EXHIBIT 10.1
INDUSTRIAL LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made as of the "Effective Lease
Date" (as defined in Section 37 herein) by and between Industrial Developments
International, Inc., a Delaware corporation ("Landlord"), and Priority
fulfillment services, inc., a Delaware corporation ("Tenant") (the words
"Landlord" and "Tenant" to include their respective legal representatives,
successors and permitted assigns where the context requires or permits).
W I T N E S S E T H:
1. Basic Lease Provisions. The following constitute the basic
provisions of this Lease:
(a) Demised Premises Address: 0000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
(b) Demised Premises Square Footage: approximately 434,900 sq. ft.
(c) Building Square Footage: approximately 602,500 sq. ft.
(d) Annual Base Rent:
Lease Years 1-4 $1,226,418.00 (plus the prorated amount
for any Fractional Month per Section 3
hereof, if applicable) (annualized,
where applicable)
(e) Monthly Base Rent Installments:
Lease Years 1-4 $102,201.50 (plus the prorated amount for
any Fractional Month per
Section 3 hereof, if applicable)
(f) Lease Commencement Date: October 1, 2004
(g) Base Rent Commencement Date: October 1, 2004
(h) Expiration Date: December 31, 2007
(i) Primary Term: Thirty-nine (39) months plus, in the event the
Base Rent Commencement Date does not occur on the first (1st)
day of a calendar month, the period from and including the
Base Rent Commencement Date to and including the last day of
the calendar month in which the Base Rent Commencement Date
occurs (if applicable, the "Fractional Month")
(j) Tenant's Operating Expense Percentage: 72.18%
(k) Security Deposit: $102,201.50
(l) Permitted Use: Storage and distribution of durable and
non-durable consumer and business goods and products, and
office and administrative uses reasonably ancillary thereto
(collectively, the "Initial Use"), or, subject to the
limitations hereinafter specified, for any other lawful
distribution center and/or warehousing use; provided, however,
that Tenant shall obtain Landlord's prior written consent to a
use which is different from the Initial Use and which involves
the distribution, warehousing or other handling or use of
either (1) Hazardous Substances (as defined in Section 16) not
used by Tenant in its Initial Use and which would materially
increase the risk of Contamination (as defined in Section 16)
or materially adversely affect the value or marketability of
the Demised Premises if a Contamination involving such
Hazardous Substances were to occur, or (2) noxious substances
not used by Tenant in its Initial Use and which would likely
cause or create a nuisance or trespass for, or otherwise
disturb the quiet enjoyment of, any other tenant and occupant
of the Building (as hereinafter defined), and provided
further, however, that Tenant's use of the Demised Premises
(i) shall never include any use prohibited by any provision
contained in this Lease (including, without limitation,
Section 16 hereof), (ii) shall never extend to or allow the
use or storage of radioactive or biohazardous materials at the
Demised Premises, or any use
wherein a Hazardous Substance (as defined in Section 16)
constitutes the principal or primary product of the business
to be conducted at the Demised Premises, (iii) shall never
include any heavy manufacturing, and (iv) must not result in a
material increase in the wear and tear on the Demised
Premises, as compared to the Initial Use.
(m) Address for notice:
Landlord: Industrial Developments International, Inc.
c/o IDI, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Manager - Lease Administration
Tenant: Priority Fulfillment Services, Inc.
000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxx 00000
Attn: Chief Financial Officer
(n) Address for rental payments:
Industrial Developments International, Inc.
c/o IDI Services Group, LLC
X.X. Xxx 000000
Xxxxxxx, Xxxxxxx 00000-0000
(o) Broker(s): Commercial Advisors
(p) Guarantor(s): PFSWeb, Inc.
000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx, Xxxxx 00000
Attn: Chief Financial Officer
2. Demised Premises. For and in consideration of the rent hereinafter
reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
Exhibit A attached hereto and incorporated herein: an agreed upon approximately
434,900 square feet of space, approximately 6,000 square feet of which is office
space, having an address as set forth in Section 1(a), located within Building E
(the "Building"), which contains a total of an agreed upon approximately 602,500
square feet and is located within Airways Distribution Center (the "Project"),
located in DeSoto County, Mississippi. The parties acknowledge that the number
of square feet recited above has been conclusively determined and is not subject
to contest by either party.
3. Term. To have and to hold the Demised Premises for a preliminary term
(the "Preliminary Term") commencing on the Effective Lease Date and ending on
the day immediately preceding the Lease Commencement Date as set forth in
Section 1(f), and a primary term (the "Primary Term") commencing on the Lease
Commencement Date and terminating on the Expiration Date as set forth in Section
1(h), as the Lease Commencement Date and the Expiration Date may be revised
pursuant to Section 17 (the Preliminary Term, the Primary Term, and any and all
extensions thereof, herein referred to as the "Term"). The term "Lease Year", as
used in this Lease, shall mean the 12-month period commencing on the Base Rent
Commencement Date, and each 12-month period thereafter during the Term;
provided, however, that (i) if the Base Rent Commencement Date occurs after the
Lease Commencement Date, the first Lease Year will include the period between
the Lease Commencement Date and the Base Rent Commencement Date, and (ii) if the
Base Rent Commencement Date is a day other than the first day of a calendar
month, the first Lease Year shall include the resulting Fractional Month and
shall extend through the end of the twelfth (12th) full calendar month following
the Base Rent Commencement Date.
4. Base Rent. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance, without demand and without abatement, reduction, set-off or deduction,
on the first day of each calendar month during the Term. If the Base Rent
Commencement Date shall fall on a day other than the first day of a calendar
month, the Base Rent shall be apportioned pro rata on a per diem basis for the
resulting Fractional Month (which pro rata payment shall be due and payable on
the Base Rent Commencement Date). No payment by Tenant or receipt by Landlord of
rent hereunder shall be deemed to be other than on account of the amount due,
and no endorsement or statement on any check or any letter accompanying any
check or payment of rent shall be deemed an accord and satisfaction, and
Landlord may accept such check as payment without prejudice to Landlord's right
to recover the balance of such installment or payment of rent or pursue any
other remedies available to Landlord.
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5. Security Deposit.
(a) Upon Tenant's execution of this Lease, Tenant will pay to
Landlord the sum set forth in Section 1(k) (the "Cash Security Deposit") as
security for the full and faithful performance by Tenant of each and every term,
covenant and condition of this Lease. In the alternative, Tenant shall have the
right, within five (5) business days of Tenant's execution of this Lease, to
deliver to Landlord an Irrevocable Letter of Credit (the "Letter of Credit") in
the amount set forth in Section 1(k) (the "LC Security Deposit"; the Cash
Security Deposit or the LC Security Deposit, as applicable, being referred to
herein as the "Security Deposit"), in a form and from a financial institution
acceptable to Landlord, and shall cause the same to be maintained in full force
and effect throughout the Term, as may be extended, and during the thirty (30)
day period after the later of (a) the Expiration Date or (b) the date that
Tenant delivers possession of the Demised Premises to Landlord, as security for
the full and faithful performance by Tenant of each and every term, covenant and
condition of this Lease. In the event that, during the Term, Tenant fails to
deliver to Landlord a renewal of or replacement to the letter of credit by a
date no later than thirty (30) days prior to its expiration date, Landlord shall
have the right to demand and receive payment in full under the letter of credit
and to hold the cash proceeds as the Security Deposit under this Lease. The
acceptance by Landlord of the Security Deposit paid by Tenant shall not render
this Lease effective unless and until Landlord shall have executed and delivered
to Tenant a fully executed copy of this Lease. The Security Deposit, if in the
form of cash, may be commingled with Landlord's other funds or held by Landlord
in a separate interest bearing account, with interest paid to Landlord, as
Landlord may elect. In the event that Tenant is in default under this Lease,
Landlord may retain or draw on the security Deposit for the payment of any sum
due Landlord or which Landlord may expend or be required to expend by reason of
Tenant's default or failure to perform; provided, however, that any such
retention by Landlord shall not be or be deemed to be an election of remedies by
Landlord or viewed as liquidated damages, it being expressly understood and
agreed that Landlord shall have the right to pursue any and all other remedies
available to it under the terms of this Lease or otherwise. In the event all or
any portion of the Security Deposit is so retained by Landlord, Tenant shall,
within five (5) days of demand therefor from Landlord, replenish the Security
Deposit to the full amount set forth in Section 1(k) (and Tenant's failure to do
so shall constitute an immediate "Event of Default", as defined in Section 22
hereof, without any further notice or demand from Landlord). In the event that
Tenant shall comply with all of the terms, covenants and conditions of this
Lease, the security deposit shall be returned to Tenant within thirty (30) days
after the later of (a) the Expiration Date or (b) the date that Tenant delivers
possession of the Demised Premises to Landlord. In the event of a sale of the
Building, Landlord shall have the right to transfer the security deposit to the
purchaser, and upon acceptance by such purchaser, Landlord shall be released
from all liability for the return of the security deposit. Tenant shall not
assign or encumber the money deposited as security, and neither Landlord nor its
successors or assigns shall be bound by any such assignment or encumbrance.
(b) Notwithstanding the foregoing, if at the end of the first (1st)
Lease Year, (i) Tenant has not previously committed an Event of Default (as
defined below) and (ii) as of the date on which such reduction is to occur, no
Event of Default exists and no facts exist which, with the passage of time or
giving of notice would constitute an Event of Default, the amount of the
Security Deposit shall be reduced by Fifty-One Thousand One Hundred and 75/100
Dollars ($51,100.75) (the "Reduction Amount") (such that, after such reduction,
the Security Deposit shall be in an amount equal to $51,100.75, which is the
equivalent of one half (1/2) installment of monthly Base Rent). In connection
with each such reduction, if applicable, Landlord will either (i) refund to
Tenant the Reduction Amount within thirty (30) days after the expiration of the
first (1st) Lease Year (if the Security Deposit is in the form of a cash
deposit), or (ii) within thirty (30) days of demand therefor from Tenant,
execute any reasonable documentation presented to Landlord by Tenant which is
necessary to cause a reduction in the Letter of Credit by the Reduction Amount
(if the Security Deposit is in the form of the Letter of Credit). If the
Security Deposit is initially in the form of a Letter of Credit, Tenant shall
nevertheless have the right at any time after the reduction in the Security
Deposit in accordance herewith to deliver to Landlord, in cash, the amount of
the then required Security Deposit (i.e., $51,100.75), which shall thereafter be
held by Landlord as a cash Security Deposit pursuant to the terms of subsection
(a) above, whereupon Landlord shall surrender the Letter of Credit to Tenant
6. Operating Expenses and Additional Rent.
(a) Tenant agrees to pay as Additional Rent (as defined in Section
6(b) below) its proportionate share of Operating Expenses (as hereinafter
defined). "Operating Expenses" shall be defined as, without duplication, all
reasonable expenses for operation, repair, replacement and maintenance as
necessary to keep the Building and the common areas, driveways, and parking
areas associated therewith (collectively, the "Building Common Area") fully
operational and in good order, condition and repair, including but not limited
to, utilities for the Building Common Area, expenses associated with the
driveways and parking areas (including sealing and restriping, and trash, snow
and ice removal), security systems, fire detection and prevention systems,
lighting facilities, landscaped areas, walkways, painting and caulking,
directional signage, curbs, drainage strips, sewer lines, all charges assessed
against or attributed to the Building pursuant to any applicable easements,
covenants, restrictions, agreements, declaration of protective covenants or
development standards, property management fees, all real property taxes and
special assessments imposed upon the Building, the Building Common Area and the
land on which the Building and the Building Common Area are constructed, all
costs of insurance paid by Landlord with respect to the Building and the
Building Common Area (including, without limitation, commercially reasonable
deductibles), and costs of improvements to the Building and the Building Common
Area
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required by any law, ordinance or regulation enacted or promulgated after the
Lease Commencement Date and applicable to the Building and the Building Common
Area generally (and not because of the particular use of the Building or the
Building Common Area by a particular tenant), which cost shall be amortized on a
straight line basis over the useful life of such improvement, as reasonably
determined by Landlord. Operating Expenses shall not include expenses for the
costs of any maintenance and repair required to be performed by Landlord at its
own expense under Section (10)(b) or advertising, marketing or commission
expenses. Further, Operating Expenses shall not include the costs for capital
improvements unless such costs are incurred for the purpose of causing a
material decrease in the Operating Expenses of the Building or the Building
Common Area or are incurred with respect to improvements made to comply with
laws, ordinances or regulations as described above. Operating Expenses shall be
accounted for in accordance with generally accepted accounting principles
consistently applied ("GAAP"). The proportionate share of Operating Expenses to
be paid by Tenant shall be a percentage of the Operating Expenses based upon the
proportion that the square footage of the Demised Premises bears to the total
square footage of the Building (such figure referred to as "Tenant's Operating
Expense Percentage" and set forth in Section 1(j)); provided that, as to
management fees, Tenant shall pay Landlord the management fees directly
attributable to the Rent (as hereinafter defined) payable hereunder with respect
to the Demised Premises, and not Tenant's Operating Expense Percentage of the
management fees payable on the entire Building, and, for each Lease Year during
the Primary Term (and in no event during any extended term), such management
fees shall not exceed two percent (2%) of the total amount of Base Rent and
Operating Expenses payable hereunder during each such Lease Year during the
Primary Term. Notwithstanding the foregoing, Landlord shall, in Landlord's
reasonable discretion, have the right to adjust Tenant's proportionate share of
individual components of Operating Expenses if Tenant's Operating Expense
Percentage thereof would not equitably allocate to Tenant its share of such
component of Operating Expenses in light of Tenant's particular use, manner of
use and/or level of tenant improvements in the Demised Premises (and Landlord
shall use good faith, diligent efforts to include in every other lease in the
Building language substantially similar to the foregoing so as to entitle
Landlord to make similar adjustments with respect to such other tenants'
Operating Expenses as and where appropriate). Prior to or promptly after the
beginning of each calendar year during the Term, Landlord shall estimate the
total amount of Operating Expenses to be paid by Tenant during each such
calendar year and Tenant shall pay to Landlord one-twelfth (1/12) of such sum on
the first day of each calendar month during each such calendar year, or part
thereof, during the Term. Within a reasonable time after the end of each
calendar year, Landlord shall submit to Tenant a statement of the actual amount
of Operating Expenses for such calendar year, and the actual amount owed by
Tenant, and within thirty (30) days after receipt of such statement, Tenant
shall pay any deficiency between the actual amount owed and the estimates paid
during such calendar year, or in the event of overpayment, Landlord shall credit
the amount of such overpayment toward the next installment of Operating Expenses
owed by Tenant or remit such overpayment to Tenant if the Term has expired or
has been terminated and no Event of Default exists hereunder. The obligations in
the immediately preceding sentence shall survive the expiration or any earlier
termination of this Lease. If the Lease Commencement Date shall fall on other
than the first day of the calendar year, and/or if the Expiration Date shall
fall on other than the last day of the calendar year, Tenant's proportionate
share of the Operating Expenses for such calendar year shall be apportioned
prorata.
(b) Any amounts required to be paid by Tenant hereunder (in addition
to Base Rent) and any charges or expenses incurred by Landlord on behalf of
Tenant under the terms of this Lease shall be considered "Additional Rent"
payable in the same manner and upon the same terms and conditions as the Base
Rent reserved hereunder except as set forth herein to the contrary (all such
Base Rent and Additional Rent sometimes being referred to collectively herein as
"Rent"). Any failure on the part of Tenant to pay such Additional Rent when and
as the same shall become due shall entitle Landlord to the remedies available to
it for non-payment of Base Rent. Tenant's obligations for payment of Additional
Rent shall begin to accrue on the Lease Commencement Date regardless of the Base
Rent Commencement Date.
(c) If applicable in the jurisdiction where the Demised Premises are
located, Tenant shall pay and be liable for all rental, sales, use and inventory
taxes or other similar taxes, if any, on the amounts payable by Tenant hereunder
levied or imposed by any city, state, county or other governmental body having
authority, such payments to be in addition to all other payments required to be
paid Landlord by Tenant under the terms of this Lease. Such payment shall be
made by Tenant directly to such governmental body if billed to Tenant, or if
billed to Landlord, such payment shall be paid concurrently with the payment of
the Base Rent, Additional Rent, or such other charge upon which the tax is
based, all as set forth herein.
(d) Landlord currently reasonably estimates that Tenant's
proportionate share of Operating Expenses for calendar year 2004 (not including
property taxes and property insurance) will be $.17 per square foot of the
Demised Premises.
7. Use of Demised Premises.
(a) The Demised Premises shall be used for the Permitted Use set
forth in Section 1(l) and for no other purpose without Landlord's prior written
consent, which consent shall not be unreasonably withheld.
(b) Tenant will permit no liens to attach or exist against the
Demised Premises, and shall not commit any waste.
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(c) The Demised Premises shall not be used for any illegal purposes,
and Tenant shall not allow, suffer, or permit any vibration, noise, odor, light
or other effect to occur within or around the Demised Premises that could
constitute a nuisance or trespass for Landlord or any occupant of the Building
or an adjoining building, its customers, agents, or invitees. Upon notice by
Landlord to Tenant that any of the aforesaid prohibited uses are occurring,
Tenant agrees to promptly remove or control the same.
(d) Tenant shall not in any way violate any law, ordinance or
restrictive covenant affecting the Demised Premises, and shall not in any manner
use the Demised Premises so as to cause cancellation of, prevent the use of, or
increase the rate of, the fire and extended coverage insurance policy required
hereunder. Landlord makes no (and does hereby expressly disclaim any) covenant,
representation or warranty as to the Permitted Use being allowed by or being in
compliance with any applicable laws, rules, ordinances or restrictive covenants
now or hereafter affecting the Demised Premises, and any zoning letters, copies
of zoning ordinances or other information from any governmental agency or other
third party provided to Tenant by Landlord or any of Landlord's agents or
employees shall be for informational purposes only, Tenant hereby expressly
acknowledging and agreeing that Tenant shall conduct and rely solely on its own
due diligence and investigation with respect to the compliance of the Permitted
Use with all such applicable laws, rules, ordinances and restrictive covenants
and not on any such information provided by Landlord or any of its agents or
employees.
(e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the use of the Demised Premises by Tenant, Tenant shall pay such additional
amount as Additional Rent. Landlord shall promptly notify Tenant of any such
increase.
8. Insurance.
(a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:
(i) Liability insurance in the Commercial General Liability
form (including Broad Form Property Damage and Contractual Liabilities or
reasonable equivalent thereto) covering the Demised Premises and Tenant's use
thereof against claims for bodily injury or death, property damage and product
liability occurring upon, in or about the Demised Premises, such insurance to be
written on an occurrence basis (not a claims made basis), to be in combined
single limits amounts not less than $1,000,000.00 and to have general aggregate
limits of not less than $2,000,000.00 with "umbrella" coverage with limits of
not less than $5,000,000.00 for each policy year. The insurance coverage
required under this Section 8(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 11 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
(ii) Insurance covering (A) all of the items included in the
leasehold improvements constructed in the Demised Premises by or at the expense
of Landlord (collectively, the "Improvements"; and, except to the extent
otherwise provided herein, the Improvements shall be deemed to include any
"Additional Improvements" constructed pursuant to Special Stipulation 1 on
Exhibit C hereto), including but not limited to demising walls and the heating,
ventilating and air conditioning system and (B) Tenant's trade fixtures,
merchandise and personal property from time to time in, on or upon the Demised
Premises, in an amount not less than one hundred percent (100%) of their full
replacement value from time to time during the Term, providing protection
against perils included within the standard form of "all-risk" fire and casualty
insurance policy, together with insurance against sprinkler damage, vandalism
and malicious mischief. Any policy proceeds from such insurance relating to the
Improvements shall be used solely for the repair, construction and restoration
or replacement of the Improvements damaged or destroyed unless this Lease shall
cease and terminate under the provisions of Section 20.
(b) All policies of the insurance provided for in Section 8(a) shall
be issued in form reasonably acceptable to Landlord by insurance companies with
a rating of not less than "A," and financial size of not less than Class X, in
the most current available "Best's Insurance Reports", and licensed to do
business in the state in which the Building is located. Each and every such
policy:
(i) shall name Landlord, Lender (as defined in Section 24),
and any other party reasonably designated by Landlord, as an additional insured.
In addition, the coverage described in Section 8(a)(ii)(A) relating to the
Improvements shall also name Landlord as "loss payee";
(ii) shall be delivered to Landlord, in the form of an
insurance certificate acceptable to Landlord as evidence of such policy, prior
to the Lease Commencement Date and thereafter within thirty (30) days prior to
the expiration of each such policy, and, as often as any such policy shall
expire or terminate. Renewal or additional policies shall be procured and
maintained by Tenant in like manner and to like extent;
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(iii) shall contain a provision that the insurer will give to
Landlord and such other parties in interest at least thirty (30) days notice in
writing in advance of any material change, cancellation, termination or lapse,
or the effective date of any reduction in the amounts of insurance; and
(iv) shall be written as a primary policy which does not
contribute to and is not in excess of coverage which Landlord may carry.
(c) In the event that Tenant shall fail to carry and maintain the
insurance coverages set forth in this Section 8, Landlord may upon thirty (30)
days notice to Tenant (unless such coverages will lapse in which event no such
notice shall be necessary) procure such policies of insurance and Tenant shall
promptly reimburse Landlord therefor.
(d) Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, their respective property, the Demised Premises, its
contents or to the other portions of the Building, arising from any risk covered
by "all-risk" fire and extended coverage insurance of the type and amount
required to be carried hereunder, provided that such waiver does not invalidate
such policies or prohibit recovery thereunder. The parties hereto shall cause
their respective insurance companies insuring the property of either Landlord or
Tenant against any such loss, to waive any right of subrogation that such
insurers may have against Landlord or Tenant, as the case may be.
9. Utilities. During the Term, Tenant shall promptly pay as billed to
Tenant all rents and charges for water and sewer services and all costs and
charges for gas, steam, electricity, fuel, light, power, telephone, heat and any
other utility or service used or consumed in or servicing the Demised Premises
and all other costs and expenses involved in the care, management and use
thereof as charged by the applicable utility companies to Tenant. All such
utilities shall be separately metered and billed to Tenant, and Tenant shall
establish an account with the utility provider with respect to each such
separately metered utility. Tenant's obligation for payment of all utilities
shall commence on the earlier of the Lease Commencement Date or the date of
Tenant's actual occupancy of all or any portion of the Demised Premises,
including any period of occupancy prior to the Lease Commencement Date,
regardless of whether or not Tenant conducts business operations during such
period of occupancy. If Tenant fails to pay any utility bills or charges,
Landlord may, at its option and upon reasonable notice to Tenant, pay the same
and in such event, the amount of such payment, together with interest thereon at
the Interest Rate as defined in Section 32 from the date of such payment by
Landlord, will be added to Tenant's next payment due as Additional Rent.
10. Maintenance and Repairs.
(a) Tenant shall, at its own cost and expense, maintain in good
condition and repair and replace as necessary the interior of the Demised
Premises, including but not limited to the heating, air conditioning and
ventilation systems, glass, windows and doors, sprinkler, all plumbing and
sewage systems, fixtures, interior walls, floors (including floor slabs),
ceilings, storefronts, plate glass, skylights (excluding seals between skylights
and the roof, which shall be a Landlord obligation as hereinafter set forth),
all electrical facilities and equipment including, without limitation, lighting
fixtures, lamps, fans and any exhaust equipment and systems, electrical motors,
and all other appliances and equipment (including, without limitation, dock
levelers, dock shelters, dock seals and dock lighting) of every kind and nature
located in, upon or about the Demised Premises, except as to such maintenance,
repair and replacement as is the obligation of Landlord pursuant to Section
10(b). During the Term, Tenant shall maintain in full force and effect a service
contract for the maintenance of the heating, ventilation and air conditioning
systems with an entity reasonably acceptable to Landlord; provided, however,
that during the one year period following the Lease Commencement Date, such
service contract shall be maintained with the contractor that installed the
heating, ventilation and air conditioning systems and shall provide for at least
two preventive maintenance service calls during such one year period. Tenant
shall deliver to Landlord (i) a copy of said service contract prior to the Lease
Commencement Date, and (ii) thereafter, a copy of a renewal or substitute
service contract within thirty (30) days prior to the expiration of the existing
service contract. Tenant's obligation shall exclude any maintenance, repair and
replacement required because of the act or negligence of Landlord, its
employees, contractors or agents, which shall be the responsibility of Landlord.
(b) Landlord shall, at its own cost and expense, maintain in good
condition and repair the foundation (beneath the floor slab), structural frame,
external walls (exclusive of painting and caulking, the cost of which will be
included in Operating Expenses in accordance with Section 6 hereof) and roof of
the Building(including the seals between the skylights and the roof). Landlord's
obligation shall exclude the cost of any maintenance or repair required because
of the act (exclusive of ordinary wear and tear resulting from the Permitted
Use) or negligence of Tenant or any of Tenant's subsidiaries or affiliates, or
any of Tenant's or such subsidiaries' or affiliates' agents, contractors,
employees, licensees or invitees (collectively, "Tenant's Affiliates"), the cost
of which shall be the responsibility of Tenant. Landlord shall never have any
obligation to repair, maintain or replace, pursuant to this subsection 10(b) or
any other provision of this Lease, any Tenant's Change (as defined in Section 18
hereof).
(c) Unless the same is caused solely by the negligent action or
inaction of Landlord, its employees or agents, and is not covered by the
insurance required to be carried by Tenant pursuant to the terms of this Lease,
Landlord shall not be liable to Tenant or to any other person for any damage
occasioned
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by failure in any utility system or by the bursting or leaking of any vessel or
pipe in or about the Demised Premises, or for any damage occasioned by water
coming into the Demised Premises or arising from the acts or neglects of
occupants of adjacent property or the public.
11. Tenant's Personal Property; Indemnity. All of Tenant's personal
property in the Demised Premises shall be and remain at Tenant's sole risk.
Landlord, its agents, employees and contractors, shall not be liable for, and
Tenant hereby releases Landlord from, any and all liability for theft thereof or
any damage thereto occasioned by any act of God or by any acts, omissions or
negligence of any persons. Landlord, its agents, employees and contractors,
shall not be liable for any injury to the person or property of Tenant or other
persons in or about the Demised Premises, Tenant expressly agreeing to indemnify
and save Landlord, its agents, employees and contractors, harmless, in all such
cases, except, in the case of personal injury only, to the extent caused by the
negligence of Landlord, its agents, employees and contractors. Tenant further
agrees to indemnify and reimburse Landlord for any costs or expenses, including,
without limitation, reasonable attorneys' fees, that Landlord reasonably may
incur in investigating, handling or litigating any such claim against Landlord
by a third person, unless such claim arose from the negligence of Landlord, its
agents, employees or contractors. The provisions of this Section 11 shall
survive the expiration or earlier termination of this Lease with respect to any
damage, injury or death occurring before such expiration or termination.
12. Tenant's Fixtures. Tenant shall have the right to install in the
Demised Premises trade fixtures required by Tenant or used by it in its
business, and if installed by Tenant, to remove any or all such trade fixtures
from time to time during and upon termination or expiration of this Lease,
provided no Event of Default, as defined in Section 22, then exists; provided,
however, that Tenant shall repair and restore any damage or injury to the
Demised Premises (to the condition in which the Demised Premises existed prior
to such installation) caused by the installation and/or removal of any such
trade fixtures. In all cases, however, any fixtures, equipment and personal
property contained in the Demised Premises owned by Xxxxxx Xxxxxx (as
hereinafter defined) may be removed at any time, and Landlord shall not prohibit
access to the Demised Premises for such purpose, provided that prior to any such
entry and removal Xxxxxx Xxxxxx shall have executed and delivered for the
benefit of Landlord an entry and indemnification agreement in form reasonably
acceptable to Landlord.
13. Signs. No sign, advertisement or notice shall be inscribed, painted,
affixed, or displayed on the windows or exterior walls of the Demised Premises
or on any public area of the Building, except in such places, numbers, sizes,
colors and styles as are approved in advance in writing by Landlord, and which
conform to all applicable laws, ordinances, or covenants affecting the Demised
Premises. Notwithstanding the foregoing, Tenant shall have the right to affix
one (1) identification sign to the exterior of the Demised Premises and to
install one (1) monument identification sign in the Building Common Area,
provided Tenant and such signs otherwise comply with the terms and conditions of
this Section 13. Any and all signs installed or constructed by or on behalf of
Tenant pursuant hereto shall be installed, maintained and removed by Tenant at
Tenant's sole cost and expense.
14. Reserved.
15. Governmental Regulations. Tenant shall promptly comply throughout the
Term, at Tenant's sole cost and expense, with all present and future laws,
ordinances, orders, rules, regulations or requirements of all federal, state and
municipal governments and appropriate departments, commissions, boards and
officers thereof (collectively, "Governmental Requirements") relating to (a) all
or any part of the Demised Premises, and (b) the use or manner of use of the
Demised Premises and the Building Common Area; provided, however, that Landlord
shall be solely responsible for making all changes necessitated by violations of
applicable Governmental Requirements that are in effect as of the Lease
Commencement Date. Tenant shall also observe and comply with the requirements of
all policies of public liability, fire and other policies of insurance at any
time in force with respect to the Demised Premises. Without limiting the
foregoing, if as a result of one or more Governmental Requirements it is
necessary, from time to time during the Term, to perform an alteration or
modification of the Demised Premises, the Building, or the Building Common Area
(a "Code Modification") which is made necessary as a result of the specific use
being made by Tenant of the Demised Premises or a Tenant's Change, then such
Code Modification shall be the sole and exclusive responsibility of Tenant in
all respects; any such Code Modification shall be promptly performed by Tenant
at its expense in accordance with the applicable Governmental Requirement and
with Section 18 hereof. If as a result of one or more Governmental Requirements
it is necessary from time to time during the Term to perform a Code Modification
which (i) would be characterized as a capital expenditure under GAAP and (ii) is
not made necessary as a result of the specific use being made by Tenant of the
Demised Premises (as distinguished from an alteration or modification which
would be required to be made by the owner of any warehouse-office building
comparable to the Building irrespective of the use thereof by any particular
occupant) or a Tenant's Change, then (a) Landlord shall have the obligation to
perform the Code Modification at its expense, (b) the cost of such Code
Modification shall be amortized on a straight-line basis over the useful life of
the item in question, in accordance with GAAP, and (c) to the extent the Code
Modification relates to the Building or the Building Common Area (and not to any
portion of the Demised Premises), Tenant shall be obligated to pay (as
Additional Rent, payable in the same manner and upon the same terms and
conditions as the Base Rent reserved hereunder) for (i) Tenant's proportionate
share (based on Tenant's Operating Expense Percentage) of the portion of such
amortized costs attributable to the remainder of the Term, including any
extensions thereof, with respect to any Code Modification respecting the
Building or the Building Common Area, and (ii) to the extent the Code
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Modification relates to the Demised Premises (and not any other portion of the
Building), the entire portion of such amortized costs attributable to the
remainder of the Term, including any extensions thereof, with respect to any
Code Modification respecting the Demised Premises. Tenant shall promptly send to
Landlord a copy of any written notice received by Tenant requiring a Code
Modification.
16. Environmental Matters.
(a) For purposes of this Lease:
(i) "Contamination" as used herein means the presence of or
release of Hazardous Substances (as hereinafter defined) into any environmental
media from, upon, within, below, into or on any portion of the Demised Premises,
the Building, the Building Common Area or the Project so as to require
remediation, cleanup or investigation under any applicable Environmental Law (as
hereinafter defined).
(ii) "Environmental Laws" as used herein means all federal,
state, and local laws, regulations, orders, permits, ordinances or other
requirements, which exist now or as may exist hereafter, concerning protection
of human health, safety and the environment, all as may be amended from time to
time including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ("RCRA").
(iii) "Hazardous Substances" as used herein means any
hazardous or toxic substance, material, chemical, pollutant, contaminant or
waste as those terms are defined by any applicable Environmental Laws and any
solid wastes, polychlorinated biphenyls, urea formaldehyde, asbestos,
radioactive materials, radon, explosives, petroleum products and oil.
(b) Landlord represents that, except as revealed to Tenant in
writing by Landlord, to Landlord's actual knowledge, Landlord has not treated,
stored or disposed of any Hazardous Substances upon or within the Demised
Premises, nor, to Landlord's actual knowledge, has any predecessor owner of the
Demised Premises.
(c) Tenant covenants that all its activities, and the activities of
Tenant's Affiliates (as defined in Section 10(b)), on the Demised Premises, the
Building, or the Project during the Term will be conducted in compliance with
Environmental Laws. Tenant warrants that it is currently in compliance with all
applicable Environmental Laws and that there are no pending or threatened
notices of deficiency, notices of violation, orders, or judicial or
administrative actions involving alleged violations by Tenant of any
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall be
responsible for obtaining all permits or licenses or approvals under
Environmental Laws necessary for Tenant's operation of its business on the
Demised Premises and shall make all notifications and registrations required by
any applicable Environmental Laws. Tenant, at Tenant's sole cost and expense,
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations and with any other
applicable Environmental Laws. Tenant warrants that it has obtained, or will
obtain prior to the date required by the applicable Governmental Requirements,
all such permits, licenses or approvals and made, or will make prior to the date
required by the applicable Governmental Requirements, all such notifications and
registrations required by any applicable Environmental Laws necessary for
Tenant's operation of its business on the Demised Premises.
(d) Tenant shall not cause or permit any Hazardous Substances to be
brought upon, kept or used in or about the Demised Premises, the Building, or
the Project in violation of any Environmental Law without the prior written
consent of Landlord, which consent shall not be unreasonably withheld; provided,
however, that the consent of Landlord shall not be required for the use at the
Demised Premises of cleaning supplies, toner for photocopying machines and other
similar materials, in containers and quantities reasonably necessary for and
consistent with normal and ordinary use by Tenant in the routine operation or
maintenance of Tenant's office equipment or in the routine janitorial service,
cleaning and maintenance for the Demised Premises. For purposes of this Section
16, Landlord shall be deemed to have reasonably withheld consent if Landlord
determines that the presence of such Hazardous Substance within the Demised
Premises could result in a risk of harm to person or property or otherwise
negatively affect the value or marketability of the Building or the Project.
(e) Tenant shall not cause or permit the release of any Hazardous
Substances by Tenant or Tenant's Affiliates into any environmental media such as
air, water or land, or into or on the Demised Premises, the Building or the
Project in any manner that violates any Environmental Laws. If such release
shall occur, Tenant shall (i) take all steps reasonably necessary to contain and
control such release and any associated Contamination, (ii) clean up or
otherwise remedy such release and any associated Contamination to the extent
required by, and take any and all other actions required under, applicable
Environmental Laws and (iii) notify and keep Landlord reasonably informed of
such release and response.
(f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
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RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold
Landlord harmless from and against any and all expense, loss, and liability
suffered by Landlord (except to the extent that such expenses, losses, and
liabilities arise out of Landlord's own negligence or willful act), by reason of
the storage, generation, release, handling, treatment, transportation, disposal,
or arrangement for transportation or disposal, of any Hazardous Substances
(whether accidental, intentional, or negligent) by Tenant or Tenant's Affiliates
or by reason of Tenant's breach of any of the provisions of this Section 16.
Such expenses, losses and liabilities shall include, without limitation, (i) any
and all reasonable expenses that Landlord may incur to comply with any
Environmental Laws; (ii) any and all reasonable costs that Landlord may incur in
studying or remedying any Contamination at or arising from the Demised Premises,
the Building, or the Project; (iii) any and all reasonable costs that Landlord
may incur in studying, removing, disposing or otherwise addressing any Hazardous
Substances; (iv) any and all fines, penalties or other sanctions assessed upon
Landlord; and (v) any and all reasonable legal and professional fees and costs
incurred by Landlord in connection with the foregoing. The indemnity contained
herein shall survive the expiration or earlier termination of this Lease.
17. Construction of Demised Premises.
(a) Within thirty (30) days after the Effective Lease Date, Landlord
shall prepare, at Landlord's sole cost and expense, and submit to Tenant a set
of plans and specifications and/or construction drawings (collectively, the
"Plans and Specifications") based on the preliminary plans and specifications
and/or preliminary floor plans set forth on Exhibit B attached hereto and
incorporated herein, covering all work to be performed by Landlord in
constructing the Improvements (as defined in Section 8(a)(ii)). Tenant shall
have ten (10) days after receipt of the plans and specifications in which to
review and to give to Landlord written notice of its approval of the plans and
specifications or its requested changes to the Plans and Specifications. Tenant
shall have no right to request any changes to the plans and specifications which
would materially alter either the Demised Premises or the exterior appearance or
basic nature of the Building, as the same are contemplated by the preliminary
Plans. If Tenant fails to approve or request changes to the Plans and
Specifications by ten (10) days after its receipt thereof, then Tenant shall be
deemed to have approved the Plans and Specifications and the same shall
thereupon be final. If Tenant requests any changes to the Plans and
Specifications, Landlord shall make those changes which are reasonably requested
by Tenant and shall within ten (10) days of its receipt of such request submit
the revised portion of the Plans and specifications to Tenant. Tenant may not
thereafter disapprove the revised portions of the Plans and specifications
unless Landlord has unreasonably failed to incorporate reasonable comments of
Tenant and, subject to the foregoing, the Plans and specifications, as modified
by said revisions, shall be deemed to be final upon the submission of said
revisions to Tenant. Landlord and Tenant shall at all times in their respective
preparation or review of the plans and specifications, and of any revisions
thereto, act reasonably and in good faith. Tenant acknowledges that the
Improvements are being constructed on a "fast track" basis and that Landlord
shall have the right and option to submit various parts of the proposed Plans
and Specifications from time to time during said thirty (30) day period and the
time period for approval of any part of the proposed plans and specifications
shall commence upon receipt of each submission. After Tenant has approved the
Plans and Specifications or the Plans and Specifications have otherwise been
finalized pursuant to the procedures set forth hereinabove, any subsequent
changes to the Plans and Specifications requested by Tenant (herein referred to
as a "Change Order") shall be at Tenant's sole cost and expense and subject to
Landlord's written approval, which approval shall not be unreasonably withheld,
conditioned or delayed. In the event Landlord approves any such requested Change
Order, Landlord shall give written notice thereof to Tenant, which notice will
specify the Change Order approved by Landlord as well as the estimated
incremental cost thereof. The cost to Tenant for Change Orders shall be
Landlord's incremental cost plus fifteen percent (15%) of such amount as
Landlord's overhead. Tenant acknowledges and agrees that Landlord shall be under
no obligation to proceed with any work related to the approved Change Order
unless and until Tenant delivers to Landlord an amount equal to the full
estimated incremental cost of such approved Change Order as set forth in
Landlord's notice. When the final incremental cost of any such Change Order has
been determined and incurred, Landlord and Tenant each agree to pay or refund
the amounts owed to the other with respect to such Change Order, based on the
estimated payment made to Landlord. If after the Plans and specifications have
been finalized pursuant to the procedures set forth hereinabove Tenant requests
a Change Order or any further changes to the Plans and specifications and, as a
result thereof, Substantial Completion (as hereinafter defined) of the
Improvements is delayed, then for purposes of establishing the Lease
Commencement Date and any other date tied to the date of Substantial Completion,
Substantial Completion shall be deemed to mean the date when Substantial
Completion would have been achieved but for such Tenant delay.
(b) Landlord shall use reasonable speed and diligence to
Substantially Complete the Improvements, at Landlord's sole cost and expense,
and have the Demised Premises ready for occupancy on or before the anticipated
Lease Commencement Date of October 1, 2004 set forth in Section 1(f). If the
Demised Premises are not Substantially Complete on that date, such failure to
complete shall not in any way affect the obligations of Tenant hereunder except
that the Lease Commencement Date and the Base Rent Commencement Date shall be
postponed one day for each day Substantial Completion is delayed until the
Demised Premises are Substantially Complete, unless the delay is caused by (i)
Tenant's failure to approve or disapprove the Plans and Specifications as set
forth in Section 17(a), (ii) change orders requested by
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Tenant after approval of the Plans and Specifications, (iii) this Lease not
being executed and delivered by Tenant on or before August 17, 2004, (iv) any
delay in construction of the Improvements as a result of the construction of any
Additional Improvements required pursuant to Special Stipulation 1 on Exhibit C
attached hereto, and/or (v) any other act or omission of Tenant or Tenant's
Affiliates (collectively, "Tenant Delays"). No liability whatsoever shall arise
or accrue against Landlord by reason of its failure to deliver or afford
possession of the Demised Premises, and Tenant hereby releases and discharges
Landlord from and of any claims for damage, loss, or injury of every kind
whatsoever as if this Lease were never executed. Notwithstanding the foregoing,
if Landlord fails to achieve Substantial Completion on or before the seventieth
(70th) day following the date on which the Plans and Specifications are
finalized pursuant to subsection 17(a) above, as such date may be extended by
Delay (as hereinafter defined) (the "Outside Improvements Date"), Tenant will
have the right, as its sole and exclusive remedy (subject to the additional
termination remedy set forth hereinbelow), to a credit against Base Rent equal
to $1,000.00 for each day Substantial Completion of the Improvements was delayed
beyond the Outside Improvements Date (excluding any days of Delay, as defined
below) until said credit is fully realized by Tenant. Notwithstanding the
foregoing, in the event that Landlord is unable to Substantially Complete the
Improvements on or before the one hundredth twentieth (120th) day after the
Outside Improvements Date, as extended by Delay, Tenant may, at its option and
as its sole and exclusive remedy, terminate this Lease by written notice to
Landlord given within thirty (30) days following the expiration of such one
hundred twenty (120)-day period (provided that Substantial Completion has not
occurred prior to Landlord's receipt of said termination notice), and thereafter
neither Landlord nor Tenant shall have any further obligation hereunder. For
purposes of this Lease, "Delay" shall mean (i) Tenant Delays, and (ii) such
additional time as is equal to the time lost by Landlord or Landlord's
contractors or suppliers in connection with the construction of the Improvements
due to strikes or other labor troubles (but in no event due to Landlord's
failure to pay such contractors or suppliers as and when due), governmental
restrictions and limitations, war or other national emergency, non-availability
of materials or supplies, delay in transportation, accidents, floods, fire,
damage or other casualties, weather or other conditions, and other matters not
within the reasonable control of Landlord.
(c) Upon Substantial Completion of the Demised Premises, a
representative of Landlord and a representative of Tenant together shall inspect
the Demised Premises and generate a punchlist of defective or uncompleted items
relating to the completion of construction of the Improvements (the
"Punchlist"). Landlord shall, within a reasonable time after the Punchlist is
prepared and agreed upon by Landlord and Tenant, complete such incomplete work
and remedy such defective work as is set forth on the Punchlist. All
construction work performed by Landlord shall be deemed approved by Tenant in
all respects except for items of said work which are not completed or do not
conform to the Plans and Specifications and which are included on the Punchlist.
(d) Reserved.
(e) Landlord hereby warrants to Tenant, which warranty shall survive
for the one (1) year period following the Lease Commencement Date, that (i) the
materials and equipment furnished by Landlord's contractors in the completion of
the Improvements will be of good quality and new, and (ii) such materials and
equipment and the work of such contractors shall comply with all applicable
laws, rules, regulations, building codes and insurance requirements and shall be
completed in accordance with the Plans and Specifications in all material
respects in a good and workmanlike manner and free from defects not inherent in
the quality required or permitted hereunder. This warranty shall exclude damages
or defects caused by Tenant or Tenant's Affiliates, improper or insufficient
maintenance, improper operation, and normal wear and tear under normal usage.
(f) For purposes of this Lease, the term "Substantial Completion"
(or any variation thereof) shall mean completion of construction of the
Improvements in accordance with the Plans and Specifications, subject only to
Punchlist items established pursuant to Section 17(c), as established by the
delivery by Landlord to Tenant of a certificate of occupancy or its equivalent
(or temporary certificate of occupancy or its equivalent) for the Demised
Premises issued by the appropriate governmental authority, if a certificate is
so required by a governmental authority, or if not so required or if unavailable
because of unfinished work to be performed by Tenant, then by the delivery by
Landlord to Tenant of a Certificate of Substantial Completion for the
Improvements on Standard AIA Form G-704 certified by Landlord's architect. In
the event Substantial Completion is delayed because of Tenant's failure to
approve or disapprove the Plans and Specifications as set forth in Section
17(a), by change orders requested by Tenant after approval of the Plans and
Specifications (including, without limitation, Tenant's request for additional
improvements in accordance with Special Stipulation 2 on Exhibit C hereto) or by
any other delay caused by Tenant or Tenant's Affiliates, then for the purpose of
establishing the Lease Commencement Date and any other date tied to the date of
Substantial Completion, Substantial Completion shall be deemed to mean the date
when Substantial Completion would have been achieved but for such delay.
18. Tenant Alterations and Additions.
(a) Tenant shall not make or permit to be made any alterations,
improvements, or additions to the Demised Premises (a "Tenant's Change"),
without first obtaining on each occasion Landlord's prior written consent (which
consent Landlord agrees not to unreasonably withhold) and Lender's prior written
consent (if such consent is required). As part of its approval process, Landlord
may require that Tenant submit plans and specifications to Landlord, for
Landlord's approval or disapproval, which approval shall
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not be unreasonably withheld. All Tenant's Changes shall be performed in
accordance with all legal requirements applicable thereto and in a good and
workmanlike manner with first-class materials. Tenant shall maintain insurance
reasonably satisfactory to Landlord during the construction of all Tenant's
Changes. If Landlord at the time of giving its approval to any Tenant's Change
notifies Tenant in writing that approval is conditioned upon restoration, then
Tenant shall, at its sole cost and expense and at Landlord's option upon the
termination or expiration of this Lease, remove the same and restore the Demised
Premises to its condition prior to such Tenant's Change. Landlord may withhold
consent to any Tenant's Change which is structural in nature or impairs the
structural strength of the Building, in Landlord's sole discretion, or reduces
its value, in Landlord's reasonable discretion. Tenant shall pay the full cost
of any Tenant's Change. Except as otherwise provided herein and in Section 12,
or as otherwise agreed at the time of a Tenant's Change is approved, all
Tenant's Changes and all repairs and all other property attached to or installed
on the Demised Premises by or on behalf of Tenant (excluding racks, conveyers
and related equipment) shall immediately upon completion or installation thereof
be and become part of the Demised Premises and the property of Landlord without
payment therefor by Landlord and shall be surrendered to Landlord upon the
expiration or earlier termination of this Lease.
(b) To the extent permitted by law, all of Tenant's contracts and
subcontracts for such Tenant's Changes shall provide that no lien shall attach
to or be claimed against the Demised Premises or any interest therein other than
Tenant's leasehold interest in the Demised Premises, and that all subcontracts
let thereunder shall contain the same provision. Whether or not Tenant furnishes
the foregoing, Tenant agrees to hold Landlord harmless from, and defend against
(with legal counsel acceptable to Landlord) all liens, claims and liabilities of
every kind, nature and description which may arise out of or in any way be
connected with such work. Tenant shall not permit the Demised Premises to become
subject to any mechanics', laborers' or materialmen's lien on account of labor,
material or services furnished to Tenant or claimed to have been furnished to
Tenant in connection with work of any character performed or claimed to have
been performed for the Demised Premises by, or at the direction or sufferance of
Tenant and if any such liens are filed against the Demised Premises, Tenant
shall promptly discharge the same; provided, however, that Tenant shall have the
right to contest, in good faith and with reasonable diligence, the validity of
any such lien or claimed lien if Tenant shall give to Landlord, within fifteen
days after demand, such security as may be reasonably satisfactory to Landlord
to assure payment thereof and to prevent any sale, foreclosure, or forfeiture of
Landlord's interest in the Demised Premises by reason of non-payment thereof;
provided further that on final determination of the lien or claim for lien,
Tenant shall immediately pay any judgment rendered, with all proper costs and
charges, and shall have the lien released and any judgment satisfied. If Tenant
fails to post such security or does not diligently contest such lien, Landlord
may, without investigation of the validity of the lien claim, discharge such
lien and Tenant shall reimburse Landlord upon demand for all costs and expenses
incurred in connection therewith, which expenses shall include any attorneys'
fees, paralegals' fees and any and all costs associated therewith, including
litigation through all trial and appellate levels and any costs in posting bond
to effect a discharge or release of the lien. Nothing contained in this Lease
shall be construed as a consent on the part of Landlord to subject the Demised
Premises to liability under any lien law now or hereafter existing of the state
in which the Demised Premises are located.
19. Services by Landlord. Landlord shall be responsible for providing for
maintenance of the Building Common Area, and, except as required by Section
10(b) hereof or as otherwise specifically provided for herein, Landlord shall be
responsible for no other services whatsoever. Tenant, by payment of Tenant's
share of the Operating Expenses, shall pay Tenant's pro rata share of the
expenses incurred by Landlord hereunder.
20. Fire and Other Casualty. In the event the Demised Premises are damaged
by fire or other casualty insured by Landlord, Landlord agrees to promptly
restore and repair the Demised Premises at Landlord's expense, including the
Improvements to be insured by Tenant, but only to the extent Landlord receives
insurance proceeds therefor, including the proceeds from the insurance required
to be carried by Tenant on the Improvements (Landlord being responsible for any
deductible under Landlord's insurance policies and the amount of any risk
retained by Landlord to the extent Landlord does not carry coverage at one
hundred percent (100%) of the replacement value of the Building, exclusive of
fixtures and property required to be insured by Tenant under this Lease).
Notwithstanding the foregoing, in the event that the Demised Premises are (i) in
the reasonable opinion of Landlord, so destroyed that they cannot be repaired or
rebuilt within one hundred eighty (180) days after the date of such damage; or
(ii) destroyed by a casualty which is not covered by Landlord's insurance, or if
such casualty is covered by Landlord's insurance but Lender or other party
entitled to insurance proceeds fails to make such proceeds available to Landlord
in an amount sufficient for restoration of the Demised Premises, then Landlord
shall give written notice to Tenant of such determination (the "Determination
Notice") within sixty (60) days of such casualty. Either Landlord or Tenant may
terminate and cancel this Lease effective as of the date of such casualty by
giving written notice to the other party within thirty (30) days after Tenant's
receipt of the Determination Notice. Upon the giving of such termination notice,
all obligations hereunder with respect to periods from and after the effective
date of termination shall thereupon cease and terminate. If no such termination
notice is given, Landlord shall, to the extent of the available insurance
proceeds, make such repair or restoration of the Demised Premises to the
approximate condition existing prior to such casualty, promptly and in such
manner as not to unreasonably interfere with Tenant's use and occupancy of the
Demised Premises (if Tenant is still occupying the Demised Premises). Base Rent
and Additional Rent and all other amounts payable by Tenant hereunder shall
equitably xxxxx during the time that the Demised Premises or any part thereof
are unusable by reason of any such damage thereto.
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21. Condemnation.
(a) If all of the Demised Premises is taken or condemned for a
public or quasi-public use, or if a material portion of the Demised Premises is
taken or condemned for a public or quasi-public use and the remaining portion
thereof is not usable by Tenant in the reasonable opinion of Landlord, this
Lease shall terminate as of the earlier of the date title to the condemned real
estate vests in the condemnor or the date on which Tenant is deprived of
possession of the Demised Premises. In such event, the Base Rent herein reserved
and all Additional Rent and other sums payable hereunder shall be apportioned
and paid in full by Tenant to Landlord to that date, all Base Rent, Additional
Rent and other sums payable hereunder prepaid for periods beyond that date shall
forthwith be repaid by Landlord to Tenant, and neither party shall thereafter
have any liability hereunder, except that any obligation or liability of either
party, actual or contingent, under this Lease which has accrued on or prior to
such termination date shall survive.
(b) If only part of the Demised Premises is taken or condemned for a
public or quasi-public use and this Lease does not terminate pursuant to Section
21(a), Landlord shall, to the extent of the award it receives, restore the
Demised Premises to a condition and to a size as nearly comparable as reasonably
possible to the condition and size thereof immediately prior to the taking, and
there shall be an equitable adjustment to the Base Rent and Additional Rent
based on the actual loss of use of the Demised Premises suffered by Tenant from
the taking.
(c) Landlord shall be entitled to receive the entire award in any
proceeding with respect to any taking provided for in this Section 21, without
deduction therefrom for any estate vested in Tenant by this Lease, and Tenant
shall receive no part of such award. Nothing herein contained shall be deemed to
prohibit Tenant from making a separate claim, against the condemnor, to the
extent permitted by law, for the value of Tenant's moveable trade fixtures,
machinery and moving expenses, provided that the making of such claim shall not
and does not adversely affect or diminish Landlord's award.
22. Tenant's Default.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or any Additional Rent
hereunder as and when such rent becomes due and such failure shall continue for
more than ten (10) days after Landlord gives written notice to Tenant of such
failure; provided, however, that Landlord shall only be required to give such a
notice of default three (3) times in any twelve (12) month period during the
Term, it being understood and agreed that any failure to pay Base Rent or any
Additional Rent on time thereafter within such twelve (12) month period shall
constitute an immediate Event of Default hereunder;
(ii) reserved;
(iii) if the Demised Premises become deserted or abandoned for
more than twenty (20) consecutive days or if Tenant fails to take possession of
the Demised Premises on the Lease Commencement Date or within twenty (20) days
thereafter;
(iv) if Tenant permits to be done anything which creates a
lien upon the Demised Premises and fails to discharge or bond such lien, or post
security with Landlord acceptable to Landlord within thirty (30) days after
receipt by Tenant of written notice thereof;
(v) if Tenant fails to maintain in force all policies of
insurance required by this Lease and such failure shall continue for more than
ten (10) business days after Landlord gives Tenant written notice of such
failure;
(vi) if any petition is filed by or against Tenant or any
guarantor of this Lease under any present or future section or chapter of the
Bankruptcy Code, or under any similar law or statute of the United States or any
state thereof (which, in the case of an involuntary proceeding, is not
permanently discharged, dismissed, stayed, or vacated, as the case may be,
within ninety (90) days of commencement), or if any order for relief shall be
entered against Tenant or any guarantor of this Lease in any such proceedings;
(vii) if Tenant or any guarantor of this Lease becomes
insolvent or makes a transfer in fraud of creditors or makes an assignment for
the benefit of creditors;
(viii) if a receiver, custodian, or trustee is appointed for
the Demised Premises or for all or substantially all of the assets of Tenant or
of any guarantor of this Lease, which appointment is not vacated within ninety
(90) days following the date of such appointment; or
(ix) if Tenant fails to perform or observe any other term of
this Lease and such failure shall continue for more than thirty (30) days after
Landlord gives Tenant written notice of such failure, or, if such failure cannot
be corrected within such thirty (30) day period, if Tenant does not
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commence to correct such default within said thirty (30) day period and
thereafter diligently prosecute the correction of same to completion within a
reasonable time.
(b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22):
(i) Terminate this Lease by giving Tenant notice of
termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or
(ii) Terminate this Lease as provided in Section 22(b)(i)
hereof and recover from Tenant all damages Landlord may incur by reason of
Tenant's default, which shall be calculated at the date of such termination, as
follows: (1) the value of the excess, if any, of (A) the Base Rent, Additional
Rent and all other sums which would have been payable hereunder by Tenant for
the period commencing with the day following the date of such termination and
ending with the Expiration Date had this Lease not been terminated (the
"Remaining Term"), over (B) the aggregate reasonable rental value of the Demised
Premises for the Remaining Term (which excess, if any shall be discounted to
present value at the "Treasury Yield" as defined below for the Remaining Term);
plus (2) the costs of recovering possession of the Demised Premises and all
other expenses incurred by Landlord due to Tenant's default, including, without
limitation, reasonable attorney's fees; plus (3) the unpaid Base Rent and
Additional Rent earned as of the date of termination plus any interest and late
fees due hereunder, plus other sums of money and damages owing on the date of
termination by Tenant to Landlord under this Lease or in connection with the
Demised Premises. The amount as calculated above shall be deemed immediately due
and payable. The payment of the amount calculated in subparagraph (ii)(1) shall
not be deemed a penalty but shall merely constitute payment of liquidated
damages, it being understood and acknowledged by Landlord and Tenant that actual
damages to Landlord are extremely difficult, if not impossible, to ascertain.
"Treasury Yield" shall mean the rate of return in percent per annum of Treasury
Constant Maturities for the length of time specified as published in document
H.15(519) (presently published by the Board of Governors of the U.S. Federal
Reserve System titled "Federal Reserve Statistical Release") for the calendar
week immediately preceding the calendar week in which the termination occurs. If
the rate of return of Treasury Constant Maturities for the calendar week in
question is not published on or before the business day preceding the date of
the Treasury Yield in question is to become effective, then the Treasury Yield
shall be based upon the rate of return of Treasury Constant Maturities for the
length of time specified for the most recent calendar week for which such
publication has occurred. If no rate of return for Treasury Constant Maturities
is published for the specific length of time specified, the Treasury Yield for
such length of time shall be the weighted average of the rates of return of
Treasury Constant Maturities most nearly corresponding to the length of the
applicable period specified. If the publishing of the rate of return of Treasury
Constant Maturities is ever discontinued, then the Treasury Yield shall be based
upon the index which is published by the Board of Governors of the U.S. Federal
Reserve System in replacement thereof or, if no such replacement index is
published, the index which, in Landlord's reasonable determination, most nearly
corresponds to the rate of return of Treasury Constant Maturities. In
determining the aggregate reasonable rental value pursuant to subparagraph
(ii)(1)(B) above, the parties hereby agree that, at the time Landlord seeks to
enforce this remedy, all relevant factors should be considered, including, but
not limited to, (a) the length of time remaining in the Remaining Term, (b) the
then current market conditions in the general area in which the Building is
located, (c) the likelihood of reletting the Demised Premises for a period of
time equal to the remainder of the Term, (d) the net effective rental rates then
being obtained by landlords for similar type space of similar size in similar
type buildings in the general area in which the Building is located, (e) the
vacancy levels in the general area in which the Building is located, (f) current
levels of new construction that will be completed during the Remaining Term and
how this construction will likely affect vacancy rates and rental rates and (g)
inflation; or
(iii) without terminating this Lease, declare immediately due
and payable the sum of the following: (1) the present value (calculated using
the "Treasury Yield") of all Base Rent and Additional Rent due and coming due
under this Lease for the entire remaining Term (as if by the terms of this Lease
they were payable in advance), plus (2) the cost of recovering and reletting the
Demised Premises and all other expenses incurred by Landlord in connection with
Tenant's default, plus (3) any unpaid Base Rent, Additional Rent and other
rentals, charges, assessments and other sums owing by Tenant to Landlord under
this Lease or in connection with the Demised Premises as of the date this
provision is invoked by Landlord, plus (4) interest on all such amounts from the
date due at the Interest Rate, and Landlord may immediately proceed to distrain,
collect, or bring action for such sum, or may file a proof of claim in any
bankruptcy or insolvency proceedings to enforce payment thereof; provided,
however, that such payment shall not be deemed a penalty or liquidated damages,
but shall merely constitute payment in advance of all Base Rent and Additional
Rent payable hereunder throughout the Term, and provided further, however, that
upon Landlord receiving such payment, Tenant shall be entitled to receive from
Landlord all rents received by Landlord from other assignees, tenants and
subtenants on account of said Demised Premises during the remainder of the Term
(provided that the monies to which Tenant shall so become entitled shall in no
event exceed the entire amount actually paid by Tenant to Landlord pursuant to
this subparagraph (iii)), less all costs, expenses and attorneys' fees of
Landlord incurred but not yet reimbursed by Tenant in connection with recovering
and reletting the Demised Premises; or
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(iv) Without terminating this Lease, in its own name but as
agent for Tenant, enter into and upon and take possession of the Demised
Premises or any part thereof. Any property remaining in the Demised Premises may
be removed and stored in a warehouse or elsewhere at the cost of, and for the
account of, Tenant without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage which may be occasioned thereby unless caused by
Landlord's negligence, provided, however, that to the extent any property
contained in the Demised Premises is owned by Xxxxxx Xxxxxx, Landlord shall give
Xxxxxx Xxxxxx five (5) days prior written notice of such removal, provided that
Xxxxxx Xxxxxx shall have executed and delivered for the benefit of Landlord an
entry and indemnification agreement in form reasonably acceptable to Landlord.
Thereafter, Landlord may, but shall not be obligated to, lease to a third party
the Demised Premises or any portion thereof as the agent of Tenant upon such
terms and conditions as Landlord may deem necessary or desirable in order to
relet the Demised Premises. The remainder of any rentals received by Landlord
from such reletting, after the payment of any indebtedness due hereunder from
Tenant to Landlord, and the payment of any costs and expenses of such reletting,
shall be held by Landlord to the extent of and for application in payment of
future rent owed by Tenant, if any, as the same may become due and payable
hereunder. If such rentals received from such reletting shall at any time or
from time to time be less than sufficient to pay to Landlord the entire sums
then due from Tenant hereunder, Tenant shall pay any such deficiency to
Landlord. Notwithstanding any such reletting without termination, Landlord may
at any time thereafter elect to terminate this Lease for any such previous
default provided same has not been cured; or
(v) Without terminating this Lease, and with or without notice
to Tenant, enter into and upon the Demised Premises and, without being liable
for prosecution or any claim for damages therefor, maintain the Demised Premises
and repair or replace any damage thereto or do anything or make any payment for
which Tenant is responsible hereunder. Tenant shall reimburse Landlord
immediately upon demand for any expenses which Landlord incurs in thus effecting
Tenant's compliance under this Lease and Landlord shall not be liable to Tenant
for any damages with respect thereto; or
(vi) Without liability to Tenant or any other party and
without constituting a constructive or actual eviction, suspend or discontinue
furnishing or rendering to Tenant any property, material, labor, utilities or
other service, wherever Landlord is obligated to furnish or render the same as
long as an Event of Default exists under this Lease; or
(vii) With or without terminating this Lease, allow the
Demised Premises to remain unoccupied and collect rent from Tenant as it comes
due; or
(viii) Pursue such other remedies as are available at law or
equity.
(c) If this Lease shall terminate as a result of or while there
exists an Event of Default hereunder, any funds of Tenant held by Landlord may
be applied by Landlord to any damages payable by Tenant (whether provided for
herein or by law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor the
settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises and
no act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice of such intention is given to Tenant. No provision
of this Lease shall be deemed to have been waived by either party unless such
waiver is in writing and signed by the party making such waiver. Landlord's
acceptance of Base Rent or Additional Rent in full or in part following an Event
of Default hereunder shall not be construed as a waiver of such Event of
Default. No custom or practice which may grow up between the parties in
connection with the terms of this Lease shall be construed to waive or lessen
either party's right to insist upon strict performance of the terms of this
Lease, without a written notice thereof to the other party.
(f) If an Event of Default shall occur, Tenant shall pay to
Landlord, on demand, all reasonable expenses incurred by Landlord as a result
thereof, including reasonable attorneys' fees, court costs and expenses actually
incurred.
23. Landlord's Right of Entry. Tenant agrees to permit Landlord and the
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises at all reasonable times for the purposes of inspecting the Demised
Premises and Tenant's compliance with this Lease, and making any necessary
repairs thereto; provided that, except in the case of an emergency, Landlord
shall give Tenant reasonable prior notice of Landlord's intended entry upon the
Demised Premises. Nothing herein shall imply any duty upon the part of Landlord
to do any work required of Tenant hereunder, and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
it. Landlord shall not be liable for inconvenience, annoyance, disturbance or
other damage to Tenant by reason
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of making such repairs or the performance of such work in the Demised Premises
or on account of bringing materials, supplies and equipment into or through the
Demised Premises during the course thereof, and the obligations of Tenant under
this Lease shall not thereby be affected; provided, however, that Landlord shall
use reasonable efforts not to disturb or otherwise interfere with Tenant's
operations in the Demised Premises in making such repairs or performing such
work. Landlord also shall have the right to enter the Demised Premises at all
reasonable times to exhibit the Demised Premises to any prospective purchaser,
mortgagee or, during the last six (6) months of the Term, tenant thereof.
24. Lender's Rights.
(a) For purposes of this Lease:
(i) "Lender" as used herein means the holder of a Mortgage;
(ii) "Mortgage" as used herein means any or all mortgages,
deeds to secure debt, deeds of trust or other instruments in the nature thereof
which may now or hereafter affect or encumber Landlord's title to the Demised
Premises, and any amendments, modifications, extensions or renewals thereof.
(b) Subject to the receipt by Tenant of a non-disturbance agreement,
substantially in the form of Exhibit F attached hereto, this Lease and all
rights of Tenant hereunder are and shall be subject and subordinate to the lien
and security title of any Mortgage. Tenant recognizes and acknowledges the right
of Lender to foreclose or exercise the power of sale against the Demised
Premises under any Mortgage.
(c) Tenant shall, in confirmation of the subordination set forth in
Section 24(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary,
upon demand, at any time or times, execute, acknowledge, and deliver to Landlord
or to Lender any and all reasonable instruments requested by either of them to
evidence such subordination which are consistent with the form of Exhibit F
attached hereto.
(d) At any time during the Term, Lender may, by written notice to
Tenant, make this Lease superior to the lien of its Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all reasonable instruments that may be necessary
to make this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall, if requested by such successor, attorn to and recognize such
successor as Tenant's landlord under this Lease without change in the terms and
provisions of this Lease and shall promptly execute and deliver any reasonable
instrument that may be necessary to evidence such attornment, provided that such
successor shall not be bound by (i) any payment of Base Rent or Additional Rent
for more than one month in advance, except prepayments in the nature of security
for the performance by Tenant of its obligations under this Lease, and then only
if such prepayments have been deposited with and are under the control of such
successor, (ii) any provision of any amendment to the Lease to which Lender has
not consented, (iii) the defaults of any prior landlord under this Lease, or
(iv) any offset rights arising out of the defaults of any prior landlord under
this Lease. Upon such attornment, this Lease shall continue in full force and
effect as a direct lease between each successor landlord and Tenant, subject to
all of the terms, covenants and conditions of this Lease.
(f) In the event there is a Mortgage at any time during the Term,
Landlord shall, at Tenant's request, use reasonable efforts to cause the Lender
to enter into a subordination, nondisturbance and attornment agreement with
Tenant reasonably satisfactory to Tenant and consistent with this Section 24.
25. Estoppel Certificate and Financial Statement.
(a) Landlord and Tenant agree, at any time, and from time to time,
within ten (10) business days after written request of the other, to execute,
acknowledge and deliver a statement in writing in recordable form to the
requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
unconditionally accepted the Demised Premises and is conducting its business
therein, and (v) and as to such additional matters as may be requested, it being
intended that any such statement delivered pursuant hereto may be relied upon by
the requesting party and by any purchaser of title to the Demised Premises or by
any mortgagee or any assignee thereof or any party to any sale-leaseback of the
Demised Premises, or the landlord under a ground lease affecting the Demised
Premises.
(b) If Landlord desires to finance, refinance, or sell the Building,
Tenant and all guarantors of Tenant's obligations hereunder, if any, shall
deliver to any potential lender or purchaser designated by Landlord such
financial statements of Tenant and such guarantors as may be reasonably
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required by such lender or purchaser, including but not limited to Tenant's
financial statements for the past 3 years; provided, however, that if Priority
Fulfillment Services, Inc. is the Tenant at the time that Landlord desires to
finance, refinance, or sell the Building, then only the guarantors of such
Tenant's obligations hereunder shall be required to provide their financial
statements, in the manner described in this subsection (b), to any such lender
or purchaser. All such financial statements shall be received by Landlord and
such lender or purchaser in confidence and shall be used only for the purposes
herein set forth.
26. Landlord Liability. NO OWNER OF THE DEMISED PREMISES, WHETHER OR NOT
NAMED HEREIN, SHALL HAVE LIABILITY HEREUNDER AFTER IT CEASES TO HOLD TITLE TO
THE DEMISED PREMISES. NEITHER LANDLORD NOR ANY OFFICER, DIRECTOR, SHAREHOLDER,
PARTNER OR PRINCIPAL OF LANDLORD, WHETHER DISCLOSED OR UNDISCLOSED, SHALL BE
UNDER ANY PERSONAL LIABILITY WITH RESPECT TO ANY OF THE PROVISIONS OF THIS
LEASE. IN THE EVENT LANDLORD IS IN BREACH OR DEFAULT WITH RESPECT TO LANDLORD'S
OBLIGATIONS OR OTHERWISE UNDER THIS LEASE, TENANT SHALL LOOK SOLELY TO THE
EQUITY OF LANDLORD IN THE BUILDING FOR THE SATISFACTION OF TENANT'S REMEDIES. IT
IS EXPRESSLY UNDERSTOOD AND AGREED THAT LANDLORD'S LIABILITY UNDER THE TERMS,
COVENANTS, CONDITIONS, WARRANTIES AND OBLIGATIONS OF THIS LEASE SHALL IN NO
EVENT EXCEED LANDLORD'S EQUITY INTEREST IN THE BUILDING.
27. Notices. Any notice required or permitted to be given or served by
either party to this Lease shall be deemed given when made in writing, and
either (i) personally delivered, (ii) deposited with the United States Postal
Service, postage prepaid, by registered or certified mail, return receipt
requested, or (iii) delivered by a nationally recognized overnight delivery
service providing proof of delivery, properly addressed to the address set forth
in Section 1(m) (as the same may be changed by giving written notice of the
aforesaid in accordance with this Section 27). If any notice mailed is properly
addressed with appropriate postage but returned for any reason, such notice
shall be deemed to be effective notice and to be given on the date of mailing.
Any notice required or permitted to be given or served by Landlord or Tenant to
this Lease may be given by either an agent, law firm or attorney acting on
behalf of Landlord or Tenant.
28. Brokers. Tenant represents and warrants to Landlord that, except for
those parties set forth in Section 1(o) (the "Brokers"), Tenant has not engaged
or had any conversations or negotiations with any broker, finder or other third
party concerning the leasing of the Demised Premises to Tenant who would be
entitled to any commission or fee based on the execution of this Lease. Tenant
hereby further represents and warrants to Landlord that Tenant is not receiving
and is not entitled to receive any rebate, payment or other remuneration, either
directly or indirectly, from the Brokers, and that it is not otherwise sharing
in or entitled to share in any commission or fee paid to the Brokers by Landlord
or any other party in connection with the execution of this Lease, either
directly or indirectly. Tenant hereby indemnifies Landlord against and from any
claims for any brokerage commissions (except those payable to the Brokers, all
of which are payable by Landlord pursuant to a separate agreement) and all
costs, expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys' fees and expenses, for any breach of the
foregoing. Landlord represents and warrants to Tenant that, except for those
parties set forth in Section 1(o) (the "Brokers"), Landlord has not engaged or
had any conversations or negotiations with any broker, finder or other third
party concerning the leasing of the Demised Premises to Tenant who would be
entitled to any commission or fee based on the execution of this Lease. Landlord
hereby further represents and warrants to Tenant that Landlord, apart from the
standard brokerage commission, is not receiving and is not entitled to receive
any rebate, payment or other remuneration, either directly or indirectly, from
the Brokers. Landlord hereby indemnifies Tenant against and from any claims for
any brokerage commissions (except those payable to the Brokers, all of which are
payable by Landlord pursuant to a separate agreement) and all costs, expenses
and liabilities in connection therewith, including, without limitation,
reasonable attorneys' fees and expenses, for any breach of the foregoing. The
foregoing indemnification shall survive the termination of this Lease for any
reason.
29. Assignment and Subleasing.
(a) Tenant may not assign, mortgage, pledge, encumber or otherwise
transfer this Lease, or any interest hereunder, or sublet the Demised Premises,
in whole or in part, without on each occasion first obtaining the prior express
written consent of Landlord, which consent Landlord shall not unreasonably
withhold, delay or condition. Any change in control of Tenant resulting from a
merger, consolidation, stock transfer or asset sale shall be considered an
assignment or transfer which requires Landlord's prior written consent. For
purposes of this Section 29, by way of example and not limitation, Landlord
shall be deemed to have reasonably withheld consent if Landlord determines (i)
that the prospective assignee or subtenant is not of a financial strength
similar to Tenant as of the Effective Lease Date, (ii) that the prospective
assignee or subtenant has a poor business reputation, (iii) that the proposed
use of the Demised Premises by such prospective assignee or subtenant
(including, without limitation, a use involving the use or handling of Hazardous
Substances) will negatively affect the value or marketability of the Building or
the Project or (iv) that the prospective assignee or subtenant is a current
tenant in the Project or is a bona-fide third-party prospective tenant.
(b) Notwithstanding Section 29(a) above, provided that there then
exists no Event of Default under this Lease which remains uncured, Tenant shall
have the right, upon forty-five (45) days' prior written notice to Landlord but
without Landlord's prior consent, to assign this Lease to Xxxxxx Xxxxxx
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USA, Inc. or to Altria Group, Inc. (either being referred to herein as a
"Pre-Approved Assignee"), provided that upon any such assignment the
Pre-Approved Assignee assumes all of the obligations and liabilities of Tenant
arising under this Lease and shall then have assets, capitalization, tangible
net worth and creditworthiness at least equal to the assets, capitalization,
tangible net worth and creditworthiness of the Guarantor as of the Effective
Lease Date as determined by GAAP. For the purpose hereof, "tangible net worth"
shall mean the excess of the value of tangible assets (i.e. assets excluding
those which are intangible such as goodwill, patents and trademarks) over
liabilities. Following an assignment to a Pre-Approved Assignee as described
hereinabove, such Pre-Approved Assignee may assign this Lease to: (a) an
affiliate of such Pre-Approved Assignee, or (b) as part of a merger or
consolidation or to an entity which acquires the business which is operated by
such Pre-Approved Assignee in the Demised Premises, without Landlord's consent,
but with notice to Landlord, provided such successor entity under (a) or (b)
above assumes the obligations of such Pre-Approved Assignee in writing, and
provided, further, that no such further assignment by such Pre-Approved Assignee
shall relieve such Pre-Approved Assignee from or reduce its obligations under
this Lease. Any sublease or assignment pursuant to and in compliance with this
subsection (b) shall be referred to herein as a "Pre-Approved Assignment". The
provisions of subsection 29(c) below shall not apply to any Pre-Approved
Assignment; provided, however, that the written notice given by Tenant to
Landlord pursuant to this subsection 29(b) must contain sufficient information
and documentation to enable Landlord to confirm that all of the requirements of
this subsection 29(b) have been satisfied.
(c) If Tenant desires to assign this Lease or sublet the Demised
Premises or any part thereof, other than in connection with a Pre-Approved
Assignment, Tenant shall give Landlord written notice no later than forty-five
(45) days in advance of the proposed effective date of any proposed assignment
or sublease, specifying (i) the name and business of the proposed assignee or
sublessee, (ii) the amount and location of the space within the Demised Premises
proposed to be subleased, (iii) the proposed effective date and duration of the
assignment or subletting and (iv) the proposed rent or consideration to be paid
to Tenant by such assignee or sublessee. Tenant shall promptly supply Landlord
with financial statements and other information as Landlord may reasonably
request to evaluate the proposed assignment or sublease. Landlord shall have a
period of thirty (30) days following receipt of such notice and other
information requested by Landlord within which to notify Tenant in writing that
Landlord elects: (i) to terminate this Lease as to the space so affected as of
the proposed effective date set forth in Tenant's notice, in which event Tenant
shall be relieved of all further obligations hereunder as to such space, except
for obligations under Sections 11 and 28 and all other provisions of this Lease
which expressly survive the termination hereof; or (ii) to permit Tenant to
assign or sublet such space; provided, however, that, if the rent rate agreed
upon between Tenant and its proposed subtenant is greater than the rent rate
that Tenant must pay Landlord hereunder for that portion of the Demised
Premises, or if any consideration shall be promised to or received by Tenant in
consideration of such proposed assignment or sublease (in addition to rent),
then one half (1/2) of such excess rent and other consideration (after payment
of brokerage commissions, attorneys' fees and other disbursements reasonably
incurred by Tenant for such assignment and subletting if acceptable evidence of
such disbursements is delivered to Landlord) shall be considered Additional Rent
owed by Tenant to Landlord, and shall be paid by Tenant to Landlord, in the case
of excess rent, in the same manner that Tenant pays Base Rent and, in the case
of any other consideration, within ten (10) business days after receipt thereof
by Tenant; or (iii) to refuse, in Landlord's reasonable discretion (taking into
account all relevant factors including, without limitation, the factors set
forth in the Section 29(a) above), to consent to Tenant's assignment or
subleasing of such space and to continue this Lease in full force and effect as
to the entire Demised Premises. If Landlord should fail to notify Tenant in
writing of such election within the aforesaid thirty (30) day period, Landlord
shall be deemed to have elected option (iii) above. Tenant agrees to reimburse
Landlord for reasonable legal fees and any other reasonable costs incurred by
Landlord in connection with any requested assignment or subletting, and such
payments shall not be deducted from the Additional Rent owed to Landlord
pursuant to subsection (ii) above. Tenant shall deliver to Landlord copies of
all documents executed in connection with any permitted assignment or
subletting, which documents shall be in form and substance reasonably
satisfactory to Landlord and which shall require such assignee to assume
performance of all terms of this Lease on Tenant's part to be performed.
(d) No acceptance by Landlord of any rent or any other sum of money
from any assignee, sublessee or other category of transferee shall be deemed to
constitute Landlord's consent to any assignment, sublease, or transfer.
Permitted subtenants or assignees shall become liable directly to Landlord for
all obligations of Tenant hereunder, without, however, relieving Tenant of any
of its liability hereunder. No such assignment, subletting, occupancy or
collection shall be deemed the acceptance of the assignee, tenant or occupant,
as Tenant, or a release of Tenant from the further performance by Tenant of
Tenant's obligations under this Lease. Any assignment or sublease consented to
by Landlord shall not relieve Tenant (or its assignee) from obtaining Landlord's
consent to any subsequent assignment or sublease.
30. Termination or Expiration.
(a) No termination of this Lease prior to the normal ending thereof, by
lapse of time or otherwise, shall affect Landlord's right to collect rent for
the period prior to termination thereof. Notwithstanding anything to the
contrary contained herein, if this Lease is rejected in any bankruptcy action or
proceeding filed by or against Tenant, and the effective date of rejection is on
or after the date upon
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which that month's Rent is due and owing, then the Rent owing under this Lease
for the month during which the effective date of such rejection occurs shall be
due and payable in full and shall not be prorated.
(b) At the expiration or earlier termination of the Term of this
Lease, Tenant shall surrender the Demised Premises and all improvements,
alterations and additions thereto, and keys therefor to Landlord, clean and
neat, and in the same condition as at the Lease Commencement Date, excepting
normal wear and tear, condemnation and casualty other than that required to be
insured against by Tenant hereunder.
(c) If Tenant remains in possession of the Demised Premises after
expiration of the Term, with or without Landlord's acquiescence and without any
express agreement of the parties, Tenant shall be a tenant-at-sufferance at the
greater of (i) one hundred fifty percent (150%) of the then current fair market
base rental value of the Demised Premises or (ii) one hundred fifty percent
(150%) of the Base Rent in effect at the end of the Term. Tenant shall also
continue to pay all other Additional Rent due hereunder. Notwithstanding the
foregoing, there shall be no renewal of this Lease by operation of law or
otherwise, and, in addition to and without limiting such rights and remedies as
may be available to Landlord at law or in equity as a result of Tenant's holding
over beyond the Term, Landlord shall be entitled to exercise any and all rights
and remedies available to Landlord in respect of an Event of Default hereunder
(it being agreed that any such holdover shall be deemed an immediate Event of
Default hereunder). In addition to the foregoing, Tenant shall be liable for all
damages, direct and consequential, incurred by Landlord as a result of such
holdover. No receipt of money by Landlord from Tenant after the termination of
this Lease or Tenant's right of possession of the Demised Premises shall
reinstate, continue or extend the Term or Tenant's right of possession. The
provisions of this subsection 30(c) shall survive the expiration of the Term.
31. Reserved.
32. Late Payments. In the event any installment of rent, inclusive of Base
Rent, or Additional Rent or other sums due hereunder, if any, is not paid within
five (5) days after the due date therefor, Tenant shall pay an administrative
fee (the "Administrative Fee") equal to five percent (5%) of such past due
amount, plus interest on the amount past due at the lesser of (i) the maximum
interest rate allowed by law or (ii) a rate of fifteen percent (15%) per annum
(the "Interest Rate"), in order to defray the additional expenses incurred by
Landlord as a result of such late payment. The Administrative Fee is in addition
to, and not in lieu of, any of the Landlord's remedies hereunder.
33. Rules and Regulations. Tenant agrees to abide by the rules and
regulations set forth on Exhibit D attached hereto, as well as other reasonable
rules and regulations reasonably promulgated by Landlord from time to time, so
long as such rules and regulations are uniformly enforced against all tenants of
Landlord in the Building and not intended to modify or amend the basic Lease
terms, or that would materially and adversely impact Tenant's cost or ability to
operate.
34. Quiet Enjoyment. So long as Tenant pays its rent and performs its
obligations hereunder, Landlord agrees that Tenant shall have the right to
quietly use and enjoy the Demised Premises for the Term free from the
disturbance by Landlord or any party by, through or under Landlord.
35. Miscellaneous.
(a) The parties hereto hereby covenant and agree that Landlord shall
receive the Base Rent, Additional Rent and all other sums payable by Tenant
hereinabove provided as net income from the Demised Premises, without any
abatement (except as set forth in Section 20 and Section 21), reduction,
set-off, counterclaim, defense or deduction whatsoever.
(b) If any clause or provision of this Lease is determined to be
illegal, invalid or unenforceable under present or future laws effective during
the Term, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and that in lieu of
such illegal, invalid or unenforceable clause or provision there shall be
substituted 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.
(c) All rights, powers, and privileges conferred hereunder upon the
parties hereto shall be cumulative, but not restrictive to those given by law.
(d) Time is of the essence of this Lease.
(e) No failure of Landlord or Tenant to exercise any power given
Landlord or Tenant hereunder or to insist upon strict compliance by Landlord or
Tenant with its obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of Landlord's or
Tenant's rights to demand exact compliance with the terms hereof.
(f) This Lease contains the entire agreement of the parties hereto
as to the subject matter of this Lease and no prior representations,
inducements, letters of intent, promises or agreements, oral or otherwise,
between the parties not embodied herein shall be of any force and effect. Any
future
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amendment to this Lease must be in writing and signed by the parties hereto. The
masculine (or neuter) pronoun, singular number shall include the masculine,
feminine and neuter gender and the singular and plural number.
(g) This contract shall create the relationship of landlord and
tenant between Landlord and Tenant; no estate shall pass out of Landlord; Tenant
has a usufruct, not subject to levy and sale, and not assignable by Tenant
except as expressly set forth herein.
(h) Under no circumstances shall Tenant have the right to record
this Lease or a memorandum thereof.
(i) The captions of this Lease are for convenience only and are not
a part of this Lease, and do not in any way define, limit, describe or amplify
the terms or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.
(k) This Lease shall be interpreted under the laws of the State
where the Demised Premises are located.
(l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.
36. Special Stipulations. The Special Stipulations, if any, attached
hereto as Exhibit C, are incorporated herein and made a part hereof, and to the
extent of any conflict between the foregoing provisions and the Special
Stipulations, the Special Stipulations shall govern and control.
37. Effective Lease Date. For purposes of this Lease, the term "Effective
Lease Date" shall mean the later date upon which this Lease is signed by
Landlord and Tenant.
38. Authority. If Tenant is not a natural person, Tenant shall cause its
corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E. Tenant is authorized by all required
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms.
39. No Offer Until Executed. The submission of this Lease by Landlord to
Tenant for examination or consideration does not constitute an offer by Landlord
to lease the Demised Premises and this Lease shall become effective, if at all,
only upon the execution and delivery thereof by Landlord and Tenant. Execution
and delivery of this Lease by Tenant to Landlord constitutes an offer to lease
the Demised Premises on the terms contained herein. The offer by Tenant will be
irrevocable until 6:00 p.m. Eastern time for fifteen (15) days after the date of
execution of this Lease by Tenant and delivery to Landlord. This Lease may be
executed and delivered by facsimile or electronic media and in multiple
counterparts.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands under
seals, the day and year first above written.
LANDLORD:
Date:__________________
INDUSTRIAL DEVELOPMENTS INTERNATIONAL, a
delaware corporation
By:_____________________________________
Name:______________________________
Title:_____________________________
Attest:_________________________________
Name:____________________________
Title:___________________________
[CORPORATE SEAL]
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TENANT:
Date:__________________ PRIORITY FULFILLMENT SERVICES, INC., a
delaware corporation
By:_____________________________________
Name:______________________________
Title:_____________________________
Attest:_________________________________
Name:____________________________
Title:___________________________
[CORPORATE SEAL]
-00-
XXXXXXXXXXX
Xxxxxxxx - Corporation:
STATE OF_________________
COUNTY OF________________
BEFORE ME, a Notary Public in and for said County, personally
appeared__________________________ and , known to me to be the person(s) who, as
___________________________________ and ____________________________________,
respectively, of Industrial Developments International, Inc., the corporation
which executed the foregoing instrument in its capacity as Landlord, signed the
same, and acknowledged to me that they did so sign said instrument in the name
and upon behalf of said corporation as officers of said corporation, that the
same is their free act and deed as such officers, respectively, and they were
duly authorized thereunto by its board of directors; and that the seal affixed
to said instrument is the corporate seal of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this__day of_____________________, 20____.
________________________________________
Notary Public
My Commission Expires:
Tenant - Corporation:
STATE OF_________________
COUNTY OF________________
BEFORE ME, a Notary Public in and for said County, personally
appeared__________________________ and , known to me to be the person(s) who, as
___________________________________ and ____________________________________,
respectively, of Priority Fulfillment Services, Inc., the corporation which
executed the foregoing instrument in its capacity as Tenant, signed the same,
and acknowledged to me that they did so sign said instrument in the name and
upon behalf of said corporation as officers of said corporation, that the same
is their free act and deed as such officers, respectively, and they were duly
authorized thereunto by its board of directors; and that the seal affixed to
said instrument is the corporate seal of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this_day of___________________, 20___.
________________________________________
Notary Public
My Commission Expires:
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LEASE INDEX
Section Subject
------- -------
1 Basic Lease Provisions
2 Demised Premises
3 Term
4 Base Rent
5 Security Deposit
6 Operating Expenses and Additional Rent
7 Use of Demised Premises
8 Insurance
9 Utilities
10 Maintenance and Repairs
11 Tenant's Personal Property; Indemnity
12 Tenant's Fixtures
13 Signs
14 Reserved
15 Governmental Regulations
16 Environmental Matters
17 Construction of Demised Premises
18 Tenant Alterations and Additions
19 Services by Landlord
20 Fire and Other Casualty
21 Condemnation
22 Tenant's Default
23 Landlord's Right of Entry
24 Lender's Rights
25 Estoppel Certificate and Financial Statement
26 Landlord's Liability
27 Notices
28 Brokers
29 Assignment and Subleasing
30 Termination or Expiration
31 Reserved 32 Late Payments
33 Rules and Regulations
34 Quiet Enjoyment
35 Miscellaneous
36 Special Stipulations
37 Effective Lease Date
38 Authority
39 No Offer Until Executed
Exhibit "A" Demised Premises
Exhibit "A-1" Parking
Exhibit "A-2" Access
Exhibit "A-3" Adjacent Space
Exhibit "B" Preliminary Plans and Specifications/Work
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E" Certificate of Authority
Exhibit "F" SNDA
Exhibit "G" Guaranty
