EXHIBIT 10.1
[Ohio Net Lease]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 23rd day of April, 2002, between
ProLogis Development Services Incorporated ("Landlord"), and the Tenant named
below.
TENANT: Innotrac Corporation
TENANT'S REPRESENTATIVE,
ADDRESS, AND PHONE NO.: Xxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
000 000-0000
PREMISES: That portion of the Building, containing
approximately 286,000 rentable square feet,
as determined by Landlord, as shown on
Exhibit A.
PROJECT: Airpark International Distribution
Center #5 (396,000 sq. ft. building)
BUILDING: Airpark International Distribution Center
#5 (396,000 sq. ft. building)
TENANT'S PROPORTIONATE
SHARE OF PROJECT: 72.000%
TENANT'S PROPORTIONATE SHARE
OF BUILDING: 72.000%
LEASE TERM: Beginning on the Commencement Date and
ending on the last day of the 60th full
calendar month thereafter.
COMMENCEMENT DATE: August 1, 2002 (Tenant shall be provided
access to the Premises on April 15, 2002 to
install equipment and fixtures)
INITIAL MONTHLY BASE RENT: $66,733.33
INITIAL ESTIMATED MONTHLY 1. Utilities
OPERATING EXPENSE PAYMENTS:
(estimates only and subject to 2. Common Area Charges: $4,052.00
adjustment to actual costs and
expenses according to the 3. Taxes: $7,150.00
provisions of this Lease)
4. Insurance $1,430.00
5. Others
INITIAL ESTIMATED MONTHLY
OPERATING EXPENSE PAYMENTS: $12,632.00
INITIAL MONTHLY BASE RENT AND
OPERATING EXPENSE PAYMENTS: $79,365.33
SECURITY DEPOSIT: $25,000.00
BROKER: Xxxx Commercial Group
ADDENDA: 1. Right of First Refusal 2. Two Renewal
Options (Baseball Arbitration)
3. Construction (Turnkey) 4. Miscellaneous
Provisions; 5. Cancellation Option;
6. Assignment & Subletting Consent
EXHIBITS: A. Site Plan B. Leasehold Improvements
1. GRANTING CLAUSE. In consideration of the obligation of Tenant
to pay rent as herein provided and in consideration of the other terms,
covenants, and conditions hereof, Landlord leases to Tenant, and Tenant takes
from Landlord, the Premises, to have and to hold for the Lease Term, subject to
the terms, covenants and conditions of this Lease.
2. ACCEPTANCE OF PREMISES. Tenant shall accept the Premises in
its condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions, and subject to Substantial
Completion of the Initial Improvements as set forth in Addendum 3 attached
hereto. Landlord has made no representation or warranty as to the suitability of
the Premises for the conduct of Tenant's business, and Tenant waives any implied
warranty that the Premises are suitable for Tenant's intended purposes. Except
as provided in Paragraph 10, in no event shall Landlord have any obligation for
any defects (except for latent defects) in the Premises or any limitation on its
use. The taking of possession of the Premises shall be conclusive evidence that
Tenant accepts the Premises and that the Premises were in good condition at the
time possession was taken except for items that are Landlord's responsibility
under Paragraph 10, latent defects, and any punchlist items agreed to in writing
by Landlord and Tenant. Landlord represents and warrants that as of the
Commencement Date, the Building's HVAC, electrical, plumbing and other
mechanical systems are in good working order and Landlord represents and
warrants, to its knowledge, that as of the Commencement Date, the Premises shall
be in compliance with all Legal Requirements, as hereinafter defined,
(including, without limitation, the Americans With Disabilities Act) in effect
as of the Commencement Date of this Lease and that no written notice has been
received by Landlord as of the date hereof of non-compliance with any Legal
Requirements.
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3. USE. The Premises shall be used only for the purpose of
receiving, storing, shipping and selling products, materials and merchandise
made and/or distributed by Tenant and for such other lawful purposes as may be
incidental thereto; provided, however, with Landlord's prior written consent,
Tenant may also use the Premises for light manufacturing. Tenant shall not
conduct or give notice of any auction, liquidation, or going out of business
sale on the Premises. Tenant will use the Premises in a careful, safe and proper
manner and will not commit waste, overload the floor or structure of the
Premises or subject the Premises to use that would damage the Premises. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise,
or vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with, or endanger
Landlord or any tenants of the Project. Outside storage, including without
limitation, storage of trucks and other vehicles, is prohibited without
Landlord's prior written consent; provided, however, that subject to applicable
Legal Requirements, Tenant shall be permitted to park trucks and trailers used
in Tenant's business operations on and from the Premises overnight at the truck
docks of the Premises, provided such trucks and trailers are at all times in
operable condition and there is no interference with the access of other tenants
to the Building parking lots and truck courts. Tenant, at its sole expense,
shall use and occupy the Premises in compliance with all laws, including,
without limitation, the Americans With Disabilities Act, orders, judgments,
ordinances, regulations, codes, directives, permits, licenses, covenants and
restrictions now or hereafter applicable to the Premises (collectively, "Legal
Requirements"). Tenant shall, at its expense, make any alterations or
modifications, within or without the Premises, that are required by Legal
Requirements related to Tenant's use or occupation of the Premises. Tenant will
not use or permit the Premises to be used for any purpose or in any manner that
would void Tenant's or Landlord's insurance, increase the insurance risk, or
cause the disallowance of any sprinkler credits. If any increase in the cost of
any insurance on the Premises or the Project is caused by Tenant's use or
occupation of the Premises, or because Tenant vacates the Premises, then Tenant
shall pay the amount of such increase to Landlord. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.
Notwithstanding anything contained herein to the contrary,
Tenant's obligations hereunder shall relate only to the interior of the Premises
and any changes to the Project that relate solely to the specific manner of use
of the Premises by Tenant; and Landlord shall make all other additions to or
modifications of the Project required from time to time by Legal Requirements.
The cost of such additions or modifications made by Landlord shall be included
in Operating Expenses pursuant to Paragraph 6 of this Lease, except for those
additions or modifications which are Landlord's sole responsibility pursuant to
Paragraph 10 of this Lease.
4. BASE RENT. Tenant shall pay Base Rent in the amount set forth
above. The first month's Base Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses (as hereafter defined) shall be due
and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Base
Rent on or before the first day of each calendar month succeeding the
Commencement Date. Payments of Base Rent for any fractional calendar month shall
be prorated. All payments required to be made by Tenant to Landlord hereunder
shall be payable at such address as Landlord may specify from time to time by
written notice delivered in accordance herewith. The obligation of Tenant to pay
Base Rent and other sums to Landlord and the obligations of Landlord under this
Lease are independent obligations. Tenant shall have no right at any time to
xxxxx, reduce, or set-off any rent due hereunder except as may be expressly
provided in this Lease. If Tenant is delinquent in any monthly installment of
Base Rent or of estimated Operating Expenses for more than 5 days, Tenant shall
pay to Landlord on demand a late charge equal to 5 percent of such delinquent
sum. The provision for such late charge shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as a penalty.
5. SECURITY DEPOSIT. The Security Deposit shall be held
by Landlord as security for the performance of Tenant's obligations under this
Lease. The Security Deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon each occurrence of an Event
of Default (hereinafter defined), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any
damage, injury, expense or liability caused by such Event of Default, without
prejudice to any other remedy provided herein or provided by law. Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.
6. OPERATING EXPENSE PAYMENTS. During each month of the Lease
Term, on the same date that Base Rent is due, Tenant shall pay Landlord an
amount equal to 1/12 of the annual cost, as reasonably estimated in good faith
by Landlord from time to time, of Tenant's Proportionate Share (hereinafter
defined) of Operating Expenses for the Project. Payments thereof for any
fractional calendar month shall be prorated. The term "Operating Expenses" means
all costs and expenses incurred by Landlord with respect to the ownership,
maintenance, and operation of the Project including, but not limited to costs
of: Taxes (hereinafter defined) and reasonable fees payable to tax consultants
and attorneys for consultation and contesting taxes to the extent of any savings
realized, not to exceed the amount of such savings; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads roofs, alleys, and
driveways, mowing, landscaping, exterior painting, utility lines, heating,
ventilation and air conditioning systems, lighting, electrical systems and other
mechanical and building systems; amounts paid to contractors and subcontractors
for work or services performed in connection with any of the
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foregoing; charges or assessments of any association to which the Project is
subject; market-rate property management fees payable to a property manager,
including any affiliate of Landlord; security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project or the Building as a bulk
warehouse facility in the market area, provided that the cost of additions or
alterations that are required to be capitalized for federal income tax purposes
shall be amortized on a straight line basis over a period equal to the useful
life thereof for federal income tax purposes. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, or the costs of renovating space for
tenants. Further, Operating Expenses shall not mean or include: (i) costs
incurred in connection with the construction or remodeling of the Project or any
other improvements now or hereafter located thereon, or correction of defects in
design or construction; (ii) interest, principal, or other payments on account
of any indebtedness, or rental or other payments under any ground lease, or any
payments in the nature of returns on or of equity of any kind; (iii) costs of
selling, syndicating, financing, mortgaging or hypothecating any part of or
interest in the Project; (iv) taxes on the income of Landlord or Landlord's
franchise taxes (unless any of said taxes are hereafter instituted by applicable
taxing authorities in substitution for ad valorem real property taxes); (v)
depreciation; (vi) Landlord's overhead costs, including equipment, supplies,
accounting and legal fees, rent and other occupancy costs or any other costs
associated with the operation or internal organization and function of Landlord
as a business entity (but this provision does not prevent the payment of a
management fee to Landlord as provided in this Paragraph 6); (vii) fees or other
costs for professional services provided by space planners, architects,
engineers, and other similar professional consultants, real estate commissions,
and marketing and advertising expenses; (viii) costs of defending or prosecuting
litigation with any party, unless a favorable judgment would be for the general
benefit of the tenants in the Project; (ix) costs incurred as a result of
Landlord's violation of any lease, contract, law or ordinance, including fines
and penalties; (x) late charges, interest or penalties of any kind for late or
other improper payment of any public or private obligation, including ad valorem
taxes; (xi) costs of removing Hazardous Materials or of correcting any other
conditions in order to comply with any environmental law or ordinance (but this
exclusion shall not constitute a release by Landlord of Tenant for any such
costs for which Tenant is liable pursuant to Paragraph 30 of this Lease); (xii)
costs for which Landlord is reimbursed from any other source; (xiii) costs
related to any building or land not included in the Project, including any
allocation of costs incurred on a shared basis, such as centralized accounting
costs, unless the allocation is made on a reasonable and consistent basis that
fairly reflects the share of costs actually attributable to the Project; and
(xiv) the part of any costs or other sum paid to any affiliate of Landlord that
may exceed the fair market price or cost generally payable for substantially
similar goods or services in the area of the Project.
If Tenant's total payments of Operating Expenses for any year
are less than Tenant's Proportionate Share of actual Operating Expenses for such
year, then Tenant shall pay the difference to Landlord within 30 days after
demand, and if more, then Landlord shall retain such excess and credit it
against Tenant's next payments, except that during the last calendar year of the
Lease Term or any extension terms thereof, Landlord shall refund any such excess
within 30 days following the termination of the Lease Term or any extension
terms thereof. For purposes of calculating Tenant's Proportionate Share of
Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease. With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant's "Proportionate Share" shall
be the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Project as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Project; and,
with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant's "Proportionate Share" shall be the percentage set forth on
the first page of this Lease as Tenant's Proportionate Share of the Building as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Building. Landlord may equitably increase Tenant's
Proportionate Share for any item of expense or cost reimbursable by Tenant that
relates to a repair, replacement, or service that benefits only the Premises or
only a portion of the Project or Building that includes the Premises or that
varies with occupancy or use. The estimated Operating Expenses for the Premises
set forth on the first page of this Lease are only estimates, and Landlord makes
no guaranty or warranty that such estimates will be accurate.
7. UTILITIES. Tenant shall pay for all water, gas, electricity,
heat, light, power, telephone, sewer, sprinkler services, refuse and trash
collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. All utilities shall be separately metered or
charged directly to Tenant by the provider, except for water and sewer, which
shall be jointly metered. Tenant shall pay its share of all charges for jointly
metered utilities based upon consumption, as reasonably determined by Landlord.
No interruption or failure of utilities shall result in the termination of this
Lease or the abatement of rent. Tenant agrees to limit use of water and sewer
for normal restroom use.
Notwithstanding anything to the contrary contained in
Paragraph 7 of this Lease, if an interruption or cessation of utilities results
from a cause within the Landlord's reasonable control and the Premises are not
usable by Tenant for the conduct of Tenant's business as a result thereof, Base
Rent and applicable Operating Expenses not actually incurred by Tenant shall be
abated for the period which commences five (5) business days after the date
Tenant gives to Landlord notice of such interruption until such utilities are
restored.
8. TAXES. Landlord shall pay all real estate taxes, assessments
and governmental charges (collectively referred to as "Taxes") that accrue
against the Project during the Lease Term, which shall be included as part of
the Operating Expenses charged to Tenant. Landlord may contest by appropriate
legal proceedings the amount, validity, or
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application of any Taxes or liens thereof. All capital levies or other taxes
assessed or imposed on Landlord upon the rents payable to Landlord under this
Lease and any franchise tax, any excise, transaction, sales or privilege tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rents from the Premises and/or the Project or any portion thereof shall be paid
by Tenant to Landlord monthly in estimated installments as part of Operating
Expenses; provided, however, in no event shall Tenant be liable for any capital
gains taxes associated with the sale of the Building or any net income taxes
imposed on Landlord unless such net income taxes are in substitution for any
Taxes payable hereunder. If any such tax or excise is levied or assessed
directly against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authority shall require.
Tenant shall be liable for all taxes levied or assessed against any personal
property or fixtures placed in the Premises, whether levied or assessed against
Landlord or Tenant.
9. INSURANCE. Landlord shall maintain all risk property insurance
covering the full replacement cost of the Building. Landlord may, but is not
obligated to, maintain such other insurance and additional coverages as it may
deem necessary, including, but not limited to, commercial liability insurance
and rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises. Landlord covenants to obtain and maintain property
and liability insurance on the Project in forms and amounts customary for
properties substantially similar to the Project, subject to customary
deductibles.
Tenant, at its expense, shall maintain during the Lease Term:
all risk property insurance covering the full replacement cost of all property
and improvements installed or placed in the Premises by Tenant at Tenant's
expense; worker's compensation insurance with no less than the minimum limits
required by law; employer's liability insurance with such limits as required by
law; and commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days' prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered to
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of
said insurance.
The all risk property insurance obtained by Landlord and
Tenant shall include a waiver of subrogation by the insurers and all rights
based upon an assignment from its insured, against Landlord or Tenant, their
officers, directors, employees, managers, agents, invitees and contractors, in
connection with any loss or damage thereby insured against. Neither party nor
its officers, directors, employees, managers, agents, invitees or contractors
shall be liable to the other for loss or damage caused by any risk coverable by
all risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.
Tenant and its subtenants, assignees, invitees, employees,
contractors and agents shall not be liable for, and Landlord hereby waives all
claims against Tenant and its subtenants, assignees, invitees, employees,
contractors and agents for damage to property sustained by Landlord or any
person claiming through Landlord resulting from any insurable accident or
occurrence in or upon the Premises or in or about the Project from any cause
whatsoever, including, without limitation, damage caused in whole or in part,
directly or indirectly, by the negligence of Tenant or its subtenants,
assignees, invitees, employees, contractors or agents; provided, however, such
waiver shall only apply to claims in excess of the commercially reasonable
deductible under Landlord's insurance policy.
10. LANDLORD'S REPAIRS. Landlord shall maintain, repair and
replace, at its expense, latent defects, the structural soundness of the roof,
foundation, and exterior walls of the Building in good repair, reasonable wear
and tear and damages caused by Tenant, its agents and contractors excluded. The
term "walls" as used in this Paragraph 10 shall not include windows, glass or
plate glass, doors or overhead doors, special store fronts, dock bumpers, dock
plats or levelers, or office entries. Tenant shall promptly give Landlord
written notice of any repair required by Landlord pursuant to this Paragraph 10,
after which Landlord shall have a reasonable opportunity to repair.
11. TENANT'S REPAIRS. Landlord, at Tenant's expense as provided in
Paragraph 6, shall maintain in good repair and condition the parking areas
(including exterior lighting in the parking areas) and other common areas of the
Building, including, but not limited to driveways, alleys, landscape and grounds
surrounding the Premises. Subject to Landlord's obligations in Paragraph 10 and
subject to Paragraphs 9 and 15, Tenant, at its expense, shall repair, replace
and maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, plumbing, water and sewer lines
up to points of common connection, fire sprinklers and fire protection systems,
entries, doors, ceilings and room membrane, windows, interior walls, and the
interior side of demising walls, and heating, ventilation and air conditioning
systems. Such repair
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and replacements include capital expenditures and repairs whose benefit may
extend beyond the Term. Heating, ventilation and air conditioning systems and
other mechanical and building systems serving the Premises shall be maintained
at Tenant's expense pursuant to maintenance service contracts entered into by
Tenant or, at Landlord's election, by Landlord. The scope of services and
contractors under such maintenance contracts shall be reasonably approved by
Landlord. If Tenant fails to perform any repair or replacement for which it is
responsible, Landlord may perform such work and be reimbursed by Tenant within
10 days after demand therefor. Subject to Paragraphs 9 and 15, Tenant shall bear
the full cost of any repair or replacement to any part of the Building or
Project that results from damage caused by Tenant, its agents, contractors, or
invitees and any repair that benefits only the Premises.
12. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent. Tenant shall cause, at its expense, all Tenant-Made Alterations to
comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations. All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by contractors
reasonably acceptable to Landlord and only good grades of materials shall be
used. All plans and specifications for any Tenant-Made Alterations shall be
submitted to Landlord for its approval. Landlord may monitor construction of the
Tenant-Made Alterations. Tenant shall reimburse Landlord for its costs in
reviewing plans and specifications and in monitoring construction. Landlord's
right to review plans and specifications and to monitor construction shall be
solely for its own benefit, and Landlord shall have no duty to see that such
plans and specifications or construction comply with applicable laws, codes,
rules and regulations. Tenant shall provide Landlord with the identities and
mailing addresses of all persons performing work or supplying materials, prior
to beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who did work on the Tenant-Made Alterations and final lien
waivers from all such contractors and subcontractors. Upon surrender of the
Premises, all Tenant-Made Alterations and any leasehold improvements constructed
by Landlord or Tenant shall remain on the Premises as Landlord's property,
except to the extent Landlord requires removal at Tenant's expense of any such
items or Landlord and Tenant have otherwise agreed in writing in connection
with Landlord's consent to any Tenant-Made Alterations. Upon Tenant's written
request, Landlord shall provide Tenant, at the time of Tenant's request for
approval of Tenant-Made Alterations, a list of which Tenant-Made Alterations
Landlord will require Tenant to remove upon surrender of the Premises. Tenant
shall repair any damage caused by such removal.
Tenant, at its own cost and expense and without Landlord's
prior approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") in the ordinary course of its business provided
that such items do not alter the basic character of the Premises, do not
overload or damage the Premises, and may be removed without injury to the
Premises, and the construction, erection, and installation thereof complies with
all Legal Requirements and with Landlord's requirements set forth above. Tenant
shall remove its Trade Fixtures and shall repair any damage caused by such
removal.
13. SIGNS. Tenant shall not make any changes to the exterior of
the Premises, install any exterior lights, decorations, balloons, flags,
pennants, banners, or painting, or erect or install any signs, windows or door
lettering, placards, decorations, or advertising media of any type which can be
viewed from the exterior of the Premises, without Landlord's prior written
consent, which consent shall not be unreasonably withheld. Upon surrender or
vacation of the Premises, Tenant shall have removed all signs and shall repair
any damage to the building facia surface to which its signs are attached. Tenant
shall obtain all applicable governmental permits and approvals for sign and
exterior treatments. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld, and conform in all respects to
Landlord's requirements.
14. PARKING. Tenant shall be entitled to park in common with other
tenants of the Project in those areas designated for nonreserved parking.
Landlord may allocate parking spaces among Tenant and other tenants in the
Project if Landlord determines that such parking facilities are becoming
crowded. Landlord shall not be responsible for enforcing Tenant's parking rights
against any third parties.
15. RESTORATION. If at any time during the Lease Term the Premises
are damaged by a fire or other casualty, Landlord shall notify Tenant within 15
days after such damage as to the amount of time Landlord reasonably estimates
will take to restore the Premises. If the restoration time is estimated to
exceed 4 months, either Landlord or Tenant may elect to terminate this Lease
upon notice to the other party given no later than 30 days after Landlord's
notice. If neither party elects to terminate this Lease or if Landlord estimates
that restoration will take 4 months or less, then, Landlord shall promptly
restore the Premises (including the Initial Improvements as defined in Addendum
3 attached hereto) excluding Tenant's Tenant-Made Alterations, Trade Fixtures
and personal property, subject to delays arising from Force Majeure events.
Tenant at Tenant's expense shall promptly perform, subject to delays arising
from Force Majeure events, all repairs or restoration to Tenant's Tenant-Made
Alterations, Trade Fixtures and personal property and shall promptly re-inter
the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either party may terminate this Lease if the
Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Base Rent and Operating Expenses shall be abated for the period of
repair and restoration in the proportion which the area of the Premises, if any,
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which is not usable by Tenant bears to the total area of the Premises. Such
abatement shall be the sole remedy of Tenant, and except as provided herein,
Tenant waives any right to terminate the Lease by reason of damage or casualty
loss.
16. CONDEMNATION. If any part of the Premises or the Project
should be taken for any public or quasi-public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or by private purchase
in lieu thereof (a "Taking" or "Taken"), and in Tenant's reasonable judgment the
Taking would prevent or materially interfere with Tenant's use of the Premises
or in Landlord's reasonable judgment would materially interfere with or impair
its ownership or operation of the Project, then upon written notice by Landlord
or Tenant this Lease shall terminate and Base Rent shall be apportioned as of
said date. If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, the Base Rent payable hereunder during the
unexpired Lease Term shall be reduced to such extent as may be fair and
reasonable under the circumstances. In the event of any such Taking, Landlord
shall be entitled to receive the entire price or award from any such Taking
without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant's
interest, if any, in such award. Tenant shall have the right, to the extent that
same shall not diminish Landlord's award, to make a separate claim against the
condemning authority (but not Landlord) for such compensation as maybe
separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.
17. ASSIGNMENT AND SUBLETTING. Without Landlord's prior written
consent, which shall not be unreasonably withheld pursuant to the provisions of
Addendum 6 attached hereto, Tenant shall not assign this Lease or sublease the
Premises or any part thereof or mortgage, pledge, or hypothecate its leasehold
interest or grant any concession or license within the Premises and any attempt
to do any of the foregoing shall be void and of no effect. For purposes of this
paragraph, a transfer of the ownership interests controlling Tenant shall be
deemed an assignment of this Lease unless such ownership interests are publicly
traded. Notwithstanding the above, Tenant may assign or sublet the Premises, or
any part thereof, to any entity controlling Tenant, controlled by Tenant or
under common control with Tenant (a "Tenant Affiliate"), without the prior
written consent of Landlord. Tenant shall reimburse Landlord for all of
Landlord's reasonable out-of-pocket expenses in connection with any assignment
or sublease. Upon Landlord's receipt of Tenant's written notice of a desire to
assign or sublet the Premises, or any part thereof (other than to a Tenant
Affiliate), Landlord may, by giving written notice to Tenant within 30 days
after receipt of Tenant's notice, terminate this Lease with respect to the space
described in Tenant's notice, as of the date specified in Tenant's notice for
the commencement of the proposed assignment or sublease.
Notwithstanding anything contained herein to the contrary,
provided no default has occurred and is continuing under this Lease, upon 10
days prior written notice to Landlord, Tenant may, without Landlord's prior
written consent, sublease a portion of the Premises consisting of approximately
3,000 square feet to Tenant's customer, Xxxxx & Xxxxxxx for purposes of retail
outlet space ("Xxxxx & Xxxxxxx Sublease"), upon the express understandings and
conditions that (a) Landlord neither approves nor disapproves the terms,
conditions and agreements contained in the Xxxxx & Xxxxxxx Sublease (all of
which shall be subordinate and subject at all times to the terms, covenants and
conditions of the Lease) and assumes no liability or obligation of any kind
whatsoever on account of anything contained in the Xxxxx & Xxxxxxx Sublease; (b)
Landlord shall not be deemed to have waived any rights under the Lease nor shall
Landlord be deemed to have waived Tenant's obligations to obtain any required
consents under the Lease (other than consent to the Xxxxx & Xxxxxxx Sublease
itself); (c) notwithstanding anything in the Xxxxx & Xxxxxxx Sublease to the
contrary, Tenant shall be and continue to remain liable for the payment of rent
and the full and prompt performance of all of the obligations of Tenant under
and as set forth in the Lease; (d) nothing contained in the Xxxxx & Xxxxxxx
Sublease shall be taken or construed to in any way modify, alter, waive or
affect any of the terms, covenants or conditions contained in the Lease, or be
deemed to xxxxx Xxxxx & Xxxxxxx any privity of contract with Landlord, or
require Landlord to accept any payments from Xxxxx & Xxxxxxx on behalf of
Tenant; (e) the Xxxxx & Xxxxxxx Sublease shall be deemed and agreed to be a
sublease only and not an assignment and there shall be no further subletting or
assignment of all or any portion of the Premises (including the premises demised
by the Xxxxx & Xxxxxxx Sublease) except in accordance with the terms and
conditions of the Lease; and (f) if Landlord terminates the Lease as a result of
a default by Tenant as set forth in the Lease, the Xxxxx & Xxxxxxx Sublease
shall automatically terminate concurrently therewith unless Landlord elects in
writing to keep the Xxxxx & Xxxxxxx Sublease in full force and effect in which
case the Xxxxx & Xxxxxxx Sublease shall become and be deemed to be a direct
indenture of lease between Landlord and Xxxxx & Xxxxxxx.
Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or
assignment plus any bonus or other consideration therefor or incident thereto)
exceeds the rental payable under this Lease (excepting the Xxxxx & Xxxxxxx
Sublease), then Tenant shall he bound and obligated to pay Landlord as
additional rent hereunder 50% of all such excess rental and other excess
consideration within 10 days following receipt thereof by Tenant (after
deducting standard tenant improvements, reasonable brokerage fees, and
reasonable attorney's fees).
If this Lease be assigned or if the Premises be subleased
(whether in whole or in part) or in the event of the mortgage, pledge, or
hypothecation of Tenant's leasehold interest or grant of any concession or
license within the Premises or if the Premises be occupied in whole or in part
by anyone other than Tenant, then upon a default by Tenant hereunder Landlord
may collect rent from the assignee, subleasee, mortgagee, pledgee, party to whom
the leasehold interest was hypothecated, concessionee or licensee or other
occupant and, except to the extent set forth in the preceding paragraph, apply
the amount collected to the next rent payable hereunder; and all such rentals
collected by Tenant shall be held in trust for Landlord and immediately
forwarded to Landlord. No such transaction or collection of rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a
release of Tenant from the further performance by Tenant of its covenants,
duties, or obligations hereunder.
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18. INDEMNIFICATION. Except for the negligence of Landlord, its
agents, employees or contractors, and to the extent permitted by law, Tenant
agrees to indemnify, defend and hold harmless Landlord, and Landlord's agents,
employees and contractors, from and against any and all losses, liabilities,
damages, costs and expenses (including attorneys' fees) resulting from claims by
third parties for injuries to any person and damage to or theft or
misappropriation or loss of property occurring in or about the Project and
arising from the use and occupancy of the Premises or from any activity, work,
or thing done, permitted or suffered by Tenant in or about the Premises or due
to any other act or omission of Tenant, its subtenants, assignees, invitees,
employees, contractors and agents. The furnishing of insurance required
hereunder shall not be deemed to limit Tenant's obligations under this Paragraph
18.
19. INSPECTION AND ACCESS. Landlord and its agents,
representatives, and contractors may enter the Premises at any reasonable time
to inspect the Premises and to make such repairs as may be required or permitted
pursuant to this Lease and for any other business purpose. Landlord and
Landlord's representatives may enter the Premises during business hours for the
purpose of showing the Premises to prospective purchasers and, during the last
year of the Lease Term, to prospective tenants. Landlord may erect a suitable
sign on the Premises stating the Premises are available to let or that the
Project is available for sale. Landlord may grant easements, make public
dedications, designate common areas and create restrictions on or about the
Premises, provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.
20. QUIET ENJOYMENT. If Tenant shall perform all of the covenants
and agreements herein required to be performed by Tenant, Tenant shall, subject
to the terms of this Lease, at all times during the Lease Term, have peaceful
and quiet enjoyment of the Premises against any person claiming by, through or
under Landlord.
21. SURRENDER. Upon termination of the Lease Term or earlier
termination of Tenant's right of possession, Tenant shall surrender the Premises
to Landlord in the same condition as received, broom clean, ordinary wear and
tear and casualty loss and condemnation covered by Paragraphs 15 and 16
excepted. Any Trade Fixtures, Tenant-Made Alterations and property not so
removed by Tenant as permitted or required herein shall be deemed abandoned and
may be stored, removed, and disposed of by Landlord at Tenant's expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Lease Term shall
survive the termination of the Lease Term, including without limitation,
indemnity obligations, payment obligations with respect to Operating Expenses
and obligations concerning the condition and repair of the Premises.
22. HOLDING OVER. If Tenant retains possession of the Premises
after the termination of the Lease Term, unless otherwise agreed in writing,
such possession shall be subject to immediate termination by Landlord at any
time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Base Rent for the holdover period, an amount
equal to 100% of the Base Rent in effect on the termination date during the
first 30 days of such holdover period and an amount equal to 150% of the Base
Rent in effect on the termination date for any holdover period thereafter,
computed on a monthly basis for each month or part thereof during such holding
over. All other payments shall continue under the terms of this Lease. In
addition, Tenant shall be liable for all damages incurred by Landlord as a
result of such holding over. No holding over by Tenant, whether with or without
consent of Landlord, shall operate to extend this Lease except as otherwise
expressly provided, and this Paragraph 22 shall not be construed as consent for
Tenant to retain possession of the Premises.
23. EVENTS OF DEFAULT. Each of the following events shall be an
event of default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent
or any other payment required herein when due, and such failure shall
continue for a period of 5 days after written notice from Landlord to
Tenant that such payment was due; provided, however, that Landlord
shall not be obligated to provide written notice of such failure more
than 2 times in any consecutive 12-month period, and the failure of
Tenant to pay any third or subsequent installment of Base Rent or any
other payment required herein when due in any consecutive 12-month
period shall constitute an Event of Default by Tenant under this Lease
without the requirement of notice or opportunity to cure.
(ii) Tenant or any guarantor or surety of Tenant's
obligations hereunder shall (A) make a general assignment for the
benefit of creditors; (B) commence any case, proceeding or other action
seeking to have an order for relief entered on its behalf as a debtor
or to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts or seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or of any substantial part
of its property (collectively a "proceeding for relief"); (C) become
the subject of any proceeding for relieve which is not dismissed
within 60 days of its filing or entry; or (D) die or suffer a legal
disability (if Tenant, guarantor, or surety is an individual) or be
dissolved or otherwise fail to maintain its legal existence (if Tenant,
guarantor or surety is a corporation, partnership or other entity).
(iii) Any insurance required to be maintained by Tenant
pursuant to this Lease shall be cancelled or terminated or shall expire
or shall be reduced or materially changed, except, in each case, as
permitted in this Lease.
(iv) Tenant shall not occupy or shall vacate the Premises
or shall fail to continuously operate its business at the Premises for
the permitted use set forth herein, whether or not Tenant is in
monetary or other
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default under this Lease. Tenant's vacating of the Premises shall not
constitute an Event of Default if, prior to vacating the Premises,
Tenant has made arrangements reasonably acceptable to Landlord to (a)
insure that Tenant's insurance for the Premises will not be voided or
cancelled with respect to the Premises as a result of such vacancy,
(b) insure that the Premises are secured and not subject to vandalism,
and (c) insure that the Premises will be properly maintained after
such vacation. Tenant shall inspect the Premises at least once each
month and report monthly in writing to Landlord on the condition of
the Premises.
(v) Tenant shall attempt or there shall occur any
assignment, subleasing or other transfer of Tenant's interest in or
with respect to this Lease except as otherwise permitted in this Lease.
(vi) Tenant shall fail to discharge any lien placed upon
the Premises in violation of this Lease within 30 days after any such
lien or encumbrance is filed against the Premises.
(vii) Tenant shall fail to comply with any provision of
this Lease other than those specifically referred to in this Paragraph
23, and except as otherwise expressly provided herein, such default
shall continue for more than 30 days after Landlord shall have given
Tenant written notice of such default, unless curing such default will,
due to the nature of such default, require a period of time in excess
of 30 days, then, after such period of time as is reasonably necessary,
but in no event shall curing such default exceed 90 days.
24. LANDLORD'S REMEDIES. Upon each occurrence of an Event of
Default and so long as such Event of Default shall be continuing, Landlord may
at any time thereafter at its election: terminate this Lease or Tenant's right
of possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and equipment
at the Premises.
If Landlord terminates this Lease, Landlord may recover from
Tenant the sum of: all Base Rent and all other amounts accrued hereunder to the
date of such termination; the cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing commissions
incurred by Landlord, and costs of removing and storing Tenant's or any other
occupant's property, repairing, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant or tenants, and all
reasonable expenses incurred by Landlord in pursuing its remedies, including
reasonable attorneys' fees and court costs; and the excess of the then present
value of the Base Rent and other amounts payable by Tenant under this Lease as
would otherwise have been required to be paid by Tenant to Landlord during the
period following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury xxxx rate at the date of such termination.
If Landlord terminates Tenant's right to possession without
terminating the Lease after an Event of Default, Landlord shall use commercially
reasonable efforts to relet the Premises; provided, however, (a) Landlord shall
not be obligated to accept any tenant proposed by Tenant, (b) Landlord shall
have the right to lease any other space controlled by Landlord first, and (c)
any proposed tenant shall meet all of Landlord's leasing criteria. For the
purpose of such reletting Landlord is authorized to make any repairs, changes,
alterations, or additions in or to the Premises as Landlord deems reasonably
necessary or desirable. If the Premises are not relet, then Tenant shall pay to
Landlord as damages a sum equal to the amount of the rental reserved in this
Lease for such period or periods, plus the cost of recovering possession of the
Premises (including attorneys' fees and costs of suit), the unpaid Base Rent and
other amounts accrued hereunder at the time of repossession, and the costs
incurred in any attempt by Landlord to relet the Premises. If the Premises are
relet and a sufficient sum shall not be realized from such reletting [after
first deducting therefrom, for retention by Landlord, the unpaid Base Rent and
other amounts accrued hereunder at the time of reletting, the cost of recovering
possession (including attorneys' fees and costs of suit), all of the costs and
expense of repairs, changes, alterations, and additions, the expense of such
reletting (including without limitation brokerage fees and leasing commissions)
and the cost of collection of the rent accruing therefrom to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately satisfy and
pay any such deficiency. Any such payments due Landlord shall be made upon
demand therefor from time to time and Tenant agrees that Landlord may file suit
to recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of Law, it being understood that such surrender and/or
termination can be effected only by the written agreement of Landlord and
Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at any time
to enforce its rights under this Lease strictly in accordance with same shall
not be construed as having created a custom in any way or manner contrary to the
specific terms, provisions, and covenants of this Lease or as having modified
the same. Tenant and Landlord further agree that forbearance or waiver by
Landlord to enforce its rights pursuant to this Lease or at law or in equity,
shall not be a waiver of Landlord's right to enforce one or more of its rights
in connection with any subsequent default. A receipt by Landlord of rent or
other payment with knowledge of the breach of any covenant hereof shall not be
deemed a waiver of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in writing and
signed by Landlord. To the greatest extent permitted by law, Tenant waives the
service of notice of Landlord's intention to re-enter as provided for in any
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statute, or to institute legal proceedings to that end, and also waives all
right of redemption in case Tenant shall be dispossessed by a judgment or by
warrant of any court or judge. The terms "enter," "re-enter," "entry" or
"re-entry," as used in this Lease, are not restricted to their technical legal
meanings. Any reletting of the Premises shall be on such terms and conditions as
Landlord in its sole discretion may determine (including without limitation a
term different than the remaining Lease Term, rental concessions, alterations
and repair of the Premises, lease of less than the entire Premises to any tenant
and leasing any or all other portions of the Project before reletting the
Premises). Landlord shall not be liable, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the Premises or
collect rent due in respect of such reletting, provided that Landlord has used
commercially reasonable efforts to mitigate its damages as provided for above.
25. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not
be in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary). All obligations of Landlord hereunder shall be
construed as covenants, not conditions. If such default by Landlord shall occur,
Tenant may pursue any legal or equitable remedy for which it is entitled. All
obligations of Landlord under this Lease will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter. The term
"Landlord" in this Lease shall mean only the owner, for the time being of the
Premises, and in the event of the transfer by such owner of its interest in the
Premises, such owner shall thereupon be released and discharged from all
obligations of Landlord thereafter accruing, but such obligations shall be
binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Any liability of Landlord under this Lease shall be limited
solely to its interest in the Project, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord.
26. WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO
TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27. SUBORDINATION. This Lease and Tenant's interest and rights
hereunder are and shall be subject and subordinate at all times to the lien of
any first mortgage, now existing or hereafter created on or against the Project
or the Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Notwithstanding the foregoing, any such
holder may at any time subordinate its mortgage to this Lease, without Tenant's
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such mortgage and had been
assigned to such holder. The term "mortgage" whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the "holder" of a mortgage shall be deemed to
include the beneficiary under a deed of trust.
Tenant shall not be obligated to subordinate the Lease or its
interest therein to any future mortgage, deed of trust or ground lease on the
Project unless concurrently with such subordination the holder of such mortgage
or deed of trust or the ground lessor under such ground lease agrees not to
disturb Tenant's possession of the Premises under the terms of the Lease in the
event such holder or ground lessor acquires title to the Premises through
foreclosure, deed in lieu of foreclosure or otherwise.
28. MECHANIC'S LIENS. Tenant has no express or implied authority
to create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within 30 days of the filing or recording thereof;
provided, however, Tenant may contest such liens or encumbrances as long as such
contest prevents foreclosure of the lien or encumbrance and Tenant causes lien
or encumbrance to be bonded or insured over in a manner satisfactory to Landlord
within such 30 day period.
29. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time,
within 10 days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. Tenant's
obligation to furnish each estoppel certificate in a timely fashion is a
material inducement for Landlord's executive of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate.
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30. ENVIRONMENTAL REQUIREMENTS. Except for Hazardous Material
contained in products used by Tenant in de minimis quantities for ordinary
cleaning and office purposes, Tenant shall not affirmatively consent or cause
any party to bring any Hazardous Material upon the Premises or transport, store,
use, generate, manufacture or release any Hazardous Material in or about the
Premises without Landlord's prior written consent. Tenant, at its sole cost and
expense, shall operate its business in the Premises in strict compliance with
all Environmental Requirements and shall remediate in a manner reasonably
satisfactory to Landlord any Hazardous Materials released on or from the Project
by Tenant, its agents, employees, contractors, subtenants or invitees. Tenant
shall complete and certify to disclosure statements as requested by Landlord
from time to time relating to Tenant's transportation, storage, use, generation,
manufacture or release of Hazardous Materials on the Premises. The term
"Environmental Requirements" means all applicable present and future statutes,
regulations, ordinances, rules, codes, judgments, orders or other similar
enactments of any governmental authority or agency regulating or relating to
health, safety, or environmental conditions on, under, or about the Premises or
the environment, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; and all state and local counterparts thereto, and
any regulations or policies promulgated or issued thereunder. The term
"Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas). As defined
in Environmental Requirements, Tenant is and shall be deemed to be the
"operator" of Tenant's "facility" and the "owner" of all Hazardous Materials
brought on the Premises by Tenant, its agents, employees, contractors or
invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless
from and against any and all losses (including, without limitation, diminution
in value of the Premises or the Project and loss of rental income from the
Project), claims, demands, actions, suits, damages (including, without
limitation, punitive damages), expenses (including, without limitation,
remediation, removal, repair, corrective action, or cleanup expenses), and costs
(including, without limitation, actual attorneys' fees, consultant fees or
expert fees and including, without limitation, removal or management of any
asbestos brought into the property or disturbed in breach of the requirements of
this Paragraph 30, regardless of whether such removal or management is required
by law) which are brought or recoverable against, or suffered or incurred by
Landlord as a result of any release of Hazardous Materials for which Tenant is
obligated to remediate as provided above or any other breach of the requirements
under this Paragraph 30 by Tenant, its agents, employees, contractors,
subtenants, assignees or invitees, regardless of whether Tenant had knowledge of
such noncompliance. The obligations of Tenant under this Paragraph 30 shall
survive any termination of this Lease.
Notwithstanding anything to the contrary in this Paragraph 30,
Tenant shall have no liability of any kind to Landlord as to Hazardous Materials
on the Premises caused or permitted by (i) Landlord, its agents, employees,
contractors or invitees; or (ii) any other tenants in the Project or their
agents, employees, contractors, subtenants, assignees or invitees; or (iii) any
other person or entity located outside of the Premises or the Project.
Landlord shall have access to, and a right to perform
inspections and tests of, the Premises to determine Tenant's compliance with
Environmental Requirements, its obligations under this Paragraph 30, or the
environmental condition of the Premises. Access shall be granted to Landlord
upon Landlord's prior notice to Tenant and at such times so as to minimize, so
far as may be reasonable under the circumstances, any disturbance to Tenant's
operations. Such inspections and tests shall be conducted at Landlord's expense,
unless such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Landlord for the
reasonable cost of such inspection and tests. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant.
If Hazardous Materials are hereafter discovered on the Premises, and
the presence of such Hazardous Materials is not the result of Tenant's use of
the Premises or any act or omission of Tenant or its agents, employees,
contractors, subtenants or invitees, and the presence of such Hazardous
Materials results in any contamination, damages, or injury to the Premises that
materially and adversely affects Tenant's occupancy or use of the Premises,
Landlord shall promptly take all actions at its sole expense as are necessary to
remediate such Hazardous Materials and as may be required by the Environmental
Requirements. Actual or threatened action or litigation by any governmental
authority is not a condition prerequisite to Landlord's obligations under this
paragraph. Within 30 days after notification from Tenant supported by reasonable
documentation setting forth such presence or release of Hazardous Materials, and
after Landlord has been given a reasonable period of time after such 30-day
period to conduct its own investigation to confirm such presence or release of
Hazardous Materials, Landlord shall either terminate this Lease or commence to
remediate such Hazardous Materials within 180 days after the completion of
Landlord's investigation and thereafter diligently prosecute such remediation to
completion. If Landlord fails to commence such remediation or if Landlord
commences such remediation and fails to diligently prosecute same until
completion, then Tenant as its sole remedy may terminate this Lease by written
notice to Landlord after expiration of 30 days following a notice to Landlord
that Tenant intends to terminate this Lease if Landlord does not promptly
commence or diligently prosecute the remediation within such 30-day period. If
Landlord commences remediation pursuant to this paragraph, Base Rent and
Operating Expenses shall be equitably adjusted if and to the extent and during
the period the Premises are unsuitable for Tenant's business. Notwithstanding
anything herein to the contrary, if Landlord obtains a letter from the
appropriate governmental authority that no further remediation is required prior
to the effective date of any such termination, such termination shall be null
and void and this Lease shall remain in full force and effect.
31. RULES AND REGULATIONS. Tenant shall, at all times during the
Lease Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between
-10-
said rules and regulations and other provisions of this Lease, the other terms
and provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by other
tenants in the Project.
32. SECURITY SERVICE. Tenant acknowledges and agrees that, while
Landlord may patrol the Project, Landlord is not providing any security services
with respect to the Premises and that Landlord shall not be liable to Tenant
for, and Tenant waives any claim against Landlord with respect to, any loss by
theft or any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33. FORCE MAJEURE. Except for monetary obligations, neither
Landlord nor Tenant shall be held responsible for delays in the performance of
its obligations hereunder when caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain labor or materials or reasonable substitutes
therefor, governmental restrictions, governmental regulations, governmental
controls, delay in issuance of permits, enemy or hostile governmental action,
civil commotion, fire or other casualty, and other causes beyond the reasonable
control of Landlord or Tenant, as the case may be ("Force Majeure").
34. ENTIRE AGREEMENT. This Lease constitutes the complete
agreement of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.
35. SEVERABILITY. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby. It is also the intention of the parties to
this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this Lease, a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
36. BROKERS. Tenant represents and warrants that it has dealt with
no broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction.
37. MISCELLANEOUS, (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this Lease
shall be in writing and shall be sent by registered or certified mail, return
receipt requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 00000 Xxxx 00xx Xxxxx, Xxxxxx, Xxxxxxxx
00000. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.
(d) Except as otherwise expressly provided in this Lease or as
otherwise required by law, Landlord retains the absolute right to withhold any
consent or approval.
(e) At Landlord's request from time to time Tenant shall furnish
Landlord with true and complete copies of its most recent annual and quarterly
financial statements prepared by Tenant or Tenant's accountants and any other
financial information or summaries that Tenant typically provides to its lenders
or shareholders.
(f) Neither this Lease nor a memorandum of lease shall be filed
by or on behalf of Tenant in any public record. Landlord may prepare and file,
and upon request by Landlord Tenant will execute, a memorandum of lease.
(g) The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease shall have
no binding force or effect, shall not constitute an option for the leasing of
the Premises, nor confer any right or impose any obligations upon either party
until execution of this Lease by both parties.
(i) Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
(j) Any amount not paid by Tenant within 5 days after its due date
in accordance with the terms of this Lease shall bear interest from such due
date until paid in full at the lesser of the highest rate permitted by
applicable law or 12 percent per year. It is expressly the intent of Landlord
and Tenant at all time to comply with applicable law
-11-
governing the maximum rate or amount of any interest payable on or in connection
with this Lease. If applicable law is ever judicially interpreted so as to
render usurious any interest called for under this Lease, or contracted for,
charged, taken, reserved, or received with respect to this Lease, then it is
Landlord's and Tenant's express intent that all excess amounts theretofore
collected by Landlord be credited on the applicable obligation (or, if the
obligation has been or would thereby be paid in full, refunded to Tenant), and
the provisions of this Lease immediately shall be deemed reformed and the
amounts thereafter collectible hereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding any
principles of conflicts of laws.
(1) Time is of the essence as to the performance of each party's
obligations under this Lease.
(m) All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.
38. LANDLORD'S LIEN/SECURITY INTEREST. Intentionally deleted.
39. LIMITATION OF LIABILITY OF TRUSTEES, SHAREHOLDERS, AND
OFFICERS OF PROLOGIS TRUST. Any obligation or liability whatsoever of ProLogis
Trust, a Maryland real estate investment trust, which may arise at any time
under this Lease or any obligation or liability which may be incurred by it
pursuant to any other instrument, transaction, or undertaking contemplated
hereby shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of, its trustees, directors,
shareholders, officers, employees or agents, regardless of whether such
obligation or liability is in the nature of contract, tort, or otherwise.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
Signed and acknowledged
in the presence of: LANDLORD
/s/ Xxxxxx X. Wheehan ProLogis Development Services Incorporated
----------------------------
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Senior Vice President
Address:
0000 X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
Signed and acknowledged
in the presence of:
TENANT
Innotrac Corporation
/s/ Xxxxxx X. Wheehan
----------------------------
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------
Title: VP
----------------------------------
Address:
0000 Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000-0000
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STATE OF ILLINOIS
COUNTY OF DU PAGE
Before me, the subscribers, a notary public in and for said county,
personally appeared Xxxxxxx X. Xxxxxxx, Xx. the Senior V.P. of Prologis Trust,
the Landlord in the foregoing instrument, who acknowledged the signing of the
foregoing instrument to be his/her free act and deed on behalf of the Landlord
for the uses and purposes set forth therein.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed my
official seal on the 23 day of April, 2002.
/s/ Xxxx Xxxxx Xxxxxx
--------------------------------------------
NOTARY PUBLIC, STATE OF ILLINOIS
STATE OF GEORGIA
COUNTY OF GWINNETT
Before me, the subscribers, a notary public in and for said county,
personally appeared Xxxxx Xxxxxx, the VP of Innotrac, the Tenant in the
foregoing instrument, who acknowledged the signing of the foregoing instrument
to be his/her free act and deed on behalf of the Tenant for the uses and
purposes set forth therein.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed my
official seal on the 10 day of April, 2002.
/s/
---------------------------------------------
NOTARY PUBLIC, STATE OF
NOTARY PUBLIC, GWINNETT COUNTY, GEORGIA
MY COMMISSION EXPIRES JUNE 23, 2002
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Rules and Regulations
1. The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or its agents, or used by them for any purpose
other than ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas
outside of its Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in the offices,
halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the
making of loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections
in the Premises, Landlord or its agent will direct the electrician as
to where and how the wires may be introduced; and, without such
direction, no boring or cutting of wires will be permitted. Any such
installation or connection shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or boiler,
or other mechanical apparatus in the Premises, except as specifically
approved in the Lease. The use of oil, gas or inflammable liquids for
heating, lighting or any other purpose is expressly prohibited.
Explosives or other articles deemed extra hazardous shall not be
brought into the Project.
7. Parking any type of recreational vehicles is specifically prohibited on
or about the Project. Except for the overnight parking of operative
vehicles, no vehicle of any type shall be stored in the parking areas
at any time. In the event that a vehicle is disabled, it shall be
removed within 48 hours. There shall be no "For Sale" or other
advertising signs on or about any parked vehicle. All vehicles shall be
parked in the designated parking areas in conformity with all signs and
other markings. All parking will be open parking, and no reserved
parking, numbering or lettering of individual spaces will be permitted
except as specified by Landlord.
8. Tenant shall maintain the Premises free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in
violation of the Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss
of property on the Premises, however occurring, or for any damage done
to the effects of Tenant by the janitors or any other employee or
person.
11. Tenant shall give Landlord prompt notice of any defects in the water,
lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
heating apparatus, or any other service equipment affecting the
Premises.
12. Except as otherwise set forth in the Lease, Tenant shall not permit
storage outside the Premises, including without limitation, outside
storage of trucks and other vehicles, or dumping of waste or refuse or
permit any harmful materials to be placed in any drainage system or
sanitary system in or about the Premises.
13. All moveable trash receptacles provided by the trash disposal firm for
the Premises must be kept in the trash enclosure areas, if any,
provided for that purpose.
14. No auction, public or private, will be permitted on the Premises or the
Project.
15. No awnings shall be placed over the windows in the Premises except with
the prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking or for
any immoral or illegal purposes or for any purpose other than that
specified in the Lease. No gaming devices shall be operated in the
Premises.
17. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account
the capacity of the electrical wiring in the Project and the Premises
and the needs of other tenants, and shall not use more than such safe
capacity. Landlord's consent to the installation of electric equipment
shall not relieve Tenant from the obligation not to use more
electricity than such safe capacity.
18. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage.
19. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's
ordinary use of the Premises and shall keep all such machinery free of
vibration, noise and air waves which may be transmitted beyond the
Premises.
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ADDENDUM 1
RIGHT OF FIRST REFUSAL
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 23, 2002, BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
(a) "Offered Space" shall mean the adjoining 110,000 square feet
of space indicated on Exhibit A attached hereto.
(b) Provided that as of the date of the giving of Landlord's
Notice, (x) Tenant is the Tenant originally named herein, (y) Tenant actually
occupies all of the Premises originally demised under this Lease and any
premises added to the Premises, and (z) no Event of Default or event which but
for the passage of time or the giving of notice, or both, would constitute an
Event of Default has occurred and is continuing, if at any time during the first
24 months of the Lease Term if Landlord intends to enter into a lease (the
"Proposed Lease") for such Offered Space with anyone (a "Proposed Tenant")
Landlord shall first offer to Tenant the right to lease the Offered Space upon
all the terms and conditions of the Proposed Lease; provided, however, (i) the
Lease Term with respect to the Offered Space shall run co-terminus with the
Lease Term for the Premises consisting of approximately 286,000 s.f., but in no
event shall the Lease Term for the Offered Space be less than a period equal to
48 months ("Offered Space Term"), (ii) the Base Rent for the Offered Space shall
be calculated at $2.85 p.s.f. per annum for the first 6 months of the Offered
Space Term, and thereafter shall be based upon the Fair Market Rent (as
hereinafter defined in Addendum 2), and (iii) Landlord shall contribute a
maximum amount of $100,000 for Tenant-Made Alterations in connection with the
Offered Space.
(c) Such offer shall be made by Landlord to Tenant in a written
notice (hereinafter called the "Offer Notice") which offer shall designate the
space being offered and shall specify the terms for such Offered Space which
shall be the same as those set forth in the Proposed Lease, except as otherwise
set forth above. Further, in addition to Landlord's Offer Notice, Landlord shall
provide Tenant with a copy of Landlord's Letter of Intent to the Proposed
Tenant. Tenant may accept the offer set forth in the Offer Notice by delivering
to Landlord an unconditional acceptance (hereinafter called "Tenant's Notice")
of such offer within 5 business days after delivery by Landlord of the Offer
Notice to Tenant. Time shall be of the essence with respect to the giving of
Tenant's Notice. If Tenant does not accept (or fails to timely accept) an offer
made by Landlord pursuant to the provisions of this Addendum with respect to the
Offered Space designated in the Offer Notice, Landlord shall be under no further
obligation with respect to such space by reason of this Addendum. In order to
send the Offer Notice, Landlord does not need to have negotiated a complete
lease with the Proposed Tenant but may merely have agreed upon the material
economic terms for the Proposed Lease, and Tenant must make its decision with
respect to the Offered Space as long as it has received a description of such
material economic terms.
(d) Intentionally deleted.
(e) If Tenant at any time declines any Offered Space offered by
Landlord, Tenant shall be deemed to have irrevocably waived all further rights
under this Addendum, and Landlord shall be free to lease the Offered Space to
the Proposed Tenant including on terms which may be less favorable to Landlord
than those set forth in the Proposed Lease.
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ADDENDUM 2
TWO RENEWAL OPTIONS
--------------------
(BASEBALL ARBITRATION)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 23, 2002 BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
(a) Provided that as of the time of the giving of the First
Extension Notice and the Commencement Date of the First Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies all
of the Premises initially demised under this Lease and any space added to the
Premises, and (z) no Event of Default exists or would exist but for the passage
of time or the giving of notice, or both; then Tenant shall have the right to
extend the Lease Term for an additional term of 1 year (such additional term is
hereinafter called the "First Extension Term") commencing on the day following
the expiration of the Lease Term (hereinafter referred to as the "Commencement
Date of the First Extension Term"). Tenant shall give Landlord notice
(hereinafter called the "First Extension Notice") of its election to extend the
term of the Lease Term at least 6 months, but not more than 9 months, prior to
the scheduled expiration date of the Lease Term.
(b) Provided that as of the time of the giving of the Second
Extension Notice and the Commencement Date of the Second Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies all
of the Premises initially demised under this Lease and any space added to the
Premises, and (z) no Event of Default exists or would exist but for the passage
of time or the giving of notice, or both and provided Tenant has exercised its
option for the First Extension Term; then Tenant shall have the right to extend
the Lease Term for an additional term of 3 years (such additional term is
hereinafter called the "Second Extension Term") commencing on the day following
the expiration of the First Extension Term (hereinafter referred to as the
"Commencement Date of the Second Extension Term"). Tenant shall give Landlord
notice (hereinafter called the "Second Extension Notice") of its election to
extend the term of the Lease Term at least 6 months, but not more than 9 months,
prior to the scheduled expiration date of the First Extension Term.
(c) The Base Rent payable by Tenant to Landlord during the First
Extension Term shall be the greater of:
(i) the Base Rent in effect on the expiration of the
Lease Term (if the Base Rent is stated as an annual or other periodic
rate, adjusted for the length of the Lease Term), and
(ii) the Fair Market Rent, as defined and determined
pursuant to Paragraphs (e), (f), and (g) below.
(d) The Base Rent payable by Tenant to Landlord during the Second
Extension Term shall be the greater of:
(i) the Base Rent in effect on the expiration of the
First Extension Term (if the Base Rent is stated as an annual or other
periodic rate, adjusted for the length of the Lease Term), and
(ii) the Fair Market Rent, as defined and determined
pursuant to Paragraphs (e), (f), and (g) below.
(e) The term "Fair Market Rent" shall mean the Base Rent,
expressed as an annual rent per square foot of floor area, which Landlord would
have received from leasing the Premises for the First Extension Term or the
Second Extension Term, as applicable, to an unaffiliated person which is not
then a tenant in the Project, assuming that such space were to be delivered in
"as-is" condition, and taking into account the rental which such other tenant
would most likely have paid for such premises, including market escalations,
provided that Fair Market Rent shall not in any event be less than the Base Rent
for the Premises as of the expiration of the Lease Term or the First Extension
Term, as applicable. Fair Market Rent shall not be reduced by reason of any
costs or expenses saved by Landlord by reason of Landlord's not having to find a
new tenant for the Premises (including without limitation brokerage commissions,
cost of improvements necessary to prepare the space for such tenant's occupancy,
rent concession, or lost rental income during any vacancy period). Fair Market
Rent means only the rent component defined as Base Rent in the Lease and does
not include reimbursements and payments by Tenant to Landlord with respect to
operating expenses and other items payable or reimbursable by Tenant under the
Lease. In addition to its obligation to pay Base Rent (as determined herein),
Tenant shall continue to pay and reimburse Landlord as set forth in the Lease
with respect to such operating expenses and other items with respect to the
Premises during the First Extension Term or the Second Extension Term, as
applicable. The arbitration process described below shall be limited to the
determination of the Base Rent and shall not affect or otherwise reduce or
modify the Tenant's obligation to pay or reimburse Landlord for such operating
expenses and other reimbursable items.
(f) Landlord shall notify Tenant of its determination of the Fair
Market Rent (which shall be made in Landlord's sole discretion and shall in any
event be not less than the Base Rent in effect as of the expiration of the Lease
Term or the First Extension Term, as applicable) for the First Extension Term or
the Second Extension Term, as applicable, and Tenant shall advise Landlord of
any objection within 15 business days of receipt of Landlord's notice. Failure
to respond within such 15-day period shall constitute Tenant's acceptance of
such Fair Market Rent. If Tenant objects, Landlord and Tenant shall commence
negotiations to attempt to agree upon the Fair Market Rent within 30 days of
Landlord's receipt of Tenant's notice. If the parties cannot agree, each acting
in good faith but without any obligation to agree, then the Lease Term shall not
be extended and shall terminate on its scheduled termination date and Tenant
shall have no further right hereunder or any remedy by reason of the parties'
failure to agree unless Tenant or Landlord invokes the arbitration procedure
provided below to determine the Fair Market Rent.
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(g) Arbitration to determine the Fair Market Rent shall be in
accordance with the Real Estate Valuation Arbitration Rules of the American
Arbitration Association. Unless otherwise required by state law, arbitration
shall be conducted in the metropolitan area where the Project is located by a
single arbitrator unaffiliated with either party. Either party may elect to
arbitrate by sending written notice to the other party and the Regional Office
of the American Arbitration Association within 5 days after the 30-day
negotiating period provided in Paragraph (f), invoking the binding arbitration
provisions of this paragraph. Landlord and Tenant shall each submit to the
arbitrator their respective proposal of Fair Market Rent. The arbitrator must
choose between the Landlord's proposal and the Tenant's proposal and may not
compromise between the two or select some other amount. Notwithstanding any
other provision herein, the Fair Market Rent determined by the arbitrator shall
not be less than, and the arbitrator shall have no authority to determine a Fair
Market Rent less than, the Base Rent in effect as of the scheduled expiration of
the Lease Term or the First Extension Term, as applicable. The cost of the
arbitration shall be paid by Tenant if the Fair Market Rent is that proposed by
Landlord and by Landlord if the Fair Market Rent is that proposed by Tenant, and
shall be borne equally otherwise. If the arbitrator has not determined the Fair
Market Rent as of the end of the Lease Term or the First Extension Term, as
applicable, Tenant shall pay 105 percent of the Base Rent in effect under the
Lease as of the end of the Lease Term or the First Extension Term, as
applicable, until the Fair Market Rent is determined as provided herein. Upon
such determination, Landlord and Tenant shall make the appropriate adjustments
to the payments between them.
(h) The parties consent to the jurisdiction of any appropriate
court to enforce the arbitration provisions of this Addendum and to enter
judgment upon the decision of the arbitrator.
(i) Except for the Base Rent as determined above, Tenant's
occupancy of the Premises during the First Extension Term or the Second
Extension Term, as applicable, shall be on the same terms and conditions as are
in effect immediately prior to the expiration of the initial Lease Term or the
First Extension Term, as applicable; provided, however, Tenant shall have no
further right to extend the Lease Term pursuant to this addendum or to any
allowances, credits or abatements or options to expand, contract, renew or
extend the Lease.
(j) If Tenant does not send the First Extension Notice or the
Second Extension Notice, as applicable, within the period set forth in
Paragraphs (a) and (b), Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the First
Extension Notice and the Second Extension Notice, as applicable, and the notice
of Tenant's objection under Paragraph (f).
(k) Landlord shall have no obligation to refurbish or otherwise
improve the Premises for the First Extension Term or the Second Extension Term,
as applicable. The Premises shall be tendered on the Commencement Date of the
First Extension Term and the Second Extension Term, as applicable, in "as-is"
condition.
(l) If the Lease is extended for the First Extension Term or the
Second Extension Term, as applicable, then Landlord shall prepare and Tenant
shall execute an amendment to the Lease confirming the extension of the Lease
Term and the other provisions applicable thereto.
(m) If Tenant exercises its right to extend the term of the Lease
for the First Extension Term or the Second Extension Term, as applicable,
pursuant to this Addendum, the term "Lease Term" as used in the Lease, shall be
construed to include, when practicable, the First Extension Term and the Second
Extension Term except as provided in (g) above.
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ADDENDUM 3
CONSTRUCTION
(TURNKEY)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 23, 2002, BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
(a) Landlord agrees to furnish or perform at Landlord's sole cost
and expense (except as otherwise set forth below) those items of construction
and those improvements (the "Initial Improvements") specified below:
1. Construct Main Office (approximately 4,800 s.f.) per
Exhibit B.
2. Construct one (1) Receiving Office (approximately
1,000 s.f.) and one (1) Shipping Office
(approximately 1,000 s.f.) per the attached Exhibit
B.
3. Install 277/480 volt, 600-amp electrical service
panel.
4. Provide portable eyewash station.
5. Install twenty-four (24) pit levelers (24,000 lb.
capacity) and twenty-four (24) dock seals; locations
to be determined.
6. Install three hundred fifty-five (355) 400-watt metal
halide light fixtures to provide 30 footcandles at
36" AFF. Rack plan to be determined.
7. Construct foil height drywall / metal stud demising
wall. The drywall shall be smooth finished and
painted.
8. Mechanically clean warehouse floor.
9. Install emergency egress/exit lighting up to a
maximum amount of $8,000.
10. Provide architectural / engineering permits,
drawings, and permit fees.
(b) If Tenant shall desire any changes, Tenant shall so advise
Landlord in writing and Landlord shall determine whether such changes can be
made in a reasonable and feasible manner. Any and all costs of reviewing any
requested changes, and any and all costs of making any changes to the Initial
Improvements which Tenant may request and which Landlord may agree to shall be
at Tenant's sole cost and expense and shall be paid to Landlord upon demand and
before execution of the change order.
(c) Landlord shall proceed with and complete the construction of
the Initial Improvements. As soon as such improvements have been Substantially
Completed, Landlord shall notify Tenant in writing of the date that the Initial
Improvements were Substantially Completed. Such date, unless an earlier date is
specified as the Commencement Date in this Lease or otherwise agreed to in
writing between Landlord and Tenant, shall be the "Commencement Date," unless
the completion of such improvements was delayed due to any act or omission of,
or delay caused by, Tenant including, without limitation, Tenant's failure to
approve plans, complete submittals or obtain permits in connection with Tenant's
installation of its tenant improvements, machinery, equipment, or fixtures
within the time periods agreed to by the parties or as reasonably required by
Landlord, in which case the Commencement Date shall be the date such
improvements would have been completed but for the delays caused by Tenant. The
Initial Improvements shall be deemed substantially completed ("Substantially
Completed") when, in the opinion of the construction manager (whether an
employee or agent of Landlord or a third party construction
manager)("Construction Manager"), the Premises are substantially completed in
accordance with the final plans attached hereto as Exhibit B, except for punch
list items which do not prevent in any material way the use of the Premises for
the purposes for which they were intended, provided such opinion is given in
conjunction with a Certificate of Occupancy or a Temporary Certificate of
Occupancy or a Permit Inspection Card or other documentation from the governing
municipality indicating that Landlord's Initial Improvements work is legal to
occupy. In the event Tenant, its employees, agents, or contractors cause
construction of such improvements to be delayed, the date of Substantial
Completion shall be deemed to be the date that, in the opinion of the
Construction Manager, Substantial Completion would have occurred if such delays
had not taken place. Without limiting the foregoing, Tenant shall be solely
responsible for delays caused by Tenant's request for any changes in the plans,
Tenant's request for long lead items or Tenant's interference with the
construction of the Initial Improvements, and such delays shall not cause a
deferral of the Commencement Date beyond what it otherwise would have been.
After the Commencement Date Tenant shall, upon demand, execute and deliver to
Landlord a letter of acceptance of delivery of the Premises. In the event of any
dispute as to the Initial Improvements, including the Commencement Date, the
certificate of the Construction Manager shall be conclusive absent manifest
error.
(d) The failure of Tenant to take possession of or to occupy the
Premises shall not serve to relieve Tenant of obligations arising on the
Commencement Date or delay the payment of rent by Tenant. Subject to applicable
ordinances and building codes governing Tenant's right to occupy or perform in
the Premises, Tenant shall be allowed to install its tenant improvements,
machinery, equipment, fixtures, or other property on the Premises on or about
April 15, 2002, provided that Tenant does not thereby interfere with the
completion of construction or cause any labor dispute as a result of such
installations, and provided further that Tenant does hereby agree to indemnify,
defend, and hold Landlord harmless from any loss or damage to such property, and
all liability, loss, or damage arising from any injury to the Project or the
property of Landlord, its contractors, subcontractors, or materialmen, and any
death or personal injury to any person or persons arising out of such
installations, unless any such loss, damage, liability, death, or personal
injury was caused by Landlord's negligence. Any such occupancy or performance in
the Premises shall be in accordance with the provisions governing Tenant-Made
Alterations and Trade Fixtures in the Lease, and shall be subject to Tenant
providing to Landlord satisfactory evidence of insurance for personal injury and
property damage related to such installations and
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satisfactory payment arrangements with respect to installations permitted
hereunder. Delay in putting Tenant in possession of the Premises shall not serve
to extend the term of this Lease or to make Landlord liable for any damages
arising therefrom.
(e) Except for incomplete punch list items and latent defects, Tenant
upon the Commencement Date shall have and hold the Premises as the same shall
then be without any liability or obligation on the part of Landlord for making
any further alterations or improvements of any kind in or about the Premises.
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ADDENDUM 4
MISCELLANEOUS PROVISIONS
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED April 23, 2002 BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
1. ECONOMIC DEVELOPMENT INDUCEMENTS. Tenant has submitted a
Kentucky Jobs Development Act ("KJDA") application to the Kentucky Economic
Development Authority ("Authority") for certain economic inducements available
under the KJDA incentive program. This Lease is hereby conditioned upon Tenant
receiving a resolution from the Authority to "preliminarily designate Tenant as
an approved company" and to "preliminarily authorize the undertaking of the
economic development project" by Tenant. Tenant covenants to diligently proceed
with the appropriate process in obtaining such resolution. Without receiving
such preliminary designation, the execution of this Lease would preclude Tenant
from obtaining the inducements available under this local program.
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ADDENDUM 5
CANCELLATION OPTION
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 23, 2002, BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
Provided no Event of Default shall then exist and no condition shall
then exist which with the passage of time or giving of notice, or both, would
constitute an Event of Default, Tenant shall have the right at any time on or
before the first day of the 30th month of the Lease Term to send Landlord
written notice (the "Termination Notice") that Tenant has elected to terminate
this Lease effective on the last day of the 36th month of the Lease Term with
respect to the Premises consisting of approximately 286,000 square feet only.
It is the express intent of the parties that this Cancellation Option shall not
apply to the Offered Space as defined in Addendum 1.
If Tenant elects to terminate this Lease pursuant to the immediately
preceding sentence, the effectiveness of such termination shall be conditioned
upon Tenant paying to Landlord $1,734,240.00 contemporaneously with Tenant's
delivery of the Termination Notice to Landlord. Such amount is consideration
for Tenant's option to terminate and shall not be applied to rent or any other
obligation of Tenant. Landlord and Tenant shall be relieved of all obligations
accruing under this Lease after the effective date of such termination but not
any obligations accruing under the Lease prior to the effective date of such
termination.
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ADDENDUM 6
ASSIGNMENT AND SUBLETTING (CONSENT)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 23, 2002, BETWEEN
PROLOGIS DEVELOPMENT SERVICES INCORPORATED
and
INNOTRAC CORPORATION
(a) Landlord shall not unreasonably withhold its consent to
Tenant's request for permission to assign the Lease or sublease all or part of
the Premises. It shall be reasonable for the Landlord to withhold its consent to
any assignment or sublease in any of the following instances:
(i) The assignee or sublessee does not have a net worth
calculated according to generally accepted accounting principles at
least equal to the greater of the net worth of Tenant immediately prior
to such assignment or sublease or the net worth of the Tenant at the
time it executed the Lease;
(ii) The intended use of the Premises by the assignee or
sublessee is not reasonably satisfactory to Landlord;
(iii) The intended use of the Premises by the assignee or
sublessee would materially increase the pedestrian or vehicular traffic
to the Premises or the Project;
(iv) Occupancy of the Premises by the assignee or
sublessee would, in Landlord's opinion, violate any agreement binding
upon Landlord or the Project with regard to the identity of tenants,
usage in the Project, or similar matters;
(v) The identity or business reputation of the assignee
or sublessee will, in the good faith judgment of Landlord, tend to
damage the goodwill or reputation of the Project;
(vi) The assignment or sublease is to another tenant in
the Project and is at rates which are below those charged by Landlord
for comparable space in the Project;
(vii) In the case of a sublease, the subtenant has not
acknowledged that the Lease controls over any inconsistent provision in
the sublease; or
(viii) The proposed assignee or sublessee is a government
entity.
The foregoing criteria shall not exclude any other reasonable basis for Landlord
to refuse its consent to such assignment or sublease.
(b) Any approved assignment or sublease shall be expressly subject
to the terms and conditions of this Lease.
(c) Tenant shall provide to Landlord all information concerning
the assignee or sublessee as Landlord may request.
(d) Landlord may revoke its consent immediately and without notice
if, as of the effective date of the assignment or sublease, there has occurred
and is continuing any default under the Lease.
(e) Landlord's agreement to not unreasonably withhold its consent
shall only apply to the first assignment or sublease under the Lease.
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EXHIBIT A
SITE PLAN
Tenant: Innotrac Corporation
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Approximate Square Feet: 286,000
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Address of Premises: 0000 Xxxxxxxx Xxxx.
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Xxxxxx, XX 00000
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