Exhibit 10.7
FIRST AMENDMENT TO
REAL PROPERTY PUT AND OPTION AGREEMENT
THIS FIRST AMENDMENT TO REAL PROPERTY PUT AND OPTION AGREEMENT (this
"Amendment") is made and entered into as of the ___ day of December, 1998, among
MAPLE LANE ACQUISITION LIMITED LIABILITY COMPANY, a Delaware limited liability
company, whose address is 00000 Xxxxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000
("Maple Lane LLC"), XXXXXX X. XXXXXX, having an address at 00000 Xxxxxxxxxx
Xxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000 ("Xxxxxx"), and CREATIVE CONCEPTS IN
ADVERTISING, INC., a Michigan corporation, whose address is 00000 Xxxxxxxxxx
Xxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000 ("CCA").
RECITALS:
A. Maple Lane LLC, Xxxxxx and CCA have heretofore entered into that certain
Real Property Put and Option Agreement dated as of January 6, 1997 (the
"Agreement").
B. Pursuant to the Agreement, at such time as the parties agree on the
lease form contemplated therein, the parties have agreed to amend the Agreement
to attach such lease form to the Agreement as Exhibit C-1.
C. The parties have agreed on such lease form.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Attached hereto as Exhibit A is a form of lease that has
been agreed upon by the parties. The parties hereto hereby agree that the
Agreement is hereby amended to attach such lease form to the Agreement as
Exhibit C-1.
2. As amended hereby, the Agreement shall continue in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
MAPLE LANE ACQUISITION LIMITED
LIABILITY COMPANY, a Delaware
limited liability company
By:
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Its:
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XXXXXX X. XXXXXX
CREATIVE CONCEPTS IN ADVERTISING,
INC., a Michigan corporation
By:
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Its:
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-2-
EXHIBIT A
Lease
(Exhibit C-1 to Real Property Put and Option Agreement)
LEASE
BETWEEN
LANDLORD: MAPLE LANE ACQUISITION, L.L.C.
AND
TENANT: CREATIVE CONCEPTS IN ADVERTISING, INC.
DATED:
LEASE
THIS LEASE (this "Lease") is entered into as of the ______ day of
__________________,199__, by and between MAPLE LANE ACQUISITION, L.L.C., a
Michigan limited liability company ("Landlord"), and
[CREATIVE CONCEPTS IN ADVERTISING, INC.], a ____________________ corporation
("Tenant")
SECTION I
BASIC LEASE PROVISIONS
LANDLORD: NAME: MAPLE LANE ACQUISITION, L.L.C., a Michigan limited
liability company
ADDRESS:
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TENANT: NAME: CREATIVE CONCEPTS IN ADVERTISING, INC., a
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ADDRESS:
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DEMISED
PREMISES: The land as described in Exhibit A attached hereto
(the "Site") and the improvements now or hereafter
located thereon in Oakland County, Michigan, commonly
known as 0000 Xxxxx Xxxx, Xxxx, Xxxxxxxx (said Site
and improvements being hereinafter collectively
referred to as the "Demised Premises"), subject,
however, to (a) all liens, easements, covenants,
restrictions and encumbrances affecting title as of
the Commencement Date (as hereinafter defined) and
(b) all present and future zoning and other
governmental laws, regulations, rules, restrictions,
and ordinances.
ORIGINAL LEASE
TERM: Five (5) years
RENEWAL TERMS: Two (2) options to renew for terms of five (5) years each.
COMMENCEMENT
DATE:
ORIGINAL EXPIRATION
DATE: Five (5) years after the Commencement Date.
ANNUAL BASE
RENT: Fair Market Rent (as hereinafter defined).
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USE OF DEMISED
PREMISES: Executive and administrative offices, warehouse and production
facilities, and, with Landlord's consent, which shall not be
unreasonably withheld, any other lawful use.
EXHIBITS
ATTACHED: A - Legal Description of Demised Premises
SECTION 2
GRANT AND TERM
2.1 DEMISED PREMISES
Landlord, in consideration of the rents to be paid and the covenants,
promises and agreements to be performed by Tenant, does hereby lease to Tenant
and Tenant hereby rents from Landlord, the Demised Premises described in Section
1.
2.2 ORIGINAL TERM
The original term of this Lease shall be for the Original Lease Term stated
in Section 1, commencing on the Commencement Date stated in Section 1 and
expiring on the Original Expiration Date stated in Section 1, unless delayed or
sooner terminated as herein set forth.
2.3 RENEWAL TERMS
A. Provided that both at the time of the exercise of the options
hereinafter set forth and at the time of the commencement of the applicable
Renewal Term (as hereinafter defined this Lease is in full force and effect and
provided, further, that Tenant is not then in default hereunder beyond any
applicable notice and grace periods, then Tenant is hereby granted the options
to renew the Term for two (2) additional periods of five (5) years each (each, a
"Renewal Term"). The first Renewal Term ("First Renewal Term") shall commence at
the expiration of the Original Lease Term and the second Renewal Term ("Second
Renewal Term") shall commence immediately after the expiration of the First
Renewal Term and shall expire on the fifth (5th) anniversary of the expiration
date of the First Renewal Term. Tenant shall exercise each option to renew, if
at all, by delivering notice of such election (each such notice, a "Renewal
Notice") to Landlord not less than twelve (12) months but not more than eighteen
(18) months prior to the expiration of the immediately preceding Term. In the
event that Landlord does not receive a Renewal Notice prior to the expiration of
such time period (time being of the essence with respect thereto), then such
option to renew the Term shall, upon the expiration of such time period, become
null and void and be of no further force or effect and Tenant shall, at the
request of Landlord, execute an instrument in form and substance acceptable to
Landlord confirming such facts. If Tenant fails to execute such instrument
within ten (10) days after receipt thereof from Landlord, then such failure
shall be a default by Tenant hereunder. In the event Tenant fails
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to timely exercise its option to renew the Term in respect of the First Renewal
Term, Tenant shall have no option to renew the Term in respect of the Second
Renewal Term. Each Renewal Term shall be upon the same terms and conditions of
this Lease except that Tenant shall have no option to renew this Lease beyond
the expiration of the Second Renewal Term.
B. Upon the exercise by Tenant of its option in respect of a Renewal Term
in accordance with this Section, (a) the term "Lease Term", as used in this
Lease, shall mean the Original Lease Term as extended for the First Renewal Term
and, if applicable, the Second Renewal Term, and (b) the term "Expiration Date"
shall mean the date of expiration of the then applicable Renewal Term.
C. Any termination, cancellation or surrender of this Lease shall terminate
any right of renewal for the Renewal Term in respect of the portion of the
leased premises as to which this Lease is terminated, cancelled or surrendered.
SECTION 3
CONDITION OF DEMISED PREMISES
Tenant represents that it has examined the Leased Premises and is fully
aware of the condition thereof and Tenant acknowledges that it is leasing the
Demised Premises in its "As Is" condition as of the Commencement Date. Tenant
acknowledges that neither Landlord nor any person purporting to act for Landlord
has made any representations concerning the physical condition of any buildings
or structures, or any portions thereof constituting a part of the Demised
Premises. Notwithstanding the foregoing, nothing contained herein shall be
deemed a waiver of any of Tenant's rights under (a) any indemnity made by
Landlord herein, (b) that certain Environmental Indemnity Agreement, dated
January ___, 1997 (the "Indemnity Agreement"), made by Xxxxxx X. Xxxxxx, or (c)
that certain Real Property Purchase Agreement, dated January 2, 1997 (the
"Purchase Agreement"), between Landlord and HA-LO Acquisition Corporation of
Michigan, Inc. (to which Tenant is the successor-by-merger).
SECTION 4
POSSESSION AND COMMENCEMENT OF TERM
4.1 POSSESSION AND COMMENCEMENT OF LEASE TERM
Landlord shall deliver actual possession of the Demised Premises to Tenant
on or before the Commencement Date. Tenant's obligation for the payment of Rent,
as defined herein, and the term of this Lease shall commence on the Commencement
Date. If permission is given to Tenant to occupy all or part of the Demised
Premises prior to the Commencement Date, Tenant covenants and agrees that such
occupancy shall be governed by all terms and conditions of this Lease, and the
Commencement Date and the Expiration
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Date shall not be changed.
4.2 LANDLORD NOT LIABLE FOR DELAYS
Under no circumstances shall Landlord be liable for any delays in the
delivery of possession of the Demised Premises to Tenant on the Commencement
Date. Tenant's sole and exclusive remedy shall be the abatement of Rent until
the Demised Premises are ready for occupancy and possession is delivered to
Tenant.
4.3 MEMORANDUM
Within thirty (30) days after the delivery of possession to Tenant, Tenant
shall join with Landlord in the execution of a written memorandum confirming the
Commencement Date and Expiration Date of the Lease Term. Tenant's failure to
execute the Memorandum shall be a default by Tenant under this Lease. Landlord's
default under this Lease shall not relieve Tenant of the obligation to execute
the Memorandum within such thirty (30) day period.
SECTION 5
RENT
5.1 BASE RENT
(a) During the Original Lease Term and each Renewal Term, if applicable,
Tenant shall pay to Landlord annual fixed rent (the "Annual Base Rent") in an
amount equal to the Fair Market Rent (as hereinafter defined) as of the date
(the "Rent Appraisal Date") which is not less than sixty (60) days prior to (i)
the Commencement Date, with respect to the Original Lease Term, (ii) the
commencement of the First Renewal Term, with respect to the First Renewal Term,
and (iii) the commencement of the Second Renewal Term, with respect to the
Second Renewal Term. The Annual Base Rent shall be payable in monthly
installments, in advance, on the first day of each and every calendar month
during the Lease Term and each Renewal Term, if applicable, without notice or
demand and without any set-off, abatement or deduction whatsoever, at the office
of Landlord stated in Section 1, or at such other place as Landlord may
designate from time to time in writing. The first monthly installment of Annual
Base Rent shall be due and payable at the time of the execution of this Lease.
Such first monthly installment of Annual Base Rent shall be in the amount due
for the first month of the Original Lease Term. The first monthly installment of
Annual Base Rent shall be credited by Landlord against the first monthly
installment of Annual Base Rent due during the Lease Term. If the Lease Term
shall commence on a day other than the first day of a calendar month, or shall
end on other than the last day of a calendar month, then the monthly installment
of Annual Base Rent due for such partial month shall be pro-rated.
(b) For the purposes of this Article, the term "Fair Market Rent" shall
mean the then annual fair market rental rate that would be paid by a willing
tenant, not compelled to
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lease, and accepted by a willing landlord, not compelled to lease, for the
Demised Premises as of the pertinent date, considering (a) that Additional Rent
shall continue to be payable during each 5-year period of the Term without any
changes in this Lease relating to Additional Rent, (b) the age and quality of
the Building as of such date, (c) the length of the applicable Term, and (d)
such other factors that Landlord and Tenant reasonably agree shall be relevant
at the applicable date. Fair Market Rent shall be determined by mutual agreement
between Landlord and Tenant (based upon the above factors) and shall be set
forth in a writing to be executed by Landlord and Tenant; provided, however,
that the failure of either party to execute such writing shall not affect the
determination of Fair Market Rent.
5.2 RENT NET OF EXPENSES
Landlord and Tenant intend that the Annual Base Rent due hereunder,
together with any adjustments during the Lease Term, shall be absolutely net of
all costs, expenses, taxes (real and personal) and charges of every kind and
nature whatsoever relating to the ownership, occupancy or use of the Demised
Premises (all of which shall be paid by Tenant) so that the Annual Base Rent,
together with any adjustments, constitutes the minimum income received by
Landlord from the Lease of the Demised Premises. Tenant shall indemnify and hold
Landlord harmless from and against any such costs, expenses, taxes (real or
personal, but excluding income taxes assessed against Landlord) and charges.
5.3 ADDITIONAL RENT
All amounts due from Tenant and payable to Landlord other than Annual Base
Rent, including, without limitation, if applicable, taxes and assessments
pursuant to Section 8 hereof and insurance premiums pursuant to Section 13
hereof, shall be deemed to be Additional Rent. Upon Tenant's failure to pay any
such Additional Rent, Landlord, in addition to any other remedies, shall have
the same rights and remedies provided for Tenant's failure to pay the Annual
Base Rent. (The Annual Base Rent and the Additional Rent, are herein
collectively referred to as "Rent"). Tenant shall pay any and all sums of money
or charges required to be paid by Tenant under this Lease promptly when the same
are due, without any deduction, abatement or setoff whatsoever.
5.4 LEASE YEAR
Lease year shall mean a period of twelve (12) consecutive calendar months.
The first lease year shall begin on the Commencement Date. Each succeeding lease
year shall commence on the anniversary of the Commencement Date.
5.5 DELINQUENCY CHARGE
If Tenant shall fail to pay all or any portion of a monthly installment of
Annual Base Rent, within ten (10) days after notice from Landlord that the same
is due, Tenant shall pay a delinquency charge equal to five percent (5%) of the
unpaid amount to reimburse Landlord for the costs incurred as the result of such
late payment and not as a penalty. Such delinquency charge shall be due and
payable upon Landlord's demand.
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5.6 DEFAULT CHARGE
If Tenant shall default in any payment or expenditure other than Annual
Base Rent required to be paid or expended by Tenant under the terms hereof, then
Landlord may, at its option, make such payment or expenditure in accordance with
Section 22. In such event, the amount thereof shall be due and payable as
Additional Rent to Landlord by Tenant, together with the next monthly
installment of Annual Base Rent, together with interest thereon at a rate equal
to the sum of the then prevailing "prime interest rate" (as hereinafter deemed)
plus four percent (4%) (but in no event in excess of the highest legal rate)
from the date of such payment or expenditure by Landlord until the date of the
payment by Tenant, to cover Landlord's loss of the use of the funds and
administrative costs resulting from Tenant's failure. No such payment or
expenditure by Landlord shall be deemed a waiver of Tenant's default nor shall
it affect any other remedy of Landlord by reason of such default. Upon Tenant's
failure to pay said Additional Rent together with interest, such interest shall
continue for each month or portion thereof outstanding until the date of
payment. The "prime interest rate" for purposes of this Lease shall mean the
rate of interest announced by the majority of commercial banks doing business in
Detroit, Michigan as the "prime interest rate". The "prime interest rate" shall
be determined as of the date of Landlord's payment or expenditure.
5.7 DISPUTE OF FAIR MARKET RENT
In the event Landlord and Tenant shall be unable to agree on the Fair
Market Rent, then the determination of Fair Market Rent shall be determined by a
duly qualified real estate appraiser who shall not be affiliated with either
Landlord or Tenant and who shall be an MAI appraiser with at least ten (10)
years' experience in the determination of fair market rentals in comparable
buildings in Troy, Michigan. If Landlord and Tenant are unable to agree upon an
appraiser, then Landlord and Tenant shall each appoint an appraiser having the
qualifications set forth above and such two (2) appraisers shall select a third
appraiser. The Fair Market Rent shall then be the average of the determinations
made by the three (3) appraisers; provided, however, that if one (1) of such
determinations differs from the other two (2) by more than fifteen percent
(15%), then such determination shall not be used in the determination of Fair
Market Rent and Fair Market Rent shall be the average of the other two (2)
determinations. The fees of the appraisers shall be borne equally by Landlord
and Tenant.
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5.8 NO ABATEMENT
No abatement, diminution or reduction in Annual Base Rent or any other
charges required to be paid by Tenant pursuant hereto shall be claimed by or
allowed to Tenant for any inconvenience or interruption, cessation, or loss of
business caused directly or indirectly, by any present or future laws, or by
priorities, rationing or curtailment of labor or materials, or by war, civil
commotion, strikes or riots, or any manner or thing resulting therefrom, or by
any other cause or causes beyond the control of Landlord or Tenant, nor shall
this Lease be affected by any such causes; and, except as expressly provided in
Section 14.2 of this Lease, no diminution in the amount of the space used by
Tenant caused by legally required changes in the construction, equipment,
fixtures, operation or use of the Demised Premises shall entitle Tenant to any
abatement, diminution or reduction of the Annual Base Rent or any other charges
required to be paid by Tenant pursuant to the terms of this Lease.
Notwithstanding any other provision of this Lease, in the event (i) there is an
interruption of utility services which (x) is the result of Landlord's gross
negligence or willful misconduct and is not caused by the acts or omission of
Tenant or any employee, agent or contractor of Tenant, (y) continues for a
period of (10) Business Days after Tenant has notified Landlord of the same, and
(z) causes the Demised Premises to be uninhabitable for general, administrative
or executive office use and Tenant does not in fact use any portion of the
Demised Premises, then Tenant shall be entitled to xxxxx the payment of all
Annual Base Rent due under the provisions of this Lease for the period
commencing on the eleventh (11th) Business Day of the existence of such
condition and ending on the date that such condition no longer exists or the
date on which Tenant occupies any portion of the Demised Premises, if earlier.
5.9 RENT RESTRICTIONS
If any of the Rent payable under the terms of this Lease shall be or become
uncollectible, reduced or required to be refunded because of any Laws (as
hereinafter defined), Tenant shall enter into such agreement(s) and take such
other steps as Landlord may request and as may be legally permissible to permit
Landlord to collect the maximum rents which from time to time during the
continuance of such legal rent restriction may be legally permissible (and not
in excess of the amounts reserved therefor under this Lease). Upon the
termination of such legal rent restriction, (a) the rents shall become and
thereafter be payable in accordance with the amounts reserved herein for the
periods following such termination and (b) Tenant shall pay to Landlord, to the
maximum extent legally permissible, an amount equal to (i) the rents which would
have been paid pursuant to this Lease but for such legal rent restriction less
(ii) the rents and payments in lieu of rents paid by Tenant during the period
such legal rent restriction was in effect.
SECTION 6
UTILITIES
Tenant agrees to pay all charges made against the Demised Premises for gas,
heat,
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water, air conditioning, electricity, sanitary and storm sewage disposition,
telephone and all other utilities during the Lease Term as the same shall become
due. Landlord shall not be liable to Tenant for the quality or quantity of any
such utilities, or for any interruption in the supply of any such utilities,
unless such interruption is the direct result of Landlord's gross negligence or
willful misconduct, in which event Landlord's liability shall be limited as set
forth in Section 5.8 hereof.
SECTION 7
INTENTIONALLY OMITTED
SECTION 8
TAXES AND ASSESSMENTS
8.1 OBLIGATION
Tenant agrees to pay directly to the applicable taxing authority all Taxes,
as defined in Section 8.2, on the Demised Premises during the Lease Term, as and
when the same become due and payable.
8.2 DEFINITION OF TAXES
"Taxes" shall be defined as: (a) all taxes (either real or personal),
assessments (general or specific), all water and sewer rents, rates and charges,
and all other municipal and governmental impositions and charges, general and
special, ordinary and extraordinary, foreseen and unforeseen, of any kind and
nature whatsoever, which may at any time during the Lease Term be assessed,
levied, confirmed, imposed upon, or become due and payable out of, or with
respect to, or which may become a lien upon the land, buildings or improvements
comprising the Demised Premises or any part thereof or any appurtenance thereto;
(b) a tax or surcharge of any kind or nature upon, against or with respect to
the parking areas or the number of parking spaces on the Demised Premises; (c)
any tax imposed on this Lease or based on a reassessment of the Demised Premises
due to a change in ownership or a transfer of all or part of Landlord's interest
in the Demised Premises; (d) any tax levied upon Landlord in full or partial
substitution for, or as a supplement to, any taxes previously included within
the definition of "Taxes"; (e) all costs and expenses incurred by Landlord
during negotiations for or contests of the amount of such taxes and assessments,
without regard to the result, including, without limitation, actual attorneys'
fees, which shall not exceed any reductions obtained; and (f) the Michigan
Single Business Tax.
8.3 PAYMENTS
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The Taxes for the years in which this Lease commences and terminates shall
be prorated on a due date basis. On the Commencement Date, Tenant shall
reimburse Landlord for the Taxes paid by Landlord for the calendar year in which
the Commencement Date occurs and allocated to the calendar months occurring
after the Commencement Date. Upon conclusion of this Lease, Landlord shall
reimburse Tenant for Taxes paid by Tenant for the calendar year in which the
Lease terminates and allocated to the calendar months occurring after the
Termination Date. In the event a refund of Taxes previously paid by Tenant is
obtained, Landlord shall, credit the portion which relates to the Demised
Premises to the next payment due under this Section. A copy of a tax xxxx or
assessment xxxx submitted by Landlord to Tenant shall at all times be sufficient
evidence of the amount of Taxes assessed or levied against the property to which
such xxxx or return relates. Tenant shall furnish to Landlord promptly after
payment of any Taxes, and at any time within five (5) days after Landlord's
request, receipts for the payment of the same or other evidence satisfactory to
Landlord that such payments have been made. In addition, Tenant shall furnish to
Landlord, semi-annually throughout the Term, a certificate of Tenant (or an
officer of Tenant, if Tenant is a corporation), stating that all Taxes have been
paid to date. In addition, if Tenant shall fail to pay any Taxes, or any part
thereof, Landlord shall have the right, but shall not be obligated, to pay the
same, and all amounts so paid, including, but not limited to, costs, penalties
and interest, shall constitute Additional Rent hereunder, and shall be repaid to
Landlord by Tenant immediately on rendition of a xxxx therefor by Landlord, and
in the event of nonpayment Landlord shall have, in addition to all other rights
and remedies, all the rights and remedies provided for herein or by law in case
of nonpayment of Annual Base Rent.
8.4 INTENTIONALLY OMITTED.
8.5 RIGHT TO CONTEST TAXES
Tenant shall have the right to contest the amount of the Taxes at Tenant's
sole cost and expense, by the appropriate proceedings diligently contested in
good faith. Notwithstanding such proceedings, Tenant shall promptly pay and
discharge such Taxes and any penalties or interest assessed thereon, unless such
proceedings and the posting of a bond or other security shall (a) operate to
prevent or stay the collection of the Taxes and secure any accruing penalties or
interest and (b) prevent Landlord's default in the payment of Taxes required
under any mortgage upon the Demised Premises. Landlord agrees to join Tenant in
such proceedings, if necessary, provided Tenant pays all costs and expenses
incurred by Landlord, including reasonable actual attorneys' fees.
8.6 TENANT'S TAXES
Tenant shall pay all real and personal property taxes levied or assessed
against Tenant's property and improvements upon or affixed to the Demised
Premises, including taxes attributable to all alterations, additions, or
improvements made by Tenant.
SECTION 9
USE OF DEMISED PREMISES
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9.1 USE OF DEMISED PREMISES
Tenant shall use and occupy the Demised Premises during the Lease Term only
for the purpose stated in Section 1, and attendant office use and for no other
purpose without the prior written consent of Landlord, which consent shall not
be unreasonably withheld. Tenant shall not use or permit any person to use the
Demised Premises or any part thereof for any use or purpose other than the use
stated in Section I or in violation of any law, statute, order, ordinance, code,
rule or regulation of any federal, state or municipal body or other governmental
agency or authority having jurisdiction thereof, including, without limitation,
occupational safety and health requirements, community right to know
requirements, requirements pertaining to the possession, generation,
transportation, treatment and disposal of hazardous substances and hazardous
wastes, or pollution standards or requirements ("Laws"), or any building and use
restrictions ("Restrictions") affecting the Demised Premises, if any. Tenant
shall comply with all such present and future Laws and Restrictions affecting
the Demised Premises and the cleanliness, safety, occupation and use of the
same, at Tenant's sole cost and expense. Tenant shall, at Tenant's expense,
obtain such approvals, permits or certificates, including, without limitation, a
certificate of occupancy, or other occupancy permit that may be required in
order for Tenant to occupy and use the Demised Premises. Landlord and Tenant
shall promptly notify each other of, and provide each other with copies of, all
notices, requests, orders, complaints or other correspondence directed to
Landlord or Tenant, as the case may be, from any federal, state or municipal
body or governmental agency or authority pertaining to any actual or alleged
violation of Laws or Restrictions.
9.2 CARE OF DEMISED PREMISES
Tenant shall keep the Demised Premises orderly, neat, safe and clean and
free from rubbish and dirt at all times. Tenant shall keep the driveways and
walkways within the Demised Premises free from trash and garbage. Tenant shall
not burn any trash or garbage at any time in or about the Demised Premises. At
the expiration or sooner termination of the Lease Term, Tenant shall surrender
the Demised Premises in as good a condition and repair as existed at the time
Tenant took possession, reasonable wear and tear excepted.
9.3 HAZARDOUS SUBSTANCES
Tenant shall not cause or permit the Demised Premises to be used to
generate, manufacture, refine, transport, treat, dispose, produce or process
hazardous substances as defined in Section 101(14) of the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, 42 U.S.C.
ss.9601(14), hazardous wastes as defined in Section 1004(5) of the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6903(5) or extremely
hazardous substances as defined in the Emergency Planning and Community
Right-To-Know Act of 1986, 42 U.S.C. ss.11001 eT Seq. or any other hazardous or
toxic substances or uristes as defined in any other federal, state or local
Environmental Laws (hereinafter collectively referred to as "Hazardous
Substances"). Hazardous Substances shall also include any petroleum or asbestos
containing materials. Environmental Laws mean any applicable federal, state,
county or local statutes, laws,
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regulations, rules, ordinances, or codes relating to environmental matters,
including by way of illustration and not by way of limitation, the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Resource, Conservation
and Recovery Act of 1976, the Comprehensive Environmental, Response,
Compensation and Liability Act of 1980, the Superfund Amendment and
Reauthorization Act of 1986, the Federal Hazardous Materials Transportation Act,
the Toxic Substance Control Act, and any amendments or extensions thereof, and
any rules, regulations, orders, standards or guidelines issued pursuant to any
of the aforesaid and all other applicable environmental standards or
requirements. Notwithstanding the foregoing or anything to the contrary
contained herein, Tenant shall have the right to store hazardous substances at
the Demised Premises which are typically kept by tenants engaged in businesses
similar to Tenant, provided that such storage is in compliance with all
applicable laws relating to such hazardous substances. Landlord shall remain
liable for any contamination existing at the Demised Premises on or prior to the
Acquisition Date (as hereinafter defined).
9.4 AFFIDAVIT AND QUESTIONNAIRE
Tenant shall submit to Landlord annually, or more often if reasonably
requested by Landlord or Landlord's mortgagee, a sworn affidavit signed by the
Chief Officer of Tenant, setting forth in detail, the identity, quantity and
purpose of all Hazardous Substances and any similar substances used or present
on the Demised Premises and the dates and period of time that such substances
were brought onto or retained on the Demised Premises.
9.5 ENVIRONMENTAL REPORT
Within sixty (60) days prior to the expiration of the Lease Term or any
extension of the Lease Term, if any, Tenant shall have the Demised Premises
thoroughly inspected by an environmental consultant reasonably acceptable to
Landlord for purposes of determining whether the Demised Premises is free from
all Hazardous Substances. Tenant shall deliver to Landlord a copy of the
environmental consultant's report thirty (30) days prior to the expiration of
the Lease Term. In the event the report discloses the existence of any Hazardous
Substances, with respect to which there is required any clean-up or any other
form of remediation or other response (collectively "Remediation") as a result
of Hazardous Substances that are not identified in (i) the Phase I Environmental
Site Assessment Report, prepared by AKT Environmental Consultants, Inc., dated
December ____, 1996, or (ii) the Baseline Environmental Assessment, prepared by
AKT Environmental Consultants, Inc., dated December ____, 1996, Tenant shall
perform such immediately and deliver the Demised Premises with the conditions
specified in the report "remediated", to the full satisfaction of Landlord. In
the event the conditions specified in the report require Remediation which
cannot be completed prior to the expiration of the Lease Term and Landlord
cannot, prior to such completion, lease the Demised Premises to another party,
Tenant shall be obligated to reimburse Landlord the greater of (1) the fair
market rental value of the Demised Premises, or (2) the Annual Base Rent, as
adjusted, for each day delivery of the Demised Premises to Landlord in the
required condition is delayed beyond the expiration of the Lease Term. The
Tenant shall also deliver to the Landlord a letter of credit in an amount equal
to the costs of Remediation plus either the fair market rental value of the
Demised Premises or the Annual Base Rent, as adjusted, at least ten (10) days
prior to the expiration of the Lease Term. For
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the purposes of the preceding sentence, the costs of Remediation shall be deemed
to be that amount so determined by the environmental consultant.
9.6 OBLIGATION OF TENANT
The obligations and liabilities of Tenant under Sections 9.1 through 9.5,
shall hereby survive termination of this Lease.
SECTION 10
INDEMNITY; NON-LIABILITY
10.1 INDEMNITY
(a) Tenant covenants to indemnify Landlord (except for loss or damage
resulting from the gross negligence or willful misconduct of Landlord, its
agents or employees), each superior lessor and superior mortgagee, and any
managing agent of Landlord, and their respective officers, directors,
stockholders, beneficiaries, partners, representatives, agents and employees,
and save them harmless from and against any and all claims, actions, damages,
liability, cost and expense, including reasonable attorneys' fees, in connection
with all losses, including loss of life, personal injury and/or damage to
property, arising from or out of any occurrence in, upon or at the Demised
Premises or the occupancy or use by Tenant of the Demised Premises or any part
thereof, or arising from or out of Tenant's failure to comply with any provision
of this Lease or occasioned wholly or in part by any act or omission of Tenant,
its subtenants, agents, contractors, suppliers, employees, servants, invitees or
licensees, in each case, only to the extent in excess of any insurance proceeds
collectible by Landlord or such injured party with respect to such damage or
injury (subject to the provisions of Section 13.4). The obligations of Tenant
under this Section 10.1(a) shall survive the expiration or sooner termination of
this Lease.
(b) Landlord agrees to indemnify Tenant (except for loss or damage
resulting from the gross negligence or willful misconduct of Tenant, its agents,
or employees), its officers, directors, stockholders, beneficiaries, partners,
representatives, agents and employees, and save them harmless from and against
any and all claims, actions, damages, liability, cost and expense, including
reasonable attorneys' fees, in connection with all losses, including loss of
life, personal injury and/or damage to property, arising from or out of any
occurrence in, upon or at areas of the Building not leased to or occupied by
Tenant, in each case, only to the extent in excess of any insurance proceeds
collectible by Tenant or such injured party with respect to such damage or
injury (subject to the provisions of Section 13.4), but Landlord shall have no
liability for consequential damages. The obligations of Landlord under this
Section 10.1(b) shall survive the expiration or sooner termination of this
Lease.
(c) In case any party indemnified pursuant to the foregoing terms of
Section 10.1(a) or 10.1(b), as the case may be, shall, without fault, be made a
party to any litigation commenced by or against the indemnifying party, or if
any such indemnified party shall, in its reasonable discretion, determine that
it must intervene in such litigation to
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protect its interest hereunder, including, without limitation, as to Landlord,
the incurring of costs, expenses, and attorneys' fees in connection with relief
of Tenant ordered pursuant to the Bankruptcy Code (11 USC ss. 101 et. Seq.),
then the indemnifying party shall protect and hold such indemnified party
harmless by attorneys reasonably satisfactory to such indemnified party and
shall pay all costs, expenses and reasonable attorneys' fees incurred or paid by
such party in connection with such litigation. The provisions of this Section
10.1(c) shall survive the expiration or sooner termination of this Lease.
10.2 NON-LIABILITY
Neither Landlord nor Landlord's agents, officers, directors, shareholders,
partners or principals (disclosed or undisclosed) shall be liable to Tenant or
Tenant's agents, employees, contractors, invitees or licensees or any other
occupant of the Demised Premises for, and Tenant shall save Landlord, the lessor
under any underlying lease, any mortgagee of the Demised Premises and their
respective agents, employees, contractors, officers, directors, shareholders,
partners and principals (disclosed or undisclosed) harmless from any loss, cost,
liability, claim, damage, expense (including reasonable attorneys' fees and
disbursements), penalty or fine incurred in connection with or arising from any
injury to Tenant or to any other person or for any damage to, or loss (by theft
or otherwise) of, any of Tenant's property or of the property of any other
person, irrespective of the cause of such injury, damage or loss (including the
acts or negligence of any tenant or of any owners or occupants of adjacent or
neighboring property or caused by operations in construction of any private,
public or quasi-public work) or from any latent or patent defects in the Demised
Premises, except to the extent due to the gross negligence or willful misconduct
of Landlord or Landlord's agents, it being understood that no property, other
than such as might normally be brought upon or kept in the Demised Premises as
incidental to the reasonable use of the Demised Premises for the purposes herein
permitted will be brought upon or be kept in the Demised Premises; provided,
however, that even if due to any such gross negligence or willful misconduct of
Landlord or Landlord's agents, Tenant waives, to the full extent permitted by
law, any claim for consequential damages in connection therewith and Landlord
and Landlord's agents shall not be liable, to the extent of Tenant's insurance
coverage, for any loss or damage to any person or property even if due to the
negligence of Landlord or Landlord's agents.
10.3 LIABILITY INSURANCE
Tenant shall procure and keep in effect during the Lease Term, for the
benefit of Landlord and any mortgagee of the Demised Premises, liability
insurance affording the coverage and in the amount as is customarily carried by
either Tenant or HA-LO Industries, Inc. with respect to properties similar to
the Demised Premises owned or leased by it. Such insurance policies shall name
Landlord and any mortgagee of the Demised Premises as additional insureds by
specific endorsement. Tenant shall also maintain all other insurance and/or
other amounts required by law or by Landlord's mortgagee.
10.4 TENANT'S CONTRACTOR'S INSURANCE
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Tenant shall require any contractor performing work on the Demised Premises
to take out and keep in force, at no expense to Landlord, (a) comprehensive
general liability insurance, including contractor's liability coverage,
contractual liability coverage, completed operations coverage, broad form
property damage endorsement and contractor's protective liability coverage, to
afford protection to the limit, for each occurrence, of not less than Three
Million Dollars ($3,000,000.00) with respect to personal injury or death and
Five Hundred Thousand Dollars ($500,000.00) with respect to property damage; and
(b) worker's compensation or similar insurance in form and amounts required by
law. The liability insurance shall name Landlord and any mortgagee of the
Demised Premises, or any portion thereof, as additional insureds by specific
endorsement.
10.5 DELIVERY OF POLICY AND SPECIAL ENDORSEMENT
The insurance policies required by this Section 10 shall contain provisions
or special endorsements satisfactory to Landlord and Landlord's mortgagee, if
any, prohibiting cancellation, alterations, changes, amendments, modifications,
deletions or reductions in coverage either at the instance of Tenant or the
insurance company issuing the policy, without at least thirty (30) days prior
written notice having been given to Landlord at the address stated above.
Original insurance certificates and copies of insurance policies and all
renewals thereof, together with receipts evidencing payment in full of the
premiums thereon, shall be delivered promptly to Landlord and in no event less
than thirty (30) days prior to expiration of such insurance.
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SECTION 11
MAINTENANCE AND REPAIRS
11.1 MAINTENANCE AND REPAIRS
Tenant shall, at its sole cost and expense, at all times during the Lease
Term, maintain and repair and keep neat and in good appearance, repair and
condition the Demised Premises and all parts thereof, including, but not limited
to, the roof, foundations, exterior, interior, ceiling, electrical system,
plumbing system, HVAC system, storm sewers, sanitary sewers, water main, the
driveways, walkways, parking area, lighting facilities, landscaping and land,
which are part of the Demised Premises. The plumbing system, including the
sewage facility, serving the Demised Premises shall not be used for any purpose
other than for which it was constructed and Tenant shall not introduce any
matter therein which results in blocking such system. Tenant shall, at its sole
risk, cost and expense, promptly make all needed repairs, replacements and
restorations, interior and exterior, ordinary and extraordinary, structural and
non-structural, foreseen and unforeseen, in and to the Demised Premises
(including, but not limited to, the roof and foundations) and equipment and
personal property now or hereafter erected upon or installed in or forming a
part of the Demised Premises, including, without limitation, vaults, sidewalks,
curbs, water, sewer and gas connections, meters, pipes and mains, and all other
fixtures and equipment now or hereafter belonging to, adjoining or connected
with the Demised Premises or used in its operation. All such repairs,
restorations and replacements shall be of good quality sufficient for the proper
maintenance and operation of the Demised Premises and shall be constructed and
installed in compliance with all Laws and insurance requirements. To the extent
possible, repairs, restorations and replacements shall be at least equivalent in
quality to the original work or the property replaced, as the case may be.
Tenant shall, at its sole cost and expense, contract with contractors approved
by Landlord, which approval shall not be unreasonably withheld or delayed, for
the performance of all maintenance and repairs required of Tenant under this
Lease. Tenant shall perform such maintenance and repair so as to maintain the
Demised Premises in a first-class condition. Such maintenance and repair
obligations shall include items deemed to be capital improvements for tax
purposes. The maintenance and repair obligations of Tenant hereunder shall
survive termination of this Lease.
11.2 COMPLIANCE WITH LAWS
During the Lease Term, Tenant, at its sole cost and expense, shall make any
repairs, additions, modifications or alterations to the Demised Premises,
regardless of the nature thereof, which are required by any Laws or Restrictions
(as defined in Section 9. 1) or required by the insurance carrier to maintain
the insurance required under this Lease.
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SECTION 12
TENANT'S ALTERATIONS
12.1 ALTERATIONS
17
Tenant shall not make any alterations, additions, modifications or
improvements ("Alterations") to the Demised Premises which Alterations cost in
excess of $100,000.00, in the aggregate, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed. If such
Alterations require consent by or notice to the holder of any mortgage on the
Demised Premises, Tenant, notwithstanding anything to the contrary contained in
this Article, shall not proceed with the Alterations until such consent has been
received, or such notice has been given, as the case may be, and all applicable
conditions and provisions of any such mortgage with respect to the proposed
Alterations have been met or complied with at Tenant's expense; and Landlord, if
it consents to the Alterations, will request such consent or give such notice,
as the case may be. Landlord will not unreasonably withhold its consent with
respect only to nonstructural Alterations which do not modify the exterior of
the Building, do not adversely affect the architectural design or systems as
described in Section 11.1, will not result in a violation of or require a change
in any certificate of occupancy applicable to the Demised Premises, and do not
involve any demolition work or which do not change the character of the Demised
Premises. Tenant shall notify Landlord in writing and obtain prior written
consent of Landlord for any Alterations which involve asbestos-based fire
retardants, ceiling tiles, pipes or other asbestos-containing materials. All
alterations made by Tenant to the Demised Premises, other than Tenant's trade
fixtures, shall become the property of Landlord and shall remain upon and be
surrendered with the Demised Premises at the termination of this Lease, without
molestation or injury unless Landlord consents in writing to Tenant's removal of
such alterations and Tenant repairs any damage or injury caused thereby in a
good and workmanlike manner. Notwithstanding anything to the contrary herein,
Landlord, at its option, may at the expiration of the Lease Term require Tenant,
at Tenant's sole cost and expense, to remove any Alterations (other than
Tenant's trade fixtures) made by Tenant during the Lease Term and to promptly
repair any damage or injury caused thereby in a good and workmanlike manner. All
alterations made by Tenant or the removal thereof shall be made free of all
liens and encumbrances and in compliance with all Laws and Restrictions. Tenant,
at its expense, shall (a) obtain all necessary governmental permits and
certificates for the commencement and prosecution of the Alterations and for
final approval thereof upon completion, (b) deliver copies thereof to Landlord,
and (c) cause the Alterations to be performed in compliance therewith and in
compliance with all insurance requirements and all applicable requirements of
mortgagees, and in good and first class workmanlike manner, using materials and
equipment at least equal in quality and class to the original installations of
the Demised Premises. Notwithstanding anything to the contrary contained in this
Lease, Tenant, at its expense, after reasonable prior notice to Landlord, may
contest, by appropriate proceedings prosecuted diligently and in good faith, the
validity or applicability of any lien filed against the Demised Premises,
provided that: (i) Landlord shall not be subject to criminal penalty or to
prosecution for a crime, nor shall the Demised Premises or any part thereof be
subject to being condemned or vacated, nor shall the certificate(s) of occupancy
for the Demised Premises be suspended or threatened to be suspended by reason of
such contest; (ii) before the commencement of such contest, Tenant shall provide
Landlord, each superior lessor and superior mortgagee, any managing agent of
Landlord, and their respective officers, directors, shareholders, beneficiaries,
partners, representatives, agents and employees with an indemnity reasonably
satisfactory to such parties against the cost of liability resulting from or
incurred in connection with such contest; (iii) such contest shall not
constitute or result in any violation of the terms of any superior lease or
superior mortgage,
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or if any such superior lease and/or superior mortgage shall condition such
contest upon the taking of action or furnishing of security by Landlord, such
action shall be taken and such security shall be furnished at the expense of
Tenant; and (iv) Tenant shall keep Landlord regularly advised as to the status
of such proceedings. Without limiting the application of the above, Landlord
shall be deemed subject to prosecution for a crime if Landlord, superior lessor,
superior mortgagee or any of their officers, directors, partners, shareholders,
agents or employees may be charged with a crime of any kind whatever. Pending
the resolution of such contest, Tenant shall be required to post a bond in the
amount required to discharge such lien. Tenant shall indemnify, defend and hold
Landlord harmless from and against any such liens, encumbrances and violations
of Laws and Restrictions or claims relating thereto. The existence of any lien
or encumbrance or without the posting of a bond insuring against collection of
the same from Demised Premises, violation of Laws or Restrictions, shall
constitute a default hereunder. The repair obligations of Tenant hereunder shall
survive the termination of this Lease.
12.2 CONSTRUCTION LIENS
Notice is hereby given that Landlord shall not be liable for any labor or
materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for any such labor or materials shall attach to or
affect the reversionary or other estate or interest of Landlord in and to the
Demised Premises. If Tenant shall suffer or permit any construction liens to be
filed against the Demised Premises or any part thereof by reason of work, labor,
services or materials supplied or claimed to have been supplied to Tenant or
anyone holding the Demised Premises or any part thereof through or under Tenant,
Tenant shall cause the same to be discharged of record within twenty (20) days
after the date of filing the same. If Tenant shall fail to discharge such
construction lien within such period, then, in addition to any other right or
remedy of Landlord, Landlord may, but shall not be obligated to, discharge the
same either by paying the amount claimed to be due or by procuring the discharge
of such lien by deposit in court or by giving security or in such other manner
as is, or may be, prescribed by law. Any amount paid by Landlord for any of the
aforesaid purposes, and all actual legal and other expenses of Landlord,
including actual counsel fees, incurred in connection with the discharge of any
such lien, together with all necessary disbursements in connection therewith,
and together with interest thereon at a rate per annum equal to the Prime Rate
publicly announced by Comerica Bank from time to time, plus four percent (4%),
but in no event higher than the legal limit, from the date of payment, shall be
repaid by Tenant to Landlord on demand, and if unpaid may be treated as
Additional Rent. Nothing herein contained shall imply any consent or agreement
on the part of Landlord to subject Landlord's estate to liability under any
construction lien law.
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SECTION 13
PROPERTY INSURANCE, REBUILDING
AND WAIVER OF SUBROGATION
13.1 PROPERTY INSURANCE
13.1.1 Tenant shall, during the Lease Term, carry at its expense insurance
for the benefit of Landlord and any mortgagee of the Demised Premises, or a
portion thereof, against fire, vandalism, malicious mischief and such other
perils as are from time to time included in a standard extended coverage
endorsement and, at the option of any superior mortgagee, special extended
coverage endorsements, insuring the Demised Premises for not less than the full
replacement and reconstruction cost, valued on a replacement cost basis of the
Building and improvements which are a part of the Demised Premises. If Tenant
fails to maintain such insurance coverage, Landlord may, at its option, procure
such insurance for the account of Tenant and the cost thereof shall be paid by
Tenant to Landlord upon delivery to Tenant of bills therefor. The insurer or
insurers shall be such as are the issuers of the insurance policies currently in
effect at Tenant's or HA-LO Industries, Inc.'s other owned or leased properties
similar to the Demised Premises. The policies or certificates of all such
insurance and all renewals thereof, together with receipts evidencing payment in
full of the premiums thereon, shall be delivered promptly to Landlord and in no
event less than thirty (30) days prior to the expiration of such insurance. The
terms and conditions of all policies and endorsements thereto shall be in the
form and content of the policies of insurance currently maintained by Tenant or
HA-LO Industries, Inc. with respect to other owned or leased properties similar
to the Demised Premises. All of the required policies of insurance shall contain
provisions satisfactory to Landlord prohibiting cancellation, alterations,
changes, amendments, modifications, deletions or reductions in coverage, either
at the instance of the Tenant or of the insurance company issuing the policy,
without at least thirty (30) days prior written notice having been given to
Landlord at the address of Landlord stated above, and shall name Landlord as a
loss payee and any mortgagee of the Demised Premises as a loss payee under the
standard mortgage loss payable endorsement. Tenant shall not, without the prior
written consent of Landlord, cancel, alter, change, amend, modify, delete or
reduce the coverage of any required policy of insurance. In the event of loss or
damage, the proceeds of the insurance shall be paid to Landlord and such
mortgagee alone, to be used to rebuild in accordance with Section 13.2 hereof.
Landlord is authorized to adjust and compromise such loss without the consent of
Tenant, to correct, receive and receipt for such proceeds in the name of
Landlord and Tenant and to endorse Tenant's name upon any check in payment
thereof. The power granted hereby shall be deemed to be coupled with an interest
and shall be irrevocable.
13.1.2 During the Lease Term, Landlord shall carry rental interruption
insurance, in an amount equal to Tenant's Annual Base Rent for twelve (12) full
months under this Lease plus the total of the estimated costs to Tenant of
Taxes, utilities and insurance premiums for such twelve (12) month period.
Tenant shall, from time to time, reimburse Landlord for the total cost of such
insurance, such reimbursement to be made within fifteen (15) days after
20
receipt of a written statement from Landlord setting forth such cost.
13.1.3 Tenant shall, during the Lease Term, carry, at its expense,
insurance against fire, vandalism, windstorm, explosion, smoke damage, malicious
mischief, and such other perils as are from time to time included in a standard
extended coverage endorsement, insuring Tenant's trade fixtures, furnishings,
equipment and all other items of personal property of Tenant located on or
within the Demised Premises, in an amount equal to the actual replacement cost
thereof and furnish Landlord with a certificate evidencing such cover-age. If
Tenant fails to maintain such insurance coverage, Landlord may, at its option,
procure such insurance for the account of Tenant and the cost thereof shall be
paid by Tenant to Landlord upon delivery to Tenant of bills therefor.
13.1.4 Tenant shall not carry any stock of goods or do anything in or about
the Demised Premises which will in any way tend to increase the insurance rates
on the Demised Premises. If Tenant installs any electrical equipment that
overloads the electrical lines in the Demised Premises, Tenant shall, at its own
expense, make whatever changes are necessary to comply with the requirements of
the insurance underwriters or governmental authorities having jurisdiction.
Tenant shall not violate or knowingly permit any occupant of the Demised
Premises, or any part thereof, to violate any of the conditions or provisions of
any such policy, and Tenant shall so perform and satisfy the requirements of the
insurers writing such policies so that at all times insurers of good standing,
satisfactory to Landlord, shall be willing to write or continue such insurance.
13.2 REBUILDING
In the event, during the Lease Term, the improvements on the Demised
Premises are damaged or destroyed in whole or in part by fire or other casualty
insured under the insurance carried by Tenant pursuant to Section 13.1 and the
insurance proceeds are not required to be paid to any mortgagee under any
mortgage upon the Demised Premises, then Landlord shall, after the adjustment of
the insurance loss and receipt of insurance proceeds, immediately commence and
diligently pursue the restoration of such improvements to good and tenantable
condition unless Landlord shall elect not to rebuild as hereinafter provided. If
(a) the insurance proceeds are insufficient to pay the full cost of the repairs
(unless Tenant deposits sufficient funds with Landlord pursuant to Section 13.3
to pay the full cost of the repairs), (b) more than thirty-five percent (35%) of
the improvements on the Demised Premises shall be destroyed by fire or other
casualty, or (c) during the last twelve (12) months of the Lease Term (unless
Tenant has previously exercised its option to renew), more than twenty percent
(20%) of the improvements on the Demised Premises shall be destroyed by fire or
other casualty, then each of Landlord and Tenant may, at its option, terminate
this Lease by notice in writing delivered to the other within one hundred twenty
(120) days after the occurrence of such fire or other casualty. If Landlord is
obligated or elects to perform such repairs, the improvements on the Demised
Premises are partially or totally untenantable, the fire or other casualty
occurred through no fault directly or indirectly or Tenant, its employees,
agents, contractors, customers or invitees and provided that rental interruption
insurance is available at the time in question for similar properties in the
locality in which the Demised Premises are located, then the Rent shall be
proportionately reduced
21
during the period of rebuilding, based upon the untenantable portion of the
improvements on the Demised Premises, provided that Tenant does not in fact
occupy such untenantable portion of the Demised Premises.
22
13.3 TENANT'S DEPOSIT FOR REBUILDING
If the insurance proceeds available for rebuilding are insufficient to
cover the cost of repair or restoration of the Demised Premises as required
hereunder, Tenant, so long as Tenant is not in default, may elect to deposit
with Landlord, or to the title company holding the insurance proceeds in escrow,
an amount which in combination with the insurance proceeds shall be sufficient
for such repairs or restorations. In the event Tenant elects not to deposit such
funds, then Landlord shall be relieved of any obligation to repair or restore
the Demised Premises. Landlord shall have no obligation hereunder if the
insurance proceeds are paid to any mortgagee under any mortgage upon the Demised
Premises.
13.4 WAIVER OF SUBROGATION
Any insurance policy carried by Landlord or Tenant or any policy covering
both the interest of Landlord or Tenant under this Section 13 shall include a
provision under which the insurance company waives all right of recovery by way
of subrogation against Landlord or Tenant in connection with any loss or damage
covered by any such policy. Landlord or Tenant hereby release and discharge each
other from any liability whatsoever arising from any loss, damage or injury
caused by fire or other casualty to the extent of the insurance covering such
loss, damage or injury.
SECTION 14
EMINENT DOMAIN
14.1 TOTAL CONDEMNATION
If the whole of the Demised Premises shall be taken by any condemning
authority under the power of eminent domain or conveyed in lieu of any such
taking, then the term of this Lease shall cease as of the date actual physical
possession of the Demised Premises is transferred to such condemning authority
and the Rent shall be paid up to that day with a proportionate refund by
Landlord of such Rent as may have been paid in advance for a period subsequent
to the date of the transfer of actual physical possession.
14.2 PARTIAL CONDEMNATION
If only a part of the Demised Premises shall be taken by any condemning
authority under the power of eminent domain or conveyed in lieu of any such
taking, then, except as otherwise provided in this Section, this Lease and the
term shall continue in full force and effect and there shall be no reduction in
the Rent. From and after the date actual physical possession of a portion of the
building or parking area on the Demised Premises is transferred to such
condemning authority, the Rent shall be reduced in the proportion which the
floor area of the part of the building on the Demised Premises so acquired, if
any, bears to the total floor area of the building on the Demised Premises
immediately prior to the date
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such actual physical possession is transferred. If (a) more than thirty-five
percent (35%) of the floor area of all buildings on the Demised Premises or such
other portion of the Demised Premises as shall materially interfere with
Tenant's use of the Demised Premises as permitted hereunder shall be taken under
eminent domain or conveyed in lieu of any such taking, or (b) more than
thirty-five percent (35%) of the parking spaces on the Demised Premises shall be
taken under eminent domain or conveyed in lieu of any such taking and Landlord
is unable to provide parking spaces on land immediately contiguous to the
Demised Premises equal to one-half of the number of parking spaces taken,
Landlord and Tenant shall each have the right to terminate this Lease and
declare the same null and void, by written notice of such intention to the other
party within thirty (30) days after the date the order is entered in such
eminent domain proceeding establishing the date upon which actual physical
possession shall be transferred to the condemning authority. In the event
neither party exercises said right of termination, the Lease Term shall cease
only on the part of the Demised Premises so taken as of the date actual physical
possession is transferred to the condemning authority and Tenant shall pay
Annual Base Rent and Additional Rent up to that day, with appropriate refund by
Landlord of such Rent as may have been paid in advance for a period subsequent
to the date actual physical possession is transferred, and thereafter all the
terms herein provided shall continue in effect, except that the Rent shall be
reduced in the proportion stated above and Landlord shall, at its own cost and
expense, make all the necessary repairs or alterations to the remaining Demised
Premises so as to cause it to be a complete architectural unit.
14.3 LANDLORD'S AND TENANT'S DAMAGES
All damages awarded for such taking under the power of eminent domain or
any consideration paid for a conveyance in lieu thereof, whether for the whole
or a part of the Demised Premises, shall belong to and be the property of
Landlord whether such damages or other consideration shall be awarded as
compensation for diminution in value to the leasehold or to the fee of the
Demised Premises; provided, however, that Landlord shall not be entitled to the
award made for depreciation to, and cost of removal of, Tenant's stock and
fixtures. Tenant shall be entitled to seek a separate award for loss of Tenant's
fixtures.
SECTION 15
ACCESS TO PREMISES
Landlord or Landlord's agents and designees shall have the right to enter
the Demised Premises at all reasonable times upon five (5) days' prior notice
(which may be telephonic), except that no notice shall be required in the event
of an emergency, to inspect or examine the same, and to show them to prospective
purchasers or mortgagees of the Demised Premises and to make such tests,
repairs, alterations, improvements or additions as Landlord may reasonably deem
necessary or desirable, and Landlord shall be allowed to take all material into
and upon the Demised Premises that may be required therefor without the same
constituting an eviction of Tenant in whole or in part, and the Annual Base Rent
and Additional Rent shall in no way xxxxx (provided the Demised Premises are not
rendered
24
entirely unusable thereby, and if a portion of the Demised Premises is rendered
entirely unusable thereby and Tenant does not in fact use such portion of the
Premises, then there shall be a proportionate abatement of Rent) while said
repairs, alterations, improvements, or additions are being made, by reason of
loss or interruption of the business of Tenant, or otherwise. In the exercise of
its rights under this Section, Landlord shall use all reasonable efforts, which
shall not include the use of overtime labor, to minimize interference with
Tenant's conduct of business in the Demised Premises during normal business
hours. During the six (6) months prior to the expiration of the Lease Term,
Landlord may exhibit the Demised Premises to prospective lessees and place upon
the Demised Premises the usual "To Let" or "For Rent" notices.
SECTION 16
FIXTURES AND EQUIPMENT
All fixtures and equipment installed by Tenant (other than Tenant's trade
fixtures) during the term of this Lease which are incorporated and affixed to
the Building or improvements and cannot be removed without damage or injury to
the Building or improvements shall not be removed without Landlord's consent
(but shall be removed at Landlord's direction), and all fixtures and equipment
not removed shall remain the property of Landlord at the termination of the
Lease Term. In the event Landlord consents to such removal (or directs Tenant to
perform any such removal), Tenant shall remove such fixtures in accordance with
all applicable Laws and Restrictions and shall promptly repair any such damage
or injury in a good and workmanlike manner.
SECTION 17
BANKRUPTCY AND INSOLVENCY OF TENANT
If the estate created hereby shall be taken in execution or by other
process of law, or if Tenant shall be declared bankrupt or insolvent, according
to law, or if any receiver be appointed for the business and property of Tenant
or if any assignment shall be made of Tenant's property for the benefit of
creditors (and as to such matters involuntarily taken against Tenant, Tenant,
has not within ninety (90) days thereof obtained release or discharge
therefrom), then this Lease may be cancelled at the option of Landlord. If, as a
matter of law, Landlord has no right upon the bankruptcy of Tenant, to terminate
this Lease, then the rights of Tenant, as debtor, or its trustee, shall be
deemed abandoned or rejected unless Tenant, as debtor or its trustee, (a) within
sixty (60) days after the date of the Order for Relief under Chapter 7 of the
Bankruptcy Code or sixty (60) days after the date the Petition is filed under
Chapter 11 of the Bankruptcy Code assumes in writing the obligations under this
Lease, (b) cures or adequately assures the cure of all defaults existing under
this Lease on Tenant's part within sixty (60) days and (c) furnishes adequate
assurances of future performance of the obligations of Tenant under this Lease
within such sixty (60) days. Adequate assurance of curing defaults means the
posting with Landlord of a sum in cash sufficient to defray the costs of such
cure. Adequate assurance of future performance
25
of the Tenant's obligations under this Lease means increasing any existing
security deposit or creating a security deposit in an amount equal to three (3)
Monthly Installments of Base Rent. Tenant shall not be permitted to assume and
assign this Lease in connection with any bankruptcy or insolvency proceedings
unless: (a) Landlord is provided with the following information regarding the
party desiring to assume the Lease ("Assumptor") which Landlord in its sole and
absolute discretion deems sufficient: (1) organizational information regarding
the Assumptor, (2) audited financial statements for the three (3) most recent
fiscal years, and (3) such other information as Landlord deems appropriate; (b)
Landlord determines that the use of the Demised Premises by the Assumptor is
compatible with the character of the Building; (c) all existing defaults under
this Lease are cured at least ten (10) days prior to any hearings in connection
with Tenant's request to assume and assign the Lease; (d) the Assumptor at any
such hearing provides adequate assurance of its future performance of the Lease
as determined by Landlord in its sole and absolute discretion, which adequately
assurance shall include at least: (1) posting of a security deposit equal to
three (3) Monthly Installments of Base Rent, if such was not already posted by
Tenant, (2) paying in advance to Landlord the next six (6) Monthly Installments
of Base Rent, or posting an irrevocable letter of credit for such amount, (3)
establishing with Landlord an escrow in advance for the full cost of all Taxes
and insurance charges as required under the Lease for the next twelve (12)
months of the Lease and thereafter on an annual basis in advance; (4) providing
Landlord with an unconditional continuing guarantee of the Lease executed by the
owners or officers of the Assumptor; and (5) the Assumptor executes a written
agreement assuming the Lease and such Lease amendments as are necessary, which
agreements and amendments are satisfactory to Landlord in its sole and absolute
discretion.
SECTION 18
RIGHT TO MORTGAGE
Landlord reserves the absolute right to subject and subordinate this Lease,
at all times, to the lien of any mortgage or mortgages now or hereafter placed
upon the Demised Premises. Although the foregoing subordination is
self-operative, in the event Landlord exercises its right hereunder, Tenant
shall execute and deliver, or join in the execution and delivery of an agreement
which shall provide, among other things, (a) that this Lease is subordinate to
the lien of any mortgage or mortgages upon the Demised Premises and (b) that the
Tenant shall attorn to any foreclosing mortgagee or purchaser at the foreclosure
sale. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of Tenant
for purposes of executing and delivering in the name of Tenant such an
agreement. Landlord agrees to request and use reasonable efforts to obtain from
the holder of any superior mortgage or superior lease, as the case may be,
executed after the date hereof a subordination, non-disturbance and attornment
agreement from the mortgagee under such superior mortgage or the lessor under
such superior lease, as the case may be, wherein such mortgagee or lessor, as
the case may be, agrees to recognize the interest of Tenant under this Lease in
the event of foreclosure or in the event of a termination of the superior lease,
as the case may be, provided Tenant is not then in default under this Lease.
Landlord shall have no liability to Tenant if such non-disturbance agreement is
not executed or delivered or,
26
if executed and delivered, the parties thereto (other than Landlord) do not
abide by the respective terms thereof.
SECTION 19
ASSIGNMENT, SUBLETTING AND TRANSFERS BY TENANT
(a) Tenant shall not sell, assign, sublet, hypothecate, encumber, mortgage
or in any manner transfer this Lease or any estate or interest therein
(including any transfer by operation of law or otherwise), the Demised Premises
or any part thereof or permit the use of the Demised Premises by any third party
(collectively "Transfer") without the prior written consent of the Landlord. In
the event of any Transfer by Tenant without Landlord's prior written consent,
Landlord, at its option, may either: (a) accelerate payment of all Rent and
amounts due for Taxes and insurance (which will be paid by Landlord when due)
payable during the balance of the unexpired Lease Term and receive immediate
payment thereof or (b) terminate this Lease, re-enter and repossess the Demised
Premises, and enforce all other remedies available under this Lease or permitted
by law as a result of Tenant's default. Consent by Landlord to one or more
Transfers shall not be deemed to be consent to a subsequent Transfer or to waive
Landlord's rights in connection therewith. The acceptance of Rent or Additional
Rent from an assignee, subtenant or occupant shall not constitute a release of
Tenant from the obligations and covenants in this Lease. Tenant shall remain
liable under this Lease unless and until Landlord executes and delivers a
written release of such liability. Landlord's consent hereunder shall not be
unreasonably withheld only in the event of a Transfer of all or any pail of the
Demised Premises to any parent corporation of Tenant or wholly owned subsidiary
of Tenant. In the event of a Transfer by Tenant, with or without Landlord's
consent, then an amount equal to fifty percent (50%) of all rent, sums of money
or other economic consideration owed to or received by Tenant as a result of
such Transfer which exceed, in the aggregate, the total sums of Rent, Additional
Rent or other economic consideration which Tenant is obligated to pay Landlord
under this Lease, shall be immediately payable to Landlord upon receipt by
Tenant as Additional Rent under this Lease without affecting or reducing any
obligations of Tenant hereunder.
(b) Tenant shall have the right to assign this Lease or sublet all or any
portion of the Demised Premises without Landlord's consent to any "Related
Entity" (for so long as such entity continues to be a Related Entity), provided
that Tenant gives Landlord prior written notice as provided in clause (i) below,
which notice shall include evidence reasonably satisfactory to Landlord that
such entity is a Related Entity. For purposes hereof, "Related Entity" shall
mean any corporation or other business entity which controls, is controlled by
or is under common control with Tenant, and "control" shall mean ownership of
fifty percent (50%) or more of the outstanding voting capital stock of a
corporation or fifty percent (50%) or more of the beneficial interests of any
other entity and, in either case, the ability effectively to control the
business decisions of Tenant. Tenant shall also have the right to assign this
Lease or sublet all or any portion of the Demised Premises without Landlord's
consent to another entity into which Tenant is merged or consolidated or to
27
which all or substantially all of Tenant's stock or assets are sold or
transferred, provided, however, that Tenant gives Landlord written notice as
provided in clause (i) below, which notice shall include evidence reasonably
satisfactory to Landlord that after completion of the contemplated transaction,
in Landlord's reasonable judgment, the proposed assignee or subtenant will be of
sound financial condition able to perform its obligations under the Lease or
such sublease, as the cases may be. Further, the shareholders of Tenant shall
have the right, without Landlord's consent, to engage in sales of Tenant's
stock, provided that Tenant's use of the Demised Premises shall continue to be
conducted in the same manner as provided herein. The following conditions shall
apply to any assignment or sublease pursuant to this paragraph: (i) Tenant shall
be required to provide Landlord with not less than thirty (30) days' prior
written notice of such assignment or sublease setting forth the name of such
assignee or subtenant; (ii) Tenant shall not at the time of such assignment or
sublease be in default under any of the terms, covenants or conditions of this
Lease; (iii) Tenant shall not be released or discharged from any of its
obligations under this Lease in connection with or as a result of any such
assignment or sublease; (iv) any such assignee or subtenant shall use the
Demised Premises or such portion thereof as may be subleased only for the uses
permitted pursuant to the terms of this Lease; (v) such assignment or sublease
is made for a valid intracorporate business purpose and is not made to
circumvent the provisions of this Section 19; and (vi) in the case of any
assignment, such assignee shall agree in writing, in form and substance
reasonably acceptable to Landlord, to perform all of the unperformed terms,
covenants and conditions of this Lease, and, in the case of a sublease, the
sublease shall specifically provide that the subtenant will be bound by all of
the terms and conditions of this Lease and the sublease will be subject and
subordinate to this Lease and to all matters to which this Lease is subject and
subordinate.
SECTION 20
SALE OR TRANSFER
Landlord shall have the right to sell, transfer or assign the Demised
Premises ("Conveyance"). In the event of a Conveyance, Tenant shall attorn to
the purchaser, transferee or assignee ("Transferee") and recognize such
Transferee as Landlord under this Lease and Landlord shall be relieved from all
subsequent obligations and liabilities under this Lease, provided such
obligations are assumed in writing by such Transferee and a copy thereof is
provided to Tenant.
SECTION 21
DEFAULT, RE-ENTRY AND DAMAGES
21.1 DEFAULT
The following shall constitute a default under this Lease: (a) failure to
pay any Annual Base Rent or Additional Rent due hereunder within ten (10) days
after notice that the same
28
is (are) due; (b) failure to perform any of the other terms and conditions of
this Lease (other than as set forth in clause (a) above or clauses (c) through
(e) below), and such failure remains uncured for thirty (30) days following
written notice, or if such default is of such a nature that it cannot be
completely remedied within said period of thirty (30) days, if Tenant shall not
(x) promptly upon the giving by Landlord of such notice, advise Landlord of
Tenant's intention to institute all steps necessary to remedy such situation,
(y) promptly institute and thereafter diligently prosecute to completion all
steps necessary to remedy the same, and (z) complete such remedy within a
reasonable time after the date of the giving of said notice by Landlord and in
any event prior to such time as would either (i) subject Landlord, Landlord's
agents, any superior lessor or superior mortgagee to prosecution for a crime or
(ii) cause a default under any ground lease or any mortgage covering the Demised
Premises; (c) any attempted Transfer (as defined in Section 19) of the Demised
Premises or taking of any other action requiring Landlord's consent, without
receiving such consent; (d) the commission by Tenant of any waste, which shall
include the failure to pay taxes, hazard insurance premiums and persistent
failure to maintain and repair the Demised Premises; or (e) abandonment or
vacating of the Demised Premises for a consecutive period in excess of 120 days.
21.2 RE-ENTRY AND DAMAGES
In the event of Tenant's default, Landlord, in addition to all of its other
remedies under this Lease, at law or in equity, shall have the right to re-enter
the Demised Premises, with or without process of law, using such force as may be
necessary to remove all persons and property therefrom. Upon such default,
Landlord, at its option, may either terminate this Lease, or without terminating
this Lease, relet the Demised Premises or any part thereof on such terms and
conditions as Landlord deems advisable in its reasonable discretion. Landlord
agrees to use its best efforts to mitigate its damages upon a default by Tenant
and, in connection therewith, to consider in good faith any prospective
replacement tenant(s) procured by Tenant. The proceeds of such reletting shall
be applied (a) First, to the payment of any indebtedness due from Tenant to
Landlord other than Annual Base Rent or Additional Rent hereunder; (b) Second,
to the payment of any reasonable costs of such reletting, including, without
limitation, the cost of any reasonable alterations and repairs to the Demised
Premises, brokerage fees and expenses, advertising expenses, inspection fees and
attorney's fees; (c) Third, to the payment of Annual Base Rent and Additional
Rent due and unpaid hereunder; (d) Fourth, to any other damages, costs and
expenses incurred by Landlord as a result of Tenant's breach; and (e) the
residue, if any, shall be held by Landlord and applied in payment of future
Annual Base Rent and Additional Rent as the same may become due and payable
hereunder. Should the proceeds of such reletting during any month be less than
the monthly installment of Annual Base Rent or Additional Rent required
hereunder, then Tenant shall during such month pay such deficiency to Landlord
upon demand. No reentry or taking possession of the Demised Premises by Landlord
shall be construed as an election on its part to terminate this Lease unless
written notice of such intention is given to Tenant. In the event Landlord
elects to terminate this Lease, then Landlord shall have the right to accelerate
all of the Annual Base Rent and Additional Rent due hereunder for the balance of
the term of this Lease and Tenant shall forthwith pay to Landlord upon demand,
as liquidated damages, the deficiency between the amount of said accelerated
rent and the proceeds of reletting, if any, for what would have otherwise
29
constituted the balance of the Lease Term or the reasonable rental value of the
Demised Premises for such balance of the Lease Term if the Demised Premises are
not relet by Landlord within thirty (30) days following Tenant's default. In
computing such liquidated damages there shall be added to such deficiency any
expenses incurred in connection with obtaining possession of the Demised
Premises and reletting the Demised Premises, whether such reletting is
successful or not, which expenses include, but are not limited to, attorneys'
fees, brokerage fees and expenses, advertising expenses, reasonable alterations
and repairs to the Demised Premises, and inspection fees.
21.3 WAIVER OF LANDLORD'S LIABILITY
Landlord shall have no liability or responsibility in any way whatsoever
for its failure to relet the Demised Premises or, in the event of reletting, for
failure to collect the rent under such reletting. The failure of Landlord to
relet the Demised Premises or any part thereof shall not release or affect
Tenant's liability for Rent or damages.
21.4 LANDLORD'S RIGHTS CUMULATIVE
All the rights and remedies of Landlord hereunder shall be cumulative and
in addition to all other rights and remedies allowed by law or equity and may be
exercised separately or jointly without constituting an election of remedies.
21.5 WAIVER OF JURY TRIAL AND COUNTERCLAIM
In the event Landlord commences any proceedings against Tenant in
connection with this Lease, Tenant shall not interpose any non-compulsory
counterclaim in any such proceeding. This shall not, however, be construed as a
waiver of Tenant's right to assert such a claim in any separate action brought
by Tenant. Landlord and Tenant waive trial by jury in any action or proceeding
brought by either party on any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of lessor and lessee, Tenant's use
or occupancy of the Demised Premises, or any claim of injury or damage.
21.6 NON-LIABILITY
Landlord shall not be responsible or liable to Tenant for any loss or
damage that may be occasioned by or through the acts or omissions of persons
occupying adjoining premises or for any loss or damage resulting to Tenant or
its property from burst, stopped or leaking water, gas, sewer or steam pipes, or
for any damage or loss of property within the Demised Premises from any other
cause whatsoever (unless the same is due to the gross negligence or willful
misconduct of Landlord), and no such occurrence shall be deemed to be an actual
or constructive eviction from the Demised Premises or result in an abatement of
rental.
30
SECTION 22
LANDLORD'S RIGHT TO CURE DEFAULTS
If Tenant defaults in the performance of any provision of this Lease,
Landlord shall have the right (but not the obligation) in addition to any and
other rights and remedies in the event of default, to cure such default for the
account of Tenant, without prior notice to Tenant, and Tenant shall upon receipt
of notice thereof and demand for payment from Landlord pay any payment or
expenditure made by Landlord with the next monthly installment of Annual Base
Rent, together with interest at the "prime interest rate" as defined in Section
5.6 plus 4%.
SECTION 23
SECURITY INTEREST
INTENTIONALLY DELETED
SECTION 24
QUIET ENJOYMENT
Landlord covenants that so long as Tenant pays the Rent and is not in
default of any of the terms and conditions of this Lease, Tenant may, subject to
the terms hereof, peacefully and quietly hold and enjoy the Demised Premises for
the Lease Term without interference by Landlord or any person claiming by,
through or under Landlord.
SECTION 25
HOLDING OVER
In the event of Tenant holding over after the expiration of the Lease Term,
then the tenancy shall continue from month to month in the absence of a written
agreement to the contrary, subject to all the terms and provisions hereof,
except the monthly installment of Annual Base Rent shall be equal to 125 percent
(125%) of the monthly installments of Annual Base Rent due for the last full
month of the Lease Term.
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SECTION 26
CUMULATIVE REMEDIES AND WAIVER
26.1 CUMULATIVE REMEDIES
Each and every right, remedy and benefit provided by this Lease to Landlord
shall be cumulative and shall not be exclusive of any other right, remedy or
benefit allowed by law. These remedies may be exercised jointly or severally
without constituting an election of remedies.
26.2 WAIVER
One or more waivers by either party hereto of any term and condition hereof
or default by the other party hereunder shall not be construed as a waiver of
such term and condition or default in the future or any subsequent default for
the same cause. Any consent or approval given by Landlord requiring such consent
or approval shall not constitute consent or approval to any subsequent similar
act by Tenant. If either party shall bring an action against the other to
enforce any of the provisions of this Lease or to protect its interest in any
matter arising under this Lease or to recover damages for the breach of this
Lease, the prevailing party in such action shall be entitled to recover its cost
of suit and reasonable attorneys' fees expended or incurred in connection
therewith.
No payment by Tenant or receipt by Landlord of a lesser amount than the
monthly installment of Annual Base Rent 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 shall accept such check or payment
without prejudice to Landlord's right to recover the balance of such Rent or
pursue any other remedy in this Lease provided.
SECTION 27
DEFINITION OF
LANDLORD, LANDLORD'S LIABILITY
The term "Landlord" as used in this Lease so far as covenants or
obligations on the part of Landlord are concerned shall be limited to mean and
include only the owner or owners at the time in question of the fee of the
Demised Premises, and in the event of any transfer or transfers of the title to
such fee, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved from
and after the date of such transfer or conveyance of all liability with respect
to the performance of any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed, provided that any funds in
the hands of such Landlord or the then grantor at the time of such transfer in
which Tenant has an interest shall be turned over to the grantee and any amount
then due and payable to Tenant by Landlord or the then
32
grantor under any provision of this Lease, shall be paid to Tenant, it being
intended hereby that the covenants and obligations contained in this Lease on
the part of Landlord shall, subject as aforesaid, be binding on Landlord, its
successors and assigns, only during and in respect of their respective
successive periods of ownership.
If Landlord shall fail to perform any covenant, term or condition of this
Lease upon Landlord's part to be performed, and if as a consequence of such
default Tenant shall recover a money judgment against Landlord, such judgment
shall be satisfied only out of the proceeds of sale received upon execution of
such judgment and levied thereon against the right, title and interest of
Landlord in the Demised Premises, and Landlord shall not be liable for any
deficiency.
SECTION 28
WASTE
Tenant shall not commit or suffer to be committed any waste upon the
Demised Premises.
SECTION 29
TENANT'S FINANCIAL INFORMATION
Tenant agrees, upon request by Landlord in connection with any proposed
financing of the Demised Premises, to provide to Landlord such financial reports
or statements as may have been prepared (but Tenant shall have no obligation to
prepare new financial statements or to have any unaudited statements audited).
SECTION 30
SIGNS
Tenant will not place or cause to be placed or maintained any sign or
advertising matter of any kind anywhere on the exterior of the Demised Premises
without Landlord's prior written approval. No illuminated signs located in the
interior of the Demised Premises and which are visible from the outside shall
advertise any product. Tenant further agrees to maintain in good condition and
repair at all times any such sign or advertising matter of any kind which has
been approved by Landlord for use by Tenant.
33
SECTION 31
SECURITY DEPOSIT
INTENTIONALLY DELETED.
SECTION 32
MISCELLANEOUS
32.1 LEASE CHANGES REQUIRED BY LENDER
This Lease shall be subject to modification of non-economic terms contained
herein at the request of any first mortgage lender furnishing financing to
Landlord in connection with the Demised Premises.
32.2 ENTIRE AGREEMENT
This Lease and exhibits attached hereto and forming a part hereof, set
forth all of the covenants, agreements, stipulations, promises, conditions,
understandings and representations, hereinafter collectively "Representations"
between Landlord and Tenant concerning the Demised Premises and the buildings
and improvements to be constructed thereon. Landlord and Tenant agree that there
are no Representations other than set forth herein and agree to make no claims
against each other based upon Representations not set forth herein.
32.3 MODIFICATION
This Lease shall not be modified or amended unless by a writing signed by
Landlord and Tenant.
32.4 JOINT VENTURE, MORTGAGE
Nothing contained herein shall be deemed or construed by the parties
hereto, nor by any third party, as creating relationship of mortgagor and
mortgagee, principal and agent or of partnership or of joint venture between the
parties hereto, it being understood and agreed that neither this method of
computation of Rent, nor any other provision contained herein, nor any acts of
the parties herein, shall be deemed to create any relationship between the
parties hereto other than the relationship of lessor and lessee.
34
32.5 NOTICES
Except as specifically provided otherwise in this Lease, any notices or
demands required under this Lease shall be given in writing and either delivered
personally or sent by certified mail, return receipt requested, postage prepaid
and addressed to the address of Landlord or Tenant as set forth in Section I
hereof or such other address as Landlord or Tenant shall designate from time to
time by written notice to the other and shall be deemed received three (3) days
after being deposited in the mail or upon personal hand-delivery.
32.6 INTENTIONALLY OMITTED.
32.7 ESTOPPEL CERTIFICATE
Upon request by Landlord, Tenant shall, from time to time, execute,
acknowledge and deliver to Landlord a written statement certifying that this
Lease is in full force and effect and unmodified (or if modified specifying the
nature of the modification), the dates to which Rent and other charges have been
paid, that Landlord is not in default hereunder (or if in default, specifying
the nature of any default) and such other matters pertaining to the Lease or
Tenant's occupancy of the Demised Premises as Landlord may reasonably request.
It is understood that such statement may be relied upon by Landlord, a
prospective purchaser, mortgagee or assignee of any mortgagee of Landlord's
interest in the Demised Premises or this Lease.
Landlord shall, without charge, at any time and from time to time during
the term of this Lease, but in no event more often than once in any twelve (12)
month period, within thirty (30) days after receipt by Landlord of written
request therefor from Tenant, deliver a duly executed and acknowledged
certificate or statement to Tenant certifying: (a) that this Lease is unmodified
and in full force and effect, or, if there has been any modification, that the
same is in full force and effect as modified, and stating any such modification;
(b) the date of commencement of the term of this Lease; (c) that Annual Base
Rent is paid currently without any offset or defense thereto; (d) the dates to
which the Annual Base Rent and other charges payable hereunder by Tenant have
been paid, and the amount of Annual Base Rent paid in advance; and (e) any other
matter relating to the status of this Lease as shall be reasonably requested by
Tenant; provided, that, in fact, such facts are accurate and ascertainable by
Landlord.
32.8 GENDER
Whenever the singular is used herein, the same shall include the plural and
the masculine, feminine and neuter genders.
32.9 CAPTIONS AND SECTION NUMBERS
The captions, section numbers, article numbers, and index appearing in this
Lease are inserted only as a matter of convenience and in no way define, limit,
construe, or describe the scope or intent of such sections or articles of this
Lease nor in any way affect this Lease.
35
32.10 BROKER'S COMMISSION
Tenant represents and warrants to Landlord that Tenant has not dealt with
any broker, finder or similar person acting in the capacity of a broker in
connection with this Lease and Tenant agrees to indemnify Landlord and hold it
harmless from all liabilities arising from any claim of any broker, finder or
similar person resulting from or arising out of an alleged agreement or act by
Tenant, including, without limitation, the cost of counsel fees in connection
therewith. The provisions of this Section 32.10 shall survive the expiration or
earlier termination of this Lease.
Landlord represents and warrants to Tenant that Landlord has not dealt with
any broker, finder or similar person acting in the capacity of a broker in
connection with this Lease and Landlord agrees to indemnify Landlord and hold it
harmless from all liabilities arising from any claim of any broker, finder or
similar person resulting from or arising out of an alleged agreement or act by
Landlord including, without limitation, the cost of counsel fees in connection
therewith. The provisions of this Section 32.10 shall survive the expiration or
earlier termination of this Lease.
32.11 RECORDING
Landlord and Tenant agree to execute and record a memorandum of lease, in
form and substance reasonably satisfactory to Landlord, Tenant and their
respective counsel.
32.12 INTEREST ON PAST DUE AMOUNTS
Any rent, late charges or other sums payable by Tenant to Landlord under
this Lease which are not paid within ten (10) days after written notice from
Landlord shall bear interest at a per annum rate equal to the Prime Rate (as
hereinabove set forth), plus four percent (4%) per annum. Such interest will be
due and payable as Additional Rent upon demand and will accrue from the date
that such Rent, late charges or other sums are payable under the provisions of
this Lease until actually paid by Tenant.
32.13 EXECUTION OF LEASE
The submission of this Lease for examination does not constitute a
reservation of, or option for, the Demised Premises, and this Lease shall become
effective as a lease only upon execution and delivery thereof by Landlord and
Tenant.
32.14 CONSTRUCTION
This Lease shall be construed and enforced in accordance with the laws of
the State of Michigan. If any provision of this Lease, or the application
thereof to any person or circumstances, shall, to any extent be invalid or
unenforceable, the remaining provisions of this Lease shall not be affected
thereby and shall be valid and enforceable.
36
32.15 BINDING EFFECT
This Lease shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors, assigns
and permitted transferees.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day
and year first above written.
IN THE PRESENCE OF: LANDLORD:
MAPLE LANE ACQUISITION, L.L.C.,
a Michigan limited liability company
By:
----------------------------------------- ---------------------------------
Its:
----------------------------------------- ---------------------------------
TENANT:
CREATIVE CONCEPTS IN
ADVERTISING, INC.
a corporation
----------------------
By:
----------------------------------------- ---------------------------------
Its:
----------------------------------------- --------------------------------
37
