized to do so, and such execution and delivery shall bind
such party.
Section 16.11. Quiet Enjoyment. Landlord covenants and agrees with Tenant
that, except as otherwise provided in this Lease, and provided Tenant is not in
Default hereunder, Tenant shall and may peaceably and quietly have, hold and
enjoy the Leased Premises for the Lease Term, free from any interference
whatsoever by, from or through Landlord or anyone claiming by, from or through
Landlord.
Section 16.12. Early Occupancy. Landlord hereby agrees to allow Tenant to
take possession of the Leased Premises as of the date hereof for fixturing
purposes. Tenant agrees to coordinate its fixturing work with the work of
Landlord such that Tenant's work does not interfere with or delay Landlord's
work; provided, however, that neither Landlord nor any of Landlord's affiliates
shall have any responsibility or liability whatsoever for any injury (including
death) to persons or loss or damage to any of Tenant's leasehold improvements,
fixtures, equipment or any other materials installed or left in the Leased
Premises prior to the Commencement Date. All of the terms and conditions of this
Lease will become effective upon Tenant taking possession of the Leased Premises
except for the payment of Minimum Annual Rent and Additional Rent which will
commence on the Commencement Date.
Section 16.13. Option to Extend.
X. Xxxxx and Exercise of Option. Provided (i) Tenant is not in default
hereunder, (ii) the creditworthiness of Tenant is substantially similar or
better than as of the Commencement Date, and (iii) the current use of the Leased
Premises is the same as the original Permitted Use, Tenant shall have the option
to extend the original Lease Term ("Original Term") for two (2) successive
periods of five (5) years each (the "Extension Term(s)"). The Extension Term
shall be upon the same terms and conditions contained in the Lease for the
Original Term except (i) this provision giving two (2) extension options shall
be amended to reflect the remaining options to extend, if any and (ii) the
Minimum Annual Rent shall be adjusted as set forth below (the "Rent
Adjustment"). Tenant shall exercise such option by (i) delivering to Landlord,
no later than nine (9) months prior to the expiration of the Original Term or,
if applicable, the Extension Term, written notice of Tenant's desire to extend
the Original Term or, if applicable, the Extension Term, and (ii) delivering to
Landlord within ten (10) business days of receipt of the Rent Adjustment,
written notice of its acceptance thereof. Unless Landlord otherwise agrees in
writing, Tenant's failure to timely exercise such option shall waive it and any
succeeding option. Landlord shall notify Tenant of the amount of the Rent
Adjustment no later than ninety (90) days prior to the commencement of the
applicable Extension Term. If Tenant properly exercises its option to extend,
Landlord and Tenant shall execute an amendment to the Lease (or, at Landlord's
option, a new lease on
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the form then in use by Landlord) reflecting the terms and conditions of the
Extension Term.
B. Market Rent Adjustment. The Market Rate shall be an amount equal to the
Minimum Annual Rent then being quoted by Landlord to prospective new tenants of
the Building for space of comparable size and quality and with similar or
equivalent improvements as are found in the Building, and if none, then in
similar buildings in the vicinity, excluding free rent and other concessions;
provided, however, that if Tenant delivers to Landlord a written objection to
Landlord's calculation of the Market Rate and the parties cannot agree on a
Market Rate within ten (10) days after Tenant's written objection then within
ten (10) days thereafter the parties shall each appoint an MAT appraiser or
licensed real estate broker and who is knowledgeable of industrial rentals in
the area. The two appraisers and/or brokers shall together appoint a third MAI
appraiser or a licensed real estate broker with the same qualifications. The
three appraisers and/or brokers shall then each determine within thirty (30)
days the then fair market value rental rate (excluding leasehold improvements
allowances, rent abatements and other prevailing market concessions and
allowances) for such space and for parking, taking into consideration the
industrial rental market in the vicinity for comparable space and parking and
the rental rates then being quoted to prospective tenants for comparable
industrial space and parking in the Building and other buildings in the
vicinity. The average of the two closest determinations shall be used as the
Minimum Annual Rent for such space. Landlord and Tenant shall each bear the cost
of its appraiser or broker and shall share the cost of the third appraiser.
Section 16.14. Covenants. Conditions and Restrictions. Landlord and Tenant
hereby agree to work together to obtain the consent of the Village of Romeoville
and the Crossroads Business Park concerning items, including but not limited to,
the potential relocation of any fire lanes, truck parking, permitted uses,
external and rooftop equipment installation (and required zoning) or other
covenants/restrictions that may encumber Tenant's intended use.
Section 16.15. Loading Docks. Landlord will provide at Landlord's sole
cost, twenty (20) loading docks and one (1) 12'X 14'drive-in door and Tenant
may, at Tenant's option and Tenant's sole cost, install additional dock doors
during the Lease Term with the prior written approval of Landlord which will not
be unreasonably withheld, conditioned or delayed.
Section 16.16. Parking. Landlord, at its sole expense, shall re-stripe the
parking lot and truck court to suit Tenant, subject to municipal approval.
Tenant, at its sole cost and expense, has the right to modify the existing
building site area as per Exhibit E attached hereto with the prior written
consent of Landlord which consent shall not be unreasonably withheld,
conditioned or delayed.
Section 16.17. Satellite Dish
a. Provided Tenant is not in Default under the Lease, and provided further
that Tenant complies with all zoning and other municipal and county rules and
regulations, Tenant shall have the right, at its own cost and expense and
subject to the terms hereof, to install, operate and maintain on the roof of the
Building, a microwave satellite dish ("Dish") for a rental rate of Zero
Dollars($0.00) per month (prorated for any partial month) payable to Landlord as
additional rent hereunder on the first day of each month commencing upon
installation of the Dish. Tenant shall be solely responsible for obtaining any
necessary permits and licenses required to install and operate the Dish. Copies
of such permits and licenses shall be provided to Landlord. Notwithstanding the
grant of this right, Landlord shall maintain control over the roof of the
Building, and nothing herein shall be deemed Landlord's consent for Tenant to
use the roof for any other purpose than the installation, operation and
maintenance of the Dish in conjunction with the operation of its business.
b. The size, location, design and manner of installation of the Dish and
all related wiring shall be designated and approved by Landlord. After obtaining
written approval of Landlord, Tenant shall
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have reasonable access to the roof for installation and maintenance of the Dish
and shall have the right to install all reasonable wiring related thereto.
However, unless otherwise approved by Landlord in writing, in no event shall
Tenant be permitted to penetrate the roof membrane in connection with the
installation or maintenance of the Dish.
c. Tenant represents and warrants that the installation and maintenance of
the Dish will not cause any damage to the structural portions of the Building.
Tenant shall be responsible for repairing any such damages to the structure.
d. Tenant shall install, operate and maintain the Dish in accordance with
all federal, state and local laws and regulations. Prior to installation of the
Dish, Tenant shall, on behalf of the installer, provide Landlord with a
certificate of insurance reasonably satisfactory to Landlord.
e. Tenant reserves the right to discontinue its use of the Dish at any
time prior to the termination of the Lease pr any renewal or extension thereof
for any reason whatsoever, provided that Tenant gives thirty (30) days prior
written notice thereof to Landlord. Tenant shall be responsible for all costs of
removal and for restoring the Building to its original condition after such
removal. Notwithstanding the foregoing, Tenant agrees within five (5) days after
written notice from Landlord to (i) remove the Dish in the event any
governmental entity or applicable law or regulation requires removal thereof or
Tenant fails to comply with the terms stated herein; or (ii) relocate the Dish
in the event the Dish interferes with any existing dish. Such removal or
relocation shall be in accordance with all of the terms and conditions set forth
herein. If Tenant elects not to remove the Dish from the Building, upon
expiration or earlier termination of this Lease, or after expiration of the five
(5) day notice period provided herein, the Dish shall be deemed abandoned by
Tenant and shall become the property of Landlord.
f. Any language in the Lease notwithstanding, Landlord shall not be liable
and Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all liability, damages (including but not limited to personal injury,
death, or property damages), costs, expenses, and attorneys' fees incurred by
Landlord arising from any Dish related cause whatsoever, including those arising
from the installation, use, maintenance and removal thereof.
g. Tenant's right to install, maintain and use such Dish shall be
subordinate and inferior to the rights of any and all existing tenants in the
Building that have previously been granted the right to install and maintain
dishes on the roof of the Building. Any use of the roof by a third party shall
not unreasonably interfere with the Dish or Tenant's use thereof.
h. In the event Tenant exercises its option to extend the term of the
Lease as provided in Section 16.13, Landlord and Tenant hereby acknowledge and
agree that the rental rate for the Dish shall be adjusted in accordance with the
terms of the option to extend.
Section 16.18. Signage. Provided that (i) Tenant complies with all zoning
and other municipal and county regulations, (ii) Tenant does not reduce,
sublease or vacate the Leased Premises or any portion thereof, and (iii) Tenant
is not in Default of this Lease (in which case Landlord may remove the signage
hereunder at Tenant's expense), Tenant may, at its own cost and expense, erect a
sign ("Sign") identifying its business on the Building [and consistent with
Exhibit F attached hereto]. The location, style and size of the Sign shall be
subject to Landlord's prior written approval. Tenant agrees to maintain such
Sign in first-class condition and in compliance with all zoning and building
codes throughout the Lease Term. Upon expiration or early termination of the
Lease Term, Tenant shall remove the Sign and repair all damage to the Building
caused thereby ,returning the Building to the condition existing prior to the
installation of the Sign. Landlord does not warrant the continuing availability
of such Sign to Tenant. Any language in the Lease notwithstanding, Tenant shall
indemnify and hold harmless Landlord from any and all liability for any loss of
or damage or injury to any person (including death resulting therefrom) or
property connected
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with or arising from the Sign or the rights granted Tenant herein. The
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease.
Section 16.19. Time is of the Essence. Time is of the essence with respect
to the performance of all obligations to be performed or observed by Landlord
and Tenant.
Section 16.20. Binding Effect; Choice of Law. This Lease shall be binding
upon the parties, successors and assigns and be governed by the laws of the
state in which the Leased Premises are located. Any litigation between the
parties hereto concerning this Lease shall be initiated in the county which the
Leased Premises are located.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD:
DUKE-WEEKS REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke-Weeks Realty Corporation,
its general partner
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Senior Vice President
Chicago Industrial
TENANT:
XXXXXXXXXX.XXX., INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxx Xxxxxx
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Printed: Xxxx Xxxxx Xxxxxx
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Title: Chief Executive Officer
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