EXHIBIT 10.11
LEASE
THIS LEASE, made and dated the 6th day of September, 1996 by and between
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, (hereinafter called "Landlord") and
AMERICA SERVICE GROUP INC., (hereinafter called "Tenant").
W I T N E S S E T H:
1. PREMISES.
Landlord, for and in consideration of rents, covenants and agreements
hereinafter mentioned and hereby agreed to be paid, kept and performed by
Tenant, hereby leases to Tenant, and Tenant hereby hires from Landlord, 12,439
rentable square feet of space calculated using BOMA standards located at 000
Xxxxxxxx Xxxxx, known as Harpeth on the Green III in the Maryland Farms Office
Park in the City of Brentwood, County of Xxxxxxxxxx, State of Tennessee, more
particularly described and shown on the plan attached hereto as Exhibit "A" and
made a part hereof, hereinafter referred to as the "Leased Premises." The Leased
Premises are leased together with the appurtenances, including the right to use,
in common with others, the lobbies, elevators and other common areas of the
building of which the Leased Premises are a part. The usable square footage is
calculated as 11,056. The common area factor is twelve point five percent
(12.5%).
2. USE OF PREMISES.
The Leased Premises shall be used and occupied by Tenant, subject to the
conditions herein contained, for general office purposes only. In no event shall
the Leased Premises be used or occupied by Tenant in any manner contrary to law,
zoning regulations or recorded restrictions.
3. TERM.
The term of this Lease shall be for seven (7) years, commencing on the first day
of November, 1996, and ending unless sooner terminated as herein provided, on
the last day of October, 2003 both dates inclusive, subject to the conditions
contained in paragraph 4 hereof.
4. POSSESSION.
(a) If the Leased Premises are not available or ready for occupancy on or before
the commencement date hereinabove set forth and if such unavailability or
unreadiness is not occasioned or caused by Tenant (such as Tenant's failure
promptly to approve plans, make material or color selections, make improvements
to the Leased Premises which are to be made by Tenant, or make other decisions
or take other actions necessary to the preparation of the Leased Premises for
occupancy), then the term of this Lease shall commence on a date fixed by
Landlord in a notice to Tenant no sooner than ten (10) days next following the
giving of such notice, which notice shall state that the Leased Premises are or,
on or before the commencement date fixed in the notice, will be available and
ready for occupancy. If the day upon which the term of this Lease commences
shall fall on a day other than the first day of a calendar month, then the term
of this Lease shall run for the unexpired portion of such calendar month plus
seven (7) years beginning with the first day of the calendar month next ensuing;
and Tenant shall pay rent as herein established on a pro rata basis for the
portion of month from the date of commencement of the term to the first of the
month immediately succeeding.
(b) In the event that, pursuant to the provisions of this paragraph, the dates
of commencement and termination of this Lease shall be other than the dates set
forth in paragraph 3 hereof, promptly after the dates of commencement and
termination are determined, Landlord and Tenant agree to execute a memorandum
certifying said dates.
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(c) If Landlord is unable to give possession of the Leased Premises on the
commencement date by reason of the fact that the Leased Premises are located in
a building being constructed which has not been sufficiently completed to make
the Leased Premises ready for occupancy or by reason of the fact that a
certificate of occupancy has not been procured or by reason of the holding over
or retention of possession of any tenant or occupant, or if repairs,
improvements or decorations of the Leased Premises or of the building of which
said Leased Premises form a part are not completed, or for any other reason,
Landlord shall not be subject to any liability for the failure to give
possession on said date.
(d) Landlord's approval of any plans, specifications or work drawings shall
create no responsibility or liability on the part of the Landlord for their
completeness, design sufficiency or compliance with all laws, rules and
regulations of governmental agencies or authorities. Landlord shall use its best
efforts to ensure the architect (IDS) provides Tenant with certification that
such plans are in compliance with all laws, rules and regulations of
governmental agencies or authorities.
(e) If by mutual consent of the parties Tenant enters into possession of the
Leased Premises or occupies premises other than the Leased Premises prior to the
commencement date, Tenant covenants and agrees that such occupancy shall be
deemed to be under all the terms, covenants, conditions and agreements of this
lease except as to the covenant to pay rent for such prior period.
(f) Notwithstanding anything contained in this Lease to the contrary and
provided 1) final plans, drawings, and construction documents with respect to
the construction of solely the 10,005 rsf on the third floor (Suite 300) have
been submitted to the Landlord on or before September 6, 1996 2) any delays in
completing such construction of Suite 300 are not caused by strike, shortages of
labor or materials, or other matters beyond the reasonable control of the
Landlord, and 3) a construction permit for construction of Suite 300 has been
issued by the City of Brentwood no later than September 20, 1996, if such
construction is not complete by December 1, 1996, then Tenant's rent on Suite
300 will be abated after the actual delivery date for the number of days after
December 1, 1996 that pass before actual delivery occurs, and the Lease Term
will remain seven (7) years outside of any rental abatement period.
(g) If the construction of Suite 300 is not completed by February 1, 1997 and
the Tenant has cooperated with the Landlord to promote the efficient and
expeditious completion of such construction, then Tenant upon notice to the
Landlord shall have the right to terminate this Lease without liability to
Landlord.
5. RENT.
Tenant shall, without deduction, abatement or setoff of any nature whatsoever,
pay to Landlord as fixed minimum rent for the Leased Premises Two Hundred Eleven
Thousand Four Hundred Sixty-Three Dollars ($211,463.00) per annum, payable in
equal monthly installments of Seventeen Thousand Six Hundred Twenty-One and
92/100 dollars ($17,621.92) each, in advance and without demand on the first day
of each and every month during the term of this Lease, at the office of the
Landlord or at such other place or to such other person as Landlord may from
time to time designate in writing, except that Tenant shall pay the first
monthly installment on the execution of this Lease. If the term of this Lease
shall commence on a date other than the first day of a calendar month, such
first installment shall be prorated for the period between the date of
commencement of the term of this Lease and the first day of the following month.
This minimum rent is calculated at $17.00 per square foot per annum based upon
12,439 square feet of rentable area.
A late charge of five percent (5%) shall be added to the amount due unless the
payment of fixed minimum rent is received by Landlord on or before the fifth day
of the month covered by said payment of fixed minimum rent. Any amount due from
Tenant to Landlord hereunder which is not paid when due shall bear interest at
the rate of eighteen (18%) percent per annum or the highest rate permitted by
applicable law (minus any late charge) from the due date until paid, unless
otherwise specifically provided herein, but the payment of such interest shall
not excuse or cure any default by Tenant under this Lease.
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6. RENT ADJUSTMENTS.
The minimum annual rental rate fixed in paragraph 5 hereof may be increased for
any calendar year following the year during which Tenant takes possession of the
Leased Premises as in this paragraph provided to reflect the increase in
Landlord's expenses incurred in operating the building of which the Leased
Premises form a part, and Tenant shall pay such rent, as increased, in equal
monthly installments.
The following definitions shall apply for the purposes of this paragraph:
(a) The Base Year shall be the calendar year 1997.
(b) For purposes of this section, "Operating Expenses" shall mean any or all of
the following incurred by Landlord with respect to the building of which the
Leased Premises form a part, including but not limited to: salaries, wages,
medical, surgical and general welfare benefits (including group life insurance)
and pension payments of employees of Landlord engaged in the operation and
maintenance of the building, payroll taxes, workmen's compensation insurance,
gas, electricity, steam, real estate taxes or special assessments, utility taxes
water (including sewer rents), all costs of capital improvements made to the
building after the commencement date required under any governmental law or
regulation that was not applicable to the building at the time it was
constructed, capital improvements which reduce Operating Expenses as reasonably
amortized by the Landlord with interest at the rate of 10% per annum on the
unamortized amount, casualty and liability insurance, repairs and maintenance,
pro-rata expenses for general park maintenance, building and cleaning supplies,
uniforms and dry cleaning, window cleaning, commercially reasonable management
fees, service contracts with independent third party contractors, telephone,
telegraph, stationary, advertising, and all other expenses paid in connection
with the operation of said premises properly chargeable against income.
During the first quarter of each calendar year beyond the base year, Landlord
shall notify Tenant by written statement of any projected increases in Operating
Expenses over the Base Year. The statement shall show Tenant's increased annual
rental rate and the resulting monthly payment effective retroactively to January
1 of the year the statement is provided. The manner in which the increase, if
any, was computed will also be furnished. Within the same first quarter,
Landlord shall notify Tenant by written statement certified to be correct by
Landlord or Landlord's agent of the actual Operating Expenses. The increase
shall be equal to the product of (a) the projected increased Operating Expenses
and (b) Fifteen point seventy-five percent (15.75%), which percent constitutes
the ratio which the net leased area of the Leased Premises bears to the total
net leasable area of the building of which the Leased Premises form a part. To
the extent that the actual expense differs from the projected expenses as paid
during the year, a lump sum payment shall be made by Tenant within thirty (30)
days or a lump sum credit shall be made by Landlord to Tenant, as required.
Provided, however, for the purpose of determining the increase (if any) in real
estate taxes, any increase attributable to capital improvements made by or for a
particular tenant shall be assessed solely to that tenant.
Any increase in real estate taxes attributed to capital improvements made to the
building after the Lease commencement date that reduce other Operating Expenses
payable by Tenant during the Lease Term, as defined above, or are required under
any governmental law or regulation that was not applicable to the building at
the time it was constructed shall be included in computing the rent adjustment
under this paragraph.
7. SECURITY DEPOSIT.
Tenant shall deliver to Landlord on the date hereof additional security (a
credit enhancement) in the form of an Irrevocable Letter Of Credit in the amount
of Seventy-Five Thousand Dollars ($75,000.00) for Landlord's consideration in
entering into this Lease. In the event of Tenant's default under this Lease, the
additional security shall be applied to or drawn
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upon to satisfy Tenant's obligations under this Lease. Said letter of credit
must be acceptable to Principal Mutual Life Insurance Company ("PMLIC") as to
form, content, and issuing bank, and must not require any documentation in order
to be drawn/valued upon and must contain an explicit waiver by the issuing bank
of any statutory, UCP or other rights to delay or defer payment upon demand
including, but not limited to, a waiver of such rights as are set forth in
Article 5, Section 5-112(a)(a) and (b) of the Uniform Commercial Code and in
Article 15-C of the Uniform Customs and Practice for Documentary Credits, 1983
Revision, ICC Publication Number 400, including any amendments and revisions
thereto. Said letter of credit shall have a seven (7) year term with an
expiration date no sooner than October 31, 2000. Said letter of credit must also
provide that the issuing bank, upon any presentation of a draft (at sight) for
valuation thereon, shall honor such draft by promptly delivering the amount of
the draft, by official bank or cashier's check to the PMLIC or, at PMLIC's sole
option, by promptly wiring Federal Funds in the amount of the draft into such
account(s) as PMLIC may specifically direct, in writing. The letter of credit
must name PMLIC, its successors and assigns, as the beneficiary of said credit.
The required form of the letter of credit is attached hereto as Exhibit "C". All
costs for issuance (or reissuance as required by Landlord in the event of
Landlord's sale of the Property) of said letter of credit shall be paid by
Tenant. In the event of Landlord's sale of the Property, Tenant shall cooperate
with Landlord in having the letter of credit reissued to the new property owner.
At such time after October 31, 2000, that Tenant achieves a net worth of
$8,500,000.00 and has had during the two consecutive preceding years a net
income of $500,000.00 or greater, Landlord must terminate such Irrevocable
Letter of Credit.
When and if Tenant meets requirements set by Landlord in order to remove such
Irrevocable Letter of Credit and such Letter is removed, Tenant shall
immediately deposit with Landlord the sum of Eight Thousand Eight Hundred Ten
and 96/100 Dollars ($8,810.96) as a security deposit. Such security deposit
(which shall not bear interest to Tenant unless required to do so by any
provision of law) shall be considered as security for the payment and
performance by Tenant of all of Tenant's obligations, covenants, conditions and
agreements under the Lease. Upon the expiration of the term hereof (or any
renewal or extension thereof), Landlord shall (provided that Tenant is not in
default under the terms hereof) return and pay back such security deposit to
Tenant, less such portion thereof as Landlord shall have appropriated to make
good any default by Tenant with respect to any of Tenant's aforesaid
obligations, covenants, conditions and agreements. In the event of any default
by Tenant hereunder during the term of this Lease, Landlord shall have the
right, but shall not be obligated, to apply all or any portion of the security
deposit to cure such default, in which event Tenant shall be obligated promptly
to deposit with Landlord the amount necessary to restore the security deposit to
its original amount. In the event of the sale or transfer of Landlord's interest
in the building, Landlord shall have the right upon notification to Tenant to
transfer the security deposit to such purchaser or transferee, in which event
Tenant shall look only to the new landlord for the return of the security
deposit and Landlord shall thereupon be released from all liability to Tenant
for the return of such security deposit.
8. ASSIGNMENT AND SUBLETTING.
Tenant will not assign, transfer, mortgage, or otherwise encumber this Lease or
sublet or rent (or permit occupancy or use of) the Leased Premises, or any part
thereof without Landlord's prior written consent which shall not be unreasonably
withheld.
In the event of any sublease or assignment of all or any portion of the Leased
Premises where the rent in the sublease or assignment exceeds the rent or pro
rata portion of the rent, as the case may be, for such space in the Lease,
Lessee shall pay the Lessor monthly, as additional Rent, at the same time as the
monthly installments of rent hereunder, one-half (1/2) of the excess rent paid
for the sublease over the rent in this Lease applicable to the sublease space.
9. TENANT'S ALTERATIONS AND FURNISHINGS.
(a) Tenant shall not make any material alterations, improvements or additions to
the Leased Premises including, but not limited to, wall coverings and special
lighting installations, without the Landlord's advance written consent in each
and every instance. In the event Tenant
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desires to make any alterations, improvements or additions, Tenant shall first
submit to Landlord plans and specifications along with the necessary permits and
governmental approvals therefor and obtain Landlord's written approval thereof
prior to commencing any such work. All alterations, improvements or additions,
whether temporary or permanent in character, made by Landlord or Tenant in or
upon the Leased Premises shall become Landlord's property and shall remain upon
the Leased Premises at the termination of this Lease without compensation to
Tenant (excepting only Tenant's moveable office furniture, trade fixtures,
office and professional equipment). In the event Landlord shall so elect, any
such alteration, improvement or addition upon the Leased Premises shall be
removed by Tenant upon termination of this Lease or any renewal thereof; should
the Leased Premises suffer any damage(s) during the course of removing such
alteration, improvement or addition, the Tenant agrees to and shall restore the
Leased Premises to their original condition, which shall be defined as the
condition and the design of the space at the time of acceptance of the space by
Tenant, fair wear and tear accepted, at Tenant's sole cost and expense, on or
before the expiration of the term of this Lease or any renewal thereof. Should
Tenant fail to remove same, then and in such event Landlord shall cause same to
be removed at Tenant's expense, and Tenant hereby agrees to reimburse Landlord
for the cost of such removal, together with any and all damages which Landlord
may suffer and sustain by reason of the failure of Tenant to remove same. Any
damage caused by or resulting from the removal of Tenant's office furniture,
trade fixtures, and office and professional equipment may be repaired by
Landlord at Tenant's cost and expense.
Any increase in Operating Expenses which results from improvements made by
the Tenant shall be the sole responsibility of that Tenant.
(b) Tenant shall not install or operate in the Leased Premises any electrically
operated equipment or other machinery other than normal office equipment using
110/120 voltage wiring, or any other equipment of any kind or nature whatsoever
which will or may necessitate any changes, replacements or additions to, or
require the use of, the water, plumbing, heating, air conditioning, or
electrical system of the Leased Premises, without first obtaining the prior
written consent of Landlord, who may condition such consent upon the payment by
Tenant of additional rent in compensation for such excess consumption of water
or electricity or wiring as may be occasioned by the operation of said equipment
or machinery.
(c) Tenant shall not permit any mechanic's lien to be filed against the fee of
the Leased Premises or against Tenant's leasehold interest in the Leased
Premises by reason of work, labor services or materials supplied or claimed to
have been supplied to Tenant or anyone holding the Leased Premises through or
under Tenant, whether prior or subsequent to the commencement of the term
hereof. If any such mechanic's lien shall at any time be filed against the
Leased Premises and Tenant shall fail to remove same within thirty (30) days
thereafter, it shall constitute a default under the provisions of this Lease.
Tenant shall bear all costs, including attorney's fees, incurred by Landlord in
defending the Leased Premises against any such lien.
(d) Landlord shall have the right to prescribe the weight and position of safes
and other heavy equipment or fixtures, which shall, if considered necessary by
the Landlord, stand on plank strips to distribute the weight. Any and all damage
or injury to the Leased Premises, or due to the same being on the Leased
Premises, shall be repaired by, and at the sole cost of, Tenant. No furniture,
equipment or other bulky matter of any description will be received into the
building or carried in the elevators except as approved by Landlord or
Landlord's agent, and all such furniture, equipment, and other bulky matter
shall be delivered only through the designated delivery entrance of the
building. Tenant agrees promptly to remove from the sidewalks adjacent to the
building any of the Tenant's furniture, equipment or other material there
delivered or deposited.
10. GOOD ORDER AND REPAIR.
Tenant agrees to keep and maintain the Leased Premises and the fixtures therein
in good order and condition and shall, at the expiration or sooner termination
of this Lease, surrender and deliver up the same in as good order and condition
as they were at the commencement of
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the term hereof, ordinary wear and tear and damage by the elements excepted.
Tenant shall immediately notify Landlord of any damage to the Leased Premises or
to the building of which they form a part caused by neglect, carelessness or
vandalism by Tenant, its employees, agents or invitees, and such damage shall be
immediately repaired by and at the cost of Tenant. If Tenant fails to make such
repairs, Landlord may make them for which costs Landlord shall be reimbursed in
full by Tenant together with interest at the maximum rate permitted by law.
11. RESTRICTIONS ON USE.
Tenant shall not use, occupy or permit the Leased Premises or any part thereof
to be used or occupied for any business use or purpose deemed by Landlord to be
disreputable, disorderly or extra-hazardous, nor in such manner as to disturb
the peaceful and quiet occupancy of the other tenants of the building or
constitute a nuisance of any kind; nor shall Tenant allow, permit or suffer any
noise, vibration, smoke or odor to escape from the Leased Premises in a manner
which will disturb other occupants of the building or of adjoining or adjacent
properties.
12. INSURANCE BY LANDLORD.
Landlord shall, during the Lease Term, procure and keep in force the following
insurance, the cost of which shall be deemed as Additional Rent payable, by
Tenant pursuant to Paragraph 6:
(1) Property insurance insuring the building and improvements and rental value
insurance for perils covered by the causes of loss-special form (all risk) and
in addition coverage for flood, earthquake and boiler and machinery (if
applicable). Such coverage (except for flood and earthquake) shall be written on
a replacement cost basis equal to ninety percent (90%) of the full insurable
replacement value of the foregoing and shall not cover Tenant's equipment, trade
fixtures, inventory, fixtures or personal property located on or in the Leased
Premises.
(2) Commercial general liability insurance against any and all claims for bodily
injury and property damage occurring in or about the Building or the Land. Such
insurance shall have a combined single limit or not less than One Million
Dollars ($1,000,000) per occurrence per location with a Two Million Dollar
($2,000,000) aggregate limit.
(3) Such other insurance as Landlord deems necessary and prudent or required by
Landlord's beneficiaries or mortgagees of any deed of trust or mortgage
encumbering the Premises.
13. INSURANCE BY TENANT.
Tenant shall, during the Lease Term, procure as its expense and keep in
force the following insurance:
(1) Commercial general liability insurance naming the Landlord as an additional
insured against any and all claims for bodily injury and property damage
occurring in, or about the Premises arising out of Tenant's use and occupancy of
the premises. Such insurance shall have combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit and excess umbrella liability insurance in the
amount of Two Million Dollars ($2,000,000). If the Tenant has other locations
that it owns or leases the policy shall include an aggregate limit per location
endorsement. Such liability insurance shall be primary and not contributing to
any insurance available to Landlord and Landlord's insurance shall be in excess
thereto. In no event shall the limits of such insurance be considered as
limiting the liability of Tenant under this lease.
(2) Personal property insurance insuring all equipment, trade fixtures,
inventory,
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fixtures and personal property located on or in the Premises for perils covered
by the causes of loss - special form (all risk) and in addition, coverage for
flood, earthquake and boiler and machinery (if applicable).
(3) Workers' compensation insurance in accordance with statutory law and
employers' liability insurance with a limit of not less than $100,000 per
employee and $500,000 per occurrence.
(4) Such other commercially reasonable insurance as Landlord reasonably deems
necessary and prudent or required by Landlord's beneficiaries or mortgagees of
any deed of trust or mortgage encumbering the Premises.
The policies required to be maintained by Tenant shall be with companies rated
AX or better in the most current issue of Best's Insurance Reports. Insurers
shall be licensed to do business in the state in which the Premises are located
and domiciled in the USA. Any deductible amounts under any insurance policies
required hereunder shall not exceed $1,000. Certificates of insurance (certified
copies of the policies may be required) shall be delivered to Landlord prior to
the commencement date and annually thereafter at least thirty (30) days prior to
the expiration date of the old policy. Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms hereof
in a blanket policy, provided such blanket policy expressly affords coverage to
the Premises and to Landlord as required by this Lease. Each policy of insurance
shall provide notification to Landlord at least thirty (30) days prior to any
cancellation or modification to reduce the insurance coverage.
14. WAIVER OF SUBROGATION.
Landlord and Tenant hereby mutually waive their respective rights of recovery
against each other for any loss of, or damage to, either parties' property, to
the extent that such loss or damage is insured by an insurance policy required
by its insurer whereby the insurer waives its rights of subrogation against the
other party. The provisions of this clause shall not apply in those instances in
which waiver of subrogation would cause either party's insurance coverage to be
voided or otherwise made uncollectible.
15. SIGNS AND ADVERTISING.
No sign, fixture, advertisement or notice shall be displayed, inscribed, painted
or affixed by Tenant on any part of the outside or inside of the Leased Premises
or building of which they form a part or on adjacent parking area(s) without the
prior written consent of Landlord, except on the directories and doors of
offices, and then only in such size, color and style as Landlord shall approve;
and if any such sign, fixture, advertisement or notice is exhibited, Landlord
shall have the right to remove same and Tenant shall be liable for any and all
expenses incurred by Landlord in said removal. Landlord shall have the right to
prohibit any advertisement of any Tenant which in Landlord's opinion tends to
impair the reputation of the building or its desirability as a building for
offices, and upon written notice from Landlord, Tenant shall refrain from and
discontinue such advertisement.
16. RULES AND REGULATIONS.
Tenant and Tenant's employees, agents and visitors shall faithfully comply with
the rules and regulations set forth in Exhibit "B" attached hereto and made a
part hereof, and with such further reasonable rules and regulations as Landlord
at any time and from time to time may make and communicate in writing to Tenant,
which, in Landlord's judgment, shall be necessary for the reputation, safety,
care of appearance of the Leased Premises or the building of which they form a
part, together with their appurtenances, or the preservation of good order
therein, or the operation or maintenance of the building and its equipment, or
the more useful occupancy or the comfort of the tenants or others in the
building. Landlord shall not be liable to Tenant for the violation of any of
said rules and regulations or the breach of any covenant or condition in any
lease, by any other tenant in the building or by any employee, agent or visitor
of Landlord.
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17. LANDLORD'S RIGHT OF ENTRY.
Landlord and the Landlord's duly authorized agents and representatives upon
reasonable advance notice during business hours (except for emergencies) shall
have the right to enter into or upon the Leased Premises or any part thereof at
all reasonable or necessary times for the purpose of inspecting same or making
such repairs or alterations as Landlord may deem necessary or exhibiting the
building for sale, lease or financing.
18. REPAIRS.
Landlord shall, at its own cost and expense, except as may be provided elsewhere
herein, make all necessary repairs and replacements to the exterior and common
areas of the building of which the Leased Premises form a part, and to the
equipment used to provide the services furnished by Landlord hereunder, unless
any such damage is caused by acts or omissions of Tenant, its employees, agents
or invitees, in which event Tenant shall bear the cost of such repairs. All
injury or damage to the building or the Leased Premises caused by moving the
property of Tenant in or out thereof, or by installation or removal of
furniture, fixtures or other property, or by any other act or omission of
Tenant, its employees, agents or invitees, shall be promptly repaired by Tenant
at Tenant's cost and expense. In the event Tenant shall fail to do so repair the
building or the Leased Premises, then Landlord shall have the right to make such
repair and any charge or cost incurred by Landlord therefor shall be paid by
Tenant and Landlord may elect, in its discretion, to regard such charge or cost
as additional rent which shall become payable with the installment of rent next
becoming due or thereafter falling due under the terms of this Lease.
19. LANDLORD'S SERVICES.
Landlord shall provide the following services without cost to Tenant:
(a) Electricity, through conduits provided by Landlord, for lighting and normal
business equipment and all replacement light bulbs or tubes for building
standard fixtures.
(b) Hot and cold water for lavatory and drinking purposes in places
designated by Landlord, and lavatory supplies.
(c) Subject to all governmental regulations or limitations in effect from time
to time, heat and air conditioning during the hours as set forth in the rules
and regulations during such seasons of the year when such services are normally
and usually furnished in modern office buildings in the Nashville area.
(d) Automatic elevator service; and
(e) Building standard cleaning service in the common areas of the building and
in the Leased Premises; except Saturdays, Sundays and Government holidays, which
service shall consist of sweeping floors, vacuuming carpets, dusting surfaces of
normal office furniture and emptying wastebaskets on each normal business day.
Windows will be cleaned at reasonable intervals.
Landlord does not warrant that any of the services above mentioned will be free
from interruptions caused by repairs, renewals, improvements, alterations
strikes, lockouts, accidents, inability of Landlord to obtain fuel or supplies,
or any other cause beyond the reasonable control of Landlord. Any such
interruption of service shall never be deemed an eviction or disturbance of
Tenant's use and possession of the Leased Premises or any part thereof or render
Landlord liable to Tenant for damages or relieve Tenant from performance of
Tenant's obligations under this Lease; provided, however, that Landlord will at
all times use reasonable efforts promptly to remedy any situation which might
interrupt such services.
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20. PARKING AREA.
Tenant shall have the right to use in common with the other tenants in the
building the parking spaces as provided by Landlord adjacent to the building for
parking of Tenant's automobiles and those of its employees and visitors, subject
to the rules and regulations now or hereafter adopted by Landlord. Tenant shall
not use nor permit any of its employees, agents or visitors to use any parking
area owned by Landlord other than the parking area adjacent to the assigned to
the building. If Landlord deems it advisable, Landlord may set aside a part of
the total parking field for use as a separate area for visitors. Landlord
reserves the right to adopt any regulations necessary to curtail unauthorized
parking, including the required use of "parking permits."
21. DAMAGE OR DESTRUCTION.
(a) Total Destruction. If the Leased Premises is damaged or destroyed by fire,
earthquake or any other casualty to such an extent as to render the same
untenantable in whole or in substantial part, Tenant shall give Landlord
immediate notice of the occurrence of such casualty. Unless Landlord notifies
Tenant within (60) days after receipt of such notice of its election to repair
or to restore the Leased Premises, this Lease shall terminate at the end of such
sixty day period. If Tenant shall not be in default under this Lease; then
Tenant's liability for rent shall cease as of the day following the casualty and
any rent paid by Tenant in advance and not yet earned as of the date of
termination shall be refunded to Tenant. If Landlord elects to so repair or
restore the Leased Premises, Landlord shall do so within one hundred eighty
(180) days with due allowance given to landlord for any reasonable delays caused
by adjustment of insurance loss, strikes, labor difficulties or any cause beyond
Landlord's control provided Landlord is diligently pursuing such restoration.
The rent shall be abated during the period of repair or restoration in the same
proportion as the untenantable portion of the Leased Premises bears to the
former leasable area of the Leased Premises. If such repair or restoration is
not completed within 180 days with aforementioned due allowances, then either
Landlord or Tenant at its option, may terminate this Lease upon notice to the
other. If more than 25% of the leasable square feet in the Building are damaged
or destroyed by fire, earthquake or any other casualty, then Landlord, at its
sole option, may terminate this Lease upon notice to the Tenant.
(b) Partial Destruction. In the event Leased Premises is damaged by fire,
earthquake or any other casualty to such an extent that it is not rendered
untenantable in whole or in substantial part, then Landlord shall promptly, to
the extent of any insurance proceeds received, repair and restore the premises.
The rent shall be abated proportionately as to the portion of the Leased
Premises damaged from the day following the casualty until the completion of the
repair and restoration. If such partial destruction renders the Leased Premises
unsuitable for Tenant's business purposes, and Landlord fails to repair and
restore same within 180 days (due allowances given to Landlord for any
reasonable delays caused by adjustment of insurance loss, strikes, labor
difficulties or any cause beyond Landlord's control provided Landlord is
diligent in pursuing such restoration), then either Tenant or Landlord may at is
option terminate this Lease upon notice to the other.
22. INDEMNIFICATION
The Tenant will indemnify and hold harmless the Landlord against and from any
and all claims arising from (i) the Tenant's occupancy of the premises,
(including, but not limited to, statutory liability and liability under workers'
compensation laws), (ii) any breach or default in the performance of any
obligation on the Tenant's part to be performed under the terms of this Lease,
(iii) any act of negligence of the Tenant, or any officer, agent, employee, or
invitee of the Tenant, (iv) all costs, attorneys' fees, expenses and liabilities
incurred in or about any such claim or any action or proceeding brought thereon,
and, in any case, action or proceeding brought against the Landlord by reason of
any such claim. The Tenant upon notice from the Landlord will defend the same at
the Tenant's expense by counsel approved in writing by the Landlord.
The Tenant, as a material part of the consideration to the Landlord assumes
all risk of damage to property or injury to persons, in, upon or about the
Leased Premises except that, (i) the Tenant does not assume any risk for damage
to the Tenant resulting from the gross negligence or willful misconduct of the
Landlord or its authorized representative, (ii) which is
9
caused by the failure of the Landlord to observe any of the terms and conditions
of the Lease if such failure has persisted for an unreasonable period of time
after written notice of such failure.
The Landlord is not liable for any claims, costs or liabilities arising out of
or in connection with the acts or omissions of any other tenants in the
Building. The Tenant waives all of its claims in respect thereof against the
Landlord.
23. CONDEMNATION.
(a) If the whole or any part of the Leased Premises shall be taken for any
public or quasi-public use under any statute or by right of eminent domain, or
by purchase under threat of condemnation, then this Lease shall at Landlord's
reasonable and sole option automatically terminate as of the date that title
shall be taken. If as a result of such condemnation, the Leased Premises is
rendered unsuitable for Tenant's business purposes in the reasonable opinion of
either Landlord or Tenant, then such party may terminate this Lease as of the
date that title shall be taken.
(b) If any part of the building of which the Leased Premises form a part or any
parking area adjacent thereto shall be so taken and this Lease shall not be
terminated under the provisions (a) above, then Landlord shall have the option
to terminate this Lease upon ninety (90) days notice to Tenant if, in Landlord's
sole discretion, continued operation of the remaining structure or improvements
is uneconomical.
(c) In any event, all compensation awarded or paid upon such a total or partial
taking shall belong to and be the property of Landlord without any participation
by Tenant; provided, however, that nothing contained herein shall be construed
to preclude Tenant from prosecuting any claim directly against the condemning
authority in such condemnation proceeding for loss of business, depreciation to,
damage to, or costs of removal of, or for the value of, trade fixtures,
furniture, and other personal property belonging to Tenant; provided, however,
that no such claim shall diminish or otherwise adversely affect Landlord's
award.
24. DEFAULT.
If Tenant shall fail to pay any installment of the fixed rent reserved herein or
any other charges at the time the same shall become due and payable, although no
demand shall have been made for same, or if Tenant shall violate or fail or
neglect to keep and perform any of the terms, covenants, conditions or
agreements herein contained on the part of Tenant to be kept and performed,
other than payment of rent and the same is not cured or corrected within thirty
(30) days after written notice thereof or if the Leased Premises shall become
vacant or deserted, or if Tenant shall make an assignment of assets for benefit
of creditors or file a voluntary petition in bankruptcy or be adjudicated
bankrupt or insolvent, or if an involuntary petition in bankruptcy or for
receivership be instituted against Tenant and the same not be dismissed within
sixty (60) days of the filing thereof, then, and in each and every such event,
and at all times thereafter, at the option of Landlord, Tenant's right of
possession of the Leased Premises and to reenter same and expel or remove Tenant
and any other person who may be occupying said Leased Premises or any part
thereof and any personal property or trade fixtures located therein without
demand of rent or demand of possession, any notice to quit or of intention to
re-enter being hereby expressly waived by Tenant. In the event of such re-entry
by process of law or otherwise, Tenant agrees to and shall remain liable for any
and all damage, deficiency or loss of rent which Landlord may sustain by such
re-entry; and in such case Landlord reserves full power, which is hereby acceded
by Tenant, to re-let the Leased Premises for the benefit of Tenant, in
liquidation and discharge, in whole or in part, as the case may be, of the
liability of Tenant under the terms and provisions of this Lease.
If Tenant becomes the subject debtor in a case pending under the Federal
Bankruptcy Code, Landlord's right to terminate this Lease under this paragraph
shall be subject to the applicable rights, if any, of the Trustee in Bankruptcy
Code. The failure of the Trustee to effect such assumption or assignment hereof
within the applicable time period provided in the Federal Bankruptcy Code shall
conclusively and irrevocably constitute the Trustee's rejection of this
10
Lease and waiver of any right of the Trustee to assume or assign this Lease.
(The Trustee shall not have the right to assume or assign this Lease.) The
Trustee shall not have the right to assume or assign the Lease unless said
Trustee (i) promptly and fully cures all defaults under this Lease, (ii)
promptly and fully compensates Landlord for all monetary damages incurred as a
result of such default, and (iii) provides to Landlord "adequate assurance of
future performance", (as defined herein below). Landlord and Tenant hereby agree
in advance that "adequate assurance of future performance", as used in this
paragraph, shall mean that all of the following minimum criteria must be met:
(a) Tenant's gross receipts in the ordinary course of its business during the
thirty (30) days immediately preceding the initiation of the case under the
Federal Bankruptcy Code must be at least two (2) times greater than the next
payment of rent due under this Lease, (b) both the average and median of
Tenant's monthly gross receipts in the ordinary course of business during the
six (6) months immediately preceding initiation of the case under Federal
Bankruptcy Code must be at least two (2) times greater than the next payment of
rent due under this Lease, (c) Tenant must pay to Landlord all rentals and other
sums payable by Tenant hereunder including also therein its share (as estimated
by Landlord) of the cost of all services provided by Landlord (whether directly
or through agents or contractors, and whether or not the cost of such services,
and (d) the Tenant must agree (by writing delivered to Landlord) that the
Tenant's business liquidating sales, auctions, or other non-first class business
operations shall be conducted on the Leased Premises, and that the use of the
Leased Premises as stated in these Lease will remain unchanged, and that the
assumption or assignment of this Lease will not violate or affect the rights of
other tenants in the building. In the event Tenant is unable to (i) cure its
defaults, (ii) reimburse Landlord for its monetary damages, (iii) pay the rents
due under this Lease or any other payments required of Tenant under this Lease
on time, or (iv) meet the criteria and obligations imposed by (a) through (d)
above in this paragraph 23, then Tenant hereby agrees in advance that it has not
met its burden to provide adequate assurance of future performance, and this
Lease may be terminated by Landlord in accordance with this paragraph. Should
the Trustee fail to comply with the provisions of the Federal Bankruptcy Code
governing the assumption or assignment of this Lease or should the Trustee
reject this Lease, then Landlord shall have the right to terminate this Lease by
giving thirty (30) days prior written notice to Tenant. The provisions of this
paragraph shall apply not only to a Trustee in Bankruptcy but also to Tenant as
a Debtor In Possession Under the Federal Bankruptcy Code.
Landlord's pursuit of any remedy herein provided shall not preclude pursuit of
any other remedies provided by law, nor shall pursuit of any remedy herein
provided constitute a forfeiture or waiver of any rent due to Landlord hereunder
or of any damages accruing to Landlord by reason of the violation of Tenant of
any of the terms, covenants, conditions or agreements of this Lease. In addition
to the foregoing, upon such default, at Landlord's option, the entire amount of
the rent then remaining to be paid under this Lease shall become due and
payable. No waiver by Landlord of any violation or breach of any of the terms,
covenants, conditions or agreements of this Lease shall be deemed or construed
to constitute a waiver of any other violation or breach of any of the terms,
covenants, conditions or agreements hereof; and no provision of this Lease shall
be deemed to have been waived by Landlord unless such waiver shall be in writing
signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly installments of rent herein stipulated shall be deemed
to be other than on account of the earliest stipulated rent nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment of 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 provided in this Lease.
11
In no event shall any lender on personal property of Tenant cause to be recorded
any financing statements, Uniform Commercial Code filings or their equivalents
(in connection with the Landlord's striking of the preceding paragraph regarding
a lien upon all personal property of Tenant) which offset or otherwise impair
title to Landlord's fixtures and real or personal property located on the
Premises.
Tenant, upon default, agrees to pay all costs and expenses of Landlord in the
enforcement of Landlord's right hereunder including all reasonable attorney's
fees.
24A. TENANT'S SELF HELP RIGHTS.
If Landlord has defaulted in the performance of any term or covenant required to
be performed by it under this lease so that at least thirty percent (30%) of the
Leased Premises is untenantable, inaccessible or incapable of use by Tenant in
the ordinary course of its business, after not less than thirty (30) days' prior
notice to Landlord, and provided that Landlord has not within such thirty (30)
day period promptly commenced and diligently pursued a cure, Tenant may, but
shall not be obligated to, remedy such default and in connection therewith may
pay reasonable sums to cure or alleviate such default and employ counsel. All
reasonable sums expended or obligations incurred by Tenant in connection
therewith shall be paid by Landlord to Tenant upon demand.
25. HOLDOVER.
Notwithstanding any provision of law or any judicial decision to the contrary,
no notice shall be required to terminate the term of this Lease as herein
mentioned without notice being required from either party. However, if Tenant
shall remain in possession of the Leased Premises beyond the expiration of the
term without the express written consent of Landlord, then such possession shall
be as a month-to-month tenant at double the rent of the last month of the Lease
term, and the provisions of this Lease shall be applicable.
26. SUBORDINATION.
This Lease is subject and subordinate to all ground or underlying leases
and to all mortgages and/or deeds of trust which may now or hereafter affect
such leases or the real property of which the Leased Premises form the part, and
to all renewals. modifications, consolidations, replacements and extensions
thereof. This paragraph shall be self-operative and no further instrument of
subordination shall be necessary to evidence the priority of any mortgagee or
trustee. In confirmation of such subordination, Tenant shall execute promptly
any certificate that the Landlord may request. Provided, however that
notwithstanding the foregoing, the party secured by any such deed of trust shall
recognize this Lease and, in the event of any foreclosure sale under such deed
of trust, this Lease shall continue in full force and effect; and the Tenant
covenants and agrees that it will, at the written request of the party secured
by any such deed of trust, execute, acknowledge and deliver any reasonable
instrument that has for its purposes and effect the subordination of the lien of
this Lease to said deed of trust. At the option of any landlord under any ground
underlying Lease to which the lease is now or may hereafter become subject or
subordinate. Tenant agrees that neither the cancellation nor termination of such
ground or underlying lease shall by operation of law or otherwise, result in
cancellation or termination of this Lease or the obligations of the Tenant
hereunder, and Tenant covenants and agreed to attorn to such landlord or to any
successor to Landlord's interest in such
12
ground or underlying lease, and in that event, this Lease shall continue as a
direct lease between the Tenant herein and such landlord or its successor; and
in any case, such landlord or successor under such ground or underlying lease
shall not be bound by any prepayment on the part of Tenant of any rent for more
than the amount of the security deposit, so that rent shall be payable under
this Lease in accordance with its terms, from the date of the termination of the
ground or underlying lease, as if such prepayment had not been made.
27. ESTOPPEL CERTIFICATE.
Tenant agrees, at any time and from time to time, upon not less than five (5)
business days prior written notice by Landlord, to execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the Lease is in full force and effect as modified and stating the
modification), (ii) stating the dates to which the rent and any other charges
hereunder have been paid by Tenant, (iii) stating whether or not to the best
knowledge of Tenant, Landlord is in default in the performance of any covenant,
agreement or condition contained in the Lease, and if, so, specifying each such
default of which Tenant may have knowledge, and (iv) stating the address to
which notices to Tenant should be sent. Any such statement delivered pursuant
hereto may be relied upon by any owner of the building of which the Leased
Premises are a part or the land underlying said building, and any prospective
purchaser of said building or said land, any mortgagee or prospective mortgagee
of said building or said land or of Landlord's interest in either, or any
prospective assignee of any such mortgagee.
28. NOTICES.
Any notice to be given by either party to the other pursuant to the provisions
of this Lease shall be in writing and shall be deemed to be duly given if
delivered personally or mailed by registered or certified mail, return receipt
requested, addressed to Landlord at the address at which it receives rent and
addressed to Tenant at the Leased Premises.
29. SALE.
In the event the original Landlord hereunder, or any successor owner of the
building, shall sell or convey the building, all liabilities and obligations on
the part of the original Landlord, or such successor owner, under this Lease
accruing thereafter shall terminate, and thereupon all such liabilities and
obligations shall be binding on the new owner. Tenant agrees to attorn to such
new owner.
30. MODIFICATIONS.
Landlord and Tenant agree that this Lease contains the entire agreement between
them and shall not be modified in any manner except by an instrument in writing
signed by each of them.
31. PARAGRAPH HEADINGS.
The paragraph headings as to contents of particular paragraphs herein are
inserted for convenience only and shall not be considered to be part of this
Lease or in any way to modify, amend or affect the provisions hereof.
13
32. MISCELLANEOUS.
Words of any gender used in this Lease shall be held to include any other
gender, and words in the singular number shall be held to include the plural,
when the context requires.
33. BENEFIT.
This Lease shall inure to the benefit of and be binding upon Landlord and Tenant
and their respective legal representatives, successors, and such assigns and
sublessees as may be approved by Landlord hereunder.
34. GOVERNING LAW.
This Lease and its provisions shall be interpreted, governed and enforced in
accordance with the law of the State of Tennessee.
35. COMPLIANCE WITH LAWS.
Tenant shall (a) at Tenant's expense, comply with all present and future laws
and requirements of any public authorities in respect of the use and occupation
of the Premises, or the abatement of any nuisance in, on or about the Leased
Premises, and (b) be responsible for the cost of the compliance with all present
and future laws and requirements of any public authorities in respect of the
Landlord's property of which the Leased Premises are a part arising from (i)
Tenant's use of the Leased Premises, (ii) the manner of conduct of Tenant's
business or operation of its installations, equipment or other property therein,
(iii) any cause or condition created by or at the instance of Tenant, or (iv)
the breach of any of Tenant's obligations hereunder, whether or not such
compliance requires work which is ordinary or extraordinary, foreseen or
unforeseen; and Tenant shall pay all the costs, expenses, fines penalties and
damages which may be imposed upon Landlord by reason of or arising out of
Tenant's failure to fully and promptly comply with and observe the provisions of
this section. Without limiting the generality of the foregoing, it is
specifically agreed that Tenant shall comply with all laws dealing with
hazardous materials and, specifically, will not allow their presence in or about
the Leased Premises or any other part of Landlord's property. Tenant shall give
prompt notice to Landlord of any notice it receives of the violation of any law
or requirement of any public authority with respect to the Leased Premises or
the use or occupation thereof.
36. LIMITATION OF LIABILITY
Notwithstanding anything contained in this Lease, or in any other document to
the contrary, Tenant shall look solely to the then interest of Landlord in the
Premises, or of any successor in interest to Landlord as owner of the Building,
for the satisfaction of any remedy of Tenant for failure to perform any of
Landlord's obligations under this Lease, express or implied, or under any law.
Neither Landlord nor any disclosed or undisclosed principal of Landlord (or
officer, director, stockholder, partner or agent of Landlord or of any such
principal), nor any successor of any of them, shall have any personal liability
for any such failure under this Lease or otherwise.
37. ADA GENERAL COMPLIANCE
Tenant, at Tenant's sole expense, shall comply with all laws, rules, orders,
ordinances, directions, regulations and requirements of federal, state, county
and municipal authorities now in force or which may hereafter be in force, which
shall impose any duty upon the Landlord or Tenant with respect to the use,
occupation or alteration of the Leased Premises, and that the
14
Tenant shall use all reasonable efforts to fully comply with the American's With
Disability Act. Landlord's responsibility for compliance with Americans With
Disability Act shall include the common areas and restrooms of the Building, but
not the Leased Premises.
38. HAZARDOUS SUBSTANCE - GENERAL
The term "Hazardous Substances," as used in this lease shall mean pollutants,
contaminants, toxic or hazardous wastes, or any other substances the use and/or
the removal of which is required or the use of which is restricted; prohibited
or penalized by any "Environmental Law." which term shall mean any federal,
state or local law, ordinance or other statute of a governmental authority
relating to pollution or protection of the environment. Tenant hereby agrees
that (i) no activity will be conducted on the Premises that will produce any
Hazardous Substance, except for such activities that are part of the ordinary
course of Tenant's business activities (the "Permitted Activities") provided
said Permitted Activities are conducted in accordance with all Environmental
Laws and have been approved in advance in writing by Landlord; Tenant shall be
responsible for obtaining any required permits and paying any fees and providing
any testing required by any governmental agency; (ii) the Premises will not be
used in any manner for the storage of any Hazardous Substances except for the
temporary storage of such materials that are used in the ordinary course of
Tenant's business (the "Permitted Materials") provided such Permitted Materials
are properly stored in a manner and location meeting all Environmental Laws and
approved in advance in writing by Landlord; Tenant shall be responsible for
obtaining any required permits and paying any fees and providing any testing
required by any governmental agency; (iii) no portion of the Premises will be
used as a landfill or a dump; (iv) Tenant will not install any underground tanks
of any type; (v) Tenant will not allow any surface or subsurface conditions to
exist or come into existence that constitute, or with the passage of time may
constitute a public or private nuisance; (vi) Tenant will not permit any
Hazardous Substances to be brought into the Premises, except for the Permitted
Materials described above, and if so brought or found located thereon, the same
shall be immediately removed, with proper disposal, and all required cleanup
procedures shall be diligently undertaken pursuant to all Environmental Laws.
Landlord or Landlord's representative shall have the right but not the
obligation to enter the Premises for the purpose of inspecting the storage, use
and disposal of Permitted Materials to ensure compliance with all Environmental
Law. Should it be determined that said Permitted Materials are being improperly
stored, used or disposed of, then Tenant shall immediately take such corrective
action as requested by Landlord. Should Tenant fail to take such corrective
action within 24 hours, Landlord shall have the right to perform such work and
Tenant shall promptly reimburse Landlord for any and all costs associated with
said work. If at any time during or after the term of the lease, the Premises is
found to be so contaminated or subject to said conditions, Tenant shall
diligently institute proper and thorough cleanup procedures at Tenant's sole
cost, and Tenant agrees to indemnify and hold Landlord harmless from all claims,
demand, actions, liabilities, costs, expenses, damages and obligations of any
nature arising from or as a result of the use of the Premises by Tenant. The
foregoing indemnification and the responsibilities of Tenant shall survive the
termination or expiration of this Lease.
Landlord agrees to indemnify and hold Tenant harmless from all claims, demands,
actions, liabilities, costs, expenses, damages, and obligations arising solely
out of the use, storage, or handling or Hazardous Materials by Landlord or those
under the control of Landlord. The foregoing indemnification shall survive the
termination or expiration of this Lease.
39. SPECIAL STIPULATIONS
1. Tenant shall be entitled to an improvement allowance of up to $12.00/rsf (the
Tenant Allowance) to be used solely for improvements to the Leased Premises. All
space planning and construction document costs will be included as part of this
Tenant Allowance. All costs incurred by Landlord in completing the Leasehold
Improvements in excess of the Tenant Allowance shall be borne by Tenant. If the
total cost for tenant improvements is less than $12.00/rsf, any savings will be
split equally between the Landlord and the Tenant and credited to the Tenant in
the form of rental abatement.
15
2. Landlord will permit Tenant to occupy the 2,434 rsf on the fourth floor
(Suite 420) from October 1, 1996 to October 31, 1996 at no rental charge. Such
space will be delivered to Tenant "as-is" and Tenant will abide by all the
terms, conditions, rules and regulations of the Lease with respect to such early
occupancy. Rental payments on the entire Leased Premises including Suite 300
will commence November 1, 1996 in accordance with paragraph "4" of the Lease;
furthermore; rental payments will commence specifically on Suite 420 on November
1, 1996 regardless of status of construction of Suite 300. Tenant shall have
four (4) month's following commencement of the Lease to allocate any residual
Tenant Allowance towards improving Suite 420. Rent on Suite 420 shall not xxxxx
during any construction period and Landlord will complete such construction in
an expeditious and efficient manner.
3. Provided Tenant is not in default hereunder, Tenant shall have one (1) option
to extend the term of the Lease for one (1) five (5) year period. Notice of
exercising the option to extend must be received by Landlord not less than one
hundred eighty (180) days prior to the expiration of the Term that Tenant seeks
to extend in order to be effective and binding on Landlord. The extension shall
be on the same terms and conditions except that the annual Base Rental shall be
adjusted to the then existing market rate of buildings of similar size and
quality in the Maryland Farms Office Park. Such existing market rate at time of
notice to renew will be determined by taking the average of the determination of
the market rate as put forth by two independent certified appraisers using
standard appraisal procedures. Landlord shall provide at its sole cost one
appraiser and Tenant shall provide at its sole cost one appraiser for
determination of the renewal option rate.
4. Tenant shall have a one-time right of first refusal on the 11,396 rsf (Suite
310) of contiguous space on the third floor when it comes available. Terms and
conditions of such right of first refusal will be the same as those offered a
bonafide third party prospect. In the event Landlord receives a bonafide offer
to lease Suite 310, Landlord shall notify Tenant and Tenant shall have ten (10)
business days to deliver Landlord written notice that it intends to lease the
space under those terms offered by the bonafide third party prospect.
5. Tenant shall have one (1) time right to cancel this Lease after the fifth
(5th) full year of the term by paying a termination fee in the amount of three
months rent plus the unamortized costs of leasing commissions and tenant
improvements (amortized over the lease term at an annual five percent (5%)
simple interest rate) together with 180 days prior written notice of Tenant's
intent to cancel.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands the
day and year first above mentioned.
LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------
Assistant Director
Title Commercial Real Estate
--------------------------
Xxxx X. Xxxxxxxxx
Assistant Director
Commercial Real Estate
Date: 9/6/96
---------------------------
Xxxxx X. Xxxxxxxx
TENANT:
AMERICA SERVICE GROUP INC.
By: /s/ Illegible
---------------------------
Title: Executive Vice President
---------------------------
Date: 29 August 1996
---------------------------
16
EXHIBIT A
[DIAGRAM OF FLOOR PLAN]
HARPETH ON THE GREEN
BUILDING III
THIRD FLOOR
EXHIBIT A (cont)
[DIAGRAM OF FLOOR PLAN]
HARPETH ON THE GREEN
BUILDING III
FOURTH FLOOR
EXHIBIT "B"
RULES AND REGULATIONS
1. Rental payments are due on the first of each month and should be mailed to
Principal Mutual Life Insurance Company c/x Xxxxx & Xxxxx, Inc., 0000 Xxxx Xxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000. Should your check be returned from the
bank, you must Reimburse Landlord with a certified check plus a $5.00 charge for
handling and to cover the fee charged by the bank for handling. Should you have
more than two checks returned by the bank, you will be asked to pay by cashiers
check from that point on.
2. The sidewalks, entries, passages, elevators, stairways and other common areas
of the building shall not be obstructed or used for any other purpose than
ingress and egress.
3. No additional locks shall be placed upon any doors in the building; and the
doors leading to the corridors shall be kept closed during business hours,
except as they may be used for ingress or egress.
4. No draperies, shades or blinds visible from the exterior of the building
shall be installed unless the color, material, shape, style and size have been
approved by Landlord, or Landlord's agent, in writing.
5. No awning, canopy or the like shall be installed unless approved by
Landlord or Landlord's agent, in writing.
6. No loud speaker system or other sound system shall be constructed,
maintained, used or operated in the Leased Premises or in or about the building
unless Tenant shall have first obtained the prior written consent of Landlord,
or Landlord's agent.
7. No vending machines shall be installed unless approved by Landlord or
Landlord's agent, in writing.
8. No freight, furniture or other bulky matter of any description shall be moved
into or out of the building or carried in the elevators, stairways or through
the windows of said building except as approved in advance by Landlord or
Landlord's agent, and at such times and in such manner as Landlord or Landlord's
agent may direct. There will be a supervision fee of $15.00 per hour for any
moves which occur during weekends or legal holidays. There shall not be used in
any space, or in any public halls of said building, either by Tenant or by
jobbers or other, in the delivery or receipt of merchandise any hand truck,
except those equipped with rubber tires and side guards. No trash or other
materials shall be left on the Premises at any time unless it is retained in
trash receptacles located within Tenant's designated space. During move-outs all
trash shall be removed from the Leased Premises at the Tenant's expense.
9. Tenant shall promptly remove from the public areas adjacent to the
building any of Tenant's property there delivered or deposited.
10. No parking is permitted in areas which are not properly designated as
parking. Cars parked in "No Parking" areas will be subject to being removed and
stored at owner's expense.
11. No portable heater or fans should be used, maintained or operated within the
Leased Premises unless Tenant shall have first obtained the prior written
consent of Landlord or Landlord's agent.
12. No animals shall be kept in or about the Premises.
13. No room or rooms shall be occupied or used as sleeping or lodging apartments
at any time, or for any immoral or illegal purposes, under penalty of immediate
cancellation of lease.
14. Maintenance and repair of plumbing or kitchen facilities within the
Leased Premises will be at the expense of Tenant.
15. Landlord's services shall be provided from 8:00 a.m. to 6:00 p.m. on Mondays
through Fridays and 8:00 a.m. to 1:00 p.m. on Saturdays, -- government holidays
excepted.
EXHIBIT C
FORM OF UNCONDITIONAL
LETTER OF CREDIT
(FOR PMLIC ONLY)
BANK LETTERHEAD
---------------
Date:
-------------------
Irrevocable Credit No.
----------------
To Beneficiary: Principal Mutual Life Insurance Company, its
successors and assigns
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: , CRE-Equities
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Gentlemen:
We hereby authorize you to value on ( X Bank )
----------------------
for the account of (depositor)
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for a sum or sums not exceeding a total of ($ ) Dollars available by
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your draft or drafts at sight. Drafts must be drawn and presented at our
office no later than , 19
-------------- --
All drafts must be marked "Drawn on ( X Bank )
------------------------------
Credit No. and all drawings negotiated under this credit must be
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endorsed on the reverse hereof.
We hereby agree with the drawers, endorsers and bona fide holders of all drafts
drawn on and in compliance with the terms of this credit that such drafts will
be duly honored upon presentation to the drawee, and that any statutory, UCP or
other rights to delay honor of sight drafts, including such rights under Article
5, Section 5-112(1)(a) and (b) of the Uniform Commercial Code are hereby
specifically waived.
Very truly yours,
--------------------------
(Authorized Signature)
