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EXHIBIT 10.12
MARYLAND MULTI-TENANT INDUSTRIAL LEASE
INGLEWOOD TECH CENTER II
by and between
XXXXX COMMERCIAL PROPERTIES, INC., Landlord
by XXXXX OFFICE MANAGEMENT, INC., Managing Agent,
and
CROWN BOOKS CORPORATION, Tenant
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MARYLAND MULTI-TENANT INDUSTRIAL LEASE
INGLEWOOD TECH CENTER II
THIS LEASE is made and entered into as of April 25, 2000 by and between
XXXXX COMMERCIAL PROPERTIES, INC., a Maryland corporation ("Landlord") by XXXXX
OFFICE MANAGEMENT, INC., Managing Agent, and CROWN BOOKS CORPORATION, a Delaware
corporation ("Tenant").
In consideration of the rents hereinafter reserved and the agreements
hereinafter set forth, Landlord and Tenant mutually agree as follows:
1. SUMMARY OF TERMS.
The following is a summary of the principal terms of the Lease. Any
capitalized term set forth below shall, for the purposes of this Lease, have the
meaning ascribed to it in this Section 1.
A. Description of Premises
(1) Building: The building known as Inglewood Tech Center II and
located at 0000 XxXxxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000.
(2) Business Community: Inglewood Business Community
(3) Premises: Approximately 41,244 square feet of Rental Area in
the Building as shown on Schedule A.
(4) Protective Covenants: Declaration of Protective Covenants -
Inglewood, A Planned Business Community, dated December 17, 1980, recorded among
the Land Records of Prince George's County, Maryland, in Liber 5350, folio 305,
as amended.
(5) Permitted Use. The Premises shall be used solely for the
operation of a business office and warehouse.
B. Rent
(1) Annual Basic Rent:
PSF Annual Monthly
--- ------ -------
Period Basic Rent Basic Rent Installment
------ ---------- ---------- -----------
Year 1: $5.50 $226,842.00 $18,903.50
Year 2: $5.72 $235,915.68 $19,659.64
Year 3: $5.95 $245,401.80 $20,450.15
Year 4: $6.19 $255,300.36 $21,275.03
Year 5: $6.43 $265,198.92 $22,099.91
Year 6: $7.43 $306,442.92 $25,536.91
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Year 7: $7.73 $318,816.12 $26,568.01
Year 8: $8.04 $331,601.76 $27,633.48
Year 9: $8.36 $344,799.84 $28,733.32
Year 10: $8.64 $356,348.16 $29,695.68
(2) Advance Rent: None.
(3) Security Deposit: Twenty-two Thousand Ninety-nine Dollars
and Ninety-one Cents ($22,099.91) to be held by Landlord as provided in Section
6.4.
C. Adjustments.
(1) Base Operating Costs. Intentionally Omitted.
(2) Adjustment Period Consumer Price Index. Intentionally
Omitted.
D. Term
(1) Term: Ten (10) years, subject to Section 4.
(2) Lease Commencement Date: July 1, 2000, subject to Section 4.
(3) Termination Date: June 30, 2010, subject to Section 4.
E. Notice and Payment
(1) Tenant Notice Address:
Prior to the Lease Commencement Date:
Crown Books Corporation
Attention: Real Estate
0000 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
After the Lease Commencement Date:
Crown Books Corporation
Attention: Real Estate
0000 XxXxxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
In the event of default, then to:
Paragon Capital
x/x Xxxxxxx, Xxxxxx & Xxxxxx, P.C.
Attention: Xx. Xxxx X. Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(2) Landlord Notice Address:
Xxxxx Office Management, Inc.
Suite 302
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0000 Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000-0000
with a copy to:
Xxxxx Office Management, Inc.
c/o The Xxxxx Company
00000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(3) Landlord Payment Address:
Xxxxx Office Management, Inc.
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000-0000
F. Broker
Xx. Xxxx Xxxxx
Transwestern Xxxxx Xxxxxxx Company
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
2. DEFINITIONS.
For purposes of this Lease, the Schedules attached and made a part
hereof and all agreements supplemental to this Lease, the following terms shall
have the respective meanings as set forth in the following Section, subsection,
paragraph and Schedule references:
Reference
Additional Rent.........................................................................6.3
Alterations............................................................................15.1
Annual Basic Rent.......................................................................1.B
Bankruptcy Code........................................................................19.1
Building...............................................................................1.A.
Building Service Equipment..............................................................8.2
Casualty...............................................................................17.1
Default Rate............................................................................6.5
Event of Default.......................................................................20.1
Event of Tenant's Bankruptcy...........................................................19.1
Fractional Share........................................................................7.1
Insolvency Laws........................................................................19.1
Landlord Notice Address................................................................1.E.
Landlord Payment Address...............................................................1.E.
Lease Commencement Date.................................................................1.D
Mortgage.................................................................................27
Mortgagee................................................................................27
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Operating Costs.........................................................................7.1
Operating Costs Statement...............................................................7.2
Operating Year..........................................................................7.1
Permitted Use..........................................................................1.A.
Premises................................................................................1.A
Property................................................................................7.1
Protective Covenants...................................................................1.A.
Public Areas.....................................................................Schedule C
Rental Area...............................................................................3
Rental Year.............................................................................6.1
Rules and Regulations.....................................................................9
Security Deposit....................................................................1.B.(3)
Tenant Allowance........................................................................5.1
Tenant Improvements.....................................................................5.1
Tenant Notice Address..................................................................1.E.
Tenant's Share of Operating Costs.......................................................7.2
Tenant's Personal Property.............................................................15.3
Term....................................................................................4.1
Termination Date.......................................................................1.D.
Transfer.................................................................................25
3. LEASED PREMISES; MEASUREMENT.
3.1. Leased Premises. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Premises as shown on the plan attached hereto
as Schedule A, together with the right to use, in common with others, the Common
Area. The rental area of the Premises ("Rental Area") has been computed in
accordance with the applicable formula set forth in Schedule X attached hereto
and made a part hereof.
Landlord covenants that as of the date hereof it has good and marketable
title to the Premises in fee simple subject to no leases, subleases, tenancies,
agreements, encumbrances, liens except for matters of public record or defects
in title. Landlord further covenants that there are no restrictive covenants
which will prevent Tenant from conducting the Permitted Use in the Premises.
3.2. Measurement. Within sixty (60) days following completion of the
Tenant Improvements, either Landlord or Tenant shall have the right to remeasure
the Premises in accordance with the above formula and if such measurement shall
disclose that the Rental Area of the Premises is different from that set forth
in Section 1.A. hereof, the Annual Basic Rent and the Tenant's Fractional Share
shall be adjusted accordingly. If neither party elects to remeasure the Premises
during such sixty (60) day period, then the Rental Area set forth in Section
1.A. shall be conclusively deemed the Rental Area of the Premises.
3.3. Right of First Offer. Landlord and Tenant agree that commencing
with the Lease Commencement Date and continuing throughout the Term, Tenant
shall have a right of first offer to lease from Landlord approximately 4,000
square feet of contiguous space in the Building, which can be leased in
increments consisting of 2,000 square feet each, as identified on Schedule A
(the "Expansion Premises") on the same terms as contained in this Lease for the
Premises, except that the Annual Basic Rent for the Expansion Premises shall be
at the Prevailing Market Rate for such space, which is defined as the current
market rental rate for the Expansion Premises, as determined by Landlord, but
not more
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than the rate at which Landlord would offer such space to any third party.
Tenant agrees to accept the Expansion Premises in their as-is condition
as of the date of delivery of the Expansion Premises by Landlord to Tenant and
further acknowledges that Landlord is not obligated to provide any improvements
whatsoever to the Expansion Premises.
Tenant shall exercise its right of first offer by written notice to
Landlord within fifteen (15) days following receipt of written notice from
Landlord that the Expansion Premises is available for lease and the Prevailing
Market Rate for the Expansion Premises. In the event that Tenant exercises the
right granted herein, Landlord and Tenant shall enter into an amendment to this
Lease to incorporate the Expansion Premises and to make necessary adjustments to
the Annual Basic Rent and similarly affected provisions of this Lease. In the
event Tenant declines to exercise its right as above provided for, or fails to
deliver notice thereof within the time period stipulated above, or fails to
execute the requisite amendment to this Lease, this right of first offer shall
lapse and be of no further force and effect as to the instant offer, and
Landlord, for a period of six (6) months from the date of its written notice to
Tenant, shall have the right to lease the Expansion Premises to any third party
without again offering same to Tenant provided that the Annual Basic Rent under
any third-party lease shall be equal to at least ninety-five percent (95%) of
the Prevailing Market Rate. Tenant's right of first offer shall be reinstated as
to any subsequent leasing of the Expansion Premises, excluding renewal or
extension of an existing lease.
The foregoing right of first offer shall not be severed from this Lease
or separately sold, assigned or transferred and shall be subject to the
following additional conditions, namely: (a) that the lease term for any
additional space shall run concurrently with this Lease; (b) that the rental for
the Expansion Premises shall be at the Prevailing Market Rate; (c) that there
shall be no abatement of rent; (d) that, unless otherwise set forth in this
Section, Landlord shall not be obligated to construct, pay for or grant an
allowance with respect to tenant improvements; (d) that, at the time that Tenant
exercises this right of first offer for the Expansion Premises, Tenant shall not
be in default of any term, covenant or obligation of this Lease; (e) that, at
the time Tenant exercises this right of first offer, Tenant shall be in
occupancy and possession of the Premises; and (f) that Landlord and Tenant shall
enter into an amendment to this Lease to incorporate the Expansion Premises and
make corresponding modifications to the provisions of this Lease regarding
Annual Basic Rent and Base Operating Costs.
4. TERM AND COMMENCEMENT OF TERM.
4.1. Term. The term of this Lease (the "Term") shall commence on the
Lease Commencement Date; provided, however, that if the Premises are not Ready
for Occupancy as of such Lease Commencement Date for any reason, except for
delays caused by Tenant, then the Lease Commencement Date shall be delayed until
the earlier of:
a. the date on which Tenant shall take possession of all or any
portion of the Premises, provided that such possession shall be only with the
written approval of Landlord; or
b. the date the Premises are Ready for Occupancy;
and, if necessary, the Termination Date shall be adjusted to effect the total
number of years in the Term, as set forth in subsection 1.D. plus the part of
the month, if any, from the adjusted Lease Commencement Date to the first full
month of the Term.
In the event the Premises are not Ready for Occupancy by the Lease
Commencement Date, as initially set forth above, because of a delay caused by
Tenant, then said Lease Commencement Date shall
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not be delayed and Tenant's obligations shall commence as of said date,
notwithstanding the status of construction.
The Term shall be for the period of time specified in Section 1.D.(1)
plus the part of the month, if any, from the Lease Commencement Date to the
first day of the first full calendar month in the Term, unless earlier
terminated pursuant to any other provision of this Lease or pursuant to law. At
Landlord's request, Tenant shall promptly enter into one or more supplementary
written agreements, in such form as Landlord shall reasonably prescribe,
specifying the Lease Commencement Date and the Termination Date.
Landlord acknowledges that if the Premises is not Ready for Occupancy on
the Lease Commencement Date then Tenant may be liable for holdover rent at its
current location. If the Premises is not Ready for Occupancy, subject to Section
24 and Tenant is charged holdover rent by its current landlord, Landlord shall,
upon sufficient written documentation provided by Tenant, extend the Term of
this Lease by a number of days representing the amount of rent determined by
dividing the total holdover damages actually paid by Tenant by the daily
calculation of the Annual Basic Rent payable by Tenant hereunder for the tenth
rental year. Landlord agrees that Tenant shall not be liable for the payment of
Annual Basic Rent or Tenant's Share of Operating Costs during the extended
period. In no event shall the Lease Term be extended for a period exceeding
thirty (30) days.
4.2. Ready For Occupancy. For purposes hereof, the Premises shall be
deemed conclusively ready for occupancy ("Ready for Occupancy") upon the
completion of the following conditions:
a. Landlord has substantially completed its work on the Tenant's
Improvements except for punch list items; and
b. Landlord shall have received any governmental approvals which
are necessary in order for Tenant to occupy the Premises, unless Tenant's acts
or omissions have caused such approvals to be denied, in which case Tenant shall
be deemed to have waived this condition 4.2.b.
Notwithstanding the foregoing, upon Tenant's receipt of Landlord's prior
approval, Tenant will be permitted to enter the Premises prior to the Lease
Commencement Date for the purpose of installing its furniture, fixtures and
other equipment and for completing any improvements not to be performed by
Landlord, provided Tenant's activities do not interfere with Landlord's
construction work. During the period that Tenant is completing its work, Tenant
shall perform all its covenants and obligations contained in this Lease
including, without limitation, those obligations relating to insurance and
indemnification, except for the obligation to pay Rent, which shall begin on the
Lease Commencement Date.
5. TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES.
5.1. Tenant Improvements. Prior to the Lease Commencement Date, Landlord
shall make improvements to the Premises ("Tenant Improvements") in accordance
with Plans and Specifications to be prepared by Landlord and approved in writing
by Tenant, which approval shall not be unreasonably withheld. Once the Plans and
Specifications are acceptable to both parties, it is agreed that same shall be
attached hereto and become a part of this Lease, being identified as Schedule B.
All materials shall be building-standard materials unless otherwise specified in
Schedule B. Except as otherwise specifically provided in this Lease, Landlord
shall not be responsible for performing or paying for the moving or installation
of telephone and computer systems, wiring or cabling, or the acquisition, moving
or installation of Tenant's furnishings, fixtures and equipment in the Premises.
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Any other initial improvements to the Premises not shown on the Plans
and Specifications are subject to Landlord's prior written approval and such
improvements shall be performed by Landlord, and the cost thereof shall be paid
by Tenant to Landlord within thirty (30) days following receipt of an invoice
for same from Landlord. Any amounts payable by Tenant hereunder shall include
Landlord's standard construction management fee computed on the total cost of
construction, including but not limited to the cost of developing, preparing and
modifying construction drawings.
5.2 Tenant Allowance. Landlord and Tenant acknowledge that the Annual
Basic Rent stated in Section 1.B.1. does not include the amortization of the
Tenant Allowance. Landlord agrees to bear the up-front cost of the Tenant
Improvements in an amount not to exceed Fifteen Dollars and No Cents ($15.00)
per rentable square foot ("Tenant Allowance"). Landlord and Tenant agree that
upon completion of the Tenant Improvements, the actual Tenant Allowance shall be
amortized and incorporated into the Annual Basic Rent with interest thereon at a
rate of eleven percent (11%) per annum, calculated on a straight-line basis over
the Term of the Lease. In addition, the parties agree to execute an amendment to
the Lease setting forth said adjusted Annual Basic Rent.
Tenant covenants and agrees to pay to Landlord all costs and expenses
incurred by Landlord in performing the Tenant Improvements in excess of the
Tenant Allowance. Landlord and Tenant agree that upon completion of the Tenant
Improvements, any costs and expenses in excess of the Tenant Allowance shall be
either be (i) paid by Tenant to Landlord in lump sum within thirty (30) days of
receipt of an invoice from Landlord; or, at Tenant's option (ii) amortized as
stated above and incorporated into the Annual Basic Rent via the amendment as
mentioned above.
5.3. Acceptance of Premises. Prior to occupancy, Landlord and Tenant
shall conduct a joint inspection of the Premises during which they shall develop
a mutually agreeable punchlist of items to be completed by Landlord. Tenant's
occupancy of the Premises shall be deemed to constitute acceptance of the
Premises and acknowledgment by Tenant that Landlord has fully complied with its
obligations hereunder to construct and deliver the Premises to Tenant, except
for the punchlist items and latent defects, which shall be completed by Landlord
within a reasonable time thereafter. Landlord shall have the right to enter the
Premises to complete or repair any such punchlist items and entry by Landlord,
its agents, employees or contractors for such purpose shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent or relieve Tenant of any of its obligations
under this Lease, or impose any liability upon Landlord or its agents, employees
or contractors, provided, that Landlord shall notify Tenant in advance of its
entry and to minimize interference with the operation of Tenant's business.
6. RENT.
6.1. Annual Basic Rent. Tenant shall pay to Landlord during each Rental
Year of the Term fixed rent equal to the Annual Basic Rent as set forth in
Section 1.B.(1). Annual Basic Rent shall be payable in advance on the first day
of each month of the Term in equal monthly installments, without notice, demand,
abatement, deduction or set-off (except as otherwise specifically provided in
this Lease). If the Term of this Lease shall commence on a day other than the
first day of a month, the first payment shall include any prorated Annual Basic
Rent for the period from the Lease Commencement Date to the first day of the
first full calendar month of the Term.
"Rental Year" shall mean each successive twelve (12) calendar month
period occurring during the Term of this Lease, or portion of such a period,
with the first Rental Year commencing as of the Lease Commencement Date and
ending on the last day of the twelfth full calendar month thereafter and the
last
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Rental Year ending on the Termination Date. For any Rental Year of less or
more than twelve full months, Annual Basic Rent shall be adjusted accordingly.
All Annual Basic Rent and Additional Rent shall be paid to Landlord at the
Landlord Payment Address.
6.2. Intentionally Omitted.
6.3. Additional Rent. Tenant shall pay to Landlord as additional rent
("Additional Rent") all other sums of money which shall become due and payable
hereunder. Unless a date for payment is otherwise specified herein, all
Additional Rent shall be due and payable within thirty (30) days of invoicing by
Landlord.
6.4 Advance Rent; Security Deposit.
A. Advance Rent. Intentionally Deleted.
B. Security Deposit. Tenant shall deposit with Landlord the
Security Deposit in accordance with Section 6.6. below, to assure Tenant's
performance of all terms, provisions and conditions of this Lease. Landlord
shall have the right, but not the obligation, at any time, to apply the Security
Deposit to cure any breach by Tenant under this Lease and, in that event, Tenant
shall immediately pay Landlord any amount necessary to restore the Security
Deposit to its original amount. To the extent permitted by law, Landlord shall
be entitled to the full use of the Security Deposit and shall not be required
either to keep the Security Deposit in a separate account or to pay interest on
account thereof. Any portion of the Security Deposit which is not utilized by
Landlord for any purpose permitted under this Lease shall be returned to Tenant
within sixty (60) days after the end of the Term provided Tenant has performed
all of the obligations imposed upon Tenant pursuant to this Lease.
6.5. Late Charge. If Tenant fails to make any payment of Annual Basic
Rent, Additional Rent, or other sums required to be paid hereunder within seven
(7) days following notice that such payment is due, Tenant shall pay to
Landlord, as Additional Rent, a late charge to cover extra administrative costs
and loss of use of funds equal to (a) six percent (6%) of the amount due for the
first month or portion thereof that such amount is past due plus (b) interest on
the amount remaining unpaid thereafter at the rate of eighteen percent (18%) per
annum or six percent (6%) above the prime rate charged by Citibank, N.A., as of
the due date of such amount, whichever rate is the greater; provided, however,
that should such late charge at any time violate any applicable law, the late
charge shall be reduced to the highest rate permitted by law (the foregoing rate
being herein referred to as the "Default Rate"). Landlord's acceptance of any
rent after it has become due and payable shall not excuse any delays with
respect to future rental payments or constitute a waiver of any of Landlord's
rights under this Lease. Notwithstanding the foregoing, if Landlord and Tenant
are disputing the actual amount of an item of Additional Rent payable by Tenant,
then a Late Charge shall not be applied to such disputed amount provided Tenant
pays the portion that is not in dispute within the foregoing seven (7) day
notice period.
6.6. Letter of Credit. Tenant shall deliver to Landlord an unconditional
and irrevocable letter of credit ("Letter of Credit") from an area banking
institution approved by Landlord which shall be in the total cumulative amount
of Four Hundred Thousand Dollars and No Cents ($400,000.00). Tenant may provide
same in increments by either amendment to or replacement of the original Letter
of Credit:
Upon Tenant's execution of this Lease $100,000.00
May 15, 2000 $100,000.00
June 15, 2000 $100,000.00
July 1, 2000 $100,000.00
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Total $400,000.00
Said Letter of Credit shall be held by Landlord as security for the
performance by Tenant of all the covenants and obligations of Tenant set forth
in this Lease and may be reduced by twenty percent (20%) on each anniversary of
the Lease Commencement Date until such amount is equal to one (1) month of the
then current monthly installment of Annual Basic Rent which shall be held by
Landlord as a "Security Deposit" in accordance with Section 6.4.
Said Letter of Credit shall contain terms whereby it can be drawn on by
Landlord at sight on any date during its term on which issuer shall receive from
Landlord a certification signed by Landlord stating that an Event of Default has
occurred by Tenant under this Lease. Landlord shall have the right to apply any
amounts so drawn against all amounts then due and owing by Tenant hereunder
and/or against sums expended by Landlord to cure existing defaults by Tenant.
Any balance left of the sum received from drawing on the Letter of Credit, after
the curing of defaults and/or the payment of amounts due by Tenant, shall be
held by Landlord, without interest, as a cash security deposit. In the event
Landlord shall draw on any Letter of Credit provided by Tenant, Tenant shall
replace same at the then current face value amount required hereunder no later
than thirty (30) days after the date of such drawing, and if same is not
replaced it shall constitute an Event of Default under the terms of the Lease
and Landlord shall have the benefit of all remedies permitted pursuant to the
terms of the Lease and the laws of the State where the Premises are located.
Tenant acknowledges and agrees that it shall keep the Letter of Credit
in full force and effect as required hereunder and for thirty (30) days
following the end thereof. In the event the term of the Letter of Credit must be
renewed annually, then not more than forty-five (45) days prior to any
expiration date of the Letter of Credit, Tenant shall provide Landlord with a
replacement Letter of Credit. Should Tenant fail to provide Landlord with a
replacement Letter of Credit on or before the expiration date of the Letter of
Credit, Landlord shall have the right to draw on the entire amount of said
Letter of Credit and hold it, without interest, for the benefit of Landlord as
security for the faithful performance of the Lease until the Letter of Credit is
replaced or thirty (30) days following expiration of the Lease Term. If the
Letter of Credit is not replaced, the amount drawn by Landlord shall be returned
to Tenant, less all costs incurred by Landlord in curing or satisfying any
default by Tenant, within a reasonable time after the Termination Date of the
Lease.
7. OPERATING COST ESCALATIONS.
7.1. Definitions. For purposes of this Lease, the following definitions
shall apply:
a. "Operating Year" means each respective calendar year or part
thereof during the Term of this Lease or any renewal thereof, or at the option
of Landlord, any other twelve month period or part thereof designated by
Landlord during the Term of this Lease or any renewal thereof.
b. "Property" means the Building, the land upon which the
Building is situated, the Common Area, and such additional facilities in
subsequent years as may be determined by Landlord to be reasonably necessary or
desirable for the management, maintenance or operation of the Building.
c. "Operating Costs" means all expenses and costs (but not
specific costs which are allocated or separately billed to and paid by specific
tenants) of every kind and nature (which shall be commercially reasonable to the
extent Landlord has control over such costs) which Landlord shall pay or become
obligated to pay because of or in connection with owning, operating, managing,
painting, repairing, insuring and cleaning the Property, including, but not
limited to, the following:
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(i) cost of all supplies and materials used, and labor charges incurred, in the
operation, maintenance, decoration, repairing and cleaning of the Property;
(ii) cost of all equipment purchased or rented which is utilized in the
performance of Landlord's obligations hereunder, and the cost of maintenance and
operation of any such equipment;
(iii) cost of all maintenance and service agreements for the Property and the
equipment therein, including, without limitation, alarm service, security
service, window cleaning, and elevator maintenance;
(iv) accounting costs, including the cost of audits by certified public
accountants, outside legal and engineering fees and expenses incurred in
connection with the operation and management of the Property;
(v) wages, salaries and related expenses including the costs of all on-site and
off-site agents or employees engaged in the operation, maintenance, security and
management of the Property; provided, however, the wages, salaries and related
expenses of any agents or employees not exclusively engaged in the operation,
maintenance, security and management of the Property shall be apportioned as
deemed appropriate by Landlord;
(vi) cost of repairs, replacements and general maintenance to the Property,
including without limitation the mechanical and electrical systems (excluding
heating, ventilating and air conditioning equipment and alterations attributable
solely to tenants, capital improvements unless they are included under c(xi),
and repairs and general maintenance paid by proceeds of insurance or by tenants
or other third parties);
(vii) any and all Common Area maintenance, repair or redecoration (including
repainting) and exterior and interior landscaping;
(viii) cost of removal of trash, rubbish, garbage and other refuse from the
Property as well as removal of ice and snow from the sidewalks on or adjacent to
the Property;
(ix) all charges for electricity, gas, water, sewerage service, heating,
ventilation and air-conditioning and other utilities furnished to the Common
Area of the Property (including legal, architectural and engineering fees
incurred in connection therewith);
(x) amortization of capital improvements made to the Building, excluding roof or
structural repairs or replacements, after the year of substantial completion of
the Building, which improvements were undertaken by Landlord with the reasonable
expectation that the same would result in more efficient operation of the
Building or are made by Landlord pursuant to any governmental law, regulation or
action not applicable to the Building at commencement of construction of the
Building; provided that the cost of each such capital improvement, together with
any financing charges incurred in connection therewith, shall be amortized over
the useful life thereof and only that portion attributable to each Operating
Year shall be included herein for such Operating Year;
(xi) a management fee for the operation and management of the Property which is
currently three and a half percent (3.5%) of gross revenues from the Property.
Landlord warrants and represents that such management fee shall not exceed the
commercially reasonable fee charged by landlords of comparable office buildings
in the Business Community;
(xii) costs and expenses incurred in order to comply with covenants and
conditions contained in liens, encumbrances and other matters of public record
affecting the Property; and
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(xiii) cost of all insurance coverage for the Property from time to time
maintained by Landlord, including but not limited to the costs of premiums for
insurance with respect to personal injury, bodily injury, including death,
property damage, business interruption, workmen's compensation insurance
covering personnel and such other insurance as Landlord shall deem reasonably
necessary, which insurance Landlord may maintain under policies covering other
properties owned by Landlord in which event the premium shall be reasonably
allocated;
(xiv) all real estate taxes, assessments (special or otherwise), levies, ad
valorem charges, benefit charges, water and sewer rents, rates and charges,
privilege permits and any other governmental liens, impositions or charges of a
similar or dissimilar nature, and any payments in lieu of such charges,
regardless of whether any such items shall be extraordinary or ordinary, general
or special, foreseen or unforeseen, levied, assessed, or imposed on or with
respect to all or any part of the Property or upon the rent due and payable
hereunder by any governmental authority (all of the aforesaid being hereinafter
referred to as "Taxes"); provided, however, that if at any time during the Term
or any extension thereof the method of taxation prevailing at the commencement
of the Term shall be altered or eliminated so as to cause the whole or any part
of the above items which would otherwise be included in Taxes to be replaced by
a levy, assessment or imposition, which is (A) a tax assessment, levy,
imposition or charge based on the rents received from the Property whether or
not wholly or partially a capital levy or otherwise, or (B) a tax, assessment,
levy, imposition or charge measured by or based in whole or in part upon all or
any portion of the Property and imposed on Landlord, or (C) a license fee
measured by the rent payable by Tenant to Landlord, or (D) any other tax, levy,
imposition, charge or license fee, however described or imposed, then such levy,
assessment or imposition shall be included in Taxes; provided, however, in no
event shall Tenant be required to pay any inheritance, estate, succession,
income, profits or franchise taxes unless they are in lieu of or in substitution
for any of the above items which would otherwise be included in Taxes.
Any of the foregoing costs which under generally accepted accounting
principles would be considered capital expenditures shall be amortized in
accordance with generally accepted accounting principles.
Notwithstanding the above, Operating Costs shall not include:
(a) payments of principal, interest, points and fees on any mortgages,
deeds of trust or other financing instruments relating to the financing of the
Property;
(b) leasing commissions or brokerage fees;
(c) costs associated with preparing; improving or altering space for any
leasing or releasing of any space within the Building;
(d) any increase in real estate taxes based on a re-assessment of the
Property resulting from the sale of the Property;
(e) any ground lease rental;
(f) costs of capital improvements and equipment, except for those (i)
required by laws enacted on or after the date the temporary certificate of
occupancy issued for the Building shall be validly issued (amortized over the
useful life of the improvement and/or equipment), together with interest at the
actual interest rate incurred by Landlord in connection with such capital
improvements, (ii) acquired to reduce Operating
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Expenses (amortized over the useful life of the improvement to equal the amount
of Operating Expenses to be saved in each calendar year throughout the Term (as
determined at the time Landlord elected to proceed with the capital improvement
or acquisition of the capital equipment to reduce Operating Expenses), together
with interest at the actual interest rate incurred by Landlord;
(g) rentals for items (except when needed in connection with normal
repairs and maintenance of permanent systems) which if purchased, rather than
rented, would constitute a capital improvement which is specifically excluded in
Subsection (f) above (excluding, however, equipment not affixed to the Building
which is used in providing janitorial or similar services);
(h) costs incurred by Landlord for the repair of damage to the Building,
except for the amount of Landlord's insurance deductible;
(i) costs, including permit, license and inspection costs, incurred with
respect to the installation of tenant improvements in the Building or incurred
in renovating or otherwise improving, decorating, painting or redecorating
vacant leasable space for tenants or other occupants of leasable premises in the
Building;
(j) depreciation, amortization and interest payments, except as provided
herein and except on materials, tools, supplies and vendor-type equipment
purchased by Landlord to enable Landlord to supply services Landlord might
otherwise contract for with a third party where such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party's services, all as determined in accordance with generally accepted
accounting principles, consistently applied, and when depreciation or
amortization is permitted or required, the item shall be amortized over its
reasonably anticipated useful life;
(k) marketing costs, including leasing commissions, attorney's fees in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with lease, sublease and/or assignment
negotiations and transaction with present or prospective tenants or other
occupants of the Building;
(l) costs incurred by Landlord for alterations which are considered
capital improvements, and replacements under generally accepted accounting
principles, consistently applied, except as permitted in (f) and (g) above;
(m) costs of a capital nature, including without limitation, capital
improvements, capital repairs, capital equipment and capital tools, all as
determined in accordance with generally accepted accounting principles,
consistently applied, excepted as permitted in (f) and (g) above;
(n) costs incurred by Landlord due to a violation by any other tenant of
the terms and conditions of any lease;
(o) any amounts paid by Landlord for, materials, labor or equipment
shall be limited to the amounts which would have been paid for the aforesaid,
based upon their procurement from an unaffiliated party in an arms length
transaction;
(p) Landlord's general corporate overhead and corporate general and
administrative expenses, to the extent such overhead and expenses exceeds the
management fee;
(q) any compensation paid to clerks, attendants or other persons,
rendering services on behalf of Landlord in commercial concessions operated by
Landlord, or any compensation paid to attendants working in a parking garage in
the Building or any other parking facility operated by Landlord;
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(r) except for making repairs or keeping permanent systems in operation
while repairs are being made, rentals and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment ordinarily
considered to be of a capital nature, except equipment not affixed to the
Building which is used in providing janitorial or similar services;
(s) All items and services for which Tenant or any other tenant in the
Building reimburses Landlord (other than through Tenant's Percentage Share of
Operating Expenses), or which Landlord provides selectively to one or more
tenants (other than Tenant) without reimbursement;
(t) Advertising of a non-employment nature and promotional expenditures,
and procurement costs of signs in or on the Building identifying the owner of
the Building;
(u) Electric power costs for which any tenant directly contracts with
the local public service company;
(v) Tax penalties incurred as a result of Landlord's negligence,
inability or unwillingness to make payments when due;
(w) Costs arising from the negligence or fault of Landlord or its
agents, or any vendors, contractors, or providers of materials or services
selected, hired or engaged by Landlord or its agents including, without
limitation, the selection of building materials;
(x) Costs incurred in curing a violation of environmental laws regarding
the storage, use or disposal of hazardous materials or substances (as defined by
applicable laws) in effect in or about the Building or Property including,
without limitation, hazardous substances in the ground water or soil, unless
such violation of environmental laws are caused by Tenant;
(y) Costs arising from Landlord's charitable or political contributions;
(z) Costs arising from latent defects in the base, shell or core of the
Building;
(aa) Costs for procuring sculpture, paintings or other objects of art;
(bb) attorney fees, costs, and disbursements (including settlements) and
other expenses incurred in connection with proposals, negotiations, or disputes
with other tenants or occupants or prospective tenants or other occupants, or
associated with the enforcement of any leases or the defense of Landlord's title
to or interest in the Premises, the Building or its appurtenances, or any part
thereof.
(cc) any costs incurred by Landlord in the repair, maintenance
or replacement of the Property and its associated systems to the extent the same
are covered by any warranty(ies) provided and/or made by any manufacturer,
contractor, and/or supplier with respect to the construction of the Property
and/or installations of its associated systems.
Landlord further agrees that since one of the purposes of Operating
Expenses and the Increase in Operating Costs provision is to allow the Landlord
to require the Tenant to pay for the costs attributable to its Premises,
Landlord agrees that (i) Landlord will not collect or be entitled to collect
Operating Costs from all of its tenants in an amount which is in excess of 100%
of the Operating Costs actually paid by Landlord in connection with the
operation of the Building.
For any Operating Year during which less than ninety-five percent (95%)
of the Rental Area of
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the Building is occupied, the calculation of that portion of Operating Costs
which vary with occupancy shall be adjusted to equal the Operating Costs which
Landlord projects would have been incurred had the Building been ninety-five
percent occupied during such Operating Year.
d. "Fractional Share" shall mean a fraction, the numerator of
which is the Rental Area of the Premises and the denominator of which is the
total Rental Area of the Building. For the purposes of this subparagraph, the
Rental Area of the Building shall mean the sum of the Rental Area of all floors
of the Building as determined by Landlord.
7.2. Payment of Operating Costs. For each Operating Year, Tenant shall
pay to Landlord, in the manner provided herein, Tenant's share of Operating
Costs which shall be computed by multiplying the Operating Costs for the
Operating Year by Tenant's Fractional Share ("Tenant's Share of Operating
Costs"); provided, however, that for the Operating Years during which the Term
begins and ends, Tenant's Share of Operating Costs shall be prorated based upon
the actual number of days Tenant occupied, or could have occupied, the Premises
during each such Operating Year.
Tenant's Share of Operating Costs shall be paid, in advance, without
notice, demand, abatement (except as otherwise specifically provided in this
Lease), deduction or set-off, on the first day of each calendar month during the
Term, said monthly amounts to be determined on the basis of estimates prepared
by Landlord on an annual basis and delivered to Tenant prior to the commencement
of each Operating Year. If, however, Landlord fails to furnish any such estimate
prior to the commencement of an Operating Year, then (a) until the first day of
the month following the month in which such estimate is furnished to Tenant,
Tenant shall pay to Landlord on the first day of each month an amount equal to
the monthly sum payable by Tenant to Landlord under this subsection 7.2 in
respect of the last month of the preceding Operating Year; (b) promptly after
such estimate is furnished to Tenant, Landlord shall give notice to Tenant
whether the installments of Tenant's Share of Operating Costs paid by Tenant for
the current Operating Year have resulted in a deficiency or overpayment compared
to payments which would have been paid under such estimate, and Tenant, within
thirty (30) days after receipt of such estimate, shall pay any deficiency to
Landlord and any overpayment shall be credited against future payments required
by Tenant under such estimate; and (c) on the first day of the month following
the month in which such estimate is furnished to Tenant and monthly thereafter
throughout the remainder of the Operating Year, Tenant shall pay to Landlord the
monthly payment shown on such estimate. Landlord may at any time or from time to
time furnish to Tenant a revised estimate of Tenant's Share of Operating Costs
for such Operating Year, and in such case, Tenant's monthly payments shall be
adjusted and paid or credited, as the case may be, substantially in the same
manner as provided in the preceding sentence.
After the end of each Operating Year, Landlord shall determine actual
Operating Costs for such Operating Year and shall provide to Tenant an
"Operating Costs Statement" setting forth the actual Tenant's Share of Operating
Costs for such Operating Year. Within thirty (30) days after delivery of the
Operating Costs Statement, Tenant shall pay Landlord any deficiency between the
amount shown as Tenant's Share of Operating Costs in the Operating Costs
Statement and the total of the estimated payments made by Tenant during the
Operating Year. In the event of overpayment, such amount shall be credited
against future payments required on account of Tenant's Share of Operating
Costs, or if the Term has expired, Landlord shall refund to Tenant the amount of
any overpayment within thirty (30) days.
Each Operating Costs Statement provided by Landlord shall be conclusive
and binding upon Tenant unless within nine (9) months after receipt thereof,
Tenant notifies Landlord that it disputes the correctness thereof, specifying
those respects in which it claims the Operating Costs Statement to be incorrect.
Unless resolved by the parties, such dispute shall be determined by arbitration
in accordance with the then prevailing rules of the American Arbitration
Association. If the arbitration proceedings
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result in a determination that the Operating Costs Statement contained an
aggregate discrepancy of less than three percent (3%), Tenant shall bear all
costs in connection with such arbitration. Pending determination of the dispute,
Tenant shall pay any amounts due from Tenant in accordance with the Operating
Costs Statement, but such payment shall be without prejudice to Tenant's claims.
Tenant, for a period of nine (9) months after delivery of the Operating Costs
Statement in each Operating Year and upon at least ten (10) days written notice
to Landlord, shall have reasonable access during normal business hours to the
books and records of Landlord relating to Operating Costs for the purpose of
verifying the Operating Costs Statement, Tenant to bear all costs relating to
such inspection. Tenant shall reimburse Landlord for any cost for photocopying
that it desires.
8. USE, CARE AND REPAIR OF PREMISES BY TENANT.
8.1. Permitted Uses. Tenant shall use and occupy the Premises solely for
general office and warehouse purposes in accordance with applicable zoning
regulations and for no other purpose. Tenant shall not do anything or permit
anything to be done in or on the Premises, or bring or keep anything therein
which will, in any way, obstruct, injure, annoy or interfere with the rights of
Landlord or other tenants, or subject Landlord to any liability for injury to
persons or damage to property, or interfere with the good order of the Building,
or conflict with the laws, rules or regulations of any Federal, state or city
authority.
8.2. Care of Premises. Tenant shall, at its sole expense, keep the
non-structural, interior portion of the Premises and the improvements and
appurtenances therein in good order and in a safe, clean and sanitary condition,
and at the expiration of the Term, or at the sooner termination of this Lease as
herein provided, deliver up the same broom clean and in as good order and
condition as at the beginning of the Term, ordinary wear and tear, alterations,
and damage by fire or other casualty excepted. Tenant, at its sole expense,
shall provide or cause to be provided janitorial service to the Premises, shall
dispose of all trash and rubbish in an appropriate manner, and shall promptly
replace damaged or broken doors and glass in and about the interior of the
Premises and shall be responsible for the repair and maintenance of all
improvements installed and placed within the Premises including sinks and
special plumbing, special light fixtures and special cabinetry and all Building
Service Equipment. "Building Service Equipment" shall mean all equipment needed
to operate or related to the Premises in an efficient and comfortable manner,
including, but not limited to, electrical, plumbing, heating, air-conditioning,
security, and sprinkler and fire protection equipment, pipes, separate water
meters, wires, ducts, fixtures and appliances installed for Tenant, and
sprinkler monitoring equipment. Consistent with the provisions of Section 22,
Tenant shall pay for all damage to the Property and any fixtures and
appurtenances related thereto, as well as for all property damage sustained by
other tenants or occupants of the Building, due to any waste, misuse or neglect
of the Premises and any fixtures and appurtenances related thereto or due to any
breach of this Lease by Tenant, its employees, agents, or representatives.
Tenant shall, at its sole expense throughout the term, carry and
maintain a full parts and labor maintenance service contract from a qualified
service company, approved in advance by Landlord, covering the heating,
ventilating, and air conditioning systems of the Premises, if any. Tenant shall
maintain all systems in a good condition during the term of this lease and any
renewal term and shall be responsible, at its sole expense, for all necessary
repairs and replacements regardless of whether or not they are covered by the
maintenance contract or which are necessitated by Tenant's failure to carry a
maintenance contract. Tenant shall submit a copy of the proposed maintenance
contract within thirty (30) days prior to the Lease Commencement Date.
Notwithstanding the foregoing, in the event one or more of the heating,
ventilating, and air conditioning units serving the Premises require replacement
at anytime during the Term, Tenant shall
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notify Landlord in writing and submit plans and specifications to Landlord in
accordance with Section 15.1. for replacement unit(s) of similiar quality to the
existing units. Upon termination of the Lease, Landlord shall pay to Tenant the
unamortized portion of the total cost of the replacement unless said replacement
is covered by Tenant's insurance.
8.3. Hazardous Substances. For purposes of this provision, "Hazardous
Substances" shall mean any hazardous or toxic substance, material or waste, now
or hereafter defined or regulated under the Resource Conservation and Recovery
Act (42 U.S.C. _ 6901 et seq.), the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. _ 9601 et seq.), the Clean Water Act
(33 U.S.C. _ 1251 et seq.), the Clean Air Act (42 U.S.C. _ 7401 et seq.), and
the Toxic Substances Control Act (15 U.S.C. _ 2601 et seq.), and all similar
federal, state and local statutes, laws, rules and regulations in connection
with environmental conditions, health and safety, including without limitation,
asbestos and petroleum products (collectively, "Environmental Laws"). Tenant
covenants and agrees that it will not use or allow the Premises to be used for
the storage, use, treatment or disposal of any Hazardous Substance, without
Landlord's prior written consent. Notwithstanding the foregoing, Landlord's
prior written consent shall not be required with respect to Tenant's use,
storage or sale of certain supplies or products, which might contain or might be
considered a Hazardous Substance, in the normal course of Tenant's business in
accordance with the specific use permitted by this Lease, provided, however,
that Tenant shall (i) comply with all other provisions of this Section; (ii)
notify Landlord in writing from time to time of the identity and approximate
quantity of such Hazardous Substance; and (iii) keep each such Hazardous
Substance on the Premises in quantities as small as reasonably practicable, but
in no event large enough to activate reporting requirements under any
Environmental Law. Tenant, at Tenant's sole cost and expense shall promptly
contain and remediate any release of a Hazardous Substance on the Property to
the extent such release arises directly from the actions of Tenant, its agents,
servants and employees.
Tenant shall indemnify, reimburse and hold harmless Landlord, its
partners and affiliates agents from and against any damages, claims, judgments,
fines, penalties, costs, liabilities (including sums paid in settlement of
claims) or loss including reasonable attorneys' fees, reasonable consultants'
fees, and reasonable expert fees incurred by any of them to the extent resulting
from Tenant's use, handling, generation, treatment, storage, disposal, other
management or release of any Hazardous Substance at or from the Premises or the
Property, whether or not Tenant has acted negligently with respect to such
Hazardous Substance. This indemnity shall survive the expiration or earlier
termination of this Lease.
Landlord warrants and represents to Tenant that to Landlord's actual
knowledge, there are no Hazardous Substances in violation of any Environmental
Laws in the Property of which the Premises are a part.
Landlord will not use or allow the Property to be used for the storage,
use, treatment or disposal of any Hazardous Substance, in violation of any
Environmental Laws. Landlord shall promptly contain and remediate any release of
a Hazardous Substance on the Property to the extent such release arises directly
from the actions of Landlord, its agents, servants and employees, and not solely
from Landlord's position as an owner or operator of the Property.
Landlord shall indemnify, reimburse and hold harmless and defend Tenant,
its servants and employees, from and against all claims, actions, losses and
expenses made or incurred by third parties (including attorneys' and other
professional fees), arising from any conduct, activity, act, omission, or
operation involving the use, handling, generation, treatment, storage, disposal,
or release of any Hazardous Substance in, from, or to the Property, to the
extent caused directly by the actions of Landlord, its servants and employees,
and not arising solely out of Landlord's position as an owner or operator of
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the Property. This indemnity shall survive the expiration or earlier termination
of this Lease.
9. RULES AND REGULATIONS, PROTECTIVE COVENANTS.
9.1. Rules and Regulations. Tenant and its agents and invitees shall
abide by and observe the rules and regulations attached hereto as Schedule C for
the operation and maintenance of the Building or any new reasonable rules and
regulations which may from time to time be issued by Landlord ("Rules and
Regulations"), provided that any new rules or regulations are not inconsistent
with the provisions of this Lease. Nothing in this Lease shall be interpreted to
impose upon Landlord any duty or obligation to enforce any such rules and
regulations against any other tenant in the Building, and Landlord shall not be
liable to Tenant for any violation of these rules and regulations by any other
tenant or its agents or invitees.
9.2. Protective Covenants. Tenant shall comply with, perform and be
bound by the terms, covenants, provisions, and conditions contained in the
Protective Covenants. For the purposes of this Lease, the term "Owner" as used
in the Protective Covenants, shall be deemed to mean Tenant, except for the
purposes of amending the Protective Covenants. In the absence of Landlord's
express written agreement to the contrary, no amendment or revocation of the
Protective Covenants shall serve to reduce or revoke Tenant's obligation to
Landlord to perform and be bound by the Protective Covenants as presently in
force.
Tenant acknowledges that the Protective Covenants require that the owner
and all occupants of the Building submit plans to the Architectural Review
Committee ("ARC") governing the Building Community for review and approval prior
to any change, addition or alteration to the Property or the interior of the
Building which is visible from the exterior. The ARC's authority is created by
the Protective Covenants and is independent of that of the Landlord or property
owner.
10. COMMON AREA.
10.1. Definition of Common Area. As used herein, "Common Area" means
those areas and facilities which may be furnished by Landlord on or near the
Property, as designated by Landlord from time to time, intended for the general
common use and benefit of all tenants of the Building and their agents,
representatives, licensees, employees and invitees, including, without
limitation, any and all stairs, landings, roofs, utility and mechanical rooms
and equipment, service closets, corridors, elevators, lobbies, lavatories and
other public areas of the Building and all parking areas, access roads,
pedestrian walkways, plazas and landscaped areas.
10.2. Use of Common Area. Tenant shall have the non-exclusive right to
use the Common Area in common with Landlord, other tenants in the Building, and
others entitled to the use thereof, subject to such reasonable rules and
regulations governing the use of the Common Area as Landlord may from time to
time prescribe and subject to such easements therein as Landlord may from time
to time grant to others, provided such easements do not materially interfere
with access to the Premises or the operation of Tenant's business. Tenant shall
not obstruct in any way any portion of the Common Area or in any way interfere
with the rights of other persons entitled to use the Common Area and shall not,
without the prior written consent of Landlord, use the Common Area in any
manner, directly or indirectly, for the location or display of any merchandise
or property belonging to Tenant or for the location of signs relating to
Tenant's operations in the Premises. The Common Area shall at all times be
subject to the exclusive control and management of Landlord.
10.3. Alterations to the Common Area. Landlord reserves the right at any
time and from time to
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time (i) to change or alter the location, layout, nature or arrangement of the
Common Area or any portion thereof, and (ii) to construct additional
improvements on the Property and make alterations thereof or additions thereto
and build additional stories on or in any such buildings or build adjoining
same; provided, however, that no such change or alteration shall deprive Tenant
of parking, access to the Premises or unreasonably interfere with the operation
of Tenant's business or reduce the Rental Area of the Premises, unless such
reduction is required by Federal, State or local laws or regulations, in which
event, a reduction in the Premises shall be permitted with a commensurate
reduction in rent, subject to Section 18 of this Lease. Landlord shall have the
right to close temporarily all or any portion of the Common Area to such extent
as may, in the reasonable opinion of Landlord, be necessary to prevent a
dedication thereof to the public, provided that Tenant is not thereby denied
access to the Premises, or for repairs, replacements or maintenance to the
Common Area, provided such repairs, replacements or maintenance are performed
expeditiously and in such a manner as not to deprive Tenant of access to the
Premises or materially interfere with the operation of Tenant's business in the
Premises.
10.4. Maintenance. Landlord covenants to keep, maintain, manage and
operate the Common Area in a manner consistent with the operation of a first
class office building and to keep the sidewalks and driveways, if any,
constituting a portion of the Common Area clean and reasonably clear of snow and
ice. Landlord reserves the right of access to the Common Area through the
Premises for the purposes of operation, decoration, cleaning, maintenance,
safety, security, alterations and repairs.
11. UTILITIES.
11.1. Landlord shall provide water through a utility meter applicable to
the Building. Tenant shall pay Landlord, as Additional Rent, its proportionate
share of the total charges for water and sewage as reasonably determined by
Landlord.
11.2. Landlord may, at its sole option, install separate meters for each
demised area within the Building to measure the consumption of water. In the
event separate meters are installed, Tenant shall pay Landlord, as Additional
Rent, the charges for water that are indicated by the meters applicable to the
Premises and shall pay for the cost of installation and for the repair or
replacement of these separate meters as necessary.
11.3. Landlord shall provide separate meters to measure Tenant's usage
of gas and electricity in the Premises. Tenant shall be solely responsible for
the payment of all metered gas and electric service to the Premises (including,
at Landlord's option, utility for exterior lighting) and shall pay for the cost
of installation, repair and replacement of the separate meters as necessary.
11.4. Landlord shall provide trash removal service for the Premises.
Tenant shall deposit all garbage, trash, rubbish and refuse emanating from the
Premises on a daily basis, in designated receptacles provided by Landlord. The
cost for providing the receptacles and trash removal shall be included in
Landlord's Operating Costs.
11.5. Landlord shall not be liable to Tenant in damages or otherwise (i)
if any utility shall become unavailable from any public utility company, public
authority or any other person or entity (including Landlord) supplying or
distributing such utility, (ii) for any disruption or discontinuance in the
provision of any utility or service resulting from voluntary or compulsory
compliance with rules, regulations, laws and guidelines of governmental
authorities regulating the provision of such utilities and services, or (iii)
for any interruption in any utility service caused by the making of any
necessary repairs or improvements or by any cause beyond Landlord's reasonable
control, and the same shall not constitute a termination of this Lease or an
eviction of Tenant. If any failure to supply services continues
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uninterrupted for a period greater than ten (10) consecutive calendar days and
thereby renders the Premises wholly or partially untenantable, the Annual Basic
Rent shall be abated during such period of untenantability.
12. COMPLIANCE WITH GOVERNMENTAL REGULATIONS.
Tenant shall, at its sole expense, continually comply with all federal,
state, and local laws, codes, ordinances, administrative and court orders and
directives, rules, and regulations applicable to Tenant's use and occupancy of
the Property, as are now or may subsequently be in effect during the Term.
Tenant shall neither conduct nor permit to be conducted on the Property any
business in violation of any county, state or federal law, ordinance or
regulation applicable to the Property. Tenant shall pay directly to the proper
agency all licenses, fees, and charges legally imposed upon the use of the
Property by the Tenant.
Landlord warrants and represents to Tenant that, as of the Lease
Commencement Date, Landlord is in the process of implementing a compliance plan
for the Property, which is intended to comply substantially with the
requirements of The Americans With Disabilities Act of 1990, and Landlord will
proceed to execute such plan throughout the Term, subject to the provisions of
Sections 7 and 15.1 of this Lease.
Subject to the foregoing paragraph, Landlord, at its sole cost and
expense, shall conform to and comply with and shall cause the Property,
excluding the Premises to conform to and comply with all federal, state, county,
municipal and other governmental statues, laws, rules, orders, regulations, and
ordinances applicable to Landlord or resulting from Landlord's use of the
Property, excluding the Premises.
13. LOSS, DAMAGE AND INJURY.
To the maximum extent permitted by law, Tenant shall occupy and use the
Premises, the Building and the Common Area at Tenant's own risk. Consistent with
the provisions of subsection 16.4, Tenant's Personal Property and personal items
of those claiming by, through or under Tenant, located in or on the Premises or
the Building shall be and remain at the sole risk of Tenant or such other
person.
No representation, guaranty, assurance, or warranty is made or given by
Landlord that the communications or security systems, devices or procedures
used, if any, will be effective to prevent injury to Tenant or any other person
or damage to, or loss (by theft or otherwise) of any of Tenant's Personal
Property or of the property of any other person, and Landlord reserves the right
to discontinue or modify at any time such communications or security systems,
devices, or procedures without liability to Tenant.
14. MAINTENANCE AND REPAIRS BY LANDLORD.
14.1. Care and Maintenance. Landlord shall, at Tenant's expense in
accordance with and subject to Section 7, maintain the exterior of the Building
(including exterior door and window glass) and the grounds upon which the
Building is located. This obligation includes, but is not limited to: painting,
cleaning and maintenance of the exterior of the Building, including exterior
windows, the care, cutting and maintenance, including replacement, of all lawns,
plantings and shrubbery; snow removal; the maintenance of any detention or storm
water management pond, irrigation system or preservation areas; the cleaning,
vacuuming, resealing, and restriping of all paved surfaces on the Lot; and the
repair and maintenance of all exterior building-mounted and parking lot
lighting, exterior sewer and water lines, and all Building identification signs.
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14.2. Landlord's Other Repair Obligations. Except as otherwise provided
in this Article, Landlord shall make all other ordinary and necessary repairs to
the structural portions of the Building, the expense of which shall be included
in Operating Costs to the extent permitted in Section 7.
14.3. Damage Caused by Tenant. Anything contained in this Article to the
contrary notwithstanding, Tenant shall be obligated to reimburse Landlord within
thirty (30) days of demand for the cost of any repairs to the Premises, Building
or Property not covered by insurance and necessitated by the negligence of
Tenant, its agents, servants, employees, licensees, or by any contractor engaged
by or on behalf of Tenant. Tenant shall also be obligated to reimburse Landlord
within thirty (30) days of demand for the cost of any repairs of damage to any
paved surface or grounds on the Lot which are caused by the excessive weight of
vehicles owned or operated by Tenant, its agents, servants, employees,
licensees, or guests or by any subcontractor engaged by or on behalf of Tenant.
The cost of these repairs shall be deemed Additional Rent.
14.4. Landlord's Failure to Repair. Anything contained in this Lease to
the contrary notwithstanding, Landlord shall not be obligated to make any
repairs, nor shall it be liable to Tenant or any other person, for any claim or
injury arising out of Landlord's failure to make any repairs under the terms of
this Lease, unless Tenant gives Landlord prompt written notice of the condition
requiring repair upon discovery and Landlord has not made a timely effort to
effect the needed repair, unless the repair is such that Landlord, in its
duties, should be aware of. There shall be no abatement in rents due and payable
hereunder and no liability on the part of Landlord by reason of any
inconvenience or annoyance arising from Landlord's making repairs, additions or
improvements to the Building in accordance with its obligations hereunder.
In an emergency, Landlord shall use all reasonable efforts to commence
the repair within twenty-four (24) hours after notification from Tenant and
shall diligently work to complete the same. In all other instances, Landlord
shall commence repairs as soon as reasonably possible after notice from Tenant
and shall diligently work to complete the same. In the event Landlord fails to
commence and diligently pursue any repairs or provide services for which
Landlord is responsible within thirty (30) days after written notice from Tenant
of the need for repair or such services, Tenant shall have the right with notice
to Landlord at the notice address to perform the repairs or provide such
services and Landlord shall reimburse Tenant for the reasonable cost of repair
or provision of services.
15. ALTERATIONS, TITLE AND PERSONAL PROPERTY.
15.1. Alterations. After the completion of the Tenant's work needed to
open the Premises, Tenant shall in no event make or permit to be made any
alteration, modification, substitution or other change of any nature to the
mechanical, electrical, plumbing, HVAC , and sprinkler systems within or serving
the Premises. After completion of Tenant's Improvements within the Premises,
Tenant shall not make or permit any other improvements, alterations, fixed
decorations, substitutions or modifications, structural or otherwise, to the
Premises or the Building ("Alterations") without the prior written approval of
Landlord. Landlord shall not unreasonably withhold or delay its consent to
Alterations which do not affect the structural, mechanical, plumbing or
electrical elements or systems of the Building and which are not visible from
outside the Premises, provided such work conforms with the design criteria,
standards and architectural guidelines for the Building. Landlord's approval
shall include the conditions under which acceptable Alterations may be made.
Alterations shall include, but not be limited to, the installation or
modification of carpeting, walls, partitions, counters, doors, shelves, lighting
fixtures, hardware, locks, ceiling, window and wall coverings; but shall not
include the initial Tenant's Improvements placed within the Premises pursuant to
Section 5.1. All Alterations shall be based on complete plans and specifications
prepared and submitted by Tenant to Landlord for approval, except in
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the instance of cosmetic changes, such as painting and carpeting, in which case
Tenant shall provide Landlord with samples showing colors, styles, etc. Tenant
shall be responsible for the cost of any additional improvements within the
Premises or the Common Area required by The Americans with Disabilities Act of
1990 as a result of Tenant's Alterations.
Notwithstanding the foregoing, Landlord shall not require approval for
any interior Alteration which meets the following criteria: (a) such Alteration
is nonstructural and does not affect the mechanical systems outside the
Premises; (b) such Alteration complies with the design criteria for the
Building; and (c) such Alteration does not require the approval of the
Architectural Review Committee governing the Building.
If Tenant makes any Alterations without the prior consent of Landlord,
then, in addition to Landlord's other remedies, Landlord may correct or remove
such Alterations and Tenant shall pay the cost thereof, as Additional Rent, on
demand.
In making any permitted Alterations as well as in its use of the
Premises, Tenant shall, at its sole expense, fully comply with all applicable
federal, state and local laws, ordinances, and regulations, including the
acquisition of permits and the payment of fees, as well as any requirements
imposed by Landlord's insurer. Tenant shall save Landlord harmless for and on
account of all charges or damages if it shall fail to comply. To the extent that
any additional improvements are required by law to be made to the Building as a
result of Tenant's Alterations, all such improvements shall be made by Tenant at
its sole cost and shall conform to plans and specifications approved by Landlord
as aforesaid.
15.2. Title. The Tenant Improvements, all Alterations and all equipment,
machinery, furniture, furnishings, and other property or improvements installed
or located in the Premises by or on behalf of Landlord or Tenant, other than
Tenant's Personal Property, shall remain upon and be surrendered to Landlord
with the Premises as a part thereof at the end of the Term. Notwithstanding the
foregoing, Landlord shall, upon approval of any Alterations (not the initial
Tenant Improvements), advise Tenant in writing what Alterations it will require
Tenant to remove at the end of the Term, and thereupon, Landlord shall at
Tenant's sole expense, cause such Alterations to be removed and restore the
Premises to its condition prior to the making of such Alterations, reasonable
wear and tear and casualty excepted. Tenant shall promptly reimburse Landlord,
as Additional Rent, for the cost of such work, which reimbursement obligation
shall survive termination of the Lease.
15.3. Tenant's Personal Property. "Tenant's Personal Property" means all
equipment, machinery, furniture, furnishings and/or other property now or
hereafter installed or placed in or on the Premises by and at the sole expense
of Tenant with respect to which Tenant has not been granted any credit or
allowance by Landlord and which (a) is not used, or was not procured for use, in
connection with the operation, maintenance or protection of the Premises or the
Building; (b) is removable without damage to the Premises or the Building; and
(c) is not a replacement of any property of Landlord, whether such replacement
is made at Tenant's expense or otherwise. Notwithstanding any other provision of
this Lease, Tenant's Personal Property shall not include Building Service
Equipment, any Alterations or any improvements or other property installed or
placed in or on the Premises as part of Tenant's Improvements, whether or not
installed at Tenant's expense. Tenant shall promptly pay all personal property
taxes on Tenant's Personal Property, as applicable. Tenant may remove all
Tenant's Personal Property from the Premises at any time, including the
termination of this Lease. Any property belonging to Tenant or any other person
which is left in the Premises after the date the Lease is terminated for any
reason shall be deemed to have been abandoned. In such event, Landlord shall
have the right to declare itself the owner of such property and to dispose of it
in whatever manner Landlord considers appropriate without waiving its right to
claim from Tenant all expenses and damages caused by Tenant's failure to
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remove such property, and Tenant shall not have any right to compensation or
claim against Landlord as a result.
16. INSURANCE.
16.1. Tenant's Insurance. Tenant, at its expense, shall obtain and
maintain in effect as long as this Lease remains in effect and during such other
time as Tenant occupies the Premises or any part thereof insurance policies in
accordance with the following provisions.
A. Coverage.
(i) commercial general liability insurance policy, including
insurance against assumed or contractual liability under this Lease, with
respect to the Property, to afford protection with limits, per occurrence, of
not less than Two Million Dollars ($2,000,000), combined single limit, with
respect to personal injury, bodily injury, including death, and property damage
and Four Million Dollars ($4,000,000) aggregate (occurrence form), such
insurance to provide for no deductible;
(ii) all-risk property insurance policy, including theft,
written at replacement cost value and with replacement cost endorsement,
covering the HVAC system and all of Tenant's Personal Property in the Premises,
and covering loss of income resulting from casualty, and comprehensive boiler
and machinery insurance with an endorsement covering off-Premises service
interruption (i.e. all Building Service Equipment, including HVAC), such
insurance to provide for no deductible greater than Five Thousand Dollars
($5,000).
(iii) worker's compensation or similar insurance policy offering
statutory coverage and containing statutory limits, which policy shall also
provide Employer's Liability Coverage of not less than Five Hundred Thousand
Dollars ($500,000) per occurrence.
(iv) Tenant shall require any construction contractor retained
by it to perform work on the Premises to carry and maintain, at no expense to
Landlord, during such times as contractor is working in the Premises, a
non-deductible (a) commercial general liability insurance policy, including, but
not limited to, contractor's liability coverage, contractual liability coverage,
completed operations coverage, broad form property damage endorsement and
contractor's protective liability coverage, to afford protection with limits per
person and for each occurrence, of not less than Two Million Dollars
($2,000,000), combined single limit, and with respect to personal injury and
death and property damage, Four Million Dollars ($4,000,000) aggregate
(occurrence form) and Two Million Dollars ($2,000,000) aggregate completed
operations; (b) automobile liability insurance in the amount of One Million
Dollars ($1,000,000) combined single limit for bodily injury and property
damage; (c) worker's compensation insurance or similar insurance in form and
amounts as required by law; and (d) any other insurance reasonably required of
Tenant by Landlord or any Mortgagee.
(v) Notwithstanding anything set forth above in this subsection
16.1 to the contrary, all dollar limits specified herein shall be increased from
time to time as reasonably necessary to effect economically equivalent insurance
coverage, or coverage deemed adequate in light of then existing circumstances.
B. Policies.
Such policies shall be maintained with companies licensed to do business
in the State where the Premises are located and in form reasonably acceptable to
Landlord and will be written as primary policy
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coverage and not contributing with, or in excess of, any coverage which Landlord
shall carry. Such policies shall be provided on an occurrence form basis unless
otherwise approved by Landlord and shall include Landlord and its managing agent
as additional insured as to coverage under paragraphs 16.1.A.(i) and
16.1.A.(iv). Such policies shall also contain a waiver of subrogation provision
and a provision stating that such policy or policies shall not be canceled,
non-renewed, reduced in coverage or materially altered except after thirty (30)
day's written notice, said notice to be given in the manner required by this
Lease to Landlord, Attention: Risk Management Department. All such policies of
insurance shall be effective as of the date Tenant occupies the Premises and
shall be maintained in force at all times during the Term of this Lease and all
other times during which Tenant shall occupy the Premises. Tenant shall deposit
the policy or policies of such required insurance or certificates thereof with
Landlord prior to the Lease Commencement Date.
16.2. Tenant's Failure to Insure. If Tenant shall fail to obtain
insurance as required under this Section 16, Landlord may, but shall not be
obligated to, obtain such insurance, and in such event, Tenant shall pay, as
Additional Rent, the premium for such insurance upon demand by Landlord.
16.3. Compliance with Policies. Tenant shall not do or allow to be done,
or keep, or allow to be kept, anything in, upon or about the Premises which will
contravene Landlord's policies insuring against loss or damage by fire, other
casualty, or any other cause, including without limitation, public liability, or
which will prevent Landlord from procuring such policies in companies acceptable
to Landlord. If any act or failure to act by Tenant in and about the Building
and the Premises shall cause the rates with respect to Landlord's insurance
policies to be increased beyond those rates that would normally be applicable
for such limits of coverage, Tenant shall pay, as Additional Rent, the amount of
any such increases upon demand by Landlord.
16.4. Waiver of Right of Recovery. Except as provided in Section 8.3,
neither party, including Landlord's managing agent, shall be liable to the other
party, including Landlord's managing agent, or to any insurance company (by way
of subrogation or otherwise) insuring the other party, for any loss or damage to
any building, structure or other tangible property, or loss of income resulting
therefrom, or losses under worker's compensation laws and benefits even though
such loss or damage might have been occasioned by the negligence of such party,
its agents or employees. The provisions of this Section 16.4 shall not limit the
indemnification for liability to third parties pursuant to Section 22.
16.5. Landlord's Insurance. Landlord shall carry commercial general
liability insurance with regard to the Property and all-risk property insurance
on the Building, including Tenant Improvements, Alterations, but not the
heating, ventilating and air-conditioning system or Tenant's Personal Property
Landlord shall not be obligated to repair any damage to the heating, ventilating
and air-conditioning system or Tenant's Personal Property or replace the same.
17. DAMAGE AND DESTRUCTION.
17.1. Landlord's Obligation to Repair and Reconstruct. If, as the result
of fire, the elements, accident or other casualty (any of such causes being
referred to herein as a "Casualty"), the Premises shall be rendered wholly or
partially untenantable (damaged to such an extent as to preclude Tenant's use of
the Premises for the purposes originally intended), then, subject to the
provisions of subsection 17.2, Landlord shall cause such damage to be repaired,
including Tenant Improvements and Alterations, and the Annual Basic Rent and
Additional Rent (but not any Additional Rent due Landlord either by reason of
Tenant's failure to perform any of its obligations hereunder or by reason of
Landlord's having provided Tenant with additional services hereunder) shall be
abated proportionately as to the portion of the Premises rendered untenantable
during the period of such untenantability. All such repairs shall be made
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at the expense of Landlord, subject to the Tenant's responsibilities set forth
herein. Landlord shall not be liable for interruption to Tenant's business or
for damage to or replacement or repair of Tenant's Personal Property, all of
which replacement or repair shall be undertaken and completed by Tenant, at
Tenant's expense.
If the Premises shall be damaged by Casualty, but the Premises shall not
be thereby rendered wholly or partially untenantable, Landlord shall promptly
cause such damage to be repaired and there shall be no abatement of rent
reserved hereunder.
17.2. Termination of Lease. (A) If the Premises are (1) rendered wholly
untenantable, or (2) materially damaged as a result of any cause which is not
covered by Landlord's insurance, or (B) if the Building is damaged to the extent
of fifty percent (50%) or more of the gross leasable area thereof, or (C) if,
for reasons beyond Landlord's control or by virtue of the terms of any financing
of the Building, sufficient insurance proceeds are not available for the
reconstruction or restoration of the Building or Premises, then, in any of such
events, Landlord may elect to terminate this Lease by giving to Tenant notice of
such election within ninety (90) days after the occurrence of such event, or
after the insufficiency of such proceeds becomes known to Landlord, whichever is
applicable, provided Landlord terminates the leases of all other tenants
similarly affected by such casualty. If such notice is given, the rights and
obligations of the parties shall cease as of the date set forth in such notice,
and the Annual Basic Rent and Additional Rent (but not any Additional Rent due
Landlord either by reason of Tenant's failure to perform any of its obligations
hereunder or by reason of Landlord's having provided Tenant with additional
services hereunder) shall be adjusted as of the date set forth in such notice,
or, if the Premises were rendered untenantable, as of the date of the Casualty.
Landlord agrees to cooperate to the extent possible under the circumstances,
with Tenant with regard to delaying the termination notice period while Tenant
locates an alternative premises.
Within ninety (90) days following a Casualty, Landlord shall notify
Tenant in writing of the date on which Landlord, in its best professional
judgment, estimates restoration will be substantially completed. If restoration
is expected to exceed one hundred eighty (180) days from the date of Landlord's
notice, then Tenant shall have the right to terminate this Lease on written
notice to Landlord within fifteen (15) days after receipt of Landlord's notice.
17.3. Demolition of the Building. If the Building shall be so
substantially damaged that it is reasonably necessary, in Landlord's judgment,
to demolish the Building for the purpose of reconstruction, Landlord may
demolish the same, in which event the Annual Basic Rent and Additional Rent (but
not any Additional Rent due Landlord either by reason of Tenant's failure to
perform any of its obligations hereunder or by reason of Landlord's having
provided Tenant with additional services hereunder) shall be abated to the same
extent as if the Premises were rendered wholly untenantable by a Casualty.
17.4. Insurance Proceeds. If the Lease is not terminated pursuant to
subsection 17.2, Landlord shall, subject to the terms of any Mortgage, disburse
and apply any insurance proceeds received by Landlord to the restoration and
rebuilding of the Building in accordance with subsection 17.1 hereof. All
insurance proceeds payable with respect to the Premises and the Building shall
belong to and shall be payable to Landlord. Notwithstanding anything to the
contrary, Tenant shall be entitled to receive all proceeds payable with respect
to Tenant's Personal Property.
18. CONDEMNATION.
18.1. Termination. If either the entire Premises or the Building shall
be acquired or condemned by any governmental authority under its power of
eminent domain for any public or quasi-public use or
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purpose, this Lease shall terminate as of the date of vesting or acquisition of
title in the condemning authority and the rents hereunder shall be abated on
that date. Landlord shall make such repairs and alterations as may be necessary
in order to restore the part not taken to useful condition and all rent (other
than any Additional Rent due Landlord by reason of Tenant's failure to perform
any of its obligations hereunder) shall be reduced in the same proportion as the
portion of the floor area of the Premises so taken. If less than the whole but
more than twenty percent (20%) of the Rental Area of the Premises or more than
twenty percent (20%) of the total area of the Building (even if the Premises are
unaffected) or such portion of the Common Area as shall render the Premises or
the Building untenantable should be so acquired or condemned, Landlord and
Tenant shall each have the option to terminate this Lease by notice given to the
other within ninety (90) days of such taking. In the event that such a notice of
termination is given, this Lease shall terminate as of the date of vesting or
acquisition of title in the condemning authority and the Annual Basic Rent and
Additional Rent (but not any Additional Rent due Landlord either by reason of
Tenant's failure to perform any of its obligations hereunder, or by reason of
Landlord's having provided Tenant with additional services hereunder) shall be
adjusted as of such date.
If (a) neither Landlord nor Tenant shall exercise their respective
options to terminate this Lease, as hereinabove set forth, or (b) some lesser
portion of the Premises or the Building or Common Area, which does not give rise
to a right to terminate pursuant to this subsection 18.1, is taken by the
condemning authority, this Lease shall continue in force and effect, but from
and after the date of the vesting of title in the condemning authority, the
Annual Basic Rent payable hereunder during the unexpired portion of the Term
shall be reduced in proportion to the reduction in the total Rental Area of the
Premises, and any Additional Rent (but not any Additional Rent due Landlord
either by reason of Tenant's failure to perform any of its obligations
hereunder, or by reason of Landlord's having provided Tenant with additional
services hereunder) payable pursuant to the terms hereof shall be adjusted to
reflect the diminution of the Premises and/or the Building, as the case may be.
18.2. Rights to Award. Tenant shall have no claim against Landlord
arising out of the taking or condemnation, or arising out of the cancellation of
this Lease as a result of any such taking or condemnation, or for any portion of
the amount that may be awarded as damages as a result of any taking or
condemnation, or for the value of any unexpired portion of the Term, or for any
property lost through condemnation, and Tenant hereby assigns to Landlord all
its right, title and interest in and to any such award with regard to the
Premises; provided, however, that, in the event of a total taking, Tenant may
assert any claim it may have against the condemning authority for compensation
for Tenant's Personal Property lost thereby, loss of income, and for any
relocation expenses compensable by statute and receive such awards therefor as
may be allowed in the condemnation proceedings provided that such awards shall
be made in addition to, and stated separately from, the award made for the
Building, the underlying land and the Premises. Landlord shall have no
obligation to contest any taking or condemnation.
19. BANKRUPTCY.
19.1. Event of Bankruptcy. For purposes of this Lease, each of the
following shall be deemed an "Event of Tenant's Bankruptcy":
(a) if Tenant becomes insolvent, as defined in the
Bankruptcy Code, or under the Insolvency Laws;
(b) the commencement of any action or proceeding for the
dissolution or liquidation of Tenant or for the
appointment of a receiver or trustee of the property of
Tenant, whether instituted by or against Tenant, if not
bonded or discharged within thirty (30) days of the date
of the commencement of such proceeding or
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action;
(c) if Tenant files a voluntary petition under the
Bankruptcy Code or Insolvency Laws;
(d) if there is filed an involuntary petition against Tenant
as the subject debtor under the Bankruptcy Code or
Insolvency laws, which is not dismissed within sixty
(60) days of filing, or results in issuance of an order
for relief against the debtor; and
(e) if Tenant makes or consents to an assignment of its
assets (other than in the normal course of financing),
in whole or in part, for the benefit of creditors, or to
a common law composition of creditors.
As used herein, (i) "Bankruptcy Code" means title 11 of the United
States Code, 11 U.S.C. Section 101 et. seq. as amended or any successor statute
and (ii) Insolvency Laws means the insolvency laws of any state or territory of
the United States.
19.2. Assumption by Trustee. If Tenant becomes the subject debtor in a
case pending under the Bankruptcy Code, Landlord's right to terminate this Lease
under Section 20 hereof shall be subject to the applicable rights (if any) of
the Trustee in Bankruptcy to assume or assign this Lease as then provided for in
the Bankruptcy Code.
19.3. Tenant's Guarantor's Bankruptcy. Notwithstanding any of the other
provisions of this Lease, in the event Tenant's obligations under this Lease are
guaranteed by a guarantor, and said guarantor shall voluntarily or involuntarily
come under the jurisdiction of the Bankruptcy Code, and thereafter said
guarantor or its trustee in bankruptcy, under the authority of and pursuant to
applicable provisions thereof, shall determine to assign the guarantee
obligations of said guarantor hereunder, Tenant and its said guarantor agree
that (a) said guarantor or its trustee will provide Landlord sufficient
information enabling it to independently determine whether Landlord will incur
actual and substantial detriment by reason of such assignment, and (b) "adequate
assurance of future performance" in regard to such guarantee obligations of said
guarantor, as that term is generally defined under the Bankruptcy Code, will be
provided to Landlord by said guarantor or its trustee and its assignee as a
condition of said assignment.
20. DEFAULT PROVISIONS AND REMEDIES.
20.1. Events of Default. Each of the following shall be deemed an Event
of Default by Tenant under this Lease:
a. failure of Tenant to pay Annual Basic Rent, Additional Rent,
or any other sum required to be paid under the terms of this Lease, including
late charges, within ten (10) days after notice from Landlord of non-payment;
b. failure by Tenant to perform or observe any other term,
covenant, agreement or condition of this Lease, on the part of Tenant to be
performed (other than those obligations of Tenant set forth in subsection 16.2
for which Tenant shall be entitled to receive no prior notice, and other than
the conditions set forth in paragraphs 20.1.a, c, d, e, f and g, which shall be
governed solely by the provisions set forth herein), within thirty (30) days
after notice thereof from the Landlord, unless such performance shall reasonably
require a longer period, in which case Tenant shall not be deemed in default if
Tenant
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commences the required performance promptly and thereafter pursues and completes
such action diligently and expeditiously and in any event within not more than
thirty (30) days;
c. the filing of a tax or mechanic's lien, suit or claim against
any property of Tenant which is not bonded or discharged and/or dismissed within
thirty (30) days of the date such lien is filed;
d. abandonment of the Premises by Tenant; provided, however,
that Tenant shall not be deemed to be in default hereunder so long as Tenant
shall continue the payment of Annual Basic Rent and Additional Rent under this
Lease;
e. an Event of Tenant's Bankruptcy;
f. the sale of Tenant's interest in the Premises under
attachment, execution or similar legal process; and
g. the failure of Tenant to vacate the Premises upon the
expiration of the Term, subject to Section 26 of this Lease, or the earlier
termination thereof pursuant to the other provisions hereof.
20.2. Remedies. Upon the occurrence of an Event of Default, Landlord,
upon three (3) days written notice to Tenant in any instance (except where
expressly provided for herein), may do any one or more of the following:
(a) Intentionally deleted
(b) perform, on behalf and at the expense of Tenant, any obligation
of Tenant under this Lease which Tenant has failed to perform
and of which Landlord shall have given Tenant notice, the cost
of which performance by Landlord, together with interest thereon
at the Default Rate from the date of such expenditure, shall be
payable by Tenant to Landlord, as Additional Rent, upon demand.
Notwithstanding the provisions of this clause (b) and regardless
of whether an Event of Default shall have occurred, Landlord may
exercise the remedy described in clause (b) without any notice
to Tenant if Landlord, in its good faith judgment, believes it
would be materially injured by failure to take rapid action or
if the unperformed obligation of Tenant constitutes an
emergency;
(c) elect to terminate this Lease and the tenancy created hereby by
giving notice of such election to Tenant, and reenter the
Premises, by summary proceedings or otherwise, and remove Tenant
and all other persons and property from the Premises, and store
such property in a public warehouse or elsewhere at the cost of
and for the account of Tenant with resort to legal process and
without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage occasioned thereby;
(d) exercise any other legal or equitable right or remedy which it
may have.
Any costs and expenses incurred by Landlord (including, without
limitation, reasonable attorneys' fees) in enforcing any of its rights or
remedies under this Lease shall be paid to Landlord by Tenant, as Additional
Rent, upon demand.
20.3. Damages. If this Lease is terminated by Landlord pursuant to
subsection 20.2.(c), Tenant nevertheless shall remain liable for (a) any Annual
Basic Rent, Additional Rent, and damages which may be due or sustained prior to
such termination and (b) all reasonable "out-of-pocket" costs, fees and
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expenses incurred by Landlord in pursuit of its remedies hereunder in the nature
of attorney's fees as awarded by the court in such action, and all
"out-of-pocket" costs, fees and expenses incurred by Landlord in re-leasing the
Premises which relate to the balance of the Term in the nature of alterations
[limited, however, to the pro-rated cost of such alterations, said pro-ration to
be equal to the cost of the tenant improvements provided by Landlord in
connection with such re-leasing multiplied by a fraction the numerator of which
shall be the unexpired portion of the Term of this Lease (i. e., that portion of
the Term of this Lease commencing with the date of termination thereof by
Landlord pursuant to subsection 20.2.(c) and ending with the Lease Termination
Date set forth in Section x.X.(3) and the denominator of which shall be the term
of the new lease executed by Landlord with respect to the aforesaid
re-leasing]and any reasonable and standard leasing commissions paid in
connection therewith, plus at the election of Landlord either:
(i) damages in an amount or amounts equal to the rent which, but for
termination of this Lease, would have become due during the remainder of the
Term, less the amount or amounts of rent, if any, which Landlord shall receive
during such period from others to whom the Premises may be rented (other than
any Additional Rent received by Landlord as a result of any failure of such
other person to perform any of its obligations to Landlord), in which case such
damages shall be computed and payable in monthly installments, in advance, on
the first day of each calendar month following termination of the Lease and
continuing until the date on which the Term would have expired but for such
termination, and any suit or action brought to collect any such damages for any
month shall not in any manner prejudice the right of Landlord to collect any
damages for any subsequent month by a similar proceeding; or
(ii) damages in an amount equal to the present worth (as of the date of
such termination) of rent which, but for termination of this Lease, would have
become due during the remainder of the Term, less the fair rental value of the
Premises, as determined by an independent reputable real estate appraiser named
by Landlord, in which case such damages shall be payable to Landlord in one lump
sum on demand and shall bear interest at the Default Rate until paid. For
purposes of this clause (ii), "present worth" shall be computed by discounting
such amount to present worth at a discount rate equal to one percentage point
above the discount rate then in effect at the Federal Reserve Bank nearest to
the location of the Property.
Damages shall be due and payable immediately upon demand by Landlord
following any termination of this Lease pursuant to Section 20.2.
If this Lease is terminated pursuant to Section 20.2., Landlord may
re-lease the Premises or any part thereof, alone or together with other
premises, for such term(s) (which may be greater or less than the period which
otherwise would have constituted the balance of the Term) and on such terms and
conditions (which may include concessions or free rent and alterations of the
Premises) as Landlord, in its sole discretion, may determine. The failure or
refusal of Landlord to re-lease the Premises or any part or parts thereof shall
not release or affect Tenant's liability for damages.
Nothing contained in this Lease shall limit or prejudice the right of
Landlord to prove and obtain in proceedings for the termination of this Lease by
reason of bankruptcy or insolvency, an amount equal to the maximum allowed by
any statute or rule of law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount be
greater, equal to, or less than the amount of the loss or damages referred to
above.
Notwithstanding anything to the contrary in this Section 20.3, Landlord
shall use reasonable efforts to re-lease the Premises, provided that Landlord
shall not be required to (i) use methods or procedures other than its usual
methods and procedures for finding tenants for comparable space in the
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Building; (ii) lease the Premises in preference to any other space in the
Building available for lease, regardless of when such other space became
available for lease; (iii) lease the Premises at rents lower than the rate at
which Landlord would otherwise offer such space to a third party; (iv) to make
improvements to the Premises at Landlord's expense; and (v) lease the Premises
for any purpose or use other than that specifically permitted by this Lease.
Landlord shall not be liable to Tenant for Landlord's failure to re-lease the
Premises despite the exercise of reasonable efforts pursuant to this paragraph,
and no such re-leasing shall relieve Tenant of its obligations under the terms
of this Lease, including, without limitation, the payment of rent as set forth
herein.
20.4. No Waiver. No act or omission by Landlord shall be deemed to be an
acceptance of a surrender of the Premises or a termination of Tenant's
liabilities hereunder, unless Landlord shall execute a written release of
Tenant. Tenant's liability hereunder shall not be terminated by the execution by
Landlord of any new lease for all or any portion of the Premises or the
acceptance of rent from any assignee or subtenant.
20.5. Remedies Not Exclusive. All rights and remedies of Landlord set
forth in this Lease shall be cumulative, and none shall exclude any other right
or remedy, now or hereafter allowed by or available under any statute,
ordinance, rule of court, or the common law, either at law or in equity, or
both. For the purposes of any suit brought or based hereon, this Lease shall be
construed to be a divisible contract, to the end that successive actions may be
maintained on this Lease as successive periodic sums shall mature hereunder. The
failure of Landlord to insist, in any one or more instances, upon a strict
performance of any of the covenants, terms and conditions of this Lease or to
exercise any right or option herein contained shall not be construed as a waiver
or a relinquishment for the future, of such covenant, term, condition, right or
option, but the same shall continue and remain in full force and effect unless
the contrary is expressed by Landlord in writing. The receipt by Landlord of
rents hereunder, with knowledge of the breach of any covenant hereof or the
receipt by Landlord of less than the full rent due hereunder, shall not be
deemed a waiver of such breach or of Landlord's right to receive the full rents
hereunder, and no waiver by Landlord of any provision hereof shall be deemed to
have been made unless expressed in writing and signed by Landlord.
20.6. Persistent Failure to Pay Rent. In addition to any other remedies
available to Landlord pursuant to this Lease or by law, Landlord may, at any
time throughout the Term of this Lease, terminate this Lease upon Tenant's
default on three (3) separate occasions during any twelve (12) month period
under subsection 20.1.a, regardless of whether or not such prior defaults have
been cured. Termination, pursuant to this subsection 20.6, shall be effective
upon Landlord's delivery to Tenant of a notice of termination; provided,
however, that, with respect to any Rental Year within the Term, Landlord shall
only be entitled to exercise such right of termination within six (6) months of
the third Event of Default occurring within such Rental Year.
21. Intentionally Omitted.
22. INDEMNITY.
To the maximum extent permitted by law, Tenant shall indemnify, hold
harmless and (at Landlord's option) defend Landlord, its agents, servants and
employees from and against all claims, actions, losses, costs and expenses
(including attorneys' and other professional fees), judgments, settlement
payments, and, whether or not reduced to final judgment, all liabilities,
damages, or fines paid, incurred or suffered by any third parties to the extent
arising directly or indirectly from (a) any default by Tenant under the terms of
this Lease, (b) the use or occupancy of the Property by Tenant or any person
claiming through or under Tenant, and/or (c) any acts or omissions of Tenant or
any contractor, agent,
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employee, invitee or licensee of Tenant in or about the Property. The foregoing
indemnity is in addition to, and not in substitution for, any indemnity given by
Tenant to Landlord under Section 8.3.
To the maximum extent permitted by law, Landlord shall indemnify, hold
harmless and defend Tenant, its agents, servants and employees from and against
all claims, actions, losses, costs and expenses (including attorneys' and other
professional fees), judgments, settlement payments, and, whether or not reduced
to final judgment, all liabilities, damages, or fines paid, incurred or suffered
by any third party to the extent arising directly or indirectly from (a) any
default by Landlord under the terms of this Lease, (b) the use or occupancy of
the Common Area by Landlord or its contractors, agents, or employees, and/or (c)
any acts or omissions of Landlord or any contractor, agent, or employee of
Landlord in or about the Common Area. This paragraph is in addition to the
indemnity contained in Section 8.3.
23. LIMITATION ON LANDLORD LIABILITY.
The term "Landlord" as used in this Lease shall mean only the owner or
the Mortgagee or its trustees, as the case may be, then in possession of the
Property so that in the event of any transfer by Landlord of its interest in the
Property, the Landlord in possession immediately prior to such transfer shall
be, and hereby is, entirely released and discharged from all covenants,
obligations and liabilities of Landlord under this Lease accruing after such
transfer and notice to Tenant. In consideration of the benefits accruing
hereunder, Tenant, for itself, its successors and assigns, covenants and agrees
that, in the event of any actual or alleged failure, breach or default hereunder
by the Landlord, and notwithstanding anything to the contrary contained
elsewhere in this Lease, the remedies of Tenant under this Lease shall be solely
and exclusively limited to Landlord's interest in the Property.
24. LANDLORD OBLIGATIONS.
Landlord agrees to perform all of its obligations under this Lease in a
first class manner consistent with the standards applicable to similar buildings
in the vicinity of the Building. Landlord shall be excused for the period of any
delay in the performance of any of its obligations when the delay is due to any
cause or causes beyond Landlord's control which include, without limitation,
acts of God, all labor disputes, governmental regulations or controls, civil
unrest, war, adverse weather condition, fire or other casualty, inability to
obtain any material, services, or financing unless otherwise provided for in
this Lease. Except where specifically set forth in this Lease, there shall be no
abatement, set-off or deduction of Annual Basic Rent or Additional Rent due
under this Lease.
25. ASSIGNMENT AND SUBLETTING.
25.1. Prohibited Without Landlord's Consent. Tenant agrees for itself
and its permitted successors and assigns in interest hereunder that it will not
(a) assign or otherwise transfer, mortgage or otherwise encumber this Lease or
any of its rights hereunder; (b) sublet the Premises or any part thereof or
permit the occupancy or use of the Premises or any part thereof by any person
other than Tenant; and/or (c) permit the assignment or other transfer of this
Lease or any of Tenant's rights hereunder by operation of law (each of the
events referred to in the foregoing clauses (a), (b) and (c) being hereinafter
referred to as a "Transfer"), without the prior written consent of Landlord in
each instance first obtained, which consent may be given or withheld in
Landlord's sole and absolute subjective discretion, and any consent given shall
not constitute a consent to any subsequent Transfer. Any attempted Transfer
without Landlord's consent shall be null and void and shall not confer any
rights upon any purported transferee, assignee, mortgagee, sublessee, or
occupant. No Transfer, regardless of whether Landlord's consent has been granted
or withheld, shall be deemed to release Tenant from any of its obligations
hereunder or to alter, impair or release the obligations of any person
guaranteeing the obligations of Tenant hereunder.
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Tenant hereby indemnifies Landlord against liability resulting from any claim
made against Landlord by any assignee or subtenant or by any broker claiming a
commission in connection with the proposed Transfer.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold
its consent to a sublet or assignment of this Lease by Tenant provided that: (a)
the proposed transferee has a net worth of at least Fifteen Million Dollars and
No Cents ($15,000,000.00) at time of proposed transfer based on financial
information about such transferee provided by Tenant or such transferee; (b) the
proposed use of the Premises by the proposed transferee is permitted by this
Lease and is compatible with the operation of the Building; (c) the proposed
transferee is not an existing tenant in the Building or was not a prospect for
the Building within six (6) months prior to the proposed Transfer, and (d) an
Event of Default does not exist under this Lease.
Notwithstanding anything herein to the contrary, provided Tenant is not
in default of any term, covenant or condition of this Lease beyond any
applicable notice and cure or grace period, Tenant shall have the right without
Landlord's consent to Transfer this Lease (i) to a parent, subsidiary or
affiliate of Tenant or any franchisee of Tenant or Tenant's parent, subsidiary,
or affiliate or (ii) in connection with a merger or consolidation or a sale of
all or substantially all of Tenant's assets in the Baltimore/Washington
metropolitan area or sale or transfer of all or substantially all of Tenant's
other stores in the Baltimore/Washington metropolitan area which could be
transferred by asset purchase agreement or stock sale. Tenant shall deliver
written notice to Landlord of such Transfer. The foregoing consent does not
constitute a waiver of the right of Landlord to consent to any other future
subletting or with regard to any other assignment.
25.2. Stock Transfer. If Tenant or any Guarantor is a privately-held
corporation, then each of the following events shall be deemed a prohibited
Transfer under this Section 25 if such event results in a change in control of
Tenant or Guarantor: any transfer of Tenant's or Guarantor's issued and
outstanding capital stock; any issuance of additional capital stock; or the
redemption of any issued and outstanding stock. If Tenant or any Guarantor is a
partnership, any Transfer of any interest in the partnership or any other change
in the composition of the partnership, which results in a change in management
of Tenant or Guarantor from the person or persons managing the partnership as of
the date hereof, shall be deemed a prohibited Transfer under this Section 25.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold
its consent to a transfer or change of ownership of the voting corporate stock
of Tenant which results in a change in control of Tenant, provided that (a) the
net assets of the Tenant are not substantially decreased by the change in the
corporate stock ownership; (b) Tenant, on demand from Landlord, properly
documents any changes in the net assets of Tenant caused by the change in
control of Tenant, so that Landlord can make an accurate judgment as to (a)
hereof; and (c) Tenant, after the change in control, continues to use the
Premises for uses permitted under this Lease and operates its business in a
manner which is consistent with the standards of operation for this Building.
The foregoing does not constitute a waiver of the right of Landlord to consent
to any subletting or any assignment.
25.3. Rents from Transfer. In the event Landlord shall consent to a
subletting of this Lease and the amount of the sub-rents to be paid to Tenant by
any such sublessee is greater than the rents required to be paid by Tenant to
Landlord pursuant to this Lease, Tenant shall pay to Landlord, as Additional
Rent, fifty percent (50%) of any such excess upon receipt thereof by Tenant from
such sublessee net of all costs of consummating such sublease (including
brokerage commission, reasonable attorneys' fees and renovation costs), any
improvement allowance or other economic concession (planning allowance, moving
expense, etc.) paid by Tenant to sublessee. The foregoing shall not apply to
permitted subletting pursuant to Section 25.1 above.
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25.4. Procedure for Obtaining Landlord's Consent.
A. In the event that, at any time or from time to time during the Term,
Tenant desires to Transfer this Lease in whole or in part (other than pursuant
to Section 25.1), whether by operation of law or otherwise, Tenant shall submit
to Landlord for its consideration (a) in writing, the name and address of the
proposed subtenant or assignee, a reasonably detailed statement of the proposed
subtenant's or assignee's business experience and reasonably detailed financial
references and information concerning the financial condition of the proposed
subtenant or assignee, (b) a disclosure of the rents to be paid by any subtenant
in excess of the rents reserved hereunder and (c) if a subletting, a description
of the area of the Premises to be sublet. In connection with a Transfer other
than to an affiliate, parent, or subsidiary corporation of Tenant, Tenant agrees
to pay Landlord, as Additional Rent, (i) a transfer fee of One Thousand Dollars
($1,000) prior to the effective date of any Transfer in order to reimburse
Landlord for its internal costs and expenses and legal costs incurred in making
investigations as to the acceptability of a proposed subtenant or assignee,
including without limitation, costs incurred in connection with the review of
financial materials, meetings with representatives of Transferor and/or
Transferee and preparation, review, approval and execution of the required
Transfer documentation; and (ii) any due but unpaid rent.
B. Landlord's consent to an assignment of this Lease shall be
effective only upon the execution by Tenant, the assignee and Landlord of an
assignment document prepared by Landlord, in which such assignee shall agree to
assume, observe, perform, and be bound by all of Tenant's obligations under this
Lease and Tenant shall agree to remain primarily liable for such obligations.
Any consent by Landlord to a subletting of all or a portion of the
Premises shall be deemed to have been given only upon the delivery by Landlord
to Tenant of a consent document prepared and executed by Landlord expressly
consenting to such subletting.
Landlord agrees not to unreasonably withhold or delay its response to a
request made by Tenant to Landlord for approval of an assignment or a subletting
or to unreasonably delay the preparation of the consent document and/or
assignment document to be prepared by Landlord in connection with its consent to
such assignment or subletting (if Landlord so consents to such assignment or
subletting).
26. HOLDING OVER.
Tenant agrees to vacate the Premises at the end of the Term, and
Landlord shall be entitled to the benefit of all summary proceedings to recover
possession of the Premises at the end of the Term. If Tenant remains in
possession of the Premises after the expiration of the Term, such action shall
not renew this Lease by operation of law and nothing herein shall be deemed as a
consent by Landlord to Tenant's remaining in the Premises. If Tenant fails to
vacate the Premises as required, Landlord may consider Tenant as either (a) a
"Tenant-at-Will" (i.e. month-to-month tenant) liable for the payment of rent at
the then market rate as determined by Landlord or (b) as a "Tenant-Holding Over"
liable for an amount equal to one hundred and fifty percent (150%) of the Annual
Basic Rent, and Additional Rent, reserved hereunder applicable to the period of
the holdover. In either event, all other covenants of this Lease shall remain in
full force and effect.
Notwithstanding the foregoing, Landlord shall not consider Tenant as a
Tenant-Holding Over for the first thirty (30) days after the Termination Date
provided Landlord deems both parties are in good faith negotiations for purposes
of extending the Term.
27. SUBORDINATION AND ATTORNMENT.
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This Lease is subject and subordinate to the liens of all mortgages,
deeds of trust and other security instruments now or hereafter placed upon the
Building or the Property or any portion thereof and all ground and other
underlying leases from which Landlord's interest is derived (said mortgages,
deeds of trust, other security instruments, and ground leases being hereinafter
referred to as "Mortgages" and the mortgagees, beneficiaries, secured parties,
and ground lessors thereunder from time to time being hereinafter called
"Mortgagees"), and to any and all renewals, extensions, modifications, or
refinancings thereof, without any further act of the Tenant, provided that any
such future Mortgagee first agrees in writing that in the event of foreclosure,
this Lease shall not be disturbed provided Tenant is not in default beyond any
applicable notice or cure period. If requested by Landlord, however, Tenant
shall promptly execute any certificate or other document confirming such
subordination. Tenant agrees that, if any proceedings are brought for the
foreclosure of any of the Mortgages, Tenant, shall attorn to the purchaser,
recognize the purchaser as the landlord under this Lease, and make all payments
required hereunder to such new landlord without any deduction or set-off of any
kind whatsoever. Tenant waives the provisions of any law or regulation, now or
hereafter in effect, which may give, or purport to give, Tenant any right to
terminate this Lease or to alter the obligations of Tenant hereunder in the
event that any such foreclosure or termination or other proceeding is prosecuted
or completed.
Notwithstanding anything contained herein to the contrary, any Mortgagee
may at any time subordinate the lien of its Mortgages to the operation and
effect of this Lease without obtaining the Tenant's consent thereto, by giving
the Tenant written notice thereof, in which event this Lease shall be deemed to
be senior to such Mortgages without regard to the respective dates of execution
and/or recordation of such Mortgages and this Lease and thereafter such
Mortgagee shall have the same rights as to this Lease as it would have had were
this Lease executed and delivered before the execution of such Mortgages.
If, in connection with obtaining financing for the Building, a Mortgagee
shall request reasonable modifications in this Lease as a condition to such
financing, Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such modifications do not materially adversely increase
the obligations of Tenant hereunder, or materially adversely affect the
leasehold interest hereby created or Tenant's use and enjoyment of the Premises,
or increase the amount of Annual Basic Rent and Additional Rent payable
hereunder.
28. ESTOPPEL CERTIFICATES.
At any time and from time-to-time, within thirty (30) days after either
party shall request the same, the other will execute, acknowledge and deliver to
the requesting party or to a Mortgagee or other party as may be designated by
the requesting party, a certificate with respect to such matters relating to
this Lease or the status or performance of the obligations of the parties
hereunder as may reasonably be requested by the requesting party. If the
requested party fails to provide such certificate within such thirty (30) day
period, the requested party shall be deemed to have approved the contents of any
such certificate submitted and the requesting party is hereby authorized to so
certify.
29. PEACEFUL AND QUIET POSSESSION.
Tenant, if and so long as it pays all rents due hereunder and performs
and observes the other terms and covenants to be performed and kept by it as
provided in this Lease, shall have the peaceable and quiet possession of the
Premises during the Term free of any claims of Landlord or anyone lawfully
claiming by, through or under Landlord, subject, however, to the terms of this
Lease and to matters of public record existing as of the date of this Lease.
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Landlord warrants that it and no other person or corporation has the
right to lease the Premises hereby demised, and that so long as Tenant is not in
default hereunder, after any applicable cure period, Tenant shall have peaceful
and quiet use and possession of the Premises.
30. LANDLORD'S ACCESS TO PREMISES.
Landlord and its agents may at any reasonable time and without incurring
any liability to Tenant, other than liability for personal injuries and damages
resulting solely from the negligence of Landlord or its agents, enter the
Premises to inspect them or to make alterations or repairs or for any purpose
which Landlord considers necessary for the repair, operation, or maintenance of
the Building; provided, however, that in the case of an emergency, Landlord may
enter the Premises at any time. Tenant shall allow the Premises to be exhibited
by Landlord (a) at any time to any representative of a lender or to any
prospective purchaser of the Building or Landlord's interest therein or (b)
within six (6) months of the end of the Term to any persons who may be
interested in leasing the Premises.
Notwithstanding the foregoing, Landlord shall use reasonable efforts to
telephone Tenant twenty-four (24) hours prior to any inspection except in cases
of emergencies. Emergencies for the purpose of this Section shall be deemed to
mean anyone or anything in the Premises, Building and/or Common Area requiring
immediate response. In any event, Tenant agrees to cooperate when access to the
Premises is requested by Landlord.
31. Intentionally Omitted.
32. BROKERS, COMMISSIONS, ETC.
Landlord and Tenant acknowledge, represent and warrant each to the other
that, except as listed in Section 1.F., no broker or real estate agent brought
about or was involved in the making of this Lease and that no brokerage fee or
commission is due to any other party as a result of the execution of this Lease.
Each of the parties hereto agrees to indemnify and hold harmless the other
against any claim by any broker, agent or finder based upon the execution of
this Lease and predicated upon a breach of the above representation and
warranty.
33. RECORDATION.
Neither Landlord nor Tenant shall record this Lease, any amendment to
this Lease or any other memorandum of this Lease without the prior written
consent of the other party, which consent may be withheld in the sole discretion
of either party and, in the event such consent is given, the party requesting
such consent and recording shall pay all transfer taxes, recording fees and
other charges in connection with such recording. Notwithstanding the above,
Tenant covenants that if at any time any mortgagee or ground lessor relating to
the financing of the Property shall require the recordation of this Lease, or if
the recordation of this Lease shall be required by any valid governmental order,
or if any governmental authority having jurisdiction in the matter shall assess
and be entitled to collect transfer taxes, documentary stamp taxes, or both, on
this Lease, Tenant, upon the request of Landlord, shall execute such
instruments, including a Memorandum of this Lease, as may be necessary to record
this Lease, and shall pay all recording fees, transfer taxes and documentary
stamp taxes, payable on, or in connection with, this Lease or such recordation;
provided, however, if Landlord's Mortgagee requires such recordation, Landlord
shall pay all such recording fees, transfer taxes and documentary stamp taxes.
34. MISCELLANEOUS.
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34.1. Separability. If any term or provision of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
34.2. Applicable Law. This Lease shall be given effect and construed by
application of the laws of the state where the Property is located, and any
action or proceeding arising hereunder shall be brought in the courts of the
State where the Premises are located.
34.3. Authority. If Tenant is a corporation or partnership, the person
executing this Lease on behalf of Tenant represents and warrants that Tenant is
duly organized and validly existing; that this Lease has been authorized by all
necessary parties, is validly executed by an authorized officer or agent of
Tenant and is binding upon and enforceable against Tenant in accordance with its
terms.
The undersigned agent of Landlord represents and warrants that it is
authorized and empowered to enter into this Lease Agreement on behalf of the
Landlord.
34.4. No Discrimination. It is Landlord's policy to comply with all
applicable state and federal laws prohibiting discrimination in employment based
on race, age, color, sex, national origin, disability, religion, or other
protected classification. It is further intended that the Building shall be
operated so that all perspective tenants thereof, and all customers, employees,
licensees and invitees of all tenants shall have equal opportunity to obtain all
the goods, services, accommodations, advantages, facilities and privileges of
the Building without discrimination because of race, age, color, sex, national
origin, disability, or religion. To that end, Tenant shall not discriminate in
the conduct and operation of its business in the Premises against any person or
group of persons because of the race, age, color, sex, religion, national origin
or other protected classification of such person or group of persons.
34.5. Integration of Agreements. This writing is intended by the parties
as a final expression of their agreement and is a complete and exclusive
statement of its terms, and all negotiations, considerations and representations
between the parties hereto are incorporated herein. No course of prior dealings
between the parties or their agents shall be relevant or admissible to
supplement, explain, or vary any of the terms of this Lease. Acceptance of, or
acquiescence to, a course of performance rendered under this Lease or any prior
agreement between the parties or their agents shall not be relevant or
admissible to determine the meaning of any of the terms or covenants of this
Lease. Other than as specifically set forth in this Lease, no representations,
understandings or agreements have been made or relied upon in the making of this
Lease. This Lease can only be modified by a writing signed by each of the
parties hereto.
34.6. Third Party Beneficiary. Except as expressly provided elsewhere in
this Lease, nothing contained in this Lease shall be construed so as to confer
upon any other party the rights of a third party beneficiary.
34.7. Captions; Gender. The captions used in this Lease are for
convenience only and do not in any way limit or amplify the terms and provisions
hereof. As used in this Lease and where the context so requires, the singular
shall be deemed to include the plural and the masculine shall be deemed to
include the feminine and neuter, and vice versa.
34.8. Successors and Assigns. Subject to the express provisions of this
Lease to the contrary
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(e.g., Section 25), the terms, provisions and covenants contained in this Lease
shall apply to, inure to the benefit of, and be binding upon the parties hereto
and their respective heirs, personal representatives, successors and assigns.
34.9. Waiver of Jury Trial. Landlord and Tenant hereby expressly waive
trial by jury in any action or proceeding or counterclaim brought by either
party hereto against the other party on any and every matter, directly or
indirectly arising out of or with respect to this Lease, including, without
limitation, the relationship of Landlord and Tenant, the use and occupancy by
Tenant of the Premises, any statutory remedy and/or claim of injury or damage
regarding this Lease.
34.10. Joint and Several Liability. In the event that two (2) or more
persons (i.e., natural persons, corporations, partnerships, associations and
other legal entities) shall sign this Lease as Tenant, the liability of each
such party to pay all rents due hereunder and perform all the other covenants of
this Lease shall be joint and several. In the event Tenant is a general
partnership or a limited partnership with two or more general partners, the
liability of each partner, or general partner, under this Lease shall be joint
and several.
34.11. Notices. All notices, demands and requests required under this
Lease shall be in writing. All such notices, demands and requests shall be
deemed to have been properly given if sent by United States certified mail,
return receipt requested, postage prepaid, or hand delivered, or overnight
delivery, addressed to Landlord or Tenant, at the Landlord Notice Address and
Tenant Notice Address, respectively. Either party may designate a change of
address by written notice to the other party, in the manner set forth above.
Notice, demand and requests which shall be served by certified mail in the
manner aforesaid, shall be deemed to have been given three (3) days after
mailing. Notices sent by overnight delivery shall be deemed to have been given
the day after sending. Without intending to limit the generality of the
foregoing requirement that all notices, demands and requests be in writing,
there are certain provisions in this Lease where, for emphasis alone, such
requirement is reiterated.
34.12. Effective Date of this Lease. Unless otherwise expressly
provided, all terms, conditions and covenants by Tenant contained in this Lease
shall be effective as of the date first above written.
34.13. Mechanics' Liens. In the event that any mechanics' or
materialmen's liens, suit or claim shall at any time be filed against the
Premises purporting to be for work, labor, services or materials performed or
furnished to Tenant or anyone holding the Premises through or under Tenant,
Tenant shall cause the same to be discharged and/or dismissed of record or
bonded within thirty (30) days after being notified of the filing thereof. If
Tenant shall fail to cause such lien to be discharged and/or dismissed or bonded
within thirty (30) days after being notified of the filing thereof, then, in
addition to any other right or remedy of Landlord, Landlord may, but shall not
be obligated to, discharge the same by paying the amount claimed to be due; and
the amount so paid by Landlord, and all reasonable costs and expenses, including
reasonable attorneys' fees incurred by Landlord in procuring the discharge of
such lien, shall be due and payable by Tenant to Landlord, as Additional Rent,
on the first day of the next succeeding month. Notice is hereby given that
Landlord shall not be liable for any labor or materials furnished to Tenant upon
credit and that no mechanics', materialmen's or other liens for any such labor
or materials shall attach to or affect the estate or interest of Landlord in and
to the land and improvements of which the Premises are a part.
34.14. Mortgagee's Performance. If requested by any Mortgagee, Tenant
shall give such Mortgagee written notice of any default by Landlord under this
Lease and the same opportunity and time to cure such default prior to
instituting any action for termination of this Lease. Tenant shall accept
performance of any of Landlord's obligations hereunder by any ground lessor or
mortgagee relating to the
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financing of the Property.
34.15. Mortgagee's Liability. No mortgagee or ground lessor relating to
the financing of the Property, not in possession of the Premises or the
Building, shall have any liability whatsoever hereunder.
34.16. Schedules. Each writing or plat referred to herein as being
attached hereto as a schedule or exhibit is hereby made a part hereof, with the
same full force and effect as if such writing or plat were set forth in the body
of this Lease.
34.17. Time of Essence. Time shall be of the essence of this Lease with
respect to the performance by Tenant of its obligations hereunder.
34.18. Amendment. This Lease may be amended by and only by an instrument
executed and delivered by each party hereto. No amendments of this Lease entered
into by Landlord and Tenant, as aforesaid, shall impair or otherwise affect the
obligations of any guarantor of Tenant's obligations hereunder, all of which
obligations shall remain in full force and effect and pertain equally to any
such amendments, with the same full force and effect as if the substance of such
amendments was set forth in the body of this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
ATTEST: LANDLORD:
XXXXX COMMERCIAL PROPERTIES, INC.
By: XXXXX OFFICE MANAGEMENT, INC.,
Managing Agent
/s/ X. X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxx (SEAL)
-------------------------------- ---------------------------------
Assistant Secretary Vice President
ATTEST: TENANT:
CROWN BOOKS CORPORATION
/s/ Xxxx X. Xxxxxxxx By: /s/ X. X. Xxxxxxx (SEAL)
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Secretary of Corporation President
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SCHEDULE C
RULES AND REGULATIONS
1. Tenant shall not obstruct or encumber the Common Area, and the
sidewalks, driveways, and other public portions of the Property (herein "Public
Areas") and such Public Areas shall not be used for any purpose other than
ingress and egress to and from its Premises. Tenant shall not permit any of its
employees, agents, licensees or invitees to congregate or loiter in any of the
Public Areas. Tenant shall not invite to, or permit to visit, its Premises
persons in such numbers or under such conditions as may interfere with the use
and enjoyment by others of the Public Areas. Fire exits and stairways are for
emergency use only, and they shall not be used for any other purpose. Landlord
reserves the right to control, operate, restrict and regulate the use of the
Common Areas, public facilities, and any facilities furnished for the common use
of the tenants in such manner as it deems best for the benefit of the tenants.
2. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades or screens shall be attached
to, hung in, or used in connection with any window or door of its Premises,
without the consent of Landlord. Such window or door coverings must be of a
quality, type, design and color approved by Landlord and further they must be
installed in a manner approved by Landlord. In order that the Building can and
will maintain a uniform appearance to those persons outside of the Building,
each tenant occupying the perimeter areas of the Building shall (a) use only
Building standard lighting in areas where lighting is visible from the outside
of the Building and (b) use only building standard blinds in window areas which
are visible from the outside of the Building.
3. Except as otherwise provided in the Lease, no sign, insignia,
advertisement, lettering, notice or other object shall be exhibited, inscribed,
painted or affixed by Tenant on any part of the exterior or interior of the
Premises or the Building or on doors without the prior approval of Landlord.
Landlord shall review the size, color, style, content and location of any
proposed signage. Landlord shall have the right to prohibit any advertising or
identifying sign by Tenant which, in the sole judgment of Landlord, impairs the
appearance, reputation, or the desirability of the Building. Upon Landlord's
approval, Tenant shall obtain all necessary approvals and permits from
governmental or quasi-governmental authorities in connection with such signs.
Further, approved signs shall be inscribed, painted or affixed by signmakers
approved by Landlord at Tenant's sole cost. In the event of a violation of the
foregoing by Tenant, upon written notice from Landlord, Tenant shall refrain
from and discontinue such advertising or identifying sign. In the event that
Tenant does not promptly correct said violation, Landlord may remove such signs
without any liability, and may charge the expense incurred in such removal to
the Tenant violating this Rule and Tenant hereby agrees to pay any such expense
as Additional Rent.
4. No bicycles, vehicles, animals (except seeing eye dogs), fish or
birds of any kind shall be brought into or kept in or about the Premises within
the Building.
5. Nothing shall be done or permitted by Tenant which would impair or
interfere with the use or enjoyment by any other occupant of the Building,
including the playing of music.
6. Nothing shall be done or permitted in the Premises and nothing shall
be brought into, installed or kept in or about the Premises, which would impair
or interfere with any of the HVAC, plumbing, electrical, structural components
of the Building or the services of the Building or the proper and economic
heating, cleaning or other services of the Building or the Premises. Neither
Tenant nor its
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employees, agents, licensees or invitees shall at any time bring or keep upon
the Premises any flammable, combustible or explosive fluid, chemical or
substance.
7. Intentionally Omitted.
8. Any delivery or moving of any safes, freight, furniture, packages,
boxes, crates or any other such object shall take place at such time and in such
manner so as not to interfere with other occupants of the Building. Tenant
hereby agrees to reimburse Landlord for extra costs incurred by Landlord
including, but not limited to, Landlord's right to inspect all objects to be
brought into the Building and to exclude from the Building any objects which may
in Landlord's sole discretion violate the Lease and/or any of these Rules and
Regulations. Tenant hereby agrees to pay any such costs as Additional Rent.
No hand trucks shall be used for such moving activities except for those
equipped with rubber tires, side guards and such other safeguards as Landlord
shall require.
9. If Tenant shall request Landlord to perform any work on the Premises
or Property, Tenant shall make such request at the management office for the
Building. Tenant shall not request employees of Landlord to perform any work or
do anything outside of their regular duties, unless under special instructions
from Landlord.
10. Canvassing, soliciting and peddling in the Building are prohibited
and Tenant shall cooperate to prevent the same.
11. Tenant shall not cause or permit any odors of cooking or other
processes, or any unusual or objectionable odors, to emanate from its Premises
which would annoy other tenants or create a public or private nuisance. No
cooking shall be done in Tenant's Premises, except for a household microwave
oven or as is expressly permitted in the Lease, or otherwise consented to in
writing by the Landlord.
12. After the Lease Commencement Date, all paneling, doors, trim or
other wood products not considered furniture shall be treated with
fire-retardant materials. Before installation of any such materials,
certification of the materials' fire-retardant characteristics shall be
submitted to and approved by Landlord, and all such materials shall be installed
in a manner approved by Landlord.
13. Whenever Tenant submits any plan, agreement or other document for
the consent or approval of Landlord, Landlord may charge, on demand, a
reasonable processing fee for the review thereof, which shall include the cost
of any services of an architect, engineer or attorney employed by Landlord to
review such plan, agreement or document. Tenant hereby agrees to pay any such
processing fee as Additional Rent.
14. When electric wiring of any kind is introduced, it must be connected
as directed by Landlord, and no stringing or cutting of wires will be allowed,
except with the prior written consent of Landlord, and shall be done only by
contractors approved by Landlord. Tenant shall not lay linoleum or other similar
floor covering so that the same shall be in direct contact with the floor of the
Premises; and if linoleum or other similar floor covering is desired to be used,
an interlining of builder's deadening felt shall be first affixed to the floor
by a paste or other material, the use of cement or other similar adhesive
material being expressly prohibited.
15. Landlord hereby reserves to itself any and all rights not granted to
Tenant hereunder, including, but not limited to, the following rights which are
reserved to Landlord for its purposes in operating the Building:
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(a) the exclusive right to use of the name of the Building for all
purposes, except that Tenant may use the name as its business
address and for no other purpose;
(b) the right to change the name or address of the Building, without
incurring any liability to Tenant for so doing;
(c) the right to install and maintain a sign or signs on the
exterior of the Building;
(d) the exclusive right to use or dispose of the use of the roof of
the Building;
(e) the right to limit the space on the directory of the Building to
be allotted to Tenant; and
(f) the right to grant anyone the right to conduct any particular
business or undertaking in the Building.
16. Tenant and its employees shall park their cars only in those
portions of the parking area designated by Landlord.
17. Tenant shall not permit undue accumulations of garbage, trash,
rubbish or any other refuse, and will keep such refuse in proper containers in
the interior of the Tenant's Premises or other places designated by the
Landlord.
18. Tenant shall not conduct or permit any bankruptcy sales, unless
directed by order of a court of competent jurisdiction, or any fictitious fire
or going out of business sale.
19. Landlord reserves the right to rescind, alter, waive or add any
reasonable and nondiscrimatory rule or regulation at any time prescribed for the
Building when Landlord deems it necessary or desirable for the reputation,
safety, character, security, care, appearance or interests of the Building, the
preservation of good order therein, the operation or maintenance of the Building
or the equipment thereof, or the comfort of tenants or others in the Building.
No rescission, alteration, waiver or addition of any rule or regulation with
respect to one tenant shall operate as a rescission, alteration or waiver in
respect of any other tenant.
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SCHEDULE X
METHOD OF BUILDING MEASUREMENT FOR OFFICE SPACE
I. SINGLE-TENANCY FLOORS
The Rental Area of a single-tenancy floor shall be the area within the
outside walls computed by measuring from the inside surface of the window glass
to the inside surface of the opposite window glass including columns and
projections necessary to the building as well as accessory areas within and
exclusively serving only that floor, with their enclosing walls, toilets,
janitors closets, electrical closets, air-conditioning rooms and fan rooms and
telephone closets, together with four percent (4%) of the sum so determined as a
"Common Area Factor". Rental Area will not include penetrations made by public
stairs, fire towers, public elevator shafts, flues, vents, stacks, pipe shafts
and vertical ducts.
II. DIVIDED FLOORS
The Rental Area of an individual office or a portion of a divided floor
shall be the area computed by measuring from the inside surface of the window
glass to the finished surface of the corridor side of corridor partitions and
from center to center of the partitions that separate the Premises from
adjoining Rental Areas including columns and projections necessary to the
Building together with twelve percent (12%) of the sum so determined as a
"Common Area Factor".
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