EXHIBIT 10.1
COMMERCIAL LEASE AGREEMENT
BETWEEN
AlP-SWAG Operating Partnership, L.P.
as Landlord
and
TM Century, Inc., a Delaware corporation
as Tenant
Dated: June 7, 2002
Table of Contents
Page
ARTICLE 1
................................................................................2
BASIC LEASE PROVISIONS AND DEFINITIONS...................................2
ARTICLE 2....................................................................4
TERM AND POSSESSION...........................................................4
ARTICLE 3 RENT.................................................................6
ARTICLE 4......................................................................9
SECURITY DEPOSIT...............................................................9
ARTICLE 5.....................................................................10
OCCUPANCY AND USE.............................................................10
ARTICLE 6.....................................................................16
UTILITIES AND SERVICES........................................................16
ARTICLE 7.....................................................................17
MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS...........................17
ARTICLE 8....................................................................20
INSURANCE, FIRE AND CASUALTY..................................................20
ARTICLE 9.....................................................................24
CONDEMNATION..................................................................24
ARTICLE 10....................................................................25
LIENS.........................................................................25
ARTICLE 11 TAXES ON TENANT'S PROPERTY.........................................26
ARTICLE 12....................................................................26
SUBLETTING AND ASSIGNING......................................................26
ARTICLE 13..................................................................27
SUBORDINATION AND TENANT'S ESTOPPEL CERTIFICATE...............................27
ARTICLE 14....................................................................29
DEFAULT.......................................................................29
ARTICLE 15....................................................................33
NOTICES ......................................................................33
ARTICLE 16....................................................................33
MISCELLANEOUS PROVISIONS......................................................33
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EXHIBITS AND RIDERS
Exhibit A Site Plan of Premises
Exhibit B Acceptance of Premises Memorandum
Exhibit C Rules and Regulations
Exhibit D Surrender Space - December 31,2002
Exhibit E Surrender Space - August 31,2003
Addendum 1 Signage
Addendum 2 Additional Provisions
Rider 1 Renewal Option
Rider 4 Tenant's Right of Opportunity
Rider 6 Cap on Certain Operating Expenses
COMMERCIAL LEASE AGREEMENT
This Commercial Lease Agreement (hereinafter called this "Lease") is made
as of this 10th day of June, 2002, but is effective as of March 1, 2002 between
AlP-SWAG Operating Partnership, L.P., a Delaware Limited Partnership
(hereinafter called "Landlord"), and TM Century, Inc., a Delaware corporation
(hereinafter called "Tenant").
ARTICLE 1
BASIC LEASE PROVISIONS AND DEFINITIONS
1. Building:
a. Name: Valley View Commerce Center
b. Address: 0000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxx, XX 00000
c. Property Number: N/ A
d. Agreed Rentable Area: 58,755 square feet
2. Premises:
a. Suite Number: #120
b. Agreed Rentable Area: 47,068 square feet from 3/1/02 -
12/31/02
35,708 square feet from 1/1/03-
8/31/03
28,749 square feet from 9/1/03-
8/31/10
3. Term: One Hundred Two (102) months
4. Commencement Date: March 1, 2002
5. Expiration Date: August 31,2010
6. Base Rent:
Rental Period Base Monthly Rent
Commencement Date xx 00-00-00 $37,262.17
1-1-03 to 8-31-03 $28,268.83
9-1-03 to 8-31-05 $22,759.63
9-1-05 to 8-31-08 $26,353.25
9-1-08 to 8-31-10 $28,150.06
7. Additional Rent, Expense Stops and Pro Rata Share Percentage:
a. Operating Expense Stop: 2002 base year
b. Real Estate Taxes Expense Stop: 2002 base year
c. Tenant's Pro Rata Share Percentage: 80.10% / 60.79% / 48.93%
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The following chart is provided as an estimate of Tenant's initial monthly
payment broken down into its components. This chart, however, does not supersede
the specific provisions contained elsewhere in this lease.
Initial Monthly Base Rent $ 37,262.17
Initial Monthly Estimated Operating Expense Escrow $ 0.00
Initial Monthly Estimated Real Tax Escrow $ 0.00
Other $ 0.00
Total Initial Monthly Payment $ 37,262.17
8. Security Deposit: $0.00
9. Permitted Use: General Offices, warehousing, and storage related to the
music industry.
10. Landlord's Broker: Xxxxxx Xxxx Company
Landlord's Broker is represented by: Xxxxx X. Xxxxxxx
11. Tenant's Broker: Xxxxxxx & Xxxxxxx
Tenant's Broker is represented by: Xxxx Xxxxxxx
12. Payments: All payments shall be sent to Landlord in care of AlP-SWAG
Operating Partnership, ("Property Manager") at the address below, or
such other place as Landlord may designate from time to time.
13. Lease Guarantor: N/A
14. Notices: Addresses for notices due under this Lease:
LANDLORD: TENANT:
AlP-SWAG Operating Partnership, L.P., TM Century, Inc.,
a Delaware Limited Partnership a Delaware corporation
c/o American Industrial Properties REIT
Attention: Xx. Xxxxxxx X. Xxxxx
Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000: Fax
PROPERTY MANAGER: ON OR AFTER COMMENCEMENT DATE:
American Industrial Properties REIT The Premises:
0000 Xxxxx Xxxxxxxx, Xxxxx #000 Attention: Xxxxx Grauper
Xxxxxx, XX 00000-0000 Fax 000-000-0000: Fax
Attention: Xxxx Xxxxx Grauper
(000) 000-0000: 000-000-0000: Fax
(000) 000-0000: Fax
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ARTICLE 2
TERM AND POSSESSION
SECTION 2.1. LEASE OF PREMISES, COMMENCEMENT AND EXPIRATION:
2.1.1. Lease of Premises: In consideration of the mutual covenants
herein, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
subject to all the terms and conditions of this Lease, the portion of the
Building (as described in Item 1 of Article 1) described as the Premises in Item
2 of Article 1 and that is more particularly described by the crosshatched area
on Exhibit A attached hereto (hereinafter called the "Premises"). The agreed
rentable area of the Premises is hereby stipulated to be the" Agreed Rentable
Area" of the Premises set forth in Item 2b of Article 1, irrespective of whether
the same should be more or less. The agreed rentable area of the Building is
hereby stipulated to be the" Agreed Rentable Area" of the Building set forth in
Item lc of Article 1, irrespective of whether the same should be more or less.
The Building, the land on which the Building is situated and all improvements
and appurtenances to the Building and the land are referred to collectively
herein as the "Property". This Lease replaces that certain Lease dated April 23,
1993 and amended August 22, 1994 between Landlord and Tenant (the "Original
Lease") under which Tenant leased from Landlord 46,645 square feet in the
Building (the "Original Premises"). Landlord and Tenant acknowledge that the
Original Lease is terminated effective as of the commencement Date of this
Lease.
2.1.2. Initial Term and Commencement: The initial term of this Lease
shall be the period of time specified in Item 3 of Article 1. The initial term
shall commence on the Commencement Date (herein so called) set forth in Item 4
of Article 1 and, unless sooner terminated pursuant to the terms of this Lease,
the initial term of this Lease shall expire, without notice to Tenant, on the
Expiration Date (herein so called) set forth in Item 5 of Article 1 (as such
Commencement Date and/or Expiration Date may be adjusted pursuant to Exhibit B
attached hereto). Notwithstanding anything to the contrary contained herein, the
Lease will expire in the last day of the last month of the Term.
SECTION 2.2. INSPECTION AND DELIVERY OF PREMISES, CONSTRUCTION OF LEASE
SPACE IMPROVEMENTS AND POSSESSION:
2.2.1. Delivery and Completion: Tenant hereby acknowledges that Tenant
has inspected the Common Area (as hereinafter defined) and the Premises, and
hereby (i) accepts the Common Area in "AS IS" condition for all purposes and
(ii) subject to Landlord's completion of its obligations under the Work Letter
(herein so called) attached hereto as Exhibit D, Tenant hereby accepts the
Premises for all purposes (including the suitability of the Premises for the
Permitted Use).
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2.2.2. Common Area: "Common Areas" will mean all areas, spaces,
facilities, and equipment (whether or not located within the Building) made
available by Landlord for the common and joint use of Landlord, Tenant and
others designated by Landlord using or occupying space in the Building or at the
Property, as applicable, to the extent same are not expressly made a part of the
Premises, and are made available for use of all tenants in the Building. Tenant
is hereby granted a nonexclusive right to use the Common Areas during the term
of this Lease for its intended purposes, in common with others designated by
Landlord, subject to the terms and conditions of this Lease, including, without
limitation, the Rules and Regulations. The Common Areas will be at all times
under the exclusive control, management and operation of the Landlord.
2.2.3.Acceptance of Premises Memorandum: Upon Substantial Completion
(as defined in the Work Letter) of Tenant's Improvements, Landlord and Tenant
shall execute the Acceptance of Premises Memorandum (herein so called) attached
hereto as Exhibit B. If Tenant occupies the Premises without executing an
Acceptance of Premises Memorandum, Tenant shall be deemed to have accepted the
Premises for all purposes and Substantial Completion shall be deemed to have
occurred on the earlier to occur of: (i) actual occupancy (ii) the Commencement
Date set forth in Item 4 of Article 1 or (iii) the date Tenant commences doing
business at the Premises if Landlord consents to an early occupancy as set forth
in Section 2.2.1.
SECTION 2.3. REDELIVERY OF THE PREMISES: Upon the expiration or earlier
termination of this Lease, or upon the exercise by Landlord of its right to
re-enter the Premises without terminating this Lease, Tenant shall immediately
deliver to Landlord the Premises in a safe, "broom clean", neat, sanitary and
operational condition, normal wear and tear and casualty excepted, together with
all keys and parking and access cards. Tenant shall, by the Expiration Date or
the date this Lease is earlier terminated in accordance with the terms hereof,
remove from the Premises, at the sole expense of Tenant: (i) unless Landlord is
asserting its lien rights therein, any equipment, machinery, trade fixtures and
personalty installed or placed in the Premises by or on behalf of Tenant and
(ii) if requested by Landlord, all or any part of the improvements made to the
Premises by or on behalf of Tenant. All removals described above shall be
accomplished in a good and workmanlike manner so as not to damage the Premises
or the primary structure or structural qualities of the Building or the
plumbing, electrical lines or other utilities. Tenant shall, at its expense,
promptly repair any damage caused by such removal, provided that in the case of
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improvements that Tenant is required to remove, Tenant shall restore the
Premises to the condition existing prior to the installation of such
improvements, normal wear and tear accepted. If Tenant fails to deliver the
Premises in the condition aforesaid, then Landlord may restore the Premises to
such a condition at Tenant's expense. All property required to be removed
pursuant to this Section not removed within time period required hereunder shall
thereupon be conclusively presumed to have been abandoned by Tenant, and
Landlord may, at its option, take over possession of such property and either
(a) declare the same to be the property of Landlord or (b) at the sole cost and
expense of Tenant, remove and store and/or dispose of the same or any part
thereof in any manner that Landlord shall choose without incurring liability to
Tenant or any other person.
SECTION 2.4. HOLDING OVER: In the event Tenant, or any party under Tenant
claiming rights to this Lease, retains possession of the Premises after the
expiration or earlier termination of this Lease, such possession shall
constitute and be construed as a tenancy at will only, subject, however, to all
of the terms, provisions, covenants and agreements on the part of Tenant
hereunder; such parties shall be subject to immediate eviction and removal, and
Tenant or any such party covenants and agrees to pay Landlord as rent for the
period of such holdover an amount equal to 1.5 times the Base Monthly Rent plus
the Additional Rent (as hereinafter defined) in effect immediately preceding
expiration or termination, as applicable, prorated on a daily basis. Tenant
covenants and agrees to also pay any and all damages sustained by Landlord as a
result of such holdover. The rent during such holdover period shall be payable
to Landlord from time to time on demand; provided, however, if no demand is made
during a particular month, holdover rent accruing during such month shall be
paid in accordance with the provisions of this Section 2.4. Tenant will vacate
the Premises and deliver same to Landlord immediately upon Tenant's receipt of
notice from Landlord to so vacate. No holding over by Tenant, whether with or
without consent of Landlord, shall operate to extend the term of this Lease. No
payments of money by Tenant to Landlord after the expiration or earlier
termination of this Lease shall reinstate, continue or extend the term of this
Lease. No payments of money by Tenant, other than the holdover rent accruing
during such holdover period paid in accordance with the provisions of this
Section 2.4, to Landlord after the expiration or earlier termination of this
Lease shall constitute full payment of rent under the terms of this Lease, and
Tenant further agrees that any such payment(s), other than the holdover rent
accruing in accordance with the provisions of this Section 2.4, to Landlord
shall constitute a default and breach of this Lease by Tenant pursuant to
Article 14 herein. No extension of this Lease after the expiration or earlier
termination thereof shall be valid unless and until the same shall be evidenced
by a writing signed by both Landlord and Tenant.
ARTICLE 3
RENT
SECTION 3.1 BASE RENT: Tenant shall pay as rent for the Premises the
applicable Base Monthly Rent shown in Item 6 of Article 1. The Base Monthly Rent
shall be payable in monthly installments equal to the applicable Base Monthly
Rent shown in Item 6 of Article 1 in advance, without notice, demand, offset or
deduction except as otherwise expressly provided in the Lease. The required
monthly installments shall commence on the Commencement Date and shall continue
on the first (1st) day of each calendar month thereafter until the Expiration
Date. If the Commencement Date is specified to occur or otherwise occurs on a
day other than the first day of a calendar month, the Base Monthly Rent for such
partial month shall be prorated.
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SECTION 3.2. ADDITIONAL RENT:
3.2.1. Definitions: For purposes of this Lease, the following
definitions shall apply:
(a) "Additional Rent", for a particular year, shall equal the
product of Tenant's Pro Rata Share Percentage (as set forth in Item 7c of
Article 1), multiplied by the sum of (i) the amount by which all Operating
Expenses for the applicable calendar year exceed Tenant's Operating Expense Stop
(as set forth in Item 7a of Article 1) plus (ii) the amount by which the Real
Estate Taxes for the applicable calendar year exceed Tenant's Real Estate Taxes
Expense Stop as set forth in Item 7b of Article 1).
(b) "Operating Expenses" shall mean (without duplication of any
costs and expenses of which Tenant is responsible under Section 6.1 or
subsection 7.2.1 below) (i) all of the costs and expenses Landlord incurs, pays
or becomes obligated to pay in connection with operating, managing, maintaining,
repairing and insuring the Property for a particular calendar year or portion
thereof as determined by Landlord in accordance with generally accepted
accounting practices, consistently applied, including, if applicable, if the
Property is less than one hundred percent (100%) occupied, all additional costs
and expenses of operating, managing, maintaining, repairing and insuring the
Property to the extent such expenses vary with occupancy (e.g., utilities) which
Landlord determines that would have been paid or incurred during the particular
calendar year or portion thereof if the Property had been one hundred percent
(100%) occupied, (ii) wages, salaries, employee benefits and taxes for personnel
working full or part-time (if part-time then only the allocable portion based on
time spent working at the Property) in connection with the operation,
maintenance and management of the Building and the Common Areas, (iii) costs of
maintenance, repair and care of rail spur areas, if any, shared with other
tenants of the Building, (iv) the annual amortized portion of the cost of any
capital improvement made to the Building by Landlord after the date of this
Lease that is required under any governmental law or regulation, enacted after
the date of this Lease such capital improvements to be amortized over its useful
life together with an amount equal to interest at the rate of twelve percent
(12%) per annum (the "Amortization Rate") on the unamortized balance thereof,
(v) the annual amortized portion of the cost of any capital improvement made to
the Common Areas of the Building after the date of this Lease that is required
under the interpretations or regulations issued from time to time after the date
of this Lease under the provisions of the Americans With Disabilities Act of
1990, 42 V.S.C. ss. 120101-12213 or comparable laws of the State and local
agencies in which the Property is located (collectively, the "Disability Acts"),
amortized over the useful life as Landlord shall reasonably determine, together
with an amount equal to interest at the Amortization Rate on the unamortized
balance thereof, (vi) the amortized portion for the year of the cost of any
labor-saving or energy-saving device or other equipment installed in the
Building after the date hereof, amortized over the useful life as is reasonably
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determined by Landlord, together with an amount equal to interest at the
Amortization Rate on the unamortized balance thereof, (vii) the charges assessed
against the Property pursuant to any contractual covenants or recorded
declaration of covenants or the covenants, conditions and restrictions of any
other similar instrument affecting the Property, and (viii) all other costs and
expenses which would generally be regarded as operating, maintenance, repair and
management costs and expenses, including those which would normally be amortized
over a period not to exceed five (5) years. Operating Expenses shall not include
Real Estate Taxes (hereinafter defined).
(c) "Real Estate Taxes" shall mean all real estate taxes and
other taxes or assessments, which are levied with respect to the Property or any
portion thereof for each calendar year and shall include any tax, surcharge or
assessment which shall be levied in addition to or in lieu of real estate taxes,
the costs and expenses of a consultant, if any, and/or of contesting the
validity or amount of such real estate or other taxes, and shall also include
any rental, excise, sales, transaction, privileged, or other tax or levy,
however denominated, imposed upon or measured by the rental payable hereunder or
on Landlord's business of leasing the Premises, any non-progressive tax on or
measured by gross rentals received from the rental of space in the Building, and
any tax in this transaction or any documents to which Tenant is a party creating
or transferring an interest in the Premises, excepting only Landlord's net
income taxes or franchise taxes (collectively, "Real Estate Taxes").
(d) "Tenant's Operating Expense Stop" shall be the total
Operating Expenses for the applicable calendar year set forth in item 7a of
Article 1 or if no year is so stated, the total dollar amount stated in Item 7a
of Article 1.
(e) "Tenant's Real Estate Taxes Expense Stop" shall be the total
of all Real Estate Taxes for the applicable calendar year set forth in Item 7b
of Article 1 or if no year is so stated, the total dollar amount stated in Item
7b of Article 1.
3.2.2. Payment Obligation: In addition to the Base Rent specified in
this Lease, Tenant shall pay to Landlord the Additional Rent, in each calendar
year or partial calendar year, payable in monthly installments as hereinafter
provided. On or prior to the Commencement Date and at least thirty (30) days
prior to each calendar year thereafter (or as soon thereafter as is reasonably
possible), Landlord shall give Tenant written notice of Tenant's estimated
Additional Rent for the applicable calendar year and the amount of the monthly
installment due for each month during such year. Tenant shall pay to Landlord on
the Commencement Date and on the first day of each month thereafter the amount
of the applicable monthly installment, without notice, demand, offset or
deduction except as otherwise provided in this Lease, provided, however, if the
applicable installment covers a partial month, then such installment shall be
prorated on a daily basis. If Landlord fails to give Tenant notice of its
estimated payments of Additional Rent in accordance with this subsection for any
calendar year, then Tenant shall continue making monthly estimated payments in
accordance with the estimate for the previous calendar year until a new estimate
is provided by Landlord. If Landlord determines that, because of unexpected
increases in Operating Expenses or other reasons, Landlord's estimate of
Operating Expenses was too low, then Landlord shall have the right to give a new
statement of the estimated Additional Rent due from Tenant for the applicable
calendar year or the balance thereof and to xxxx Tenant for any deficiency which
may have accrued during such calendar year or portion thereof, and Tenant shall
thereafter pay monthly installments of Additional Rent based on such new
statement. Within a reasonable time after the end of each calendar year and the
Expiration Date, Landlord shall prepare and deliver to Tenant a statement
showing Tenant's actual Additional Rent for the applicable calendar year,
8
provided that with respect to the calendar year in which the Expiration Date
occurs, (x) that calendar year shall be deemed to have commenced on January 1 of
that year and ended on the Expiration Date (the "Final Calendar Year") and (y)
Landlord shall have the right to estimate the actual Operating Expenses
allocable to the Final Calendar Year. If Tenant's total monthly payments of
Additional Rent for the applicable calendar year are less than Tenant's actual
Additional Rent, then Landlord shall credit the amount of such overpayment to
Tenant, provided, however, with respect to the Final Calendar Year, Landlord
shall pay to Tenant the amount of such excess payments, less any additional
amounts then owed to Landlord. Unless Tenant takes written exception to any item
within thirty (30) days after the furnishing of an annual statement, such
statement shall be considered as final and accepted by Tenant. Any amount due
Landlord as shown on any such statement shall be paid by Tenant within twenty
(20) days after it is furnished to Tenant.
SECTION 3.3. RENT DEFINED AND NO OFFSETS: The Base Monthly Rent, the
Additional Rent and all other sums required to be paid to Landlord by Tenant
under this Lease, including any sums due under the Work Letter, shall constitute
rent and are sometimes collectively referred to as "Rent". Tenant shall pay each
payment of Rent when due, without prior notice or demand therefore and without
deduction or offset except as otherwise expressly provided in this Lease.
SECTION 3.4. LATE CHARGES: If any installment of Base Monthly Rent or
Additional Rent or any other payment of Rent under this Lease shall not be paid
within five (5) days of when due, a "Late Charge" of five percent (5%) of the
amount overdue may be charged by Landlord to defray Landlord's administrative
expense incident to the handling of such overdue payments. Each Late Charge
shall be payable by Tenant on demand of Landlord.
ARTICLE 4
SECURITY DEPOSIT
Tenant will pay Landlord on the date this Lease is executed by Tenant the
Security Deposit set forth in Item 8 of Article 1 as security for the
performance of the terms hereof by Tenant. Tenant shall not be entitled to
interest thereon and Landlord may commingle such Security Deposit with any other
funds of Landlord. It is expressly understood and agreed that the Security
Deposit is not an advance payment of Rent or a measure of Landlord's damages in
case of default by Tenant. If Tenant defaults with respect to any provisions of
this Lease, Landlord may, but shall not be required to, from time to time,
without prejudice to any other remedy, use, apply or retain all or any part of
the Security Deposit for the payment of any Rent or any other sum in default, or
for the payment of any other amount which Landlord may spend or become obligated
to spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default,
including, without limitation, costs and attorneys' fees incurred by Landlord to
recover possession of the Premises. Upon the occurrence of any event of default
by Tenant, Landlord may, from time to time, without prejudice to any other
remedy provided herein or provided by law, use such fund to the extent necessary
to make good any arrears of rentals and any other damage, injury, expense or
liability caused to Landlord by such event of default, and Tenant shall pay to
Landlord on demand the amount so applied in order to restore the security
deposit to its original amount. If Tenant shall fully and faithfully perform
9
every provision of this Lease to be performed by it, the Security Deposit shall
be returned to Tenant within sixty (60) days after the Expiration Date, or the
termination of the Lease pursuant to Sections 8.1, 9.1 or 9.2. Tenant agrees
that it will not assign or encumber or attempt to assign or encumber the monies
deposited with Landlord as the Security Deposit and that Landlord and its
successors and assigns shall not be bound by any such actual or attempted
assignment or encumbrance.
ARTICLE 5
OCCUPANCY AND USE
SECTION 5.1. USE OF PREMISES:
5.1.1. General: The Premises shall, subject to the remaining
provisions of this Section, be used solely for the purpose specified in Item 9
of Article 1. Prior to commencement of any work pursuant to the Work Letter (or
if no work is to be performed pursuant to a Work Letter, then prior to Tenant's
occupancy of the Premises), Tenant shall satisfy itself and Landlord that the
Permitted Use will comply with all applicable zoning ordinances, rules and
regulations. Without in any way limiting the foregoing, Tenant shall not use any
part of the Premises for sleeping quarters, or for the generation of hazardous
or toxic chemical or materials, and will not use, occupy or permit the use or
occupancy of the Premises for any purpose which is forbidden by or in violation
of any zoning ordinance, law, rule or regulation or any other law, ordinance, or
governmental or municipal regulation, order, or certificate of occupancy, or
which may be dangerous to life, limb or property; or permit the maintenance of
any public or private nuisance; or keep any substance or carryon or permit any
operation which might emit offensive odors or conditions from the Premises; or
commit, suffer or permit any waste in or upon the Premises, or at any time sell,
permit the sale of food in any form by or to any of Tenant's agents or employees
or other parties in the Premises except through vending machines in employees'
lunch or rest areas within the Premises for use by Tenant's employees only; or
use an apparatus which might make undue noise or set up vibrations in the
Building; or permit anything to be done which would increase the fire and
extended coverage insurance rate on the Building or contents, and if there is
any increase in such rate by reason of acts of Tenant, then Tenant agrees to pay
such increase upon demand therefore by Landlord. Payment by Tenant of any such
rate increase shall not be a waiver of Tenant's duty to comply herewith. TENANT
SHALL INDEMNIFY AND HOLD LANDLORD HARMLESS FROM ANY AND ALL COSTS, EXPENSES
(INCLUDING REASONABLE ATTORNEYS FEES), CLAIMS AND CAUSES OF ACTION ARISING FROM
TENANT'S FAILURE TO COMPLY WITH SECTION. Outside storage, including without
limitation, storage in non-operative or stationary trucks, trailers and other
vehicles, and vehicle maintenance or repair is prohibited without Landlord's
prior written consent. Tenant shall keep the Premises neat and clean at all
times. Tenant shall promptly correct any violation of a governmental law, rule
or regulation with respect to the Premises to the extent such violation did not
pre-date the original Lease with Tenant. Tenant shall comply with any direction
of any governmental authority having jurisdiction which imposes any duty upon
Tenant or Landlord with respect to the Premises, or with respect to the
occupancy or use thereof and shall comply with all matters of record affecting
the Premises which may impose additional restrictions and/or obligations on the
Landlord or the Tenant.
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5.1.2. Hazardous and Toxic Materials:
(a) Tenant shall not incorporate into, use, release or otherwise
place or dispose of at, in, on, under or near the Premises, the Building or the
Property any hazardous or toxic materials except that Tenant may use and
temporarily store cleaning and office supplies used in the ordinary course of
Tenant's business and then only if (i) such materials are in small quantities,
properly labeled and contained, (ii) such materials are handled and disposed of
off- site [(iii) deleted] (iv) such materials are used, transported, stored,
handled and disposed of off-site in accordance with all applicable governmental
laws, rules and regulations, including without limitation, applicable
Environmental Laws, as defined below. Landlord may condition its consent to
Tenant's storage or use of any hazardous or toxic materials at, on, or in the
Premises other than cleaning and office supplies as permitted above, upon
Tenant's payment of an additional deposit to Landlord, which deposit shall be in
an amount estimated by Landlord as sufficient security for the payment of costs
and expenses arising from or related to the potential release of hazardous or
toxic materials in connection with Tenant's use or occupancy of the Premises,
which deposit, less any costs or expenses incurred or estimated to be incurred
in response to such release, shall be returned to Tenant after removal of the
hazardous or toxic materials and proper closure or remediation of any area
affected by or containing any such hazardous or toxic materials, in compliance
with applicable governmental regulations including, without limitation,
applicable Environmental Laws. Under no circumstances shall Tenant cause or
allow the disposal of hazardous or toxic materials at, in, on, under or about
the Building, the Property, or Premises. Tenant shall not (i) occupy or use the
Premises, nor permit any portion of the Premises to be occupied or used (A)
except in compliance with all laws, ordinances, governmental or municipal
regulations, and orders, including without limitation Environmental Laws, or (B)
in a manner which may be dangerous to life, limb or property; or (ii) cause or
permit the maintenance of any public or private nuisance; or (iii) cause or
permit anything to be done which would in any way increase the rate of fire,
liability, or any other insurance coverage on the Premises, the Building, or its
contents. Landlord shall have the right to periodically inspect, take samples
for testing and otherwise investigate the Premises for the presence of hazardous
or toxic materials. If Tenant ever has knowledge of the presence in the Premises
or the Building or the Property of hazardous or toxic materials which affect the
Premises, Tenant shall notify Landlord thereof in writing promptly after
obtaining such knowledge. For purposes of this Lease, hazardous or toxic
materials shall mean asbestos containing materials (" ACM") and all other
materials, substances, wastes and chemicals classified, defined, listed, or
regulated as, or containing, a "hazardous substance," "hazardous waste," "toxic
substance," "pollutant," "contaminant," "oil," "hazardous material," "solid
waste," and/or "regulated substance" under any Environmental Law. As used
herein, the term "Environmental Laws" shall mean any and all statutes, rules,
regulations, ordinances, orders, permits, licenses, and other applicable legal
requirements, relating directly or indirectly to human health or safety or the
environment, or the presence, handling, treatment, storage, disposal, recycling,
reporting, remediation, investigation, or monitoring of hazardous or toxic
materials. As used herein, the term "release" shall have the same meaning as
under the Comprehensive Environmental Response, Compensation and Liability Act,
as amended, 42 V.S.C. Section 9601 et seq.
11
(b) Prior to commencement of any tenant finish work to be
performed by Landlord, Tenant shall have the right to make such studies and
investigations and conduct such non-destructive or non-invasive environmental
tests and surveys of the Premises as Tenant deems necessary or appropriate,
subject to the conditions that all such studies and investigations shall be
completed prior to the commencement of any tenant finish work to be performed by
landlord. TENANT SHALL RESTORE THE PREMISES AND HOLD LANDLORD HARMLESS FROM AND
INDEMNIFY LANDLORD AGAINST ALL LOSS, DAMAGES, AND CLAIMS RESULTING FROM OR
RELATING TO TENANT'S STUDIES, TESTS AND INVESTIGATIONS. If such study, test,
investigation or survey evidences hazardous or toxic materials which affect the
Premises, Tenant shall have the right to terminate this Lease provided such
right shall be exercised, if at all, prior to the commencement of any tenant
finish work to be performed by Landlord and within five (5) days after Tenant
receives the evidence of hazardous or toxic materials. If Tenant takes occupancy
of the Premises prior to exercising such right, Tenant's right to terminate this
Lease shall be null and void and of no further force and effect. By its
occupancy of the Premises, Tenant agrees that it will accept the Premises in its
AS IS-WHERE IS condition, WITH ALL FAULTS. Tenant acknowledges that Landlord
makes no, and expressly disclaims any, representations and/or warranties,
express or implied, regarding the presence or absence of hazardous or toxic
materials at, in, on, under, or about the Premises, the Building or the
Property, the status of compliance of the Property, the Building or the Premises
or any part of them with Environmental Laws, and Tenant acknowledges and agrees
that any presence of any hazardous or toxic materials shall not constitute an
eviction, actual or constructive, of Tenant nor entitle Tenant to an offset
against its obligations hereunder.
(c) If Tenant or its employees, agents, contractors, invitees, or
visitors shall ever violate the provisions of paragraph (a) of this subsection
5.1.2 or otherwise contaminate the Premises or the Property, then Tenant shall
promptly, diligently, and expeditiously investigate, clean up, remove and
dispose of the material causing the violation, in compliance with all applicable
governmental standards, laws, rules and regulations, including without
limitation, applicable Environmental Laws and then prevalent industry practice
and standards and shall repair any damage to the Premises or the Building or the
Property as soon as practicable. Tenant shall notify Landlord in advance of its
method, time and procedure for any investigation, remediation or monitoring of
hazardous or toxic materials and Landlord shall have the right to require
reasonable changes in such method, time or procedure as Landlord considers
appropriate to prevent interference with any use, occupancy, care, appearance or
maintenance of the Property or the Building, or the rights of other tenants or
to require the same to be done after normal business hours. Under no
circumstances shall any remediation by Tenant leave any hazardous or toxic
materials at, in, on, or under the Premises, the Property, or the Building
without first obtaining the prior written consent of Landlord. If (1) any
lender, insurer, prospective purchaser, governmental agency, or other person
shall ever require testing or Landlord shall ever undertake testing to ascertain
whether or not there has been any release of hazardous or toxic materials due to
the acts or omissions of Tenant, or any of its agents, invitees, licensees, or
employees, and (2) such testing reveals evidence of such releases, then Tenant's
obligations under this subsection 5.1.2(c) shall survive the expiration or
sooner termination of this Lease.
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(d) TENANT AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE
LANDLORD, ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS,
AND ASSIGNS FROM AND AGAINST ALL OBLIGATIONS (INCLUDING REMOVAL AND REMEDIAL
ACTIONS), LOSSES, CLAIMS, SUITS, JUDGMENTS, LIABILITIES (INCLUDING WITHOUT
LIMITATION STRICT LIABILITIES ARISING PURSUANT TO ENVIRONMENTAL LAWS OR
OTHERWISE), PENALTIES, DAMAGES (INCLUDING CONSEQUENTIAL AND PUNITIVE DAMAGES),
COSTS AND EXPENSES (INCLUDING ATTORNEYS' AND CONSULTANTS' FEES AND EXPENSES) OF
ANY KIND OR NATURE WHATSOEVER THAT MAY AT ANY TIME BE INCURRED BY, IMPOSED ON OR
ASSERTED AGAINST SUCH INDEMNITEES DIRECTLY OR INDIRECTLY BASED ON, OR ARISING OR
RESULTING FROM (A) THE ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS OR
TOXIC MATERIALS ON, AT, IN, UNDER, FROM OR NEAR THE PREMISES, THE BUILDING, OR
THE PROPERTY WHICH IS CAUSED OR PERMITTED BY TENANT OR ITS LICENSEES OR INVITEES
OR ANY PERSON ACTING UNDER, ON BEHALF OF, OR AT THE DIRECTION OR PERMISSION OF
TENANT AND/OR (B) OPERATION OR USE OF THE PREMISES OR NON-COMPLIANCE WITH
ENVIRONMENTAL LAWS, OR THE CONDUCT OF OBLIGATIONS HEREUNDER, BY TENANT, OR ITS
LICENSEES OR INVITEES OR ANY PERSON ACTING UNDER, ON BEHALF OF, OR AT THE
DIRECTION OR PERMISSION OF TENANT, AND IN EACH CASE UNDER EITHER (A) OR (B)
REGARDLESS OF WHETHER ATTRIBUTABLE IN WHOLE OR IN PART TO ANY OF THE
INDEMNITEES' SOLE, CONTRIBUTORY, COMPARATIVE, ACTIVE OR PASSIVE NEGLIGENCE OR
STRICT LIABILITY.
(e) LANDLORD AGREES TO DEFEND. INDEMNIFY AND HOLD HARMLESS THE
TENANT, ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS,
AND ASSIGNS FROM AND AGAINST ALL COSTS AND EXPENSES INCURRED IN CONNECTION WITH
THE CLEAN UP AND/OR REMEDIATION OF HAZARDOUS OR TOXIC MATERIALS EXISTING ON, AT,
IN, UNDER THE PREMISES ON OR BEFORE THE COMMENCEMENT DATE OF THE ORIGINAL LEASE.
(f) THE PROVISIONS OF THIS SECTION 5.1.2 SHALL SURVIVE THE
EXPIRATION OR SOONER TERMINATION OF THIS LEASE.
5.1.3. Building: Inspection Survey: Tenant hereby acknowledges that:
(a) Landlord has heretofore engaged one or more independent
contractors (collectively "BIS Consultants") to perform limited building
inspection surveys ("BIS") of the Building to determine if hazardous or toxic
materials exist on, at, or under the Building, and that prior to execution of
this Lease, Tenant has had the opportunity to review and has reviewed the BIS,
and that after execution of this Lease such BIS are made available upon written
13
request and within a reasonable time at the office of the Property Manager, for
Tenant's inspection during normal business hours.
(b) The purpose of the BIS is to provide information pursuant to
29 C.P.R. ss.1910.1001, and no other duties of disclosure or notification are
created or implied by Landlord's providing an opportunity for review of the BIS
by Tenant, indicate the presence or absence of hazardous or toxic materials (as
defined in the Lease) on, at, or under the Building based on the present levels
or content of said hazardous or toxic materials as presently set by the U.S.
Environmental Protection Agency ("EPA") or the U.S. Occupational Safety and
Health Administration ("OSHA"), however, Tenant acknowledges that neither
extensive testing nor sampling of any portion of the Property was performed in
connection with the BIS.
(c) Landlord has been advised by its BIS Consultants that any
such presence of said hazardous or toxic materials does not violate lawful
levels for such materials or require removal or controls beyond those already
implemented by Landlord. Tenant agrees and acknowledges that Landlord makes no
express or implied representations or warranties whatsoever regarding the BIS,
including but not limited to the contents, accuracy, scope or recommendations
contained therein. In addition, Landlord is not aware of any studies,
evaluations, tests, surveys, or investigations concerning the presence of
hazardous or toxic materials at, in, or under the Building other than the BIS on
file with the Property Manager or any information that makes the BIS inaccurate
in any material respect.
(d) Landlord has implemented an Operations and Maintenance
Program ("OMP") with respect to any asbestos containing materials (" ACM") or
presumed asbestos containing material ("PACM") located in the Building, and the
terms of such OMP is set forth in a written document located in the Property
Manager's office. To reduce the risk that any PACM or ACM in the Building will
be improperly disturbed or handled by untrained persons, Tenant agrees and
acknowledges that:
1. Removal of thermal system insulation (TSI) and surfacing
ACM and P ACM (i.e., sprayed-on or troweled-on material, e.g., textured ceiling
paint or fireproofing material);
2. Removal of ACM or PACM that are not TSI or surfacing ACM
and PACM such as vinyl floor covering;
3. Repair and maintenance of operations that are likely to
disturb any ACM or PACM; and
4. Custodial and housekeeping activities where even minimal
contact with any ACM or PACM may occur, shall be undertaken and conducted only
upon thirty (30) days prior written notice to Landlord of such activity and in
full accordance with the OMP. In addition, Tenant shall insure and hereby agrees
that all contractors and subcontractors engaged by Tenant agree in writing to be
bound by and will undertake and conduct all work in full compliance with the
OMP, and Tenant agrees to fully cooperate with Landlord in all reasonable
procedures or actions necessary for the conduct of the OMP.
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TENANT HEREBY ACKNOWLEDGES THAT IT SHALL TAKE ALL APPROPRIATE MEASURES TO ENSURE
THAT THE PRESENCE OF ANY PACM OR ACM PRESENT IN, AT, OR UNDER THE PREMISES WILL
NOT CONSTITUTE AN UNDUE RISK TO ITSELF, ITS EMPLOYEES, AGENTS, CONTRACTORS,
INVITEES, OR LICENSES, AND TENANT WARRANTS AND REPRESENTS THAT, UPON TAKING
POSSESSION OF THE PREMISES, IT HAS FULLY SATISFIED ITSELF THAT THE PREMISES ARE
ACCEPTABLE AND SUITABLE WITH REGARDS TO HAZARDOUS OR TOXIC MATERIALS.
TENANT AGREES TO PROVIDE LANDLORD WITH TRUE AND CORRECT COPIES OF ANY AND ALL
STUDIES, EVALUATIONS, TESTS, SURVEYS, OR INVESTIGATIONS PERFORMED BY OR ON
BEHALF OF TENANT AT ANY TIME INVOLVING THE PREMISES, AND TENANT SHALL NOT
PERFORM ANY INVASIVE OR DESTRUCTIVE INVESTIGATIONS OR ANALYSES WITHOUT
LANDLORD'S PRIOR WRITTEN CONSENT, WHICH CONSENT MAY BE WITHHELD, OR GIVEN
SUBJECT TO ANY CONDITIONS OR RESTRICTIONS, AS LANDLORD SHALL DEEM APPROPRIATE IN
ITS SOLE DISCRETION. IF LANDLORD CONSENTS TO ANY INVASIVE OR DESTRUCTIVE
INVESTIGATION OR ANALYSIS, TENANT SHALL FULLY RESTORE ALL AREAS AND IMPROVEMENTS
WHERE SAMPLES WERE TAKEN OR WORK PERFORMED. REGARDLESS OF THE TYPE OF
INSPECTIONS OR ANALYSES WHICH TENANT MAY CAUSE TO BE PERFORMED, TENANT SHALL
IMMEDIATELY REPAIR ALL DAMAGE RESULTING FROM ANY OF THE SAME AND SHALL INDEMNIFY
AND HOLD LANDLORD, ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS,
SUCCESSORS, AND ASSIGNS HARMLESS FROM AND AGAINST ALL CLAIMS, ACTIONS,
LIABILITIES, DAMAGES, LOSSES, INJURIES OR DEATHS IN CONNECTION WITH OR ARISING
OUT OF OR FROM ANY INSPECTION, TESTING, SAMPLING, OR SIMILAR OR DISSIMILAR
ACTIVITY CONDUCTED BY TENANT, TENANT'S AGENTS OR CONTRACTORS AT, ON, OR UNDER
THE PREMISES FOR HAZARDOUS OR TOXIC MATERIALS, WHETHER UNDER THIS RIDER OR
OTHERWISE UNDER OR IN CONNECTION WITH THE LEASE.
SECTION 5.2. RULES AND REGULATIONS: Tenant will comply with such reasonable
rules and regulations (the "Rules and Regulations") generally applying to
tenants in the Building as may be adopted from time to time by Landlord for the
management, cleanliness of, and the preservation of good order and protection of
property in, the Premises and the Building and the Property. A current copy of
the Rules and Regulations applicable to the Building is attached hereto as
Exhibit C. All such Rules and Regulations are hereby made a part hereof. All
changes and amendments to the Rules and Regulations sent by Landlord to Tenant
in writing and conforming to the foregoing standards shall be carried out and
observed by Tenant. Landlord hereby reserves all rights necessary to implement
and enforce the Rules and Regulations and each and every provision of this
Lease.
SECTION 5.3. ACCESS; RIGHT OF ENTRY: Without being deemed or construed as
committing an actual or constructive eviction of Tenant and without abatement of
Rent, Landlord or its authorized agents shall have the right to enter the
Premises, upon reasonable prior notice (except in emergency situations where no
prior notice is required), to inspect the Premises, to show the Premises to
15
prospective lenders, purchasers or tenants and to fulfill Landlord's obligations
or exercise its rights under this Lease; provided, however, no notice shall be
required to inspect or show the Premises within the six (6) month period prior
to expiration of this Lease. Tenant hereby waives any claim for damages for any
injury or inconvenience or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. Landlord shall have the right to use any and all means which Landlord
may deem proper to enter the Premises in an emergency without liability
therefore.
SECTION 5.4. QUIET POSSESSION: Provided Tenant timely pays Rent and
observes and performs all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have the
quiet possession of the Premises until the Expiration Date, subject to all of
the provisions of this Lease and all laws, encumbrances, liens and restrictive
covenants to which the Property is subject.
ARTICLE 6
UTILITIES AND SERVICES
SECTION 6.1. UTILITIES.
(a) Utilities Generally. Except for Landlord's obligation under
the last two sentences of this Section 6.1, Tenant shall be responsible for
providing all utilities to the Premises. Without limiting the foregoing, Tenant
shall heat the Premises as necessary to prevent any freeze damage to the
Premises or any portion thereof. Landlord shall directly pay for all utilities
used on the Premises which are separately metered, and Tenant shall reimburse
Landlord for the cost of such utilities (if any) together with any maintenance
charges for utilities. The Landlord shall xxxx Tenant directly for its
utilities. Tenant's use of electric current shall at no time exceed the capacity
of the feeders or lines to the Building or the risers or wiring installation of
the Building or the Premises. Landlord shall in no event be liable for any
interruption or failure of, and Tenant shall not be entitled to any abatement or
reduction of Rent by reason of, any interruption or failure of utilities or
other services to the Premises, nor shall any such interruption or failure in
any such utility or service be construed as an eviction (constructive or actual)
of Tenant or as a breach of the implied warranty of suitability, or relieve
Tenant from the obligation to perform any covenant or agreement herein, and in
no event shall Landlord be liable for damage to persons or property (including,
without limitation, business interruption), or in default hereunder, as a result
of any such interruption or failure. However, if any such interruption is caused
by a break or other damage to any utility lines located on the Property and
outside of the Building that are under the exclusive control of Landlord, upon
receipt of written notice of such interruption Landlord shall use reasonable
efforts to perform or cause to be performed the necessary repairs within such
time frame as may be reasonable under the circumstances in order to restore the
affected service to the Premises. In addition, if any such interruption is
caused by a break or other damage to any utility line located on the Property
and controlled by a governmental, private or public utility, Landlord will
16
cooperate with such utility so that the interrupted service is restored to the
Premises as soon as is reasonably possible. Notwithstanding the foregoing if
there is and interruption of a utility for a period of five (5) consecutive days
and such interruption was solely caused by Landlord's gross negligence then
commencing on the sixth (6) day, rent shall be abated until such service is
restored.
(b) Allocation of Electric Charges. Tenant shall pay Tenant's
Electric Share (as hereinafter defined) for the electricity provided to the
Premises. For purposes of this Section, "Tenant's Electric Share" shall be an
amount equal to the fraction with Tenant's Agreed Rentable Area as the numerator
and the amount of rentable square feet in the Original Premises that are
occupied by tenants (including Tenant) from time to time. For example, if Tenant
is the only occupant of the Original Premises, then Tenant's Electric Share
shall be 100%. For purposes of this Section, if the Original Premises is fully
occupied by tenants, then the number of square feet in the denominator shall be
deemed to be 47,068 square feet.
(c) Electric Consumption Baseline. If at any time the total
annual electrical consumption for the Building exceeds the Consumption Baseline
(as hereinafter defined) by more than ten (10%) percent, then Tenant shall have
the right to perform an electrical survey (the "Electrical Survey") of the
Building to determine which occupant(s) are responsible for the increase in
consumption. The Electrical Survey shall be performed by a qualified consultant
reasonably acceptable to Landlord. If the Electrical Survey demonstrates that
Tenant's electrical consumption is equal to or less than Tenant's Electrical
Share of the Consumption Baseline then Tenant shall pay for its electric charges
based on the Stipulated Amount (as hereinafter defined). For example if the
Consumption Baseline is 1,000,000 kilowatt hours and Tenant's Electric Share is
sixty (60%) percent, then if Tenant's electrical consumption is calculated to be
600,000 kilowatt hours or less (according to the Electric Survey), then it shall
be entitled to pay Tenant's Electric Share based on the Stipulated Amount. For
purposes of this Article 6 the "Stipulated Amount" shall be equal to Tenant's
Electric Share multiplied by the Consumption Baseline. If the Electrical Survey
demonstrates that Tenant's electrical consumption is greater than Tenant's
Electric Share of the Consumption Baseline, then Tenant's Electric Share shall
be increased to equal the percentage of the total consumption attributable to
Tenant's usage. In the event Tenant's electrical usage cannot be determined with
reasonable certainty, then Tenant shall continue to pay Tenant's Electrical
Share of the total Building electrical consumption. For purposes of this Article
6, the "Consumption Baseline" shall be determined as follows. At the time
Landlord enters into a lease with any third party tenant (including the present
subtenant occupying a portion of the Premises) for a portion of the Original
Premises, Landlord shall review the prior 12 to 24 months of Tenant's electric
bills and make a reasonable determination of the Consumption Baseline. The
Consumption Baseline shall approximate the amount of electricity which would be
typically consumed at the Original Premises in a twelve (12) month period if the
Original Premises were fully occupied.
SECTION 6.2. Landlord shall be under no obligation to provide any services
to the Building or Premises, except that Landlord shall provide routine
maintenance and cleaning in the Common Areas and utility service lines and
hookups to the Building.
ARTICLE 7
MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS
17
SECTION 7.1. LANDLORD'S OBLIGATION TO MAINTAIN AND REPAIR: Landlord shall
(subject to Section 8.1, Section 8.4, Article 9 and Landlord's rights under
Section 3.2, and except for ordinary wear and tear) maintain load bearing walls
and foundation and repair or replace the roof of the Building when necessary
(with the cost of roof repairs an Operating Expense, and charged to Tenant
pursuant to Section 3.2.1. (b)). Landlord shall (subject to Section 8.1, Section
8.4, Article 9 and Landlord's rights under Section 3.2) maintain the heating and
air conditioning systems and fixtures servicing the Premises (with the cost of
all repairs and/or replacement as an Operating Expense, and charged to Tenant
pursuant to Section 3.2.1. (b)).
Except for maintaining the structural soundness of the load bearing walls
and foundation and the roof of the Building located within the Premises,
Landlord shall not be required to maintain or repair any other portion of the
Premises.
SECTION 7.2. TENANT'S OBLIGATIONS TO MAINTAIN AND REPAIR:
7.2.1. Tenant's Obligation: Subject to Sections 7.1, 8.1 and 8.4 and
Article 9, Tenant shall, at Tenant's sole cost and expense, and with Landlord's
supervision, repair and, as appropriate, replace any damage or injury done to
the Premises caused by Tenant, Tenant's agents, employees, licensees, invitees
or visitors and shall otherwise keep and maintain in good condition, appearance
and repair (including replacements), the Premises, which obligation shall
include, but not be limited to, the maintenance, repair and, as appropriate,
replacement of (a) all security, fire (including fire sprinkler),(b) all
plumbing, sewage, mechanical and electrical systems and fixtures serving and
located within the Premises, and (c) all fixtures, walls, ceilings, floors,
doors, overhead and dock loading doors, windows, plate glass, skylights, lamps,
fans and all other appliances and equipment of every kind and nature located in,
upon or about the Premises. TENANT SHALL INDEMNIFY AND HOLD LANDLORD HARMLESS
FROM ANY AND ALL COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES), CLAIMS
AND CAUSES OF ACTION ARISING FROM OR INCURRED BY AND/OR ASSERTED IN CONNECTION
WITH ANY SUCH MAINTENANCE, REPAIRS, REPLACEMENTS, DAMAGE OR INJURY OR TENANT'S
BREACH OF ITS OBLIGATIONS UNDER THIS SECTION 7.2. All repairs and replacements
performed by or on behalf of Tenant shall be performed in a good and workmanlike
manner reasonably acceptable in all aspects to Landlord, and in accordance with
Landlord's standards applicable to alterations or improvements performed by
Tenant. Tenant shall continue to pay Rent, without abatement, during any period
that repairs or replacements are performed or required to be performed by Tenant
under this Section 7.2. Tenant shall make no repairs to or penetrations of the
roof of the Premises without Landlord's consent.
7.2.2. Rights of Landlord: Any maintenance, repairs or replacements to
be performed by Tenant under Section 7.2.1 above and any service which Tenant is
required to provide under Section 6.1 above may, upon written notice from
Landlord to Tenant, be performed by Landlord for Tenant's benefit, in which
18
event Tenant shall reimburse Landlord for all expenses and costs incurred by
Landlord in performing same plus an additional five percent (5%) of such amount
to compensate Landlord for Landlord's overhead and administrative costs relating
to such work. Landlord shall have the same rights with respect to repairs
performed by Tenant as Landlord has with respect to improvements and alterations
performed by Tenant under subsection 7.3.3. In the event Tenant fails, in the
reasonable judgment of Landlord, to maintain the Premises in good order,
condition and repair, or otherwise satisfy its repair and replacement
obligations under subsection 7.2.1 or fails to provide the services required
under Section 6.1 above, and such failure continues beyond a reasonable period
of time after prior written notice from the Landlord specifying the nature of
the repairs, Landlord shall have the right to perform such maintenance, repairs
and replacements or provide such services, at Tenant's sole cost and expense.
Tenant shall pay to Landlord on demand any such expense incurred by Landlord
plus an additional five percent (5%) of such amount to compensate Landlord for
Landlord's overhead and administrative costs relating to such work, together
with interest thereon at the rate specified in Section 16.9 from the date of
demand until paid. All such amounts owing pursuant to this Section 7.2.2 shall
be deemed Rent hereunder.
SECTION 7.3. IMPROVEMENTS AND ALTERATIONS:
7.3.1. Landlord's Construction Obligation: Landlord's sole
construction obligation under this Lease is as set forth in the Work Letter
attached hereto as Exhibit D.
7.3.2. Alteration of Building by Landlord: New Construction: Landlord
hereby reserves the right and at all times shall have the right to repair,
change, redecorate, alter, improve, modify, renovate, enclose or make additions
to any part of the Property (including structural elements and load bearing
elements within the Premises), to enclose and/or change the arrangement and/or
location of driveways or parking areas or landscaping or other Common Areas of
the Property, and to construct new improvements on adjacent parcels of land, all
without having committed an actual or constructive eviction of Tenant or breach
of the implied warranty of suitability and without an abatement of Rent (the
"Reserved Right"). When exercising the Reserved Right, Landlord will use
reasonable efforts to minimize interference with Tenant's use and occupancy of
the Premises, and use reasonable efforts to maintain (1) same parking for Tenant
and its employees, agents and invites and (2) safe ingress and egress to and
from the Premises.
7.3.3 Alterations, Additions, Imporvements and Installations by
Tenant: Tenant shall not, without the prior written consent of Landlord which
consent shall not be unreasonably make any changes, modifications, alterations,
additions or imporvements (other than Tenant's Improvements under the Work
Letter) to, nor install any equipment or machinary (other than office equipment
and unattached personal property) on, the Premises (all such changes,
modifications, alterations, additions, improvements other than Tenant's
Improvements under the Work Letter and installations approved by Landlord are
herein collectively referred to as "Intallations") if any such Installations
would (i) affect structural or load bearing portions of the Premesis, (ii)
result in a material increase of electrical usage above the normal type and
amount of electrical current to be provided by Landlord, (iii) result in an
increase of Tenant's usage of heating or air conditioning, (iv) adversely impact
19
mechanical, electrical or plumbing systems in the Premises or the Building, (v)
affect areas of the Premises which can be viewed from Common Areas, (vi) require
greater or more difficult cleaning work (e.g., kitchens, reproduction rooms, and
interior glass partitions) or (vii) violate any provision in Article 5 or
Exhibit B attached hereto. All Installations shall be at Tenant's sole cost and
expense. Without in any way limiting Landlord's consent rights, Landlord's
consent shall be conditioned on (a) Landlord approving the contractor or person
making such Installations and approves such contractor's insurance coverage to
be provided in connection with the work, (b) Landlord's supervision of the work
unless Landlord's contractor is used or Landlord elects to do the work, (c)
Landlord approving final and complete plans and specifications for the work and
(d) the appropriate governmental agency, if any, having final and complete plans
and specifications for such work. All work performed by Tenant or its contractor
relating to the Installations shall conform to applicable governmental laws,
rules and regulations, including, without limitation, the Disability Acts. Upon
completion of the Installations, Tenant shall deliver to Landlord "as built"
plans. All Installations that constitute improvements constructed within the
Premises shall be surrendered with the Premises at the expiration or earlier
termination of this Lease, unless Landlord requests that same be removed
pursuant to Section 2.3 of this Lease. TENANT SHALL INDEMNIFY AND SAVE LANDLORD
HARMLESS FROM ANY AND ALL COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES
AND COSTS), DEMANDS, CLAIMS, CAUSES OF ACTION AND LIENS ARISING FROM OR IN
CONNECTION WITH ANY INSTALLATIONS PERFORMED BY OR ON BEHALF OF TENANT (other
than if performed by Landlord), All Installations performed by or on behalf of
Tenant will be performed diligently and in a first-class workmanlike manner, and
in compliance with all applicable laws, ordinances, regulations and rules of any
public authority having jurisdiction over the Building and/or Tenant's and
Landlord's insurance carriers. Landlord will have the right, but not the
obligation, to inspect periodically the work on the Premises and may require
changes in the method or quality of the work.
7.3.4. Approvals: Any approval by Landlord (or Landlord's architect
and/or engineers) of any of Tenant's contractors or Tenant's drawings or plans
or specifications which are prepared in connection with any construction of
improvements (including without limitation, Tenant's Improvements) in the
Premises shall not in any way be construed as or constitute a representation or
warranty of Landlord as to the abilities of the contractor or the adequacy or
sufficiency of such drawings, plans or specifications or the improvements to
which they relate, for any use, purpose or condition.
ARTICLE 8
INSURANCE, FIRE AND CASUALTY
SECTION 8.1. TOTAL OR PARTIAL DESTRUCTION OF THE BUILDING OR THE PREMISES:
Tenant covenants and agrees to immediately give Landlord telephonic and written
notice of any fire or other casualty affecting the Premises or the Building. In
the event that the Building should be totally destroyed by fire or other
casualty or in the event the Building (or any portion thereof) should be so
damaged that rebuilding or repairs cannot be completed, in Landlord's reasonable
opinion, within two hundred seventy (270) days of Landlord's becoming aware of
the applicable fire or casualty, either Landlord or Tenant may, at its option,
terminate this Lease, by written notice to the other, with Tenant's notice to be
20
given within twenty (20) days after being advised by Landlord that the
rebuilding or repairs cannot be completed within two hundred seventy (270) days.
In the event the Building or the Premises should be damaged by fire or other
casualty and, in Landlord's reasonable opinion, the rebuilding or repairs can be
completed within two hundred seventy (270) days of the date of the applicable
fire or casualty, or if the damage should be more serious but neither Landlord
nor Tenant elect to terminate this Lease pursuant to this Section, Landlord
shall, within sixty (60) days after the date of receipt of notice of such
damage, commence to rebuild or repair the Building and the Premises (including
Tenant's Improvements, but only to the extent of insurance proceeds actually
received by Landlord for the repair of Tenant's Improvements), and shall pursue
with reasonable diligence the repair and restoration of the Building and the
Premises to substantially the same condition which existed immediately prior to
the happening of the casualty, except that Landlord shall not be required to
rebuild, repair or replace any part of the furniture, equipment, fixtures,
inventory, supplies or any other personalty or any other improvements (except
Tenant's Improvements, but only to the extent of insurance proceeds actually
received by Landlord for the repair of Tenant's Improvements which shall be
first utilized by Landlord before any proceeds of Landlord's insurance) which
may have been placed by Tenant or other tenants within the Building or at the
Premises. Landlord shall allow Tenant a proportionate diminution of Base Rent
and Additional Rent as may be fair and reasonable under the circumstances during
any period of reconstruction or repair of the Premises due to an occurrence
contemplated in this Section 8.1. Notwithstanding Landlord's restoration
obligation, in the event any mortgagee under a deed of trust, security agreement
or mortgage on the Building should require that the insurance proceeds be used
to retire or reduce the mortgage debt or if the insurance company issuing
Landlord's fire and casualty insurance policy fails or refuses to pay Landlord
the proceeds under such policy, Landlord have no obligation to rebuild and this
Lease shall terminate upon notice by Landlord to Tenant. Any insurance which may
be carried by Landlord or Tenant against loss or damage to the Building or to
the Premises shall be for the sole benefit of the party carrying such insurance
and under its sole control. Upon termination of the Lease pursuant to this
Section, Base Rent and Additional Rent shall be abated from the date of the fire
or casualty.
SECTION 8.2. TENANT'S INSURANCE:
8.2.1. Types of Coverage: Tenant covenants and agrees that from and
after the date of delivery of the Premises from Landlord to Tenant, Tenant will
carry and maintain, at its sole cost and expense, the insurance set forth below:
(a) Liability Insurance: Commercial General Liability Insurance
covering the Premises and Tenant's use thereof against claims for personal or
bodily injury or property damage occurring upon, in or about the Premises
(including contractual indemnity and liability coverage), such insurance to
insure both Tenant and, as additional named insureds, Landlord and its
subsidiaries, directors, agents and employees and the Property Manager, with
limits of not less than $1,000,000.00 per occurrence and $2,000,000.00 in the
aggregate, combined single limit, with respect to injury to any number of
persons and all property damage, without a deductible. If the Agreed Rentable
Area of the Premises is more than 20,000 square feet, then, in addition to and
not in lieu of the above-stated coverage, Tenant shall carry umbrella or
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so-called excess coverage in an amount not less than $1,000,000.00 over Tenant's
base coverage amount with no deductible. This insurance coverage shall extend to
any liability of Tenant arising out of the indemnities provided for in this
Lease.
(b) Property Insurance: Property insurance on an "all-risk"
coverage basis covering all fixtures, equipment and personalty located in the
Premises, in an amount not less than one hundred percent (100%) of full
replacement cost thereof, with a deductible not to exceed $1,000.00. Such policy
will be written in the names of Tenant, Landlord, and any other parties
reasonably designated by Landlord from time to time, as their respective
interests may appear.
(c) Workers Compensation Insurance: Worker's compensation
insurance or any equivalent coverage allowed by law including Employer's
Liability Insurance with limits in amounts not less than $500,000 per accident,
$500,000 per individual, and $500,000 per policy-disease. Said policy shall
insure against and satisfy Tenant's obligations and liabilities under the
worker's compensation laws of the state where the Property is located.
(d) Such other insurance as Landlord may reasonably require from
time to time.
8.2.2. Other Requirements of Insurance: All such insurance will be
issued and underwritten by companies with an A.M. Best rating of not less than
A-VIII licensed to do business in the state where the Premises is located and
will contain endorsements that ( a) such insurance may not lapse with respect to
Landlord or Property Manager or be canceled or amended with respect to Landlord
or Property Manager without the insurance company giving Landlord and Property
Manager at least thirty (30) days prior written notice of such cancellation or
amendment, (b) Tenant will be solely responsible for payment of premiums, (c) in
the event of payment of any loss covered by such policy, Landlord or Landlord's
designees will be paid first by the insurance company for Landlord's loss and
(d) Tenant's insurance is primary in the event of overlapping coverage which may
be carried by Landlord.
8.2.3. Proof of Insurance: Tenant shall deliver to Landlord duplicate
originals of certificates (policies at Landlord's request) of insurance required
by this Section 8.2 prior to the Commencement Date and duly executed originals
of binders of such insurance evidencing in-force coverage, within ten (10) days
prior to the commencement of construction of Tenant's Improvements. Further,
Tenant shall deliver to Landlord renewals thereof at least thirty (30) days
prior to the expiration of the respective policy terms.
SECTION 8.3. LANDLORD'S INSURANCE:
8.3.1. Types of Coverage: Landlord covenants and agrees that from and
after the date of delivery of the Premises from Landlord to Tenant, Landlord
will carry and maintain the insurance set forth below:
(a) Liability Insurance: Commercial General Liability Insurance
covering the Building and all Common Areas, insuring against claims for personal
or bodily injury or property damage occurring upon, in or about the Building or
Common Areas with limits of not less than $1,000,000.00 per occurrence and
22
$2,000,000.00 in the aggregate, combined single limit, with respect to injury to
any number of persons and property damage. This insurance coverage shall extend
to any liability of Landlord arising out of the indemnities provided for in this
Lease.
(b) Property Insurance: Landlord shall at all times during the
term hereof maintain in effect a policy or policies covering the Building
(excluding property required to be insured by Tenant) on an "all risk" basis in
such amounts as Landlord may from time to time determine, providing protection
against perils included within the standard form of "all risk" insurance policy
promulgated in the State where the Property is located, and such other risks as
Landlord may from time to time determine and with any such deductibles as
Landlord may from time to time determine.
8.3.2. Self-Insurance: Any insurance provided for in subsection 8.3.1
may be effected by self-insurance or by a policy or policies of blanket
insurance covering additional items or locations or assureds, provided that the
requirements of this Section 8.3 are otherwise satisfied. Tenant shall have no
rights in any policy or policies maintained by Landlord.
SECTION 8.4. WAIVER OF SUBROGATION:
LANDLORD AND TENANT EACH HEREBY WAIVE ANY RIGHTS THEY MAY HAVE AGAINST THE OTHER
(INCLUDING, BUT NOT LIMITED TO, A DIRECT ACTION FOR DAMAGES) ON ACCOUNT OF ANY
LOSS OR DAMAGE OCCASIONED TO LANDLORD OR TENANT, AS THE CASE MAY BE (WHETHER OR
NOT SUCH LOSS OR DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS
CONDUCT, ACTS OR OMISSIONS OF LANDLORD OR TENANT OR THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR INVITEES), to their respective property, the
Premises, its contents or to any other portion of the Building or the Property
arising from any risk covered by the current form of property insurance and fire
and extended coverage insurance promulgated by the applicable insurance board or
commission in the State where the Property is located and required to be carried
by Tenant and Landlord, respectively under subsections 8.2.1 and 8.3.1 of this
Lease. If a party waiving rights under this Section is carrying an "all-risk"
coverage insurance policy in the promulgated form used in the state where the
Property is located and an amendment to such promulgated form is passed, such
amendment shall be deemed not a part of such promulgated form until it applies
to the policy being carried by the waiving party. The parties hereto each, on
behalf of their respective insurance companies insuring the property of either
Landlord or Tenant against any such loss, waive any right of subrogation that
Landlord or Tenant or their respective insurers may have against the other party
or their respective officers, directors, employees, agents or invitees and all
rights of their respective insurance companies based upon an assignment from its
insured. Each party to this Lease agrees immediately to give to each such
insurance company written notification of the terms of the mutual waivers
contained in this Section, and to have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverage
by reason of said waivers. The foregoing waiver shall be effective whether or
not the parties maintain the required insurance.
SECTION 8.5. INDEMNITY:
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8.5.1. Tenant's Indemnity: TENANT COVENANTS AND AGREES TO INDEMNIFY
AND HOLD LANDLORD, PROPERTY MANAGER AND THEIR RESPECTIVE PARTNERS, TRUST
MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS HARMLESS FROM ALL CLAIMS,
DEMANDS, ACTIONS, DAMAGES, LOSS, LIABILITIES, JUDGMENTS, COSTS AND EXPENSES,
INCLUDING WITHOUT LIMITATION, ATTORNEYS' FEES AND COURT COSTS (EACH A "CLAIM"
AND COLLECTIVELY THE "CLAIMS") WHICH (i) ARE SUFFERED BY, RECOVERED FROM OR
ASSERTED AGAINST LANDLORD, (ii) ARE NOT PAID BY INSURANCE CARRIED BY TENANT OR
LANDLORD (WITHOUT IN ANY WAY AFFECTING THE REQUIREMENTS OF OR LANDLORD'S RIGHTS
UNDER SECTION 8.2 AND (iii) ARISE FROM OR IN CONNECTION WITH (a) THE USE OR
OCCUPANCY OF THE PREMISES AND/OR ANY ACCIDENT, INJURY OR DAMAGE OCCURRING IN OR
AT THE PREMISES OR (b) ANY BREACH BY TENANT OF ANY REPRESENTATION OR COVENANT IN
THIS LEASE; PROVIDED, HOWEVER, SUCH INDEMNIFICATION OF LANDLORD BY TENANT SHALL
NOT INCLUDE ANY CLAIM WAIVED BY LANDLORD UNDER SECTION 8.4 HEREOF, ANY CLAIM TO
THE EXTENT CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR ANY
CLAIM RELATING TO HAZARDOUS OR TOXIC MATERIALS EXCEPT TO THE EXTENT SUCH CLAIM
ARISES OUR OF A BREACH BY TENANT OF ANY OF THE PROVISIONS OF SUBSECTION 5.1.2.
8.5.2. Landlord's Indemnity: LANDLORD WILL INDEMNIFY AND HOLD TENANT
AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS HARMLESS FROM ALL CLAIMS WHICH
ARE SUFFERED BY, RECOVERED FROM OR ASSERTED AGAINST TENANT AND WHICH ARE NOT
PAID BY PROCEEDS OF INSURANCE CARRIED BY LANDLORD OR TENANT AND WHICH ARISE FROM
OR IN CONNECTION WITH (a) THE USE OF THE COMMON AREAS AND/OR ANY ACCIDENT,
INJURY OR DAMAGE OCCURRING IN OR ON THE COMMON AREAS OR (b) ANY BREACH BY
LANDLORD OF ANY REPRESENTATION OR COVENANT IN THIS LEASE; PROVIDED, HOWEVER,
SUCH INDEMNIFICATION OF TENANT BY LANDLORD SHALL NOT INCLUDE ANY CLAIM WAIVED BY
TENANT UNDER SECTION 8.4 HEREOF, ANY CLAIM TO THE EXTENT CAUSED BY THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF TENANT OR ANY CLAIM RELATING TO HAZARDOUS OR
TOXIC MATERIALS EXCEPT TO THE EXTENT SUCH CLAIM ARISES OUT OF A BREACH BY
LANDLORD OF ANY OF THE PROVISIONS OF SUBSECTION 5.1.2.
ARTICLE 9
CONDEMNATION
SECTION 9.1. CONDEMNATION OF THE PROPERTY; If the Property or any portion
thereof that, in Landlord's reasonable opinion, is necessary to the continued
efficient and/or economically feasible use of the Property shall be taken or
condemned in whole or in part for public purposes, or sold to a condemning
24
authority in lieu of taking, then the term of this Lease shall, at the option of
Landlord upon written notice to Tenant, forthwith cease and terminate.
SECTION 9.2. CONDEMNATION OF PREMISES: In the event that all or
substantially all of the Premises are taken or condemned or sold in lieu thereof
or Tenant will be unable to use a substantial portion of the Premises for a
period exceeding two hundred seventy (270) consecutive days by reason of a
temporary taking, either Landlord or Tenant may terminate this Lease by
delivering written notice thereof to the other within ten (10) business days
after the taking, condemnation or sale in lieu thereof.
SECTION 9.3. CONDEMNATION WITHOUT TERMINATION: If upon a taking or
condemnation or sale in lieu of the taking of all or less than all of the
Property which gives either Landlord or Tenant the right to terminate this Lease
pursuant to Section 9.1 or 9.2 and neither Landlord nor Tenant elect to exercise
such termination right, then this Lease shall continue in full force and effect,
provided that, if the taking, condemnation or sale includes any portion of the
Premises or the Building, the Base Rent and Additional Rent shall be
redetermined on the basis of the remaining square feet of Agreed Rentable Area
of the Premises or the Building. Landlord, at Landlord's sole option and
expense, shall restore and reconstruct the Building to substantially its former
condition to the extent that the same may be reasonably feasible, but such work
shall not be required to exceed the scope of the work done by Landlord in
originally constructing the Building, nor shall Landlord in any event be
required to spend for such work in an amount in excess of the amount received by
Landlord as compensation or damages (in excess of amounts retained by the
mortgagee of the Property relating to the property taken) for the part of the
Building or the Premises so taken.
SECTION 9.4. CONDEMNATION PROCEEDS: Landlord shall receive the entire award
(which shall include sales proceeds) payable as a result of a condemnation,
taking or sale in lieu thereof. Tenant hereby expressly assigns to Landlord any
and all right, title and interest of Tenant now or hereafter arising in and to
any such award. Tenant shall, however, have the right to recover from such
authority through a separate award which does not reduce the Landlord's award,
any compensation as may be awarded to Tenant on account of moving and relocation
expenses and depreciation to and removal of Tenant's physical property and for
any other expenditure of Tenant in connection with the Premises
ARTICLE 10
LIENS
Tenant shall keep the Premises free from all liens arising out of any work
performed, materials furnished or obligations incurred by or for Tenant and
TENANT SHALL INDEMNIFY AND HOLD LANDLORD HARMLESS FROM ANY AND ALL CLAIMS,
CAUSES OF ACTION, DAMAGES, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEE AND
COSTS), ARISING FROM OR IN CONNECTION WITH ANY SUCH LIENS. In the event that
Tenant shall not, within ten (10) days following notification to Tenant of the
imposition of any such lien, cause the same to be released of record by payment
or the posting of a bond in amount, form and substance acceptable to Landlord,
25
Landlord shall have, in addition to all other remedies provided herein and by
law, the right but not the obligation, to cause the same to be released by such
means as it shall deem proper, including payment of or defense against the claim
giving rise to such lien. All amounts paid or incurred by Landlord in connection
therewith shall be paid by Tenant to Landlord on demand and shall bear interest
from the date of demand until paid at the rate set forth in Section 16.9.
Nothing in this Lease shall be deemed or construed in any way as constituting
the consent or request of Landlord, express or implied, by inference or
otherwise, to any contractor, subcontractor, laborer or materialman for the
performance of any labor or the furnishing of any materials for any specific
improvement, alteration or repair of or to the Building or the Premises or any
part thereof, nor as giving Tenant any right, power or authority to contract for
or permit the rendering of any services or the furnishing of any materials that
would give rise to the filing of any mechanic's or other liens against the
interest of Landlord in the Property or the Premises.
ARTICLE 11
TAXES ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, prior to their becoming delinquent,
any and all taxes and assessments levied against, and any increases in Real
Estate Taxes as a result of, any personal property or trade or other fixtures
placed by Tenant in or about the Premises and any improvements (excluding
Tenant's Improvements) constructed in the Premises by or on behalf of Tenant. In
the event Landlord, at its sole election, pays any such additional taxes, or
increases, Tenant will, within ten (10) days after demand, reimburse Landlord
for the amount thereof. Such amounts shall bear interest from the date paid by
Landlord until reimbursed by Tenant at the rate set forth in Section 16.9.
ARTICLE 12
SUBLETTING AND ASSIGNING
SECTION 12.1. SUBLEASE AND ASSIGNMENT: Tenant shall not assign this Lease,
or allow it to be assigned, in whole or in part, by operation of law or
otherwise (it being agreed that for purposes of this Lease, assignment shall
include, without limitation the transfer of a majority interest of stock,
partnership or other forms of ownership interests, merger or dissolution) or
mortgage or pledge the same, or sublet the Premises or any part thereof or
permit the Premises to be occupied by any firm, person, partnership or
corporation or any combination thereof, other than Tenant, without the prior
written consent of Landlord. which consent shall not be unreasonably withheld or
delayed. Tenant agrees that Landlord's failure to consent shall not be deemed
reasonable if, in Landlord's opinion, among other things: (i) Tenant is in
default under this Lease; (ii) the proposed sublease or assignment would tend to
result in the violation of any applicable law, ordinance or regulation; (iii)
the nature of the business of any assignee, sublessee or transferee (a) is
inconsistent with any other tenant leases now or hereafter entered into by
Landlord containing provisions against Landlord leasing space in the Building
for certain uses, or (b) may have an adverse impact upon the manner in which the
Building is operated or with the reputation of the Building; (iv) the character
of the assignee, sublessee or transferee may have any adverse impact upon the
reputation of the Building; (v) the sublessee, assignee or transferee is not
26
sufficiently financially responsible to perform its obligations under the
proposed sublease or assignment; (vi) the assignee, sublessee or transferee (a)
is a tenant or occupant in the Building, (b) is a governmental entity; or (c) is
any entity with whom Landlord is currently negotiating for space in the
Building, even though in any of the foregoing circumstances (1) through (vi) the
potential assignee, sublessee or transferee may have a good credit rating. In no
event shall any assignment or sublease ever release Tenant from any obligation
or liability hereunder. No assignee or sublessee of the Premises or any portion
thereof may assign or sublet the Premises or any portion thereof. Consent by
Landlord to one or more assignments or sublettings shall not operate as a waiver
of Landlord's rights as to any subsequent assignments and/or sublettings. All
reasonable legal fees and expenses incurred by Landlord in connection with any
assignment or sublease proposed by Tenant will be the responsibility of Tenant
and will be paid by Tenant within twenty (20) days of receipt of an invoice from
Landlord. In addition, Tenant will pay to Landlord an administrative overhead
fee of not more than $500.00 in consideration for Landlord's review of any
requested assignment or sublease.
SECTION 12.2. LANDLORD'S RIGHTS RELATING TO ASSIGNEE OR SUBTENANT: If this
Lease or any part hereof is assigned or the Premises or any part thereof are
sublet, Landlord may at its option collect directly from such assignee or
sublessee all rents becoming due to Tenant under such assignment or sublease and
apply such rent against any sums due to Landlord by Tenant hereunder, with
Landlord retaining any excess rent {in excess of Rent Due under this Lease plus
out of pocket costs actually incurred by Tenant in making the transfer for
Landlord's sole benefit. Tenant hereby authorizes and directs any such assignee
or sublessee to make such payments of rent directly to Landlord upon receipt of
notice from Landlord, and Tenant agrees that any such payments made by an
assignee or sublessee to Landlord shall, to the extent of the payments so made,
be a full and complete release and discharge of rent owed to Tenant by such
assignee or sublessee. No direct collection by Landlord from any such assignee
or sublessee shall be construed to constitute a novation or a release of Tenant
or any guarantor of Tenant from the further performance of its obligations
hereunder. Receipt by Landlord of rent from any assignee, sublessee or occupant
of the Premises or any part thereof shall not be deemed a waiver of the above
covenant in this Lease against assignment and subletting or a release of Tenant
under this Lease. In the event that, following an assignment or subletting, this
Lease or the rights and obligations of Tenant hereunder are terminated for any
reason, including without limitation in connection with default by or bankruptcy
of Tenant (which, for the purposes of this Section 12.2, shall include all
persons or entities claiming by or through Tenant), Landlord may, at its sole
option, consider this Lease to be thereafter a direct lease to the assignee or
subtenant of Tenant upon the terms and conditions contained in this Lease.
ARTICLE 13
SUBORDINATION AND TENANT'S ESTOPPEL CERTIFICATE
SECTION 13.1. SALE OF THE PROPERTY: In the event of a sale or conveyance by
Landlord of the Property, the same shall operate to release Landlord from any
and all liability under this Lease arising after the date of such sale, provided
27
that if a Security Deposit has been paid by Tenant, Landlord shall not be
released from liability with respect thereto unless Landlord transfers or
credits the Security Deposit to the applicable purchaser.
SECTION 13.2. SUBORDINATION, ATTORNMENT AND NOTICE: This Lease is subject
and subordinate to any lease wherein Landlord is the tenant and to the liens of
any and all mortgages or deeds of trust, regardless of whether such lease,
mortgages or deeds of trust now exist or may hereafter be created with regard to
all or any part of the Property, and to any and all advances to be made
thereunder, and to the interest thereon, and all modifications, consolidations,
renewals, replacements and extensions thereof. Tenant also agrees that any
lessor, mortgagee or trustee may elect (which election shall be revocable) to
have this Lease superior to any lease or lien of its mortgage or deed of trust,
and in the event of such election and upon notification by such lessor,
mortgagee or trustee to that effect, this Lease shall be deemed superior to the
said lease, mortgage or deed of trust, whether this Lease is dated prior to or
subsequent to the date of said lease, mortgage or deed of trust. Tenant shall,
in the event of the sale or assignment of Landlord's interest in the Premises
(except in a sale-leaseback financing transaction), or in the event of a
termination of any lease in a sale-leaseback financing transaction wherein
Landlord is the lessee, attorn to and recognize such purchaser, assignee or
mortgagee as Landlord under this Lease. Tenant shall, in the event of any
proceedings brought for the foreclosure of, or in the event of the exercise of
the power of sale under, any mortgage or deed of trust covering the Premises,
attorn to and recognize purchaser at such sale, assignee, or mortgagee, as the
case may be, as Landlord under this Lease. Tenant shall not seek to enforce any
remedy it may have for any default on the part of Landlord without giving
written notice specifying the default in reasonable detail to any lessor,
mortgagee or trustee whose address has been delivered to Tenant, and affording
such lessor, mortgagee or trustee a reasonable opportunity to perform and/or
cure Landlord's default. Tenant further agrees that any lessor, mortgagee,
trustee or purchaser at foreclosure shall not be liable for any acts of
Landlord, shall not be liable for the Security Deposit if not actually received
by any such party, be bound by any amendment of this Lease to which it did not
consent in writing or be obligated to recognize Tenant's payment of any Rent
which is paid to Landlord more than thirty (30) days in advance of its due date.
The above subordination and attornment clauses shall be self-operative and no
further instruments of subordination or attornment need be required by any
mortgagee, trustee, lessor, purchaser or assignee. In confirmation thereof,
Tenant agrees that, upon the request of Landlord, or any such lessor, mortgagee,
trustee, purchaser or assignee, Tenant shall execute and deliver whatever
instruments may be required for such purposes and to carry out the intent of
this Section 13.2. Notwithstanding the foregoing, Tenant's agreement to
Subordinate and/or attorn is expressly conditioned on any such mortgagee
agreement not to disturb this Lease provided Tenant's not in default.
SECTION 13.3. TENANT'S ESTOPPEL CERTIFICATE: Tenant shall, within ten (10)
days of the receipt of a request of Landlord or any mortgagee of Landlord,
without additional consideration, deliver an estoppel certificate, consisting of
reasonable statements required by Landlord, any mortgagee or purchaser of any
interest in the Property, which statements may include but shall not be limited
to the following: to Tenant's knowledge: the commencement date of this Lease;
the amount of any security deposit; that this Lease is in full force and effect,
with rental paid through the current date specified by Tenant and that Tenant is
not in default; that this Lease has not been modified or amended; that Landlord
is not in default and has fully performed all of its obligations hereunder. If
Tenant is unable to make any of the statements contained in the estoppel
28
certificate because the same is untrue, Tenant shall with specificity state the
reason why such statement is untrue. Tenant shall, if requested by Landlord or
any such mortgagee, deliver to Landlord a fully executed instrument in form
reasonably satisfactory to Landlord evidencing the agreement of Tenant to the
mortgage or other hypothecation by Landlord of the interest of Landlord
hereunder.
ARTICLE 14
DEFAULT
SECTION 14.1. DEFAULTS BY TENANT: The occurrence of any of the events
described in subsections 14.1.1 through 14.1.7 shall constitute a default and
breach of this Lease by Tenant.
14.1.1. Failure to Pay Rent: Any failure by Tenant to pay Rent or to
make any other payment required to be made by Tenant hereunder when due, no
notice being required for default in payment of Rent.
14.1.2. Failure to Perform: Except for failure covered by subsection
14.1.1 or 14.1.3, any failure by Tenant to observe and perform any provision of
this Lease to be observed or performed by Tenant where such failure continues
for fifteen (15) days after written notice to Tenant, provided that if such
failure cannot be cured within said fifteen (15) day period, Tenant shall not be
in default hereunder so long as Tenant commences curative action within such
fifteen (15) day period, diligently and continuously pursues the curative
action, and fully and completely cures the failure within thirty (30) days after
such written notice to Tenant.
14.1.3. Continual Failure to Perform: The third failure by Tenant to
perform and observe a particular provision of this Lease to be observed or
performed by Tenant (other than the failure to pay Rent, which in all instances
will be covered by subsection 14.1.1), no notice or cure period being required
or afforded for any such third failure.
14.1.4 Bankruptcy, Insolvency, Etc: Tenant or any Guarantor of
Tenant's obligations hereunder, cannot meet its obligations as they become due;
or is declared insolvent according to any law; or an assignment of Tenant's or
Guarantor's property is made for the benefit of creditors; or a receiver or
trustee is appointed for Tenant or Guarantor under this Lease is levied on under
execution or under other legal process; or any petition is filed by or against
Tenant or Guarantor to declare Tenant or Guarantor's bankrupt or to delay,
reduce or modify Tenant's or Guarantor's debts or obligations; or any petition
is filed or oter action taken to reorganize or modify Tenant's or Guarantor's
capital structure if either Tenant or Guarantor be a corporation or other entity
(provided that no such levy, execution, legal process or petition filed against
Tenant or Guarantor shall constitute a breach of this Lease if Tenant or
Guarantor shall vigorously contest the same by appropriate proceedings and shall
remove or vacate the same within sixty (60) days from the date of its creation,
service or filing).
14.1.5. Abandonment: Vacation: The abandonment of the Premises by
Tenant, or the vacating of the Premises by Tenant, which shall be conclusively
presumed if Tenant is absent from the Premises for ten (10) consecutive days or
29
more or if Tenant shall fail to move into or take possession of the Premises
within ten (10) days after the date on which Rent is to commence under the terms
of this Lease provided the Tenant shall not be in default so long as it (i)
continues to a rent and all other sums due hereunder and (ii) pays any and all
costs or increase in costs caused by its abandonment or vacation of the
Premises.
14.1.6. Loss of Right to do Business: If Tenant fails to maintain its
right to do business in the state in which the Property is located or fails to
pay any applicable annual franchise or other applicable taxes or assessments as
and when the same become finally due and payable.
14.1.7. Dissolution or Liquidation: Tenant dissolves or liquidates or
otherwise fails to maintain its corporate or partnership structure, as
applicable.
SECTION 14.2. REMEDIES OF LANDLORD: Upon the occurrence of any default by
tenant specified in Section 14.1, Landlord, at its option, may in addition to
all other rights and remedies provided herein or at law or in equity, exercise
one or more of the remedies set forth in subsections 14.2.1, 14.2.2 or 14.2.3.
14.2.1. Termination of the Lease: Upon the occurrence of a default
hereunder, Landlord may terminate this Lease and Tenant's right of possession of
the Premises by giving written notice thereof to Tenant (whereupon all
obligations and liabilities of Landlord hereunder shall terminate) and, without
further notice and without liability, repossess the Premises. Landlord shall be
entitled to recover all loss and damage Landlord may suffer by reason of such
termination, whether through inability to relet the Premises on satisfactory
terms or otherwise, including without limitation, the following (without
duplication of any element of damages):
(a) accrued Rent to the date of termination and Late Charges,
plus interest thereon at the rate established under Section 16.9 from the date
due through the date paid or date of any judgment or award by any court of
competent jurisdiction, the unamortized cost of Tenant's Improvements, brokers'
fees and commissions, attorneys' fees, moving allowances, and any other costs
incurred by Landlord in connection with making or executing this Lease, the cost
of recovering the Premises and the costs of reletting the Premises (including
without limitation advertising costs, brokerage fees, leasing commissions,
reasonable attorneys' fees, and refurbishing costs and other costs in readying
the Premises for a new tenant); and
(b) the present value of the Rent (discounted at a rate of
interest equal to six percent (6%) per annum (the "Discount Rate") that would
have accrued under this Lease for the balance of the Lease term but for such
termination, reduced by the reasonable fair market rental value of the Premises
for such balance of the Lease term (determined from the present value of the
actual base rents, discounted at the Discount Rate, received and to be received
from Landlord's reletting of the Premises or, if the Premises are not relet, the
base rents, discounted at the Discount Rate, that would be received from a
comparable lease and comparable tenant for a comparable term and taking into
account among other things, the condition of the Premises, market conditions and
the period of time the Premises may reasonably remain vacant before Landlord is
able to re-lease the same to a suitable replacement tenant, it being agreed that
30
Landlord shall have no obligation to relet or attempt to relet the Premises
except as otherwise required by law); and
(c) any other costs or amounts necessary to compensate Landlord
for its damages.
14.2.2. Repossession and Re-Entry: Upon the occurrence of a default
hereunder, Landlord may, without judicial process, immediately terminate
Tenant's right of possession of the Premises (whereupon all obligations and
liability of Landlord hereunder shall terminate), but not terminate this Lease,
and, without notice, demand or liability, enter upon the Premises or any part
thereof, take absolute possession of the same, expel or remove Tenant and any
other person or entity who may be occupying the Premises and change the locks
and other security systems. If Landlord terminates Tenant's possession of the
Premises under this subsection 14.2.2, (i) Landlord shall have no obligation
whatsoever to tender to Tenant a key or other form of access for the new locks
and other security systems installed in the Premises, (ii) Tenant shall have no
further right to possession of the Premises, and (iii) Landlord shall have no
obligation whatsoever to relet or attempt to relet the Premises. Landlord may,
however, at its sole option relet the Premises or any part thereof for such
terms and such rents as Landlord may in its sole discretion elect. If Landlord
elects to relet the Premises, rent received by Landlord from such reletting
shall be applied first, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord (in such order as Landlord shall designate),
second, to the payment of any reasonable cost of such reletting, including,
without limitation, refurbishing costs, reasonable attorneys' fees, advertising
costs, brokerage fees and leasing commissions, and third, to the payment of Rent
due and unpaid hereunder (in such order a Landlord shall designate), and Tenant
shall satisfy and pay to Landlord any deficiency upon demand therefor from time
to time. Landlord shall not be responsible or liable for any failure to relet
the Premises or any part thereof or for any failure to collect any rent due upon
any such reletting. No such re-entry or taking of possession of the Premises by
Landlord shall be construed as an election on Landlord's part to terminate this
Lease unless a written notice of such termination is given to Tenant pursuant to
subsection 14.2.1. If Landlord relets the Premises, either before or after the
termination of this Lease, all such rentals received from such lease shall be
and remain the exclusive property of Landlord, and Tenant shall not be, at any
time, entitled to recover any such rental. Landlord may at any time after a
reletting elect to terminate this Lease. To the maximum extent permitted by
applicable laws, Landlord is under no obligation to mitigate its damages by
reletting the Premises, and Tenant hereby waives any requirement of Landlord to
mitigate its damages by reletting the Premises. In the event Landlord is
required, by Law, to mitigate its damages, Tenant agrees and acknowledges that
the following actions of the Landlord constitute "objectively reasonable
efforts:"
(a) within forty-five (45) days after Tenant no longer occupies
the Premises, placing a "For Lease" sign at the Premises; placing the Premises
on Landlord's inventory of available space, if any; making Landlord's inventory
available to area brokers; advertising the Premises for lease in a suitable
trade journal; and showing the Premises to prospective tenants who request to
see it.
14.2.3. Cure of Default: Landlord may enter upon the Premises, without
having any liability therefore, and do whatever Tenant is obligated to do under
the terms of this Lease and Tenant agrees to reimburse Landlord on demand for
31
any expenses which Landlord may incur in 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, UNLESS SOLELY
CAUSED BY THE GROSS NEGLIGENCE QB WILLFUL MISCONDUCT OF LANDLORD.
14.2.4. Continuing Obligations: No repossession of or re-entering upon
the Premises or any part thereof pursuant to subsection 14.2.2 or 14.2.3 of this
Section or otherwise and no reletting of the Premises or any part thereof
pursuant to subsection 14.2.2 shall relieve Tenant or any Guarantor of its
liabilities and obligations hereunder, all of which shall survive such
repossession or re-entering. In the event of any such repossession of or
re-entering upon the Premises or any part thereof by reason of the occurrence of
a default, Tenant will continue to pay to Landlord Rent required to be paid by
Tenant.
14.2.5. Cumulative Remedies: No right or remedy herein conferred upon
or reserved to Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy given hereunder or now or hereafter existing at law
or in equity or by statute. In addition to the other remedies provided in this
Lease, Landlord shall be entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements conditions or provisions of this
Lease, or to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any other remedy
allowed to Landlord at law or in equity.
SECTION 14.3. DEFAULTS BY LANDLORD: Landlord shall be in default under this
Lease if Landlord fails to perform any of its obligations hereunder and said
failure continues for a period of thirty (30) days after Tenant delivers written
notice thereof to Landlord (to each of the addresses required by this Section)
and each mortgagee who has a lien against any portion of the Property and whose
name and address has been provided to Tenant, provided that if such failure
cannot reasonably be cured within said thirty (30) day period, Landlord shall
not be in default hereunder if the curative action is commenced within said
thirty (30) day period and is thereafter diligently pursued until cured. In no
event shall (i) Tenant claim a constructive or actual eviction or that the
Premises have become unsuitable hereunder or (ii) a constructive or actual
eviction or breach of the implied warranty of suitability be deemed to have
occurred under this Lease, prior to the expiration of the notice and cure
periods provided under this Section 14.3. Any notice of a failure to perform by
Landlord shall be sent to Landlord at the addresses and to the attention of the
parties set forth in Item 14 of Article 1. Any notice of a failure to perform by
Landlord not sent to Landlord at all addresses and/or to the attention of all
parties required under this Section and to each mortgagee who is entitled to
notice or not sent in compliance with Article 15 shall be of no force or effect.
SECTION 14.4. LANDLORD'S LIABILITY:
14.4.1. Limitations of Recourse: Tenant is granted no contractual
right of termination by this Lease, except to the extent and only to the extent
set forth in Sections 8.1 and 9.2, or in any Rider which may be attached hereto.
If Tenant shall recover a money judgment against Landlord, such judgment shall
be satisfied only out of the right, title and interest of Landlord in the
32
Property as the same may then be encumbered and Landlord, its trust managers,
partners, officers, employees and shareholders shall not be liable for any
deficiency or other property of Landlord be levied for execution. In no event
shall Landlord be liable to Tenant for consequential or special damages by
reason of a failure to perform (or a default) by Landlord hereunder or
otherwise.
14.4.2. Limitations on Landlord's Liability: Unless covered by Section
8.5.2, Landlord shall not be liable to Tenant for any claims, actions, demands,
costs, expenses or damage or liability of any kind arising from (i) the use,
occupancy or enjoyment of the Premises by Tenant or any person therein or
holding under Tenant or by or through the acts or omissions of any of their
respective employees, officers, agents, invitees, or contractors; (ii) fire,
explosion, falling sheetrock, gas, electricity, water, rain, or snow, or
dampness or leaks in any part of the Premises, (iii) the pipes, appliances or
plumbing works or from heating, ventilation or air conditioning equipment, the
roof, street, or subsurface, or (iv) tenants or any persons either in the
Premises or elsewhere in the Building (other than Common Areas), or by occupants
of Property adjacent to the Building or Common Areas, or by the public or by the
construction of any private, public, or quasi-public work. In no event shall
Landlord be liable to Tenant for any loss of or damage to property of Tenant or
of others located in the Premises or the Building by reason of theft or
burglary.
ARTICLE 15
NOTICES
Any notice required or permitted in this Lease shall be given in writing, sent
by (a) personal delivery, or (b) Federal Express or similar overnight carrier
with proof of delivery, or (c) United States mail, postage prepaid, addressed as
provided in Item 14 of Article 1 and Section 14.3 hereof, or to such other
address or to the attention of such other person as shall be designated from
time to time in writing by the applicable party and sent in accordance herewith.
Notice also may be given by telex or fax, provided each transmission is
confirmed (and such confirmation is supported by documented evidence) as
received and further provided a telex or fax number, as the case may be, is set
forth in Item 14 of Article 1. Any such notice or communication shall be deemed
to have been given either at the time of receipt of personal delivery or, in the
case of overnight courier service or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or in the case of
telegram or telex or fax, upon receipt.
ARTICLE 16
MISCELLANEOUS PROVISIONS
SECTION 16.1. BUILDING NAME AND ADDRESS: Tenant shall not, without the
prior written consent of Landlord, use the name of the Building for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, and in no event shall Tenant acquire any rights in or to such names.
Landlord shall have the right at any time to change the name, number, address,
or designation by which the Building is known.
SECTION 16.2. SIGNAGE: Tenant shall not without the prior written consent
of Landlord erect, inscribe, paint, affix or display anything or other insignia
upon any part of the Property or any portion of the Premises other than
33
customary and usual artwork. diplomas. etc. Without in any way limiting the
foregoing, any signs erected by Tenant shall conform to all laws, ordinances,
statutes, rules, regulations or other governmental or quasi-governmental or
restrictive covenant requirements and standard signage criteria that Landlord
has prescribed for the Property. Once approved by Landlord and erected by
Tenant, Tenant shall keep and maintain such signs in good repair and remove the
same and restore the Premises (and/or Property) prior to the Expiration Date (as
set forth in Item 5 of Article 1) to their original condition.
SECTION 16.3. NO WAIVER: No waiver by Landlord or by Tenant of any
provision of this Lease shall be deemed to be a waiver by either party of any
other provision of this Lease. No waiver by Landlord or Tenant of any breach by
the other shall be deemed a waiver of any subsequent breach by such party of the
same or any other provision. The failure of Landlord or Tenant to insist at any
time upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in this Lease shall not be construed as
a waiver or a relinquishment thereof for the future. Landlord's or Tenant's
consent to or approval of any act by the other party requiring the other party's
consent or approval shall not be deemed to render unnecessary the obtaining
consent to or approval of any subsequent act of the other party. No act or thing
done by Landlord or Landlord's agents during the term of this Lease shall be
deemed an acceptance of a surrender of the Premises, unless done in writing
signed by Landlord. The delivery of the keys or access cards to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises. The acceptance of any Rent by Landlord following a
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such
breach or any other breach. No waiver by Landlord or Tenant of any provision of
this Lease shall be deemed to have been made unless such waiver is expressly
stated in writing signed by the waiving party. No payment by Tenant or receipt
by Landlord of a lesser amount than the monthly installment of Rent due under
this Lease shall be deemed to be other than on account of the earliest Rent due
hereunder, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such Rent or pursue any other remedy which may
be available to Landlord.
SECTION 16.4. APPLICABLE LAW: This Lease shall be governed by and construed
in accordance with the laws of the state where the Property is located.
Furthermore, this Lease shall not be construed against either party more or less
favorably by reason of authorship or origin of language.
SECTION 16.5. SUCCESSORS AND ASSIGNS: Subject to Article 12 hereof, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representative, successors and assigns.
SECTION 16.6. BROKERS: Tenant warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in Item 11 of Article 1, and that it knows of no
other real estate brokers or agents who are or might be entitled to a commission
in connection with this Lease. TENANT AGREES TO INDEMNIFY AND HOLD HARMLESS
LANDLORD FROM AND AGAINST ANY LIABILITY OR CLAIM, WHETHER MERITORIOUS OR NOT,
34
ARISING IN RESPECT TO BORKERS AND/OR AGENTS NOT SO NAMES. Landlord warrants that
it has had not dealings with any real estate broker or agent in connection with
the negotiation of this Lease, excepting only the broker named in Item 10 of
Article 1, and that it knows of no other real estate brokers or agents who are
or might be entitled to a commission in connection with the Lease. LANDLORD
AGREES TO INDEMNIFY AND HOLD XXXXXXX TENANT FROM AND AGAINST ANY LIABILITY OR
CLAIM, AND/OR AGENTS NOT SO NAMED. Landlord has agreed to pay the fees of the
brokers (but only the brokers) named in Items 10 and 11 of Article 1 to the
extent that Landlord has agreed to pursuant to a written agreement with such
brokers.
SECTION 16.7. SEVERABILITY: If any provision of this Lease or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the application of such provisions to other persons
or circumstances and the remainder of this Lease shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.
SECTION 16.8. EXAMINATION OF LEASE: Submission by Landlord of this
instrument to Tenant for examination or signature does not constitute a
reservation of or option for lease. This Lease will be effective as a lease or
otherwise only upon execution by and delivery to both Landlord and Tenant.
SECTION 16.9. INTEREST ON TENANT'S OBLIGATIONS: In addition to the late
charges specified in Section 3.4, any amount due from Tenant to Landlord which
is not paid on or before the date due shall bear interest at the lower of (i)
twelve (l2%) per annum or (ii) the highest rate from time to time allowed by
applicable law, from the date such payment is due until paid, but the payment of
such interest shall not excuse or cure the default.
SECTION 16.10. TIME: Time is of the essence in this Lease and in each and
all of the provisions hereof. Whenever a period of days is specified in this
Lease, such period shall refer to calendar days unless otherwise expressly
stated in this Lease.
SECTION 16.11. DEFINED TERMS AND MARGINAL HEADINGS: The words Landlord and
Tenant as used herein shall include the plural as well as singular. If more than
one person is named as Tenant, the obligations of such persons are joint and
several. The headings and titles to the articles, sections and subsections of
this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part of this Lease.
SECTION 16.12. AUTHORITY OF TENANT: Tenant and each person signing this
Lease on behalf of Tenant represents to Landlord as follows: Tenant and its
general partners and managing members, if applicable, are each duly organized
and legally existing under the laws of the state of its incorporation and is
duly qualified to do business in the state where the Property is located. Tenant
and its general partners and managing members, if applicable, each has all
requisite power and all governmental certificates of authority, licenses,
permits, qualifications and other documentation to lease the Premises and to
35
carryon its business as now conducted and as contemplated to be conducted. Each
person signing on behalf of Tenant is authorized to do so.
SECTION 16.13. FORCE MAJEURE: Whenever a period of time is hereby
prescribed for action to be taken by Landlord or Tenant, the party taking the
action shall not be liable or responsible for, and there shall be excluded from
the computation of any such period of time, any delays due to strikes, riots,
acts of God, shortages of labor or materials, war, governmental laws,
regulations or restrictions or any other causes of any kind whatsoever which are
beyond the reasonable control of such party; provided, however, in no event
shall the foregoing apply to the financial obligations of either Landlord or
Tenant to the other under this Lease, including Tenant's obligation to pay Base
Monthly Rent, Additional Rent or any other amount payable to Landlord hereunder.
SECTION 16.14. RECORDING: This Lease shall not be recorded. However,
Landlord shall have the right to record a short form or memorandum hereof, at
Landlord's expense, at any time during the terms hereof, and, if requested,
Tenant agrees (without charge of Landlord) to join in the execution thereof.
SECTION 16.15. NO REPRESENTATIONS: LANDLORD AND LANDLORD'S AGENTS HAVE MADE
NO WARRANTIES, REPRESENTATIONS OR PROMISES (EXCEPT OR IMPLIED) WITH RESPECT TO
THE PREMISES, THE BUILDING OR ANY OTHER PART OF THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, THE CONDITION, USE OR SUITABILITY OF THE PREMISES, THE BUILDING OR
THE PROPERTY), EXCEPT AS HEREIN EXPRESSLY SET FORTH AND NO RIGHTS, EASEMENTS OR
LICENSES ARE ACQUIRED BY TENANT BY IMPLICATION OR OTHERWISE EXCEPT AS EXPRESSLY
SET FORTH IN THE PROVISIONS OF THIS LEASE.
SECTION 16.16. PARKING: The parking areas and any parking structures shall
be designated for automobile parking on a non-exclusive basis for all Property
tenants (including Tenant) and their respective employees, customers, invitees
and visitors. Parking and delivery areas for all vehicles shall be in accordance
with parking regulations established from time to time by Landlord with which
Tenant agrees to conform. Tenant shall only permit parking by its employees,
customers and agents of appropriate vehicles in appropriate designated parking
areas. Tenant shall receive non-exclusive access to three (3) parking spaces for
every 1000 square feet of the Premises.
SECTION 16.17. ATTORNEYS' FEES: In the event of any legal action or
proceeding brought by either party against the other arising out of this Lease,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in such action (including, without limitation, all costs of
appeal) and such amount shall be included in any judgment rendered in such
proceeding.
SECTION 16.18. NO LIGHT, AIR OR VIEW EASEMENT: Any diminution or shutting
off of light, air or view by any structure which may be erected on the Property
or lands adjacent to the Property shall in no way affect this Lease or impose
any liability on Landlord (even if Landlord is the adjacent land owner).
36
SECTION 16.19. SURVIVAL OF INDEMNITIES: Each indemnity agreement and hold
harmless agreement contained herein shall survive the expiration or termination
of the Lease.
SECTION 16.20. TENANT HEREBY WAIVES ITS RIGHTS UNDER THE DECEPTIVVE TRADE
PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE
CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY/LEGAL COUNSEL OF TENANT'S OWN SELECTION, TENANT
VOLUNTARILY CONSENTS TO THIS WAIVER. TENANT COVENANTS, REPRESENTS AND WARRANTS
THAT TENANT'S ATTORNEY/LEGAL COUNSEL WAS NOT DIRECTLY OR INDIRECTLY IDENTIFIED,
SUGGESTED, OR SELECTED BY LANDLORD OR AN AGENT OF LANDLORD.
SECTION 16.21. TENANT AND LANDLORD EACH: (1) AGREE NOT TO ELECT A TRIAL BY
JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP
BETWEEN THE PARTIES AS TENANT AND LANDLORD THAT IS TRIABLE OF RIGHT BY A JURY;
AND (2) WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.
SECTION 16.22. WITH RESPECT TO THE BUILDING OR ANY PORTION THEREOF, TENANT
HEREBY WAIVES ALL RIGHTS UNDER SECTIONS 41.413 AND 42.015 OF THE TEXAS TAX CODE
OR ANY SIMILAR OR CORRESPONDING LAW: (1) TO PROTEST A DETERMINATION OF APPRAISED
VALUE OR TO APPEAL AN ORDER DETERMINING A PROTEST; (2) TO RECEIVE NOTICES OF
REAPPRAISALS. TENANT SHALL HAVE THE REIGHT, FROM TIME TO TIME, TO REQUEST THAT
LANDLORD APPEAL THE ASSESSMENT OF REAL ESTATE TAXES PROVIDED THAT TENANT
DELIVERS WRITTEN NOTICE TO LANDLORD AT LEASE SIXTY (60) DAYS PRIOR TO THE
DEADLINE FOR FILING AND APPEAL or such earlier time as is reasonable. Landlord
shall give Tenant notice of any increase in assessed property value. TENANT'S
NOTICE SHALL STATE THE BASIS FOR WHICH IT BELIEVES THE TAX ASSESSMENT SHOULD BE
REDUCED. LANDLORD SHALL CONSIDER TENANT'S REQUEST AND DETERMINE WHETHER IS
WISHES TO FILE AN APPEAL. IF LANDLORD ELECTS NOT TO FILE AN APPEAL IT SHALL
NOTIFY TENANT AND TENANT SHALL HAVE THE RIEGHT TO APPEAL THE TAX ASSESSMENT AT
ITS SOLD COST AND EXPENSE.
SECTION 16.23. ENTIRE AGREEMENT: This Lease contains all of the agreements
of the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreement, understanding or representation pertaining to any
such matter shall be effective for any purpose. No provision of this Lease may
be amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest.
37
SECTION 16.24 SURRENDER SPACE: On December 31, 2002 Tenant shall surrender
to Landlord approximately 11,360 square feet of space located on the first floor
as set forth on the second floor as set forth on Exhibit "D". On August 31, 2003
Tenant shall surrender to Landlord approximately 6,959 square feet of space
located on the first floor as set forth on Exhibit "E". Tenant shall surrender
such space in accordance with Section 2.3 above. Landlord shall erect a demising
wall separating the surrendered space from the Premises.
SECTION 16.25. [Intentionally omitted]
SECTION 16.26. LANDLORD'S LIEN: Tenant grants to Landlord an express
contractual lien on and security interest in and to all goods, equipment,
furnishings, fixtures, furniture, chattels and tangible personal property of
whatever nature owned by Tenant attached or affixed to or used in and about the
Premises on the date of this Lease or at any time after the date of this Lease
or otherwise located in the Premises or relating to Tenant's use of the Premises
and all renewals or replacements or substitutions for any of the foregoing, all
building materials and equipment now or hereafter delivered to the Premises and
intended to be installed in the Premises and all security deposits and advance
rentals under lease agreements on the date of this Lease or at any time after
the date of this Lease covering or affecting the Premises and held by or for the
benefit of Tenant, and all proceeds of the foregoing (including by way of
illustration, but not limitation, proceeds of any insurance which may accrue to
Tenant by reason of damage or destruction of any such property). Upon Landlord's
request, Tenant shall execute and deliver to Landlord two (2) originals of a
financing statement in form sufficient to perfect the security interest granted
hereunder. A carbon, photographic or other reproduction of this Lease or this
provision is sufficient and may be filed as a financing statement. Landlord
shall have all the rights and remedies of a secured party under the Uniform
Commerce Code as adopted in the State where the Property is located and this
lien and security interest may be foreclosed by process of law. The requirement
of reasonable notice prior to any sale under Article 9 of the applicable Uniform
Commerce Code shall be met if such notice is given in the manner prescribed
herein at least ten (10) days before the day of sale. Any public sale made
pursuant to the provisions of this Section shall be deemed to have been
conducted in a commercially reasonable manner if held in the Premises after the
time place and method of sale and a general description of the types of property
to be sold have been advertised for ten (10) consecutive days prior to the date
of sale in a daily newspaper published in the county where the Building is
located.
SECTION 16.27. SECOND FLOOR ELEVATOR: Reference is made to the following
facts: (i) a portion of the Premises is located on the second floor of the
Building (ii) and existing elevator services the second floor, but it is located
within lease space Landlord intends to lease to third parties so there will be
no elevator servicing Tenants area access to the portion of the Premises on the
second floor, and (iii) Tenant has been advised by Xxxxxx Xxxxxx and Consultants
(a firm specializing in issues related to the Texas Accessibility Standards
("TAS") and the Americans with Disabilities Act ("ADA") that under the
regulations and guidelines issued under the Americans with Disabilities Act and
the Texas Architectural Barriers Act (collectively, "Access Laws") at the time
of this lease execution, it is unlikely that elevator access will be required.
In the event that under new regulations and guidelines related to the Access
Laws, governmental authority gives notice to Tenant seeking such elevator
access, Tenant will use its best efforts to obtain a variance by all applicable
governmental authorities, if permitted by applicable Access Laws, so that no
38
elevator access to the second floor portion of the Premises will be required. In
the further event that Tenant is unable to obtain such a variance and Landlord
is satisfied that Tenant has used its best efforts, the Landlord has the right
at its option either to (i) construct a common area access way to the existing
elevator on the second floor for use by Tenant, its employees, agents,
contractors and invitees or, (ii) to recapture the second floor area to comply
with the Access Laws. Landlord retains the right to construct a common area
access on the second floor that will include the elevator access.
SECTION 16.28. LEASE CONTENTS: This lease consists of sixteen Articles and
Exhibits "A" through "E" and Rider 1. 3. 4 and 6.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Lease as of the date specified in the introductory paragraph of this Lease.
LANDLORD
AlP-SWAG OPERATING
PARTNERSHIP, L.P., a Delaware
Limited Partnership
By: AIP-SWAG GP, Inc., a Texas
Corporation, its general partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Date: June 7, 2002
TENANT:
TM Century, Inc.
By: /s/ Xxxxx Xxxxxxxx, CEO
------------------------------------
Name: Xxxxx Xxxxxxxx, CEO
EXHIBIT A
SITE PLAN OF PREMISES
[GRAPHIC OMITTED]
SECOND FLOOR AREA EXHIBIT
[GRAPHIC OMITTED]
EXHIBIT B
ACCEPTANCE OF PREMISES MEMORANDUM
This Acceptance of Premises Memorandum is being executed pursuant to that
certain Commercial Lease Agreement (the "Lease") dated the _________ day of
________________ between AlP-SWAG Operating Partnership, L.P., a Delaware
Limited Partnership c/o American Industrial Properties REIT, ("Landlord"), and
TM Century, Inc., a Delaware corporation, ("Tenant"), pursuant to which Landlord
leased to Tenant and Tenant leased from Landlord certain space in the building
located at 0000 Xxxxxxx Xxxx. Landlord and Tenant hereby agree that:
1. Landlord has fully completed the construction work required under the
terms of the Lease, except for the Punch List Items (as may be shown
on the attached List).
2. The Premises are tenantable, Landlord has no further obligation for
construction (except with respect to Punch List Items), and Tenant
acknowledges that the Building, the Premises and Tenant's Improvements
are satisfactory in all respects, except for the Punch List Items, and
are suitable for the Permitted Use.
3. The Commencement Date of the Lease is the 1st day of March, 2002. If
the date set forth in Item 4 of Article 1 of the Lease is different
than the date set forth in the preceding sentence, then Item 4 of
Article 1 of the Lease is hereby amended to be the Commencement Date
set forth in the preceding sentence.
4. The Expiration Date of the Lease is the 31st day of August, 2010. If
the date set forth in Item 5 of Article 1 of the Lease is different
than the date set forth in the preceding sentence, then Item 5 of
Article 1 of the Lease is hereby amended to be the Expiration Date set
forth in the preceding sentence.
5. Tenant represents to Landlord that Tenant has obtained a Certificate
of Occupancy covering the Premises, a copy of which is attached hereto
as Exhibit B-1.
6. Tenant acknowledges that it has been given the opportunity to inspect
the Premises and has conducted such inspections and investigations of
the Premises as it deems necessary and appropriate and accepts the
Premises in an "AS IS, WHERE IS" condition, that the buildings and
improvements comprising the Premises are suitable for the purpose for
which the Premises are being leased hereby and that Landlord makes no
warranty as the habitability, fitness or suitability of the Premises
for a particular purpose nor as to the absence of any toxic or
otherwise hazardous substances.
B-1
7. All capitalized items not defined herein shall have the meaning
assigned to them in the Lease.
Agreed and Executed this _______________day of ______________
LANDLORD: TENANT:
AlP-SWAG Operating Partnership, L.P., TM Century, Inc., a Delaware corporation
a Delaware Limited Partnership
AlP-SWAG G.P. Inc.,
a Texas Corporation
its General Partner
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxx
------------------------ ------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx Xxxxxxxx
Title, Vice President Title: CEO
B-2
EXHIBIT C
RULES AND REGULATIONS
1. No loud speakers, television, phonographs, radios or other devices shall
be used in a manner so as to be heard or seen outside the Premises without prior
consent of Owner.
2. Tenant shall not use the public or common area in the office complex for
business purposes.
3. Tenant shall not place or suffer to be placed displays or decorations in
front of the Premises or in any common area.
4. Tenant and Tenant employees and agents shall not distribute any
handbills or other advertising matter in automobiles parked in the parking area,
or in any other common areas of the Projects.
5. No entries or passageways shall be obstructed, nor shall any material of
any nature be placed in these areas, or such areas be used at any time except
for the access or egress by Tenant, Tenant's agents, employees or invitees.
0.Xx portion of Tenant's area or any other part of Building shall at any
time be used or occupied as sleeping or lodging quarters.
7. No signs will be allowed in any form on exterior of Building or windows
inside or out, and no signs except in uniform location and uniform styles fixed
by Owner will be permitted in the public corridors or on corridor doors or
entrances to Tenant's space.
8.Owner will not be responsible for lost or stolen personal property from
Tenant's area or public rooms regardless of whether or not such loss occurs when
area is locked against entry or not.
9. No draperies, shutters, or other window covering shall be installed on
exterior windows or walls or windows and doors facing public corridors without
Owner's written approval.
10. Tenant will refer all contractors, contractor's representatives an
installation technicians, rendering any service on or to the leased Premises for
Tenant, to Owner for Owner's reasonable approval and supervision before
performance of any contractual service. This provision shall apply to all work
performed in the Building including installation of telephones, telegraph
equipment, electrical devices and attachments and installation of any nature
affecting floors, walls, woodwork, trim, windows, ceilings, equipment of any
other physical portion of the Building.
11. Tenant shall not place, install or operate on the lease Premises or in
any other part of the Building, any engine, stove or machinery, or conduct
mechanical operations or xxxx thereon or therein (except microwave and beverage
C-l
services for employees and guests) or place or use in or out the leased Premises
any explosives, gasoline, kerosene, oil, acids, caustics, or any inflammable,
explosive, or hazardous material without written consent of Owner.
RULES AND REGULATIONS
(CONTINUED)
12. The movement of furniture, equipment, merchandise or materials within,
into or out of the Building shall be restricted to time, method and routing of
movement as reasonably determined by Owner upon request from Tenant and Tenant
shall assume all liability and risk in such movement. Safes and other heavy
equipment shall be moved into leased premises only with Owner's written consent
and placed where directed by Owner. Any damage done to building by taking in or
removing any safe, or from overloading any floor in any way, shall be placed
upon the Tenant.
13. 0wner shall provide all locks for doors in each Tenant's premises, at
the cost of such Tenant, and no additional locks shall be placed on any door in
Building without written consent of Owner. A reasonable number of keys to leased
Premises will be furnished by Owner and neither Tenant, its agents, or
employees, shall have any duplicate keys made. Owner may at all times keep a
pass key to leased Premises. All keys shall be returned to Owner promptly upon
termination of this Lease.
14. Tenant shall have the non-exclusive use in common with the Owner, other
tenants, their guests and invitees, of the uncovered automobile surface parking
areas, subject to reasonable rules and regulations for the use thereof as
prescribed from time to time by Owner. Owner shall have the right to designate
parking areas for the use of the Building's Tenant and their employees.
15. A11 alterations or miscellaneous job orders shall at all times be
directed to the Property Manager's office in order that the management may
provide for the orderly and otherwise proper processing of such work in
accordance with any covenants of the Lease Agreement applicable thereto.
16. Corridor doors, when not in use, shall be kept closed.
17. Tenant shall cooperate with Owner's employees in keeping its leased
Premises neat and clean.
18. No birds, fowls, or animals shall be brought into or kept in or about
the Building.
19. The water closets and other water fixtures shall not be used for any
purpose other than those for which they are constructed, and any damage to them
C-2
from misuse, or by the defacing or injury of any part of the Building shall be
borne by the person who shall occasion it. No person shall waste water by
interfering with the faucets or otherwise.
20. Agents of the Landlord shall at all times be allowed admittance to said
leased Premises in accordance with other provisions of the Lease.
C-3
21. No smoking will be allowed in any area of the Building including common
areas, restrooms, and tenant premises.
22. Owner may amend or add new rules and regulations subject to other
provisions of this Lease.
/s/ Xxxxx Xxxxxxxx
---------------------------
================================================================================
Tenant
C-4
EXHIBIT D
SURRENDER SPACE - DECEMBER 31.2002
[See Attached Plan ]
[GRAPHIC OMITTED]
SECOND FLOOR AREA EXHIBIT
EXHIBIT E
SURRENDER SPACE - AUGUST 31.2003
[See Attached Plan]
[GRAPHIC OMITTED]
RIDER 1
RENEWAL OPTION
1. If, and only if, on the Expiration Date and the date Tenant notifies
Landlord of its intention to renew the term of this Lease (as provided below),
(i) Tenant is not in default under this Lease, (ii) Tenant then occupies and the
Premises consisting of at least all the original Premises, and (iii) this Lease
is in full force and effect, then Tenant, but not any assignee or subtenant of
Tenant, shall have and may exercise an option to renew this Lease for one (1)
additional term of five (5) years (the "Renewal Term") upon the same terms and
conditions contained in this Lease with the exceptions that (x) this Lease shall
not be further available for renewal, and (y) the rental for the Renewal Term
shall be the "Renewal Rental Rate", but in no event will the Base Monthly Rent
be less than the Base Monthly Rent for the last twelve (12) calendar months of
the initial term of the Lease. The Renewal Rental Rate is hereby defined to mean
the then prevailing market rent (including, without limitation, those similar to
the Base Monthly Rent and Additional Rent) for the Building as determined by
Landlord.
2. If Tenant desires to renew this lease, Tenant must notify Landlord in
writing of its intention to renew on or before the date which is at least six
(6) months but no more than nine (9) months prior to the Expiration Date.
Landlord shall, within the next forty five (45) days, notify Tenant in writing
of Landlord's determination of the Renewal Rental Rate and Tenant shall, within
the next twenty (20) days following receipt of Landlord's determination of the
Renewal Rental Rate, notify Landlord in writing of Tenant's acceptance or
rejection of Landlord's determination of the Renewal Rental Rate. If Tenant
timely notifies Landlord of Tenant's acceptance of Landlord's determination of
the Renewal Rental Rate, this Lease shall be extended as provided herein and
Landlord and Tenant shall enter into an amendment to this Lease to reflect the
extension of the term and changes in Rent in accordance with this Rider. If (x)
Tenant timely notifies Landlord in writing of Tenant's rejection of Landlord's
determination of the Renewal Rental Rate or (y) Tenant does not notify Landlord
in writing of Tenant's acceptance or rejection of Landlord's determination of
the Renewal Rental Rate within such twenty (20) day period, this Lease shall end
on the Expiration Date and Landlord shall have no further obligation or
liability hereunder.
RIDER 4
TENANT'S RIGHT OF OPPORTUNITY
A. Prior to leasing to a third party any of the area described on Schedule
A attached to. this Rider (the "Opportunity Expansion Space"), Landlord shall
deliver to Tenant a written statement ("Statement") setting forth Landlord has
received a bonafide offer to lease all or a portion of the Opportunity Expansion
Space. Tenant shall have two (2) business days after receipt of the Statement
within which to notify Landlord in writing that it desires to lease the
applicable Opportunity Expansion Space (each such written notice is herein
referred to as a "Notice "). Failure by Tenant to notify Landlord within such
two (2) business day period shall be deemed an election by Tenant not to lease
the applicable Opportunity Expansion Space and Landlord shall have the right to
lease such space to the tenant identified in the Statement. If Landlord does not
lease such Opportunity Expansion Space to such tenant, then Landlord will comply
with the provision of this Addendum prior to leasing such space to any other
third party during the primary term of the Lease.
B. The Opportunity Expansion Space shall be leased to Tenant upon all terms
and conditions of this Lease with the following exceptions: (i) all Opportunity
Expansion Space shall be delivered to Tenant in "as is" condition; (ii) Base
Annual Rent for the Opportunity Expansion Space will be equal to the product of
the Agreed Rentable Area of the Opportunity Expansion Space multiplied by a
fraction, the numerator of which will be the Base Annual Rent for the Premises
immediately prior to the addition of the Opportunity Expansion Space to the
Premises and the denominator of which will be the Agreed Rentable Area of the
Premises immediately prior to the addition of the Opportunity Expansion Space to
the Premises; (iii) Base Monthly Rent for the Opportunity Expansion Space will
be equal to one-twelfth (1/12th) of the Base Annual Rent for the Opportunity
Expansion Space; (iv) the Opportunity Expansion Space will be improved by
Landlord in accordance with part C following; (v) except as provided in part C
following, Tenant shall not be entitled to any allowances or inducements with
respect to the applicable Opportunity Expansion Space; and (vi) Base Annual Rent
and Additional Rent with respect to the applicable Opportunity Expansion Space
shall commence on the earlier to occur of (x) the date that Tenant commences use
of the applicable Opportunity Expansion Space for any purpose, or (y) the date
on which the applicable Opportunity Expansion Space improvements are
Substantially Completed, provided that the initial date determined under this
clause (y) shall be adjusted backward (i.e., to an earlier date) by one (1) day
for each day of Tenant Delays (as defined in the applicable agreement for
Opportunity Expansion Space construction). Upon such rent commencement date, (1)
the Agreed Rentable Area of the Premises shall be deemed increased by the agreed
rentable area of the Opportunity Expansion Space, (2) Base Annual Rent for the
Premises shall be deemed increased by an amount equal to the Base Annual Rent
for the Opportunity Expansion Space, (3) Base Monthly Rent for the Premises
shall be deemed increased to an amount equal to one twelfth (1/12th) of the Base
Annual Rent for the Premises (as increased), and (4) Additional Rent for the
Premises shall be recalculated in the basis of the increased Agreed Rentable
Area of the Premises.
C. Within fifteen (15) days after Landlord's receipt of a Notice, Tenant
and Landlord will enter into an agreement for construction, substantially in the
form of Exhibit D attached to the Lease, provided that such form shall be
amended to (i) set forth appropriate dates, (ii) amend the finish allowance to
be an amount calculated in accordance with the remaining provisions of this part
C, and (iii) provide for such other matters as are necessary to reflect the
agreements of the parties with respect to the finish out of the applicable
Opportunity Expansion Space. Pursuant to the agreement for construction,
Landlord shall construct or cause to be constructed improvements in the
applicable Opportunity Expansion Space in substantial accordance with
construction plans agreed to be Landlord and Tenant. The cost of constructing
such improvements shall be borne by Tenant except that Landlord shall provide
Tenant with a finish allowance equal to the product of (i) the per square foot
finish allowance, if any, provided by Landlord with respect the initial Premises
times (ii) the number of square feet in the applicable Opportunity Expansion
Space times (iii) a fraction, the numerator of which will be the number of full
calendar months in the initial Lease Term from and after the date Base Annual
Rent commences with respect to the Opportunity Expansion Space and the
denominator which will be the number of full calendar months in the initial
Lease Term.
D. Upon Substantial Completion of the applicable Opportunity Expansion
Space improvements, Landlord and Tenant shall execute an Acceptance of Premises
Memorandum in substantially the form of Exhibit B attached to the Lease. If
Tenant occupies any Opportunity Expansion Space without executing the Acceptance
of Premises Memorandum, Tenant shall be deemed to have accepted such Opportunity
Expansion Space for all purposes.
E. Within fifteen (15) days after Landlord's receipt of a Notice, Landlord
and Tenant will enter into an amendment to this Lease reflecting (i) the
addition of the applicable Opportunity Expansion Space to the Premises, (ii) the
increase in Base Annual Rent and Additional Rent payable under this Lease, (iii)
the increase in Tenant's Pro Rata Share Percentage, and (iv) such other
amendments as are necessary as determined by Landlord.
F. Notwithstanding any other provision or inference herein to the contrary,
Tenant's right and Landlord's obligations under this Rider shall expire and be
of no further force or effect on the earliest of (i) the expiration or earlier
termination of the initial term of this Lease, (ii) a default beyond any
applicable period by Tenant under this Lease.
RIDER 6
CAP ON CERTAIN OPERATING EXPENSES
For the purpose of determining Additional Rent, Operating Expenses (exclusive of
the Non-Capped Expenses, as hereinafter defined) for any calendar year shall not
be increased over the amount of Operating Expenses (exclusive of Non-Capped
Expenses) during the calendar year in which the term of this Lease commences by
more than eight percent (8%) per year on a cumulative basis, compounded
annually. For example, if Operating Expenses (exclusive of Non-Capped Expenses)
during the calendar year in which the term of this Lease commences were
$100,000, the cap on Building Operating Expenses for the fourth full calendar
year would be $136,048.90 ($100,000 times 1.08 times 1.08 times 1.08 times 1.08.
It is understood and agreed that there shall be no cap on Non-Capped Expenses,
which are hereby defined to mean all utility expenses, insurance premiums and
the expenses described in parts (iii), (iv) and (v) of subsection 3.2.1(b) of
Article 3 of the Lease.
ADDENDUM 2
This Addendum is attached to and made a part of that certain Lease (the
"Lease") by and between AlP-SWAG Operating Partnership, L.P., ("Landlord") and
TM Century, Inc., ("Tenant"), for certain demised premises located at 0000
Xxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxx. In the event of any contradiction or
inconsistency between the terms and provisions of this Addendum and the terms
and provisions of the Lease to which it is attached, the terms and provisions of
this Addendum shall control and be interpreted in such a manner as to override
any provision of the Lease which would prevent the spirit and letter of the
terms and provisions of this Addendum from being given full force and effect.
All defined terms not specifically defined in this Addendum shall be given the
same meaning as the defined terms in the Lease.
1. LAND LORD WARRANTIES. Landlord represents, covenants and warrants
(i) that it has lawful title to the Property and has full right, power and
authority to enter into this Lease; (ii) to the Landlord's knowledge that
the permitted 'use' of the Premises does not currently violate the terms
insurance policies or result in and insurance costs, and (iii) that, to
Landlord's knowledge, based solely on the BIS dated June 12. 1997. the
Premises are free of Hazardous Materials.
2. ASSIGNMENT AND SUBLETTING. Tenant shall have the right to assign or
sublet all or any portion of the Demised Premises (i) to an entity into
which Tenant is merged or consolidated, (ii) to an entity which has
acquired substantially all of the assets of Tenant, or (iii) to an entity
that is controlled by, controlling of, or under common control with Tenant.
3. REASONABLENESS. Wherever either party to the Lease is required or
requested to give its consent, such consent shall not be unreasonably
withheld or delayed.
4. A shall have the right to audit, inspect and copy the books and
records from time to time withing xxxxx (30) days following receipt of an
annual statement. In the event Tenant discovers an error in the total
amounts charged to Tenant for additional rent in an amount in excess of
five (5%) percent, then Landlord shall reimburse to Tenant the amount
expended for the audit (up to a maximum of $3,000) in addition to repaying
to Tenant the amount of any overcharges. The services must be performed by
a CPA firm on a "fixed or hourly fee only" basis. Tenant may not use a
consulting company which charges a contingency fee.
5. TENANT FINANCING. Tenant shall have the right from time to time to
grant and assign a mortgage or other security interests in all of Tenant's
personal property located within the Premises to its lender in connection
with Tenant's financing arrangements, and any lien of Landlord against
Tenant's personal property (whether by statute or under the terms of this
Lease) shall be subject and subordinate to such security interest. Landlord
shall execute such documents as Tenant's lenders may reasonably request in
connection with any such financing.
EXHIBIT D
WORK LETTER
PLANS TO BE AGREED UPON/
FINISH ALLOWANCE
AlP-SWAG Operating Partnership, L.P., a Delaware Limited Partnership,
(Landlord), and TM Century, Inc., a Delaware Corporation (Tenant) have
entered into that certain Commercial Lease Agreement dated March 1,
2002 (the "Lease") for the lease of certain space in the industrial
facility located at 0000 Xxxxxxx Xxxx in Farmers Branch, Texas (the
"Building"). Pursuant to subsection 2.2.1 of ARTICLE 2 of the Lease,
Lease, Landlord and Tenant are entering into this Work Letter (the
"Agreement"). Any capitalized terms not defined herein shall have the
meaning assigned to it in the Lease. Landlord and Tenant mutually
agree as follows:
Construction and cost of Tenant Improvements:
1. Construction Obligation and Finish Allowance. Landlord shall provide
Tenant with an allowance of $201,243.00 (the "Finish Allowance"), which Finish
Allowance shall be disbursed by Landlord, from time to time, for payment of (in
the following priority): (i) the contract sum required to be paid to the general
contractor engaged to construct Tenant's improvements (the "Contract Sum"), and
(ii) the fees of the preparer of the Construction Plans.
The Tenant Improvements will be completed by Tenant's contractor(s). Tenant
agrees to abide by the Improvement and Alterations policies conveyed in Section
7.3 of the Original Lease. As for payment of said Improvement Allowance, Tenant
will pay all contractor(s) directly and request a reimbursement from Landlord.
After Landlord has inspected the Premises and is satisfied that the Tenant
Improvements are complete, Landlord will reimburse Tenant the Improvement
Allowance within thirty (30) days after receipt of all required documentation.
Tenant must supply Landlord with all original contractor invoices detailing the
work performed and all original signed and notarized lien waivers from each
contractor as a condition of reimbursement from Landlord.
2. Tenant's Additional Allowance. Provided Tenant is not in default under
any of the terms and conditions contained in the Lease, Landlord shall also
reimburse Tenant for a portion of the cost of Tenant's Work within the Premises,
in the amount and manner hereinafter provided. The amount of such reimbursement
shall hereinafter be referred to as "Tenant's Additional Allowance." It is
understood and agreed that Tenant's Additional Allowance shall be a
reimbursement for a portion of the actual cost incurred by Tenant to complete
Tenant's work within the Premises as detailed in the plans and specifications
therefore to be approved by Landlord. Tenant's Additional Allowance shall be an
amount equal to Eighty-Nine Thousand Nine Hundred Thirty-Three Dollars and Forty
Cents ($89,933.04) which represents approximately seventy-two (72) days of the
Minimum Rent due and owing. Tenant acknowledges that Tenant's Additional
Allowance shall not be a cash payment, but shall be given in the form of an
abatement of Base Rent in an amount not to exceed $8,993.34 per month.
3. Tenant's Contractors. Tenant shall provide the following: prior to
permitting any work at the Premises:
(a) Tenant shall use only such contractors which Landlord shall
approve in its reasonable discretion and Landlord shall have approved the plans
to be utilized by Tenant and Tenant's contractor, which approval will not be
unreasonably withheld: and
(b) Tenant shall provide detailed plans of any work that will be
performed at the Premises.
(c) Tenant (notwithstanding the first sentence of subsection 7.2.1 of
the Lease), Tenant's Contractors and other agents shall provide Landlord
sufficient evidence that each is covered under such workmen's compensation,
public liability and property damage insurance as Landlord may reasonably
request for its protection.
Landlord shall not be liable for any injury, loss or damage to any of
Tenant's installations or decorations. Tenant shall indemnify and hold
harmless Landlord from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Premises by or on behalf of Tenant (but excluding work
performed by Landlord or Landlord's Contractors). Landlord is not responsible
for the function and maintenance of Tenant's Improvements. Such entry by Tenant
and Tenant's contractors pursuant to this Section 5 shall be deemed to be under
all of the terms, covenants, provisions and conditions of the Lease.
4. Liens Arising: from Excess Costs. Tenant agrees to keep the Premises
from any liens arising out of nonpayment of any costs. In the event that any
such lien is filed, and Tenant, within ten (10) days following such filing,
fails to cause same to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition t all other remedies provided herein and
by law, the right, but not the obligation, to cause the same to be released by
such means as it in its sole discretion deems proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by Landlord in
connection therewith shall constitute Rent under the Lease and a demand
obligation of Tenant to Landlord, and such obligation shall bear interest at the
rate provided for in Section 16.10 of the Lease from the date of payment by
Landlord until the date paid by Tenant.
5. Compliance With Disabilities Acts. Tenant shall promptly provide
Landlord and Landlord's space planner and/or architect, as applicable, with all
information needed to cause the construction of Tenant's Improvements to be
completed such that Tenant, the Premises and Tenant's Improvements (as
constructed) will be in compliance with the Disability Acts. Tenant shall
indemnify and hold harmless Landlord from an against any and all claims,
liabilities and expenses (including without limitation reasonable attorney's
fees and expenses) incurred by or asserted against Landlord by reason of or in
connection with any violation of the Disability Acts by Tenant and or Tenant's
Improvements or the Premises not being in compliance with the Disability Acts.
6. Construction Representatives. Landlord's and Tenant's representative
coordination of construction and approval of change orders will be as follows,
provided that either party may change their respective representative upon
written notice to the other:
LANDLORD'S REPRESENTATIVE:
NAME: Xxxx Xxxxx. Property Manager at American Industrial Properties
ADDRESS: 0000 Xxxxxxxx Xxxx. Xxxxx #000
Xxxxxx:. XX 00000
PHONE: 000-000-0000
TENANT'S REPRESENTATIVE:
NAME:
ADDRESS:
=================================================
PHONE:
=================================================
IN WITNESS WHEREOF. the parties hereto have executed and delivered this
Agreement simultaneously with the execution and delivery of the Lease.
LANDLORD:
AlP-SWAG Operating Partnership. L.P. by its General Partner AlP-
SWAG GP. Inc.. a Texas Corporation
By:_____________________________
its duly authorized agent
By /s/ Xxxxxxx X. Xxxxx :
--------------------------------
Xxxxxxx X. Xxxxx. Vice President
TENANT
======
TM CENTURY. INC.. A DELAWARE CORPORATION
BY: Xxxxx Xxxxxxxx
===========================================
Name: /s/ Xxxxx Xxxxxxxx
===========================================
Title: Pres/CEO
===========================================
