AMENDED AND RESTATED INDUSTRIAL LEASE AGREEMENT
BETWEEN
INDUSTRIAL DEVELOPMENTS INTERNATIONAL (TENNESSEE), L.P.
AS LANDLORD
AND
XXXXXXXXXXXXXX.XXX LLC
AS TENANT
LEASE INDEX
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Section Subject
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1 Basic Lease Provisions
2 Demised Premises
3 Term
4 Base Rent
5 Security Deposit
6 Operating Expenses and Additional Rent
7 Use of Demised Premises
8 Insurance
9 Utilities
10 Maintenance and Repairs
11 Tenant's Personal Property; Indemnity
12 Tenant's Fixtures
13 Signs
14 Landlord's Lien
15 Governmental Regulations
16 Environmental Matters
17 Construction of Demised Premises
18 Tenant Alterations and Additions
19 Services by Landlord
20 Fire and Other Casualty
21 Condemnation
22 Tenant's Default
23 Landlord's Right of Entry
24 Lender's Rights
25 Estoppel Certificate
26 Landlord's Liability
27 Notices
28 Brokers
29 Assignment and Subleasing
30 Termination or Expiration
31 Intentionally Omitted
32 Late Payments
33 Rules and Regulations
34 Quiet Enjoyment
35 Miscellaneous
36 Special Stipulations
37 Intentionally omitted
38 Authority
39 No Offer Until Executed
Exhibit "A" Demised Premises
Exhibit "B" Preliminary Plans
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E-1" Tenant's Certificate of Authority
Exhibit "E-2" Landlord's Certificate of Authority
Exhibit "F" Sign Criteria
Exhibit "G" Form SNDA
AMENDED AND RESTATED INDUSTRIAL LEASE AGREEMENT
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THIS AMENDED AND RESTATED INDUSTRIAL LEASE AGREEMENT (the "Lease") is
made to be effective as of the 27th day of July, 1999 (the "Lease Date") by and
between Industrial Developments International (Tennessee), L.P., a Georgia
limited partnership ("Landlord"), and XXXXXXXXXXXXXX.XXX LLC, a Delaware limited
liability company ("Tenant") (the words "Landlord" and "Tenant" to include their
respective legal representatives, successors and permitted assigns where the
context requires or permits).
W I T N E S S E T H:
1. Basic Lease Provisions. The following constitute the basic
provisions of this Lease:
(a) Demised Premises Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
(b) Demised Premises Square Footage: approximately 380,000 sq. ft.
(c) Building Square Footage: approximately 540,000 sq. ft.
(d) Annual Base Rent (based on $2.89/sq. foot, and subject to adjustment as provided in
Special Stipulation 9 on Exhibit C hereto):
Lease Year 1 $915,170.00
Lease Year 2 $1,098,204.00
Lease Year 3 $1,098,204.00
Lease Year 4 $1,098,204.00
Lease Year 5 $1,098,204.00
Lease Year 6 $183,034.00
(2 months)
(e) Monthly Base Rent Installments (based on $2.89/sq. foot, and subject to adjustment as
provided in Special Stipulation 9 on Exhibit C hereto):
Lease Year 1
(Months 1-2) $0.00
(Months 3-12) $91,517.00
Lease Year 2 $91,517.00
Lease Year 3 $91,517.00
Lease Year 4 $91,517.00
Lease Year 5 $91,517.00
Lease Year 6 $91,517.00
(2 months)
(f) Lease Commencement Date: The later to occur of (i) "substantial completion" of the
Improvements, or (ii) November 15, 1999
(g) Base Rent Commencement Date: Sixty (60) days after the Lease Commencement Date, but in
no event earlier than January 15, 2000
(h) Expiration Date: The day immediately preceding the fifth (5th) anniversary of the Base
Rent Commencement Date.
(i) Primary Term: 62 months
(j) Tenant's Operating Expense Percentage: 70.37%, subject to adjustment as provided in
Special Stipulation 9 on Exhibit C hereto.
(k) Security Deposit: See Section 5 hereof
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(l) Permitted Use: Distribution and warehousing of books (including books on tape, disks and
CD-ROM), magazines, periodicals, computer software, compact discs and other forms of
recorded music and video tapes, together with consumer products reasonably related to any of
the foregoing, and office and administrative uses reasonably ancillary thereto
(collectively, the "Initial Use"), or for distribution and warehousing (but not
manufacturing) of any other retail consumer goods and products; provided, however, that
Tenant shall obtain Landlord's prior written consent to a use which is different from the
Initial Use and which involves the distribution, warehousing or other handling or use of
either (1) Hazardous Substances, or other substances or materials which would materially
increase the risk of Contamination (as defined in Section 16) or have a material adverse
affect on the value or marketability of the Building if a Contamination involving such other
substance or material occurs, or (2) noxious substances or materials which would likely
interfere with the business operations of any other tenant and occupant of the Project, or
violate any of the terms or conditions of this Lease, including, without limitation, Section
16 hereof.
(m) Address for notice:
Landlord: Industrial Developments International (Tennessee), L.P.
c/o Industrial Developments International, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Vice President - Operations
Tenant: xxxxxxxxxxxxxx.xxx llc
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
(n) Address for rental payments:
Industrial Developments International (Tennessee), L.P.
c/o IDI Services Group, Inc.
P. O. Xxx 000000
Xxxxxxx, Xxxxxxx 00000-0000
(o) Broker(s): Benchmark Associates, Inc. (Tenant's Broker)
Attn: Xx. Xxxxx Xxxx
IDI Services Group, Inc. (Landlord's Broker)
Attn: Mr. Xxxx Xxxxxx
2. Demised Premises. For and in consideration of the rent hereinafter
reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
Exhibit A attached hereto and incorporated herein: approximately 380,000 square
feet of space, approximately 28,244 square feet of which is office space, having
an address as set forth in Section 1(a), located within Building G (the
"Building"), which contains a total of approximately 540,000 square feet and is
located within Chickasaw Distribution Center (the "Project"), located in Shelby
County, Tennessee. In addition, Tenant shall have the non-exclusive right to use
and enjoy the Building Common Area (as hereinafter defined), as shown on Exhibit
A hereto, subject to the terms and conditions of this Lease.
3. Term. To have and to hold the Demised Premises for a preliminary term
(the "Preliminary Term") commencing on the Lease Date and ending on the Lease
Commencement Date as set forth in Section 1(f), and a primary term (the "Primary
Term") commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17 (the Preliminary Term,
the Primary Term, and any and all extensions thereof, herein referred to as the
"Term"). The term "Lease Year" shall mean each one (1) year period of the Term
(or portion thereof if the last Lease Year of the Term is less than one (1) full
year) beginning on the Lease Commencement Date, and each anniversary thereof,
and ending on the day immediately prior to the next succeeding anniversary of
the Lease Commencement Date.
4. Base Rent. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance and, except as otherwise provided herein, without demand and without
abatement, reduction, set-off or deduction, on the first day of each calendar
month during the Term. If the Base Rent Commencement Date shall fall on a day
other than the first day of a calendar month, the Base Rent shall be apportioned
pro rata
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on a per diem basis (i) for the period between the Base Rent Commencement Date
and the first day of the following calendar month (which pro rata payment shall
be due and payable on the first day of the month immediately following the Base
Rent Commencement Date), and (ii) for the last partial month of the Term, if
applicable. No payment by Tenant or receipt by Landlord of rent hereunder shall
be deemed to be other than on account of the amount due, and no endorsement or
statement on any check or any letter accompanying any check or payment of rent
shall be deemed an accord and satisfaction, and Landlord may accept such check
as payment without prejudice to Landlord's right to recover the balance of such
installment or payment of rent or pursue any other remedies available to
Landlord.
5. Security Deposit. If at any time there shall remain one hundred
eighty (180) days left in the Term without any then available renewal option
hereunder having been validly exercised by Tenant, Tenant agrees that, prior to
such one hundred eightieth (180th) day, Tenant will have delivered to Landlord
an Irrevocable Letter of Credit in the amount of the Monthly Base Rent
Installment applicable for the month which includes such one hundred eightieth
(180th) day (the "Security Deposit"), in a form and from a financial institution
reasonably acceptable to Landlord, and that Tenant shall cause the same to be
maintained in full force and effect throughout the remainder of the Term, and
during the thirty (30) day period after the later of (a) the Expiration Date or
(b) the date that Tenant delivers possession of the Demised Premises to
Landlord, as security for the full and faithful performance by Tenant of each
and every term, covenant and condition of this Lease. The Security Deposit may
be commingled with Landlord's other funds or held by Landlord in a separate
interest bearing account, with interest paid to Landlord, as Landlord may elect.
In the event that Tenant is in default under this Lease beyond any applicable
grace or cure period, Landlord may retain the security Deposit for the payment
of any sum due Landlord or which Landlord may expend or be required to expend by
reason of Tenant's default or failure to perform; provided, however, that any
such retention by Landlord shall not be or be deemed to be an election of
remedies by Landlord or viewed as liquidated damages, it being expressly
understood and agreed that Landlord shall have the right to pursue any and all
other remedies available to it under the terms of this Lease or otherwise. In
the event all or any portion of the Security Deposit is so retained by Landlord,
Tenant shall, within five (5) days of demand therefor from Landlord, replenish
the Security Deposit to the full amount set forth in Section 1(k). In the event
that Tenant shall comply with all of the terms, covenants and conditions of this
Lease, the security deposit shall be returned to Tenant within thirty (30) days
after the later of (a) the Expiration Date or (b) the date that Tenant delivers
possession of the Demised Premises to Landlord. In the event of a sale of the
Building, Landlord shall have the right to transfer the security deposit to the
purchaser, and upon acceptance by such purchaser, Landlord shall be released
from all liability for the return of the security deposit. Tenant shall not
assign or encumber the money deposited as security, and neither Landlord nor its
successors or assigns shall be bound by any such assignment or encumbrance.
6. Operating Expenses and Additional Rent. (See Special Stipulations 3
and 10 on Exhibit C hereto)
(a) Tenant agrees to pay as Additional Rent (as defined in
Section 6(b) below) its proportionate share of Operating Expenses (as
hereinafter defined). "Operating Expenses" shall be defined as all reasonable
expenses for operation, repair, replacement and maintenance as necessary to keep
the Building and the common areas, driveways, and parking areas associated
therewith (collectively, the "Building Common Area") in good order, condition
and repair, including but not limited to, utilities for the Building Common
Area, expenses associated with the driveways and parking areas (including
sealing and restriping, and snow, trash and ice removal), security systems for
the Building Common Area, fire detection and prevention systems for the Building
Common Area, lighting facilities, landscaped areas, walkways, painting and
caulking, directional signage, curbs, drainage strips, sewer lines, all
maintenance, repair and replacement costs required to be paid for or contributed
toward by Landlord pursuant to any applicable access, driveway, shared truck
court or other such easements benefiting the Building (subject, with respect to
any replacements or improvement of a capital nature made thereunder, to the same
limitations on passing through the costs of capital replacements or improvements
as are set forth in the fourth (4th) sentence of this Section 6), all real
property taxes and special assessments imposed upon the Building, the Building
Common Area and the land on which the Building and the Building Common Area are
constructed, all costs of insurance paid by Landlord with respect to the
Building and the Building Common Area, and costs of improvements to the Building
and the Building Common Area required by any law, ordinance or regulation
applicable to the Building and the Building Common Area generally (and not
because of the particular use of or alterations within the Building or the
Building Common Area by a particular tenant), which cost shall be amortized on a
straight line basis over the useful life of such improvement in accordance with
generally accepted accounting principles ("GAAP"); provided, however, that no
such cost to comply with any such law, ordinance or regulation shall be included
in Operating Expenses to the extent the Building or Building Common Area failed
to comply with any such law, ordinance or regulation in effect as of the Lease
Commencement Date. Notwithstanding anything to the contrary contained herein,
Operating Expenses shall not include expenses for the costs of any maintenance
and repair required to be performed by Landlord at its own expense under Section
(10)(b). Further, Operating Expenses shall not include the costs for capital
replacements and/or improvements unless such costs (i) are incurred for the
purpose of causing a material decrease in the Operating Expenses of the Building
or the Building Common Area, provided such costs are amortized (and included in
Operating Expenses as so amortized) on a straight line basis over the useful
life of such improvement in accordance with GAAP, (ii) are incurred with respect
to improvements made to comply with laws, ordinances or regulations as described
above, or (iii) constitute a commercially reasonable deductible, not to exceed
$20,000.00, paid by Landlord in the event of a casualty under any
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casualty insurance carried by Landlord. The proportionate share of Operating
Expenses to be paid by Tenant shall be a percentage of the Operating Expenses
based upon the proportion that the square footage of the Demised Premises bears
to the total square footage of the Building (such figure referred to as
"Tenant's Operating Expense Percentage" and, subject to adjustment as provided
herein, set forth in Section 1(j)). Prior to or promptly after the beginning of
each calendar year during the Term, Landlord shall estimate the total amount of
Operating Expenses to be paid by Tenant during each such calendar year and
Tenant shall pay to Landlord one-twelfth (1/12) of such sum on the first day of
each calendar month during each such calendar year, or part thereof, during the
Term. Within a reasonable time after the end of each calendar year (but not
later than one hundred twenty (120) days after the end of each such calendar
year), Landlord shall submit to Tenant a reasonably detailed statement of the
actual amount of Operating Expenses for such calendar year, and the actual
amount owed by Tenant, and within thirty (30) days after receipt of such
statement, Tenant shall pay any deficiency between the actual amount owed and
the estimates paid during such calendar year, or in the event of overpayment,
Landlord shall credit the amount of such overpayment toward the next installment
of Operating Expenses owed by Tenant or remit such overpayment to Tenant if the
Term has expired or has been terminated and no Event of Default exists
hereunder. The obligations in the immediately preceding sentence shall survive
the expiration or any earlier termination of this Lease. If the Lease
Commencement Date shall fall on other than the first day of the calendar year,
and/or if the Expiration Date shall fall on other than the last day of the
calendar year, Tenant's proportionate share of the Operating Expenses for such
calendar year shall be apportioned prorata.
(b) Any amounts required to be paid by Tenant hereunder (in
addition to Base Rent) and any charges or expenses incurred by Landlord on
behalf of Tenant under the terms of this Lease shall be considered "Additional
Rent" payable in the same manner and upon the same terms and conditions as the
Base Rent reserved hereunder except as set forth herein to the contrary. Any
failure on the part of Tenant to pay such Additional Rent when and as the same
shall become due shall entitle Landlord to the remedies available to it for
non-payment of Base Rent. Tenant's obligations for payment of Additional Rent
shall begin to accrue on the Base Rent Commencement Date.
(c) If applicable in the jurisdiction where the Demised Premises
are located, Tenant shall pay and be liable for all rental, sales, use and
inventory taxes or other similar taxes, if any, on the amounts payable by Tenant
hereunder levied or imposed by any city, state, county or other governmental
body having authority, such payments to be in addition to all other payments
required to be paid Landlord by Tenant under the terms of this Lease. Such
payment shall be made by Tenant directly to such governmental body if billed to
Tenant, or if billed to Landlord, such payment shall be paid concurrently with
the payment of the Base Rent, Additional Rent, or such other charge upon which
the tax is based, all as set forth herein.
7. Use of Demised Premises.
(a) The Demised Premises shall be used for the Permitted
Use set forth in Section 1(l) and for no other purpose.
(b) Tenant will permit no liens to attach or exist against
the Demised Premises, and shall not commit any waste.
(c) The Demised Premises shall not be used for any illegal
purposes, and Tenant shall not allow, suffer, or permit any vibration, noise,
odor, light or other effect to occur within or around the Demised Premises that
could constitute a nuisance or trespass for Landlord or any occupant of the
Building or an adjoining building, its customers, agents, or invitees. Upon
notice by Landlord to Tenant that any of the aforesaid prohibited uses are
occurring, Tenant agrees to promptly remove or control the same. Notwithstanding
the foregoing, Landlord acknowledges and agrees that this subparagraph (c) shall
not be deemed to prohibit vibrations, odors and/or noises that are customarily
associated with the operation of a warehouse facility for the uses permitted
herein including, without limitation, loading and unloading of trucks, and the
use of conveyor belts, generators, and heating, ventilating and air conditioning
units and air compressors.
(d) Tenant shall not in any way violate any law, ordinance or
restrictive covenant affecting the Demised Premises, and shall not in any manner
use the Demised Premises so as to cause cancellation of, prevent the use of, or
increase the rate of, the fire and extended coverage insurance policy required
hereunder. Except as expressly set forth below in this subsection 7(d), Landlord
makes no (and does hereby expressly disclaim any) covenant, representation or
warranty as to the Permitted Use being allowed by or being in compliance with
any applicable laws, rules, ordinances or restrictive covenants now or hereafter
affecting the Demised Premises, and any zoning letters, copies of zoning
ordinances or other information from any governmental agency or other third
party provided to Tenant by Landlord or any of Landlord's agents or employees
shall be for informational purposes only, Tenant hereby expressly acknowledging
and agreeing that Tenant shall conduct and rely solely on its own due diligence
and investigation with respect to the compliance of the Permitted Use with all
such applicable laws, rules, ordinances and restrictive covenants and not on any
such information provided by Landlord or any of its agents or employees.
Landlord hereby represents to Tenant that, as of the Lease Date, (i) neither the
current zoning classification applicable to the Demised Premises nor the
Declaration of Protective Covenants established by Landlord and currently
encumbering the Building (the "Declaration") prohibits Tenant from operating a
warehouse/distribution facility for the Initial Use twenty-four (24) hours a
day, three hundred
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sixty-five (365) days a year, and (ii) none of the title exceptions listed in
Schedule B-Section 2 of the copy of that certain Lawyer's Title Insurance
Company lender's title insurance policy having Bank of America (as hereinafter
defined) as the insured, a copy of which has been delivered by Landlord to
Tenant, prohibits Tenant from conducting general warehousing and distribution
operations within and from the Demised Premises.
(e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the use of the Demised Premises by Tenant, to the extent such increase is
solely a result of Tenant's use of the Demised Premises, Tenant shall pay such
additional amount as Additional Rent, provided Landlord's insurance company
delivers to Tenant a certification showing the manner in which Tenant's use has
brought about such increase. To Landlord's actual knowledge, as of the Lease
Date Tenant's use of the Demised Premises for the Permitted Use (as opposed to
Tenant's manner of use) shall not cause an increase in Landlord's insurance
rates.
8. Insurance.
(a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:
(i) Liability insurance in the Commercial General
Liability form (or reasonable equivalent thereto) covering the Demised Premises
(including any portion of the Building Common Area fenced in by Tenant pursuant
to Special Stipulation 12 of Exhibit C hereto) and Tenant's use thereof against
claims for bodily injury or death, property damage and product liability
occurring upon, in or about the Demised Premises, such insurance to be written
on an occurrence basis (not a claims made basis), to be in combined single
limits amounts not less than $3,000,000.00 and to have general aggregate limits
of not less than $5,000,000.00 for each policy year. The insurance coverage
required under this Section 8(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 11 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
(ii) Insurance covering (A) all of the items
included in the leasehold improvements constructed in the Demised Premises by or
at the expense of Landlord (collectively, the "Improvements"), including but not
limited to demising walls and the heating, ventilating and air conditioning
system and (B) Tenant's trade fixtures, fencing, merchandise and personal
property from time to time in, on or upon the Demised Premises (including any
portion of the Building Common Area fenced in by Tenant pursuant to Special
Stipulation 12 of Exhibit C hereto), in an amount not less than one hundred
percent (100%) of their full replacement value from time to time during the
Term, providing protection against perils included within the standard form of
"all-risks" fire and casualty insurance policy, together with insurance against
sprinkler damage, vandalism and malicious mischief. Any policy proceeds from
such insurance relating to the Improvements shall be used solely for the repair,
construction and restoration or replacement of the Improvements damaged or
destroyed unless this Lease shall cease and terminate under the provisions of
Section 20.
(b) All policies of the insurance provided for in Section 8(a)
shall be issued in form reasonably acceptable to Landlord by insurance companies
with a rating of not less than "A," and financial size of not less than Class
XII, in the most current available "Best's Insurance Reports", and licensed to
do business in the state in which the Building is located. Each and every such
policy:
(i) shall name Landlord, Lender (as defined in
Section 24), and any other party reasonably designated by Landlord, as an
additional insured. In addition, the coverage described in Section 8(a)(ii)(A)
relating to the Improvements shall also name Landlord as "loss payee";
(ii) shall be delivered to Landlord, in the form of
an insurance certificate reasonably acceptable to Landlord as evidence of such
policy, prior to the Lease Commencement Date and thereafter within thirty (30)
days prior to the expiration of each such policy, and, as often as any such
policy shall expire or terminate. Renewal or additional policies shall be
procured and maintained by Tenant in like manner and to like extent;
(iii) shall contain a provision that the insurer
will give to Landlord and such other parties in interest at least fifteen (15)
days notice in writing in advance of any material change, cancellation,
termination or lapse, or the effective date of any reduction in the amounts of
insurance; and
(iv) shall be written as a primary policy which
does not contribute to and is not in excess of coverage which Landlord may
carry.
(c) In the event that Tenant shall fail to carry and maintain
the insurance coverages set forth in this Section 8, Landlord may upon thirty
(30) days notice to Tenant (unless such coverages will lapse in which event no
such notice shall be necessary) procure such policies of insurance and Tenant
shall promptly reimburse Landlord therefor.
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(d) Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, with respect to their respective property, the
Demised Premises, its contents or to the other portions of the Building, arising
from any risk covered by all risks fire and extended coverage insurance of the
type and amount required to be carried hereunder, provided that such waiver does
not invalidate such policies or prohibit recovery thereunder. The parties hereto
shall cause their respective insurance companies insuring the property of either
Landlord or Tenant against any such loss, to waive any right of subrogation that
such insurers may have against Landlord or Tenant, as the case may be.
9. Utilities. During the Term, Tenant shall promptly pay as billed to
Tenant all costs and charges for gas, steam, electricity, fuel, light, power,
telephone, heat and any other utility or service used or consumed in or
servicing the Demised Premises, all of which (other than water and sewer service
to the Demised Premises) shall be separately metered and billed to Tenant. The
cost of water and sewer service to the Demised Premises shall be passed through
to Tenant by Landlord (at Landlord's actual cost) on a prorata basis as an
Operating Expense under Section 6 hereof. In no event shall such charges include
any Landlord-imposed surcharge, administrative fee, overhead or profit. In the
event Tenant's use of any utility not separately metered to the Demised Premises
is in excess of the average use by other tenants, Landlord shall have the right
to install a meter for such utility, at Tenant's expense, and xxxx Tenant for
Tenant's actual use, or to increase equitably Tenant's proportionate share of
the cost of such utility based on such excess use. If Tenant fails to pay any
utility bills or charges, Landlord may, at its option and upon reasonable notice
to Tenant, pay the same and in such event, the amount of such payment, together
with interest thereon at the Interest Rate as defined in Section 32 from the
date of such payment by Landlord, will be added to Tenant's next due payment as
Additional Rent.
10. Maintenance and Repairs.
(a) Subject to Landlord's obligations under Section 17 hereof,
Tenant shall, at its own cost and expense, maintain in good condition and repair
the interior of the Demised Premises, including but not limited to the heating,
air conditioning and ventilation systems, glass, windows and doors, sprinkler,
all components of any plumbing and sewage systems located within or under the
Demised Premises [i.e., inside of the exterior walls and the middle of any
interior demising walls of the Demised Premises, and/or within or under the
floor slab or the underlying foundation], fixtures, interior walls, floors
(including floor slabs, unless specifically reserved unto Landlord in subsection
(b) below), ceilings, storefronts, gutters, flashing and downspouts, plate
glass, skylights, all electrical facilities and equipment including, without
limitation, lighting fixtures, lamps, fans and any exhaust equipment and
systems, electrical motors, and all other appliances and equipment (including,
without limitation, dock levelers, dock shelters, dock seals and dock lighting)
of every kind and nature located in, upon or (to the extent exclusively serving
the Demised Premises) about the Demised Premises, except as to such maintenance
and repair as is the obligation of Landlord pursuant to Section 10(b). During
the Term, Tenant shall maintain in full force and effect a service contract for
the maintenance of the heating, ventilation and air conditioning systems with an
entity reasonably acceptable to Landlord. Tenant shall deliver to Landlord (i) a
copy of said service contract prior to the Lease Commencement Date, and (ii)
thereafter, a copy of a renewal or substitute service contract within thirty
(30) days prior to the expiration of the existing service contract. Tenant's
obligation shall exclude any maintenance and repair required because of the act
or negligence of Landlord, its employees, contractors or agents, which shall be
the responsibility of Landlord.
(b) Landlord shall, at its own cost and expense, maintain in
good condition and repair the roof (including, without limitation, keeping the
same free of leaks), foundation (beneath the floor slab, provided that Landlord
shall repair any damage to the floor slab resulting solely from improperly
compacted subgrade located beneath the same), exterior walls, columns, and
structural frame of the Building. Landlord's obligation shall exclude the cost
of any maintenance or repair required because of the act or negligence of Tenant
or Tenant's agents, contractors, employees and invitees (collectively, "Tenant's
Affiliates"), the cost of which shall be the responsibility of Tenant.
(c) Unless the same is caused solely by the negligent action or
inaction of Landlord, its employees or agents, and is not covered by the
insurance required to be carried by Tenant pursuant to the terms of this Lease,
Landlord shall not be liable to Tenant or to any other person for any damage
occasioned by failure in any utility system or by the bursting or leaking of any
vessel or pipe in or about the Demised Premises, or for any damage occasioned by
water coming into the Demised Premises or arising from the acts or neglects of
occupants of adjacent property or the public.
(d) Landlord shall give Tenant two (2) days prior written notice
of any repairs or replacements required of Landlord pursuant to subsection 10(b)
above to, or which would otherwise materially adversely affect the normal
operation of Tenant's business in, the Demised Premises [except in the case of
an emergency posing significant risk of physical damage to the Demised Premises
or any other part of the Building, including, without limitation, Tenant's
property located within the Demised Premises, or injury to persons, in which
event Landlord shall only be required to give such notice (including oral notice
to any on-site, management personal, provided such oral notice is followed by
written notice given in the manner provided for notices herein within three (3)
days of such oral notice) as is reasonable under the circumstances]. Landlord
shall use reasonable efforts to perform such repairs or replacements in a manner
that does not interfere with the operation of Tenant's business at the Demised
Premises (or any portion thereof).
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(e) If (i) Landlord has failed to commence any repair of the
Demised Premises, as required in subsection 10(b) above, within seven (7) days
after written notice from Tenant specifying which repair Landlord has failed to
perform (or, in the case of leaks in the roof of the Demised Premises that
otherwise meet the conditions required for "self-help" hereinbelow, within
twenty-four (24) hours after written notice from Tenant specifying same), or
(ii) Landlord has failed to complete any repair of the Demised Premises, as
required in subsection 10(b) above, within thirty (30) days after written notice
from Tenant specifying which repair Landlord has failed to complete (provided
such repair is reasonably capable of being completed within such thirty (30) day
period), and, in Tenant's reasonable opinion, "self-help" measures are necessary
in an emergency situation to prevent significant physical damage to the Demised
Premises (including Tenant's property located within the Demised Premises) or
injury to persons, Tenant may exercise such self-help to perform or complete
such repair, as the case may be, after giving Landlord such notice of Tenant's
intent to do so as is reasonable under the circumstances (it being acknowledged
that oral notice may be appropriate in certain emergency situations, but that
any such oral notice must be followed by written notice given in the manner
provided for notices herein within three (3) days of such oral notice);
provided, however, that in performing any such self-help with respect to the
roof of the Demised Premises, Tenant (i) shall only use a manufacturer approved,
licensed roof contractor, and (ii) shall not void or impair any applicable roof
warranty. Tenant shall be entitled to recover from Landlord the reasonable and
actual out-of-pocket cost of any such self-help measures, and Landlord shall pay
such amount to Tenant within forty-five (45) days after Tenant's request for
reimbursement as described below. In addition, any requests for reimbursement
made by Tenant shall be accompanied by such documentation as Landlord shall
reasonably require showing the actual costs incurred by Tenant, and by full and
final lien waivers from all contractors performing the work. If Landlord has not
paid to Tenant such amount or given Tenant notice of its objection to such
amount within such forty-five (45) day period, or if Landlord's objection to
such amount is resolved against Landlord by agreement of the parties or by a
court of competent jurisdiction to which the dispute has been submitted by
either party, then Tenant may offset the reasonable and actual out-of pocket
cost of such self-help measures from future Monthly Base Rent Installments next
coming due hereunder until Tenant has been reimbursed in full therefor, such
offset for any given month to be up to, but not to exceed, one-half (1/2) of the
Monthly Base Rental Installment due for such month.
11. Tenant's Personal Property; Indemnity. All of Tenant's personal
property in the Demised Premises (including any portion of the Building Common
Area enclosed by fencing installed by Tenant pursuant to Special Stipulation 12
of Exhibit C hereto) shall be and remain at Tenant's sole risk. Landlord, its
agents, employees and contractors, shall not be liable for, and Tenant hereby
releases Landlord from, any and all liability for theft of such personal
property or any damage to such personal property occasioned by any act of God or
by any acts, omissions or negligence of any persons, other than to the extent
occasioned by the negligence of Landlord or its agents, employees or
contractors. Landlord, its agents, employees and contractors, shall not be
liable for any injury to the person or property of Tenant or other persons
within the Demised Premises (including any portion of the Building Common Area
enclosed by fencing installed by Tenant pursuant to Special Stipulation 12 of
Exhibit C hereto), Tenant expressly agreeing to indemnify and save Landlord, its
agents, employees and contractors, harmless, in all such cases, except to the
extent caused by the negligence of Landlord, its agents, employees and
contractors. Tenant further agrees to indemnify and reimburse Landlord for any
costs or expenses, including, without limitation, attorneys' fees, that Landlord
reasonably may incur in investigating, handling or litigating any such claim
against Landlord by a third person, unless such claim arose from the negligence
of Landlord, its agents, employees or contractors. Landlord agrees to indemnify
and save Tenant harmless from and against any claims, actions, damages, losses,
costs or expenses, including, without limitation, attorneys' fees, that Tenant
reasonably may suffer or incur as a result of any injury to person or property
in or about the Building Common Area (excluding any portion of the Building
Common Area enclosed by fencing installed by Tenant pursuant to Special
Stipulation 12 of Exhibit C hereto) resulting from the negligence or willful
misconduct of Landlord or its employees or agents, except to the extent caused
by the negligence or willful misconduct of Tenant or its agents, employees,
invitees or contractors. The provisions of this Section 11 shall survive the
expiration or earlier termination of this Lease with respect to any damage,
injury or death occurring before such expiration or termination, and are in any
event subject to the provisions of Section 8(d) hereof.
12. Tenant's Fixtures. Tenant shall have the right to install in the
Demised Premises trade fixtures required by Tenant or used by it in its
business, and if installed by Tenant, to remove any or all such trade fixtures
from time to time during and upon termination or expiration of this Lease,
provided no Event of Default, as defined Section 22, then exists; provided,
however, that Tenant shall repair and restore any damage or injury to the
Demised Premises (to the condition in which the Demised Premises existed prior
to such installation) caused by the installation and/or removal of any such
trade fixtures.
13. Signs. No sign, advertisement or notice shall be inscribed, painted,
affixed, or displayed on the windows or exterior walls of the Demised Premises
or on any public area of the Building, except in such places, numbers, sizes,
colors and styles as are approved in advance in writing by Landlord, and which
conform to all applicable laws, ordinances, or covenants affecting the Demised
Premises. Any and all signs installed or constructed by or on behalf of Tenant
pursuant hereto shall be installed, maintained and removed by Tenant at Tenant's
sole cost and expense. Notwithstanding the foregoing, Tenant shall have the
right, at Tenant's sole cost and expense, to attach one (1) sign on the exterior
of the Building of such size and in such location and manner as are approved in
advance by Landlord in writing (which approval shall not be unreasonably
withheld), provided such sign otherwise complies with this Section 13 and with
the sign criteria for the Project, a copy of which is attached hereto as Exhibit
F.
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14. Landlord's Lien. Notwithstanding any other provision hereof to the
contrary, Tenant does hereby grant to Landlord, and Landlord shall have at all
times, a security interest in and a valid first lien upon all of the personal
property and trade fixtures of Tenant situated in and upon the Demised Premises
to secure the obligations of Tenant for all Base Rent, Additional Rent and other
sums to become due hereunder and the performance by Tenant of each and all of
Tenant's other covenants and obligations hereunder. The security interest and
lien granted herein may be foreclosed in the manner and form provided by law for
the foreclosure of chattel mortgages or in any other manner provided or
permitted by law. Landlord does hereby agree to subordinate the lien granted
herein, as well as any statutory lien granted to Landlord, to the lien of any
institutional lender providing purchase money financing to Tenant, or to any the
lien of the IDB (as defined in Special Stipulation 8 on Exhibit C hereto), if
required, that is secured by Tenant's trade fixtures, equipment, inventory or
other personal property located at the Demised Premises, all pursuant to a
landlord lien subordination agreement in form and substance reasonably
satisfactory to Landlord.
15. Governmental Regulations. Tenant shall promptly comply throughout
the Term, at Tenant's sole cost and expense, with all present and future laws,
ordinances, orders, rules, regulations or requirements of all federal, state and
municipal governments and appropriate departments, commissions, boards and
officers thereof (collectively, "Governmental Requirements") relating to (a) all
or any part of the Demised Premises, and (b) to Tenant's use or manner of use of
the Demised Premises and/or to Tenant's manner of use of the Building Common
Area. Tenant shall also observe and comply with the requirements of all policies
of public liability, fire and other policies of insurance at any time in force
with respect to the Demised Premises. Without limiting the foregoing, if as a
result of one or more Governmental Requirements it is necessary, from time to
time during the Term, to perform an alteration or modification of the Demised
Premises (a "Code Modification") to the extent made necessary as a result of the
specific use being made by Tenant of the Demised Premises or any other
alteration performed by Tenant with respect to the Demised Premises, then such
Code Modification shall be the sole and exclusive responsibility of Tenant in
all respects; any such Code Modification shall be promptly performed by Tenant
at its expense in accordance with the applicable Governmental Requirement and
with Section 18 hereof. If as a result of one or more Governmental Requirements
it is necessary from time to time during the Term to perform a Code Modification
which (i) would be characterized as a capital expenditure under generally
accepted accounting principles and (ii) is not made necessary as a result of the
specific use being made by Tenant of the Demised Premises (as distinguished from
an alteration or modification which would be required to be made by the owner of
any warehouse-office building comparable to the Building irrespective of the use
thereof by any particular occupant), or by any other alteration performed by
Tenant with respect to the Demised Premises, then (a) Landlord shall have the
obligation to perform the Code Modification at its expense, (b) the cost of such
Code Modification shall be amortized on a straight-line basis over the useful
life of the item in question, as determined in accordance with GAAP, and (c)
Tenant shall be obligated to pay (as Additional Rent, payable in the same manner
and upon the same terms and conditions as the Base Rent reserved hereunder) for
the portion of such amortized costs attributable to the remainder of the Term,
including any extensions thereof (if exercised). Tenant shall promptly send to
Landlord a copy of any written notice received by Tenant requiring a Code
Modification.
16. Environmental Matters.
(a) For purposes of this Lease:
(i) "Contamination" as used herein means
the presence of or release of Hazardous Substances (as hereinafter defined) into
any environmental media from, upon, within, below, into or on any portion of the
Demised Premises, the Building, the Building Common Area or the Project so as to
require remediation, cleanup or investigation under any applicable Environmental
Law (as hereinafter defined).
(ii) "Environmental Laws" as used herein
means all federal, state, and local laws, regulations, orders, permits,
ordinances or other requirements, which exist now or as may exist hereafter,
concerning protection of human health, safety and the environment, all as may be
amended from time to time.
(iii) "Hazardous Substances" as used
herein means any hazardous or toxic substance, material, chemical, pollutant,
contaminant or waste as those terms are defined by any applicable Environmental
Laws (including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any
solid wastes, polychlorinated biphenyls, urea formaldehyde, asbestos,
radioactive materials, radon, explosives, petroleum products and oil.
(b) Landlord represents that, except as revealed to Tenant in
writing by Landlord, to Landlord's actual knowledge, (i) Landlord has not
treated, stored or disposed of any Hazardous Substances upon or within the
Building and/or Building Common Area, nor, to Landlord's actual knowledge, has
any predecessor owner of the Building and/or Building Common Area, (ii) no
Hazardous Substances are present on or under the Building and/or Building Common
Area as of the Lease Date, and (iii) no underground storage tanks exist at or
under the Building and/or Building Common Area.
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(c) Tenant covenants that all its activities, and the activities
of Tenant's Affiliates (as defined in Section 10(b)), on the Demised Premises,
the Building, or the Project during the Term will be conducted in compliance
with Environmental Laws. Tenant warrants that it is currently in compliance with
all applicable Environmental Laws and that there are no pending or threatened
notices of deficiency, notices of violation, orders, or judicial or
administrative actions involving alleged violations by Tenant of any
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall be
responsible for obtaining all permits or licenses or approvals under
Environmental Laws necessary for Tenant's operation of its business on the
Demised Premises and shall make all notifications and registrations required by
any applicable Environmental Laws. Tenant, at Tenant's sole cost and expense,
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations and with any other
applicable Environmental Laws. Tenant warrants that it has obtained all such
permits, licenses or approvals and made all such notifications and registrations
required by any applicable Environmental Laws necessary for Tenant's operation
of its business on the Demised Premises.
(d) Tenant shall not cause or permit any Hazardous Substances to
be brought upon, kept or used in or about the Demised Premises, the Building, or
the Project without the prior written consent of Landlord, which consent shall
not be unreasonably withheld; provided, however, that the consent of Landlord
shall not be required for the use at the Demised Premises of cleaning supplies,
toner for photocopying machines and other similar materials, in containers and
quantities reasonably necessary for and consistent with normal and ordinary use
by Tenant in the routine operation or maintenance of Tenant's office equipment
or in the routine janitorial service, cleaning and maintenance for the Demised
Premises. For purposes of this Section 16, Landlord shall be deemed to have
reasonably withheld consent if Landlord determines that the presence of such
Hazardous Substance within the Demised Premises could result in a risk of harm
to person or property or otherwise negatively affect the value or marketability
of the Building or the Project.
(e) Tenant shall not cause or permit the release of any
Hazardous Substances by Tenant or Tenant's Affiliates into any environmental
media such as air, water or land, or into or on the Demised Premises, the
Building or the Project in any manner that violates any Environmental Laws. If
such release shall occur, Tenant shall (i) take all steps reasonably necessary
to contain and control such release and any associated Contamination, (ii) clean
up or otherwise remedy such release and any associated Contamination to the
extent required by, and take any and all other actions required under,
applicable Environmental Laws and (iii) notify and keep Landlord reasonably
informed of such release and response.
(f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold
Landlord harmless from and against any and all expense, loss, and liability
suffered by Landlord (except to the extent that such expenses, losses, and
liabilities arise out of Landlord's own negligence or willful act), by reason of
the storage, generation, release, handling, treatment, transportation, disposal,
or arrangement for transportation or disposal, of any Hazardous Substances
(whether accidental, intentional, or negligent) by Tenant or Tenant's Affiliates
or by reason of Tenant's breach of any of the provisions of this Section 16.
Such expenses, losses and liabilities shall include, without limitation, (i) any
and all expenses that Landlord may incur to comply with any Environmental Laws;
(ii) any and all costs that Landlord may incur in studying or remedying any
Contamination at or arising from the Demised Premises, the Building, or the
Project; (iii) any and all costs that Landlord may incur in studying, removing,
disposing or otherwise addressing any Hazardous Substances; (iv) any and all
fines, penalties or other sanctions assessed upon Landlord; and (v) any and all
legal and professional fees and costs incurred by Landlord in connection with
the foregoing. The indemnity contained herein shall survive the expiration or
earlier termination of this Lease. Landlord shall indemnify Tenant and hold
Tenant harmless from and against any and all expenses, losses and liabilities
actually suffered by Tenant (with the exception of any and all consequential
damages, including but not limited to the loss of use of the Demised Premises,
lost profits and loss of business, and those expenses, losses, and liabilities
arising from Tenant's own negligence or willful act) as a result of a
governmental authority having jurisdiction ordering a cleanup, removal or other
remediation by Tenant of any Hazardous Substances placed on, under or about the
Demised Premises by Landlord or its agents or employees.
17. Construction of Demised Premises.
(a) Within thirty (30) days following the Lease Date, Landlord
shall prepare, at Landlord's sole cost and expense, and submit to Tenant a set
of plans and specifications and/or construction drawings (collectively, the
"Plans and Specifications") covering all work to be performed by Landlord in
constructing the Improvements (as defined in Section 8(a)(ii)), which Plans and
Specifications shall be based on the preliminary plans and specifications set
forth on Exhibit B attached hereto and incorporated herein, including, without
limitation, Tenant's operational plan (the "Operational Plan") incorporated
therein
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by reference (collectively, the "Performance Specifications"), it being agreed
by Landlord and Tenant that, unless specifically noted on a separate summary
sheet attached to the final Plans and Specifications and agreed to and initialed
by authorized employees or agents of Landlord and Tenant, in the event of any
conflict between the Plans and Specifications and such Performance
Specifications, the latter shall control. Tenant shall have five (5) business
days after receipt of the plans and specifications in which to review and to
give to Landlord written notice of its approval of the plans and specifications
or its requested changes to the Plans and Specifications. Tenant shall have no
right to request any changes to the plans and specifications which would
materially alter the exterior appearance or basic nature of the Building, as the
same exist as of the Lease Date or are otherwise contemplated by the Performance
Specifications. If Tenant fails to approve or request changes to the Plans and
Specifications by five (5) business days after its receipt thereof, then Tenant
shall be deemed to have approved the Plans and Specifications and the same shall
thereupon be final. If Tenant requests any changes to the Plans and
Specifications, Landlord shall make those changes which are reasonably requested
by Tenant and shall within ten (10) days of its receipt of such request submit
the revised portion of the Plans and specifications to Tenant. Tenant may not
thereafter disapprove the revised portions of the Plans and specifications
unless Landlord has unreasonably failed to incorporate reasonable comments of
Tenant and, subject to the foregoing, the Plans and specifications, as modified
by said revisions, shall be deemed to be final upon the submission of said
revisions to Tenant. Tenant acknowledges that the Improvements are being
constructed on a "fast track" basis and that Landlord shall have the right and
option to submit various parts of the proposed Plans and Specifications from
time to time during the aforesaid thirty (30) day period and the time period for
approval of any part of the proposed plans and specifications shall commence
upon receipt of each submission. Tenant shall at all times in its review of the
plans and specifications, and of any revisions thereto, act reasonably and in
good faith. Tenant's approval of the final Plans and Specifications shall not
constitute an opinion or agreement by Tenant that the Demised Premises will be
structurally sufficient or that the final Plans and Specifications comply with
applicable building codes and laws. After Tenant has approved the Plans and
Specifications or the Plans and Specifications have otherwise been finalized
pursuant to the procedures set forth hereinabove, any subsequent changes to the
Plans and Specifications requested by Tenant shall be at Tenant's sole cost and
expense and subject to Landlord's written approval, which approval shall not be
unreasonably withheld, conditioned or delayed. If, after the Plans and
specifications have been finalized pursuant to the procedures set forth
hereinabove, Tenant requests any further changes to the Plans and specifications
and, as a result thereof, completion of construction of the Improvements is
delayed solely due to Tenant's changes (and Landlord gives Tenant reasonable
evidence of the date that substantial completion of the Improvements would have
occurred but for delays caused by Tenant's changes), the Term shall nevertheless
begin, and Tenant's obligation to pay Base Rent hereunder shall nevertheless
begin, on the Lease Commencement Date and the Base Rent Commencement Date,
respectively, that would have occurred hereunder but for such Tenant changes.
(b) Landlord shall use reasonable speed and diligence to
"substantially complete" the Improvements, at Landlord's sole cost and expense,
and have the Demised Premises ready for occupancy on or before November 15,
1999. If the Demised Premises are not substantially complete on that date, such
failure to complete shall not in any way affect the obligations of Tenant
hereunder except that the Lease Commencement Date, the Base Rent Commencement
Date, and the Expiration Date shall be postponed one day for each day
substantial completion is delayed until the Demised Premises are substantially
complete, unless the delay is caused by Tenant's disapproval of any revised
portions of the Plans and specifications (except to the extent Tenant's
disapproval is as a result of Landlord having failed reasonably to incorporate
reasonable comments of Tenant), or by change orders requested by Tenant after
approval of the Plans and Specifications; provided, however, that (x) in the
event the Demised Premises are not substantially complete on or before November
15, 1999, as extended by "Construction Delay" (as defined below), and provided
Tenant has not exercised its right to terminate this Lease as provided in part
(y) of this sentence, then for each day after the ultimate Base Rent
Commencement Date Tenant shall receive "free" Base Rent (i.e., Base Rent shall
be waived) on a one (1) for one (1) basis for each day substantial completion
was delayed beyond November 15, 1999, as extended by Construction Delay, and (y)
in the event that Landlord is unable to achieve substantial completion on or
before February 15, 2000, as extended by Construction Delay, Tenant may, at its
option and as its sole and exclusive remedy, terminate this Lease by written
notice to Landlord given on or before February 29, 2000 (provided that
substantial completion has not occurred prior to Landlord's receipt of said
termination notice), and thereafter neither Landlord nor Tenant shall have any
further obligation hereunder. Except as set forth in this subsection (b), no
liability whatsoever shall arise or accrue against Landlord by reason of its
failure to deliver or afford possession of the Demised Premises, and Tenant
hereby releases and discharges Landlord from and of any claims for damage, loss,
or injury of every kind whatsoever as if this Lease were never executed. For
purposes of this Lease, the term "Construction Delay" shall mean delays incurred
by reason of Tenant's failure to deliver the Operation Plan by August 1, 1999,
Tenant's failure to approve the Plans and Specifications as set forth in Section
17(a) or changes requested by Tenant in the Plans and Specifications after
Tenant's approval thereof, and for such additional time as is equal to the time
lost by Landlord or Landlord's contractors or suppliers in connection with the
performance of Landlord's work and/or the construction of the Demised Premises
and related improvements due to industry-wide strikes or other labor troubles
that are not specific to Landlord or the Demised Premises, governmental
restrictions and limitations not known to Landlord (or reasonably capable of
being known to Landlord) as of the Lease Date, war or other national emergency,
non-availability of materials or supplies, delay in transportation, accidents,
floods, fire, damage or other casualties, weather or other conditions, acts or
omissions of Tenant, or delays by utility companies in bringing utility lines to
the Demised Premises to the extent not resulting from Landlord's failure to
order or apply for the same in a timely manner. For purposes of this Lease, the
term "substantial completion" or any grammatical variation
-11-
thereof shall mean sufficient completion of construction of the Demised Premises
in accordance with the Plans and Specifications (including the Performance
Specifications) so that Tenant can lawfully occupy the Demised Premises for the
uses permitted herein, subject only to minor punchlist items, the completion of
which will not interfere with such permitted uses by Tenant, as evidenced by the
delivery by Landlord to Tenant of (i) a Certificate of Occupancy or its
equivalent (or Temporary Certificate of Occupancy or its equivalent) for the
Demised Premises issued by the appropriate governmental authority if so required
by applicable law, and (ii) a Certificate of Substantial Completion on standard
AIA Form G-704 certified by Landlord's architect, working in good faith together
with such duly licensed Tennessee architect, if any, as may be selected by
Tenant as Tenant's architect by written notice to Landlord given, if at all,
within thirty (30) days of the Lease Date.
(c) Upon substantial completion of the Demised Premises, a
representative of Landlord and a representative of Tenant together shall inspect
the Demised Premises and generate a punchlist of defective or uncompleted items
relating to the completion of construction of the Improvements (the
"Punchlist"). Landlord shall use reasonable efforts to complete such incomplete
work and remedy such defective work as is set forth on the Punchlist within
thirty (30) days after the Punchlist is prepared and agreed upon by Landlord and
Tenant, subject to Punchlist Delay (as defined below). All construction work
performed by Landlord shall be deemed approved by Tenant in all respects except
for items of said work which are not completed or do not conform to the Plans
and Specifications and which are included on the Punchlist. For purposes of this
Lease, "Punchlist Delay" shall mean such additional time as is equal to the time
lost by Landlord or Landlord's contractors or suppliers in connection with the
performance of Landlord's work and/or the construction of the Building or the
Demised Premises and related improvements due to industry-wide strikes or other
labor troubles that are not specific to Landlord or the Demised Premises,
governmental restrictions and limitations not known to Landlord (or reasonably
capable of being known to Landlord) as of the Lease Date, war or other national
emergency, non-availability of materials or supplies, delay in transportation,
accidents, floods, fire, damage or other casualties, weather or other
conditions, acts or omissions of Tenant, or delays by utility companies in
bringing utility lines to the Building or the Demised Premises to the extent not
resulting from Landlord's failure to order or apply for the same in a timely
manner.
(d) Upon substantial completion of the Demised Premises and the
creation of the Punchlist, Tenant shall execute and deliver to Landlord a letter
of acceptance in which Tenant (i) accepts the Demised Premises subject only to
Landlord's completion of the items listed on the Punchlist and (ii) confirms the
Lease Commencement Date, the Base Rent Commencement Date and the Expiration
Date.
(e) Landlord hereby warrants to Tenant (i) that the materials
and equipment furnished by Landlord's contractors in the initial construction of
the Building (including all plumbing, utility lines and sewage systems serving
the same) and the performance and completion of the Improvements to be
constructed pursuant hereto will be of good quality and new, (ii) that during
the one (1) year period following the Lease Commencement Date, such materials
and equipment and the work of such contractors shall be free from defects
(subject to the limitations inherent in the quality required or permitted
hereunder or in the Plans and Specifications, including the Performance
Specifications), (iii) that such work will conform to the Plans and
Specifications, and (iv) that the design and construction of the Building and
the Improvements will comply in all material respects with the Performance
Specifications. This warranty shall exclude damages or defects caused by Tenant
or Tenant's Affiliates, improper or insufficient maintenance, improper
operation, or normal wear and tear under normal usage.
18. Tenant Alterations and Additions.
(a) Tenant shall not make or permit to be made any alterations,
improvements, or additions to the Demised Premises (a "Tenant's Change"),
without first obtaining on each occasion Landlord's prior written consent (which
consent Landlord agrees not to unreasonably withhold or delay) and Lender's
prior written consent (if such consent is required); provided, however, that
Tenant shall have the right without Landlord's (or Lender's) prior written
consent to make a Tenant's Change which is non-structural and which requires an
expenditure of less than $75,000.00 for any one Tenant's Change and less than
$200,000.00 in the aggregate either for the initial Term or for any extended
Term, provided that Tenant shall, at Landlord's option and request and at
Tenant's sole cost and expense, remove any such non-structural Tenant's Change
for which Landlord's consent was not obtained (or was obtained but was
conditioned upon removal) and/or restore the Demised Premises to its condition
prior to such non-structural Tenant's Change upon the termination or expiration
of this Lease. As part of its approval process, if applicable, Landlord may
require that Tenant submit plans and specifications to Landlord, for Landlord's
approval or disapproval, which approval shall not be unreasonably withheld or
delayed. All Tenant's Changes shall be performed in accordance with all legal
requirements applicable thereto and in a good and workmanlike manner with
first-class materials. Tenant shall maintain insurance reasonably satisfactory
to Landlord during the construction of all Tenant's Changes. If, where
Landlord's approval is required or otherwise requested by Tenant, Landlord at
the time of giving its approval to any Tenant's Change notifies Tenant in
writing that approval is conditioned upon restoration, then Tenant shall, at its
sole cost and expense and at Landlord's option and request upon the termination
or expiration of this Lease, remove the same and restore the Demised Premises to
its condition prior to such Tenant's Change. No Tenant's Change shall be
structural in nature or impair the structural strength of the Building or reduce
its value. Tenant shall pay the full cost of any Tenant's Change. Except as
otherwise provided herein and in Section 12, all Tenant's Changes and all
repairs and all other property attached to or installed on the Demised Premises
by
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or on behalf of Tenant shall immediately upon completion or installation thereof
be and become part of the Demised Premises and the property of Landlord without
payment therefor by Landlord and shall be surrendered to Landlord upon the
expiration or earlier termination of this Lease. No term or condition of this
subsection (a) shall be deemed to prohibit Tenant from installing and removing
its trade fixtures (including, without limitation, Tenant's machinery,
generators, and racks and conveyor system), in accordance with Section 12
hereof.
(b) To the extent permitted by law, all of Tenant's contracts
and subcontracts for such Tenant's Changes shall provide that no lien shall
attach to or be claimed against the Demised Premises or any interest therein
other than Tenant's leasehold interest in the Demised Premises, and that all
subcontracts let thereunder shall contain the same provision. Whether or not
Tenant furnishes the foregoing, Tenant agrees to hold Landlord harmless against
all liens, claims and liabilities of every kind, nature and description which
may arise out of or in any way be connected with such work. Tenant shall not
permit the Demised Premises to become subject to any mechanics', laborers' or
materialmen's lien on account of labor, material or services furnished to Tenant
or claimed to have been furnished to Tenant in connection with work of any
character performed or claimed to have been performed for the Demised Premises
by, or at the direction or sufferance of Tenant and if any such liens are filed
against the Demised Premises, Tenant shall promptly discharge the same;
provided, however, that Tenant shall have the right to contest, in good faith
and with reasonable diligence, the validity of any such lien or claimed lien if
Tenant shall give to Landlord, within thirty (30) days after demand, such
security as may be reasonably satisfactory to Landlord to assure payment thereof
(or bond over any such lien with a surety company licensed to do business in
Tennessee) and to prevent any sale, foreclosure, or forfeiture of Landlord's
interest in the Demised Premises by reason of non-payment thereof; provided
further that on final determination of the lien or claim for lien, Tenant shall
immediately pay any judgment rendered, with all proper costs and charges, and
shall have the lien released and any judgment satisfied. If Tenant fails to post
such security or bond or does not diligently contest such lien, Landlord may,
upon thirty (30) days notice to Tenant, without investigation of the validity of
the lien claim, discharge such lien and Tenant shall reimburse Landlord upon
demand for all costs and expenses incurred in connection therewith, which
expenses shall include any attorneys' fees, paralegals' fees and any and all
costs associated therewith, including litigation through all trial and appellate
levels and any costs in posting bond to effect a discharge or release of the
lien. Nothing contained in this Lease shall be construed as a consent on the
part of Landlord to subject the Demised Premises to liability under any lien law
now or hereafter existing of the state in which the Demised Premises are
located.
19. Services by Landlord. Landlord shall be responsible for providing
for maintenance of, and at all time during the Term shall keep in good condition
and repair, the Building Common Area, and, except as required by Section 10(b)
hereof, Landlord shall be responsible for no other services whatsoever. Tenant,
by payment of Tenant's share of the Operating Expenses, shall pay Tenant's pro
rata share of the expenses incurred by Landlord hereunder pursuant to Section 6
hereof.
20. Fire and Other Casualty. In the event the Demised Premises are
damaged by fire or other casualty insured or required hereunder to be insured by
Landlord, Landlord agrees to promptly restore and repair the Demised Premises at
Landlord's expense, including the Improvements to be insured by Tenant but only
to the extent Landlord receives insurance proceeds or adequate alternative funds
from Tenant for the restoration of such Improvements to be insured by Tenant.
Notwithstanding the foregoing, in the event that the Demised Premises are (i) in
the reasonable opinion of Landlord's project architect and Tenant's architect
selected pursuant to subsection 17(b) above, acting in cooperation (or such
other architect as Landlord or Tenant, as the case may be, may select as its
architect for purposes of this Section 20 by written notice to the other within
five (5) days of such casualty), so destroyed that they cannot be repaired or
rebuilt within one hundred eighty (180) days after the date of such damage,
joint notice of such determination (the "Determination Notice") to be given to
Landlord and Tenant by such architects within thirty (30) days of such casualty;
or (ii) destroyed or damaged in any material respect during the last Lease Year
of the Term (without Tenant having validly extended or thereupon agreeing to
extend the Term pursuant to an existing renewal option ), then in the event only
part (i) of the immediately preceding sentence applies, then Tenant (not
Landlord) may terminate and cancel this Lease effective as of the date of such
casualty by giving written notice to the Landlord within thirty (30) days after
Tenant's receipt of the Determination Notice, and in the event part (ii) of the
immediately preceding sentence applies, then either Landlord or Tenant may
terminate and cancel this Lease effective as of the date of such casualty by
giving written notice to the other party within thirty (30) days after the date
of such casualty. Upon the giving of any such termination notice, all
obligations hereunder with respect to periods from and after the effective date
of termination shall thereupon cease and terminate. If no such termination
notice is given, Landlord shall make such repair or restoration of the Demised
Premises to the approximate condition existing prior to such casualty [but, as
to the Improvements to be insured by Tenant hereunder, only to the extent of
insurance proceeds received by Landlord, provided that nothing herein shall
relieve Tenant of its obligation under Section 30(b) hereof to return the
Demised Premises to Landlord at the expiration of the Term in substantially the
same condition (i.e., with substantially the same Improvements and in good
condition and repair) as existed at the Lease Commencement Date, subject to any
Tenant's Changes made in accordance with Section 18 hereof], promptly and in
such manner as not to unreasonably interfere with Tenant's use and occupancy of
the Demised Premises (if Tenant is still occupying the Demised Premises). Base
Rent and Additional Rent shall proportionately xxxxx during the time that the
Demised Premises or any part thereof are unusable by reason of any such damage
thereto (except to the extent they remain unusable due to the lack of available
insurance proceeds with respect to the Improvements to be insured by Tenant). If
Landlord fails to
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commence restoration within the earlier of thirty (30) days after receipt of all
insurance proceeds payable as a result of such casualty (Landlord hereby
agreeing to use reasonable efforts to settle any claim promptly following such
casualty), or sixty (60) days after the date of such casualty (as such period
shall be extended until Landlord shall have received adequate proceeds to
restore the Improvements to be insured by Tenant), Tenant may perform the
restoration after giving Landlord written notice of its intent to perform such
restoration, and Landlord shall reimburse Tenant for the reasonable costs of
such restoration actually incurred by Tenant up to the amount of insurance
proceeds payable to Landlord (or which would be payable to Landlord had Landlord
carried the insurance required to be carried by it herein) as a result of such
casualty, within thirty (30) days after Tenant's request for reimbursement as
described below. Any requests for reimbursement made by Tenant shall be
accompanied by such documentation as Landlord shall reasonably require showing
the actual costs incurred by Tenant, together with full and final lien waivers
from all contractors performing the work. If Landlord has not paid to Tenant
such amount or given Tenant notice of reasonable objection to such amount within
such thirty (30) day period, or if Landlord's objection to such amount is
resolved against Landlord by agreement of the parties or by a court of competent
jurisdiction to which the dispute has been submitted by either party, then
Tenant may offset the reasonable and actual out-of pocket cost of such
restoration from future Monthly Base Rent Installments next coming due hereunder
until Tenant has been reimbursed in full therefor, such offset for any given
month to be up to, but not to exceed, one-half (1/2) of the Monthly Base Rental
Installment due for such month.
21. Condemnation.
(a) If (i) all of the Demised Premises is taken or condemned for
a public or quasi-public use, (ii) a material portion of the Demised Premises
(which shall include one-third (1/3) or more of the loading docks exclusively
serving the Demised Premises) is taken or condemned for a public or quasi-public
use and the remaining portion thereof is not usable by Tenant in the reasonable
opinion of Landlord and Tenant, cooperating together in good faith, (iii) if a
taking or condemnation reduces the number of parking spaces in Tenant's
Exclusive Parking Area (as hereinafter defined) to below 250 spaces and Landlord
is unable to provide reasonable alternative parking, or (iv) if in connection
with a taking or condemnation access to Tenant's Exclusive Parking Area or the
loading area serving the Demised Premises is taken and no alternative access
reasonably acceptable to Tenant is provided by Landlord, this Lease shall
terminate as of the earlier of the date title to the condemned real estate vests
in the condemnor or the date on which (i) Tenant is deprived of possession of
the Demised Premises or (ii) such amount of (or access to) Tenant's Exclusive
Parking Area, as the case may be. In such event, the Base Rent herein reserved
and all Additional Rent and other sums payable hereunder shall be apportioned
and paid in full by Tenant to Landlord to that date, all Base Rent, Additional
Rent and other sums payable hereunder prepaid for periods beyond that date shall
forthwith be repaid by Landlord to Tenant, and neither party shall thereafter
have any liability hereunder, except that any obligation or liability of either
party, actual or contingent, under this Lease which has accrued on or prior to
such termination date shall survive.
(b) If only part of the Demised Premises is taken or condemned
for a public or quasi-public use and this Lease does not terminate pursuant to
Section 21(a), Landlord shall, to the extent of the award it receives, restore
the Demised Premises to a condition and to a size as nearly comparable as
reasonably possible to the condition and size thereof immediately prior to the
taking, and there shall be an equitable adjustment to the Base Rent and
Additional Rent based on the actual loss of use of the Demised Premises suffered
by Tenant from the taking.
(c) Landlord shall be entitled to receive the entire award in
any proceeding with respect to any taking provided for in this Section 21,
without deduction therefrom for any estate vested in Tenant by this Lease, and
Tenant shall receive no part of such award. Nothing herein contained shall be
deemed to prohibit Tenant from making a separate claim, against the condemnor,
to the extent permitted by law, for the value of Tenant's moveable trade
fixtures, machinery and moving expenses, provided that the making of such claim
shall not and does not adversely affect or diminish Landlord's award.
22. Tenant's Default.
(a) The occurrence of any one or more of the following events
shall constitute an "Event of Default" of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or
any Additional Rent hereunder as and when such rent becomes due and such failure
shall continue for more than ten (10) days after Landlord gives written notice
to Tenant of such failure;
(ii) if Tenant fails to pay Base Rent or
any Additional Rent on time more than three (3) times in any period of twelve
(12) months, notwithstanding that such payments have been made within the
applicable cure period;
(iii) if Tenant fails to take possession of
the Demised Premises on the Lease Commencement Date or promptly thereafter;
(iv) if Tenant permits to be done anything
which creates a lien upon the Demised Premises and fails to discharge or bond
such lien, or post security with Landlord acceptable to Landlord within thirty
(30) days after receipt by Tenant of written notice thereof;
-14-
(v) if Tenant fails to maintain in force
all policies of insurance required by this Lease and such failure shall continue
for more than ten (10) days after Landlord gives Tenant written notice of such
failure;
(vi) if any petition is filed by or
against Tenant or any guarantor of this Lease under any present or future
section or chapter of the Bankruptcy Code, or under any similar law or statute
of the United States or any state thereof (which, in the case of an involuntary
proceeding, is not permanently discharged, dismissed, stayed, or vacated, as the
case may be, within ninety (90) days of commencement), or if any order for
relief shall be entered against Tenant or any guarantor of this Lease in any
such proceedings;
(vii) if Tenant or any guarantor of this
Lease becomes insolvent or makes a transfer in fraud of creditors or makes an
assignment for the benefit of creditors;
(viii) if a receiver, custodian, or trustee
is appointed for the Demised Premises or for all or substantially all of the
assets of Tenant or of any guarantor of this Lease, which appointment is not
vacated within ninety (90) days following the date of such appointment; or
(ix) if Tenant fails to perform or observe
any other term of this Lease and such failure shall continue for more than
thirty (30) days after Landlord gives Tenant written notice of such failure, or,
if such failure cannot be corrected within such thirty (30) day period, if
Tenant does not commence to correct such default within said thirty (30) day
period and thereafter diligently prosecute the correction of same to completion
within a reasonable time.
(b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22):
(i) Terminate this Lease by giving Tenant notice
of termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or
(ii) Terminate this Lease as provided in Section
22(b)(i) hereof and recover from Tenant all damages (to the exclusion of
consequential damages) Landlord may incur by reason of Tenant's default,
including, without limitation, an amount which, at the date of such termination,
is calculated as follows: (1) the value of the excess, if any, of (A) the Base
Rent, Additional Rent and all other sums which would have been payable hereunder
by Tenant for the period commencing with the day following the date of such
termination and ending with the Expiration Date had this Lease not been
terminated (the "Remaining Term"), over (B) the aggregate reasonable rental
value of the Demised Premises for the Remaining Term (which excess, if any shall
be discounted to present value at the "Treasury Yield" as defined below for the
Remaining Term); plus (2) the costs of recovering possession of the Demised
Premises and all other expenses incurred by Landlord due to Tenant's default,
including, without limitation, reasonable attorney's fees; plus (3) the unpaid
Base Rent and Additional Rent earned as of the date of termination plus any
interest and late fees due hereunder, plus other sums of money and damages owing
on the date of termination by Tenant to Landlord under this Lease or in
connection with the Demised Premises. The amount as calculated above shall be
deemed immediately due and payable. The payment of the amount calculated in
subparagraph (ii)(1) shall not be deemed a penalty but shall merely constitute
payment of liquidated damages, it being understood and acknowledged by Landlord
and Tenant that actual damages to Landlord are extremely difficult, if not
impossible, to ascertain. "Treasury Yield" shall mean the rate of return in
percent per annum of Treasury Constant Maturities for the length of time
specified as published in document H.15(519) (presently published by the Board
of Governors of the U.S. Federal Reserve System titled "Federal Reserve
Statistical Release") for the calendar week immediately preceding the calendar
week in which the termination occurs. If the rate of return of Treasury Constant
Maturities for the calendar week in question is not published on or before the
business day preceding the date of the Treasury Yield in question is to become
effective, then the Treasury Yield shall be based upon the rate of return of
Treasury Constant Maturities for the length of time specified for the most
recent calendar week for which such publication has occurred. If no rate of
return for Treasury Constant Maturities is published for the specific length of
time specified, the Treasury Yield for such length of time shall be the weighted
average of the rates of return of Treasury Constant Maturities most nearly
corresponding to the length of the applicable period specified. If the
publishing of the rate of return of Treasury Constant Maturities is ever
discontinued, then the Treasury Yield shall be based upon the index which is
published by the Board of Governors of the U.S. Federal Reserve System in
replacement thereof or, if no such replacement index is published, the index
which, in Landlord's reasonable determination, most nearly corresponds to the
rate of return of Treasury Constant Maturities. In determining the aggregate
reasonable rental value pursuant to subparagraph (ii)(1)(B) above, the parties
hereby agree that, at the time Landlord seeks to enforce this remedy, all
relevant factors should be considered, including, but not limited to, (a) the
length of time remaining in the Term, (b) the then current market conditions in
the general area in which the Building is located, (c) the likelihood of
reletting the Demised Premises for a period of time equal to the remainder of
the Term, (d) the net effective rental rates then being obtained by landlords
for similar type space of similar
-15-
size in similar type buildings in the general area in which the Building is
located, (e) the vacancy levels in the general area in which the Building is
located, (f) current levels of new construction that will be completed during
the remainder of the Term and how this construction will likely affect vacancy
rates and rental rates and (g) inflation; or
(iii) Intentionally omitted;
(iv) Without terminating this Lease, in its own
name but as agent for Tenant, enter into and upon and take possession of the
Demised Premises or any part thereof. Any property remaining in the Demised
Premises may be removed and stored in a warehouse or elsewhere at the cost of,
and for the account of, Tenant without Landlord being deemed guilty of trespass
or becoming liable for any loss or damage which may be occasioned thereby unless
caused by Landlord's negligence. Thereafter, Landlord may, but shall not be
obligated to, lease to a third party the Demised Premises or any portion thereof
as the agent of Tenant upon such terms and conditions as Landlord may deem
necessary or desirable in order to relet the Demised Premises. The remainder of
any rentals received by Landlord from such reletting, after the payment of any
indebtedness due hereunder from Tenant to Landlord, and the payment of any costs
and expenses of such reletting, shall be held by Landlord to the extent of and
for application in payment of future rent owed by Tenant, if any, as the same
may become due and payable hereunder. If such rentals received from such
reletting shall at any time or from time to time be less than sufficient to pay
to Landlord the entire sums then due from Tenant hereunder, Tenant shall pay any
such deficiency to Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for any such previous default provided same has not been cured; or
(v) Without terminating this Lease, and with or
without notice to Tenant, enter into and upon the Demised Premises and, without
being liable for prosecution or any claim for damages therefor, maintain the
Demised Premises and repair or replace any damage thereto or do anything or make
any payment for which Tenant is responsible hereunder. Tenant shall reimburse
Landlord immediately upon demand for any expenses which Landlord incurs in thus
effecting Tenant's compliance under this Lease and Landlord shall not be liable
to Tenant for any damages with respect thereto; or
(vi) Intentionally omitted; or
(vii) With or without terminating this Lease, allow the
Demised Premises to remain unoccupied and collect rent from Tenant as it comes
due; or
(viii) Pursue such other remedies as are available at
law or equity.
(c) If this Lease shall terminate as a result of or while there
exists an Event of Default hereunder, any funds of Tenant held by Landlord may
be applied by Landlord to any damages payable by Tenant (whether provided for
herein or by law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor
the settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises
and no act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice of such intention is given to Tenant. No provision
of this Lease shall be deemed to have been waived by either party unless such
waiver is in writing and signed by the party making such waiver. Landlord's
acceptance of Base Rent or Additional Rent in full or in part following an Event
of Default hereunder shall not be construed as a waiver of such Event of
Default. No custom or practice which may grow up between the parties in
connection with the terms of this Lease shall be construed to waive or lessen
either party's right to insist upon strict performance of the terms of this
Lease, without a written notice thereof to the other party.
(f) If an Event of Default shall occur, Tenant shall pay to
Landlord, on demand, all expenses incurred by Landlord as a result thereof,
including reasonable attorneys' fees, court costs and expenses actually
incurred; provided, however, that Landlord and Tenant shall each reimburse the
other for the reasonable and actual attorneys' fees incurred by such other party
in connection with any litigation initiated by Landlord or Tenant, as the case
may be, pursuant to this Lease which results in a final, unappealable judgment
as to the merits in the other party's favor.
23. Landlord's Right of Entry. Tenant agrees to permit Landlord and the
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises at all reasonable times for the purposes of inspecting the Demised
Premises and Tenant's compliance with this Lease, and making any necessary
repairs thereto; provided that, except in the case of an emergency posing
significant physical damage to the Demised Premises, including, without
limitation, Tenant's property located within the Demised Premises, or injury to
persons, Landlord shall give Tenant at least forty-eight (48) hours prior
-16-
written notice of Landlord's intended entry upon the Demised Premises. Nothing
herein shall imply any duty upon the part of Landlord to do any work required of
Tenant hereunder, and the performance thereof by Landlord shall not constitute a
waiver of Tenant's default in failing to perform it. Landlord shall not be
liable for inconvenience, annoyance, disturbance or other damage to Tenant by
reason of making such repairs or the performance of such work in the Demised
Premises or on account of bringing materials, supplies and equipment into or
through the Demised Premises during the course thereof, and the obligations of
Tenant under this Lease shall not thereby be affected; provided, however, that
Landlord shall use reasonable efforts not to disturb or otherwise interfere with
Tenant's operations in the Demised Premises in making such repairs or performing
such work. Landlord also shall have the right to enter the Demised Premises at
all reasonable times during the Term to exhibit the Demised Premises to any
prospective purchaser or mortgagee thereof, and at all reasonable times during
the last six (6) months of the Term to exhibit the Demised Premises to any
prospective tenant thereof.
24. Lender's Rights.
(a) For purposes of this Lease:
(i) "Lender" as used herein means the holder of a
Mortgage;
(ii) "Mortgage" as used herein means any or all
mortgages, deeds to secure debt, deeds of trust or other instruments in the
nature thereof which may now or hereafter affect or encumber Landlord's title to
the Demised Premises, and any amendments, modifications, extensions or renewals
thereof.
(b) This Lease and all rights of Tenant hereunder are and shall
be subject and subordinate to the lien and security title of any Mortgage
provided that the holder of said Mortgage agrees not to disturb Tenant's
possession of the Demised Premises or otherwise diminish Tenant's rights
hereunder so long as Tenant is not in default hereunder beyond any applicable
grace or cure period, as evidenced by a subordination and non-disturbance
agreement signed by said holder which agreement shall include (i) conditions
substantially in the form contained in Section 24(e) of this Lease, (ii) a
requirement that said holder be given notice and opportunity to cure a landlord
default and (iii) other commercially reasonable provisions customarily required
by such holder and reasonably acceptable to Tenant. Tenant shall promptly
execute such a subordination and non-disturbance agreement upon Landlord's
request.. Tenant recognizes and acknowledges the right of Lender to foreclose or
exercise the power of sale against the Demised Premises under any Mortgage.
(c) Tenant shall, in confirmation of the subordination set forth
in Section 24(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary,
upon demand, at any time or times, execute, acknowledge, and deliver to Landlord
or to Lender any and all instruments requested by either of them to evidence
such subordination, provided that such instrument contains the non-disturbance
provisions referred to in Section 24(b) above.
(d) At any time during the Term, Lender may, by written notice
to Tenant, make this Lease superior to the lien of its Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all instruments that may be reasonably necessary
to make this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall, if requested by such successor, attorn to and recognize such
successor as Tenant's landlord under this Lease without change in the terms and
provisions of this Lease and shall promptly execute and deliver any instrument
that may be reasonably necessary to evidence such attornment, provided that such
successor shall not be bound by (i) any payment of Base Rent or Additional Rent
for more than one month in advance, except prepayments in the nature of security
for the performance by Tenant of its obligations under this Lease, and then only
if such prepayments have been deposited with and are under the control of such
successor, (ii) any provision of any amendment to the Lease to which Lender has
not consented (unless such amendment merely confirms the occurrence of an event
or a decision by Landlord or Tenant which is expressly contemplated by a
specific provision hereof), (iii) the defaults of any prior landlord under this
Lease, unless the same shall be continuing, or (iv) any offset rights arising
out of the defaults of any prior landlord under this Lease (unless if such right
of offset is expressly provided in this Lease and Lender has been given notice
of an opportunity to cure Landlord's default which gave rise to Tenant's offset
right). Upon such attornment, this Lease shall continue in full force and effect
as a direct lease between each successor landlord and Tenant, subject to all of
the terms, covenants and conditions of this Lease.
(f) Tenant hereby acknowledges that the Building is currently
subject to a Mortgage in favor of Bank of America, N.A. d/b/a NationsBank, N.A.
("Bank of America"). It shall be a condition of this Lease and of Tenant's
obligation to accept the Demised Premises that Landlord deliver a subordination,
non-disturbance and attornment agreement to Tenant, executed by Bank of America
and to be executed by Tenant, substantially in the form attached hereto as
Exhibit G, with such modifications as Tenant may reasonably request. In the
event there is any other Mortgage at any time during the Term, Landlord shall
-17-
use reasonable efforts to cause the Lender to enter into a subordination,
nondisturbance and attornment agreement with Tenant reasonably satisfactory to
Tenant and consistent with this Section 24.
25. Estoppel Certificate. Landlord and Tenant agree, at any time, and
from time to time, within fifteen (15) days after written request of the other,
to execute, acknowledge and deliver a statement in writing in recordable form to
the requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
unconditionally accepted the Demised Premises and is conducting its business
therein, and (v) and as to such additional matters as may be reasonably
requested, it being intended that any such statement delivered pursuant hereto
may be relied upon by the requesting party and by any purchaser of title to the
Demised Premises or by any mortgagee or any assignee thereof or any party to any
sale-leaseback of the Demised Premises, or the landlord under a ground lease
affecting the Demised Premises.
26. Landlord Liability. No owner of the Demised Premises, whether or not
named herein, shall have liability hereunder after it ceases to hold title to
the Demised Premises, provided any transferee assume in writing Landlord's
obligations under this Lease arising from and after the date of such transfer.
Neither Landlord nor any officer, director, shareholder, partner or principal of
Landlord, whether disclosed or undisclosed, shall be under any personal
liability with respect to any of the provisions of this Lease. In the event
Landlord is in breach or default with respect to Landlord's obligations or
otherwise under this Lease, Tenant shall look solely to the equity of Landlord
in the Building (and any future rents and profits derived therefrom) for the
satisfaction of Tenant's remedies. It is expressly understood and agreed that
Landlord's liability under the terms, covenants, conditions, warranties and
obligations of this Lease shall in no event exceed the loss of Landlord's equity
interest in the Building. Notwithstanding the foregoing provisions of this
Section 26, Industrial Developments International (Tennessee), L.P. ("IDI") (but
not its officers, directors, shareholders, employees, partners or principals)
shall be personally liable for the completion of the construction and
installation of the Improvements in accordance with the Plans and
Specifications, and, other than any collateral or other grants or assignments
made in connection with any construction financing of such work, IDI shall not
grant a security interest in, nor assign or convey any of its ownership of, the
Demised Premises prior to substantial completion of such work, unless, in
connection with any such conveyance, IDI agrees to remain liable for completion
of all such work (and provides Tenant with reasonable evidence of such
agreement).
27. Notices. Any notice required or permitted to be given or served by
either party to this Lease shall be deemed given when made in writing, and
either (i) personally delivered, (ii) deposited with the United States Postal
Service, postage prepaid, by registered or certified mail, return receipt
requested, or (iii) delivered by licensed overnight delivery service providing
proof of delivery, properly addressed to the address set forth in Section 1(m)
(as the same may be changed by giving written notice of the aforesaid in
accordance with this Section 27). If any notice mailed is properly addressed
with appropriate postage but returned for any reason, such notice shall be
deemed to be effective notice and to be given on the date of mailing. The time
period in which a party must respond to any such notice given by deposit with
the United States Postal Service pursuant to part (ii) hereof shall commence
upon such party's actual receipt of such notice as evidenced by the return
receipt,
28. Brokers. Landlord and Tenant hereby represent and warrant, each to
the other that, except for those parties set forth in Section 1(o) (the
"Brokers"), the representing party has not engaged or had any conversations or
negotiations with any broker, finder or other third party concerning the leasing
of the Demised Premises to Tenant who would be entitled to any commission or fee
based on the execution of this Lease. Landlord and Tenant hereby indemnify each
other against and from any claims for any brokerage commissions (except those
payable to the Brokers, all of which are payable by Landlord pursuant to a
separate agreement) and all costs, expenses and liabilities in connection
therewith, including, without limitation, reasonable attorneys' fees and
expenses, for any breach of the foregoing representation by the indemnifying
party. The foregoing indemnification shall survive the termination of this Lease
for any reason. Tenant hereby acknowledges and agrees that notwithstanding any
affiliation between Benchmark Associates and IDI Services Group, Inc. for
commission sharing or any other purposes, IDI Service Group, Inc. is only
representing Landlord in connection with this Lease and Tenant hereby expressly
waives any conflict of interest to which such affiliation may give rise.
29. Assignment and Subleasing.
(a) Tenant may not assign, mortgage, pledge, encumber or
otherwise transfer this Lease, or any interest hereunder, or sublet the Demised
Premises, in whole or in part, without on each occasion first obtaining the
prior express written consent of Landlord, which consent Landlord shall not
unreasonably withhold. Any change in control of Tenant resulting from a merger,
consolidation, stock transfer or asset sale shall be considered an assignment or
transfer which requires Landlord's prior written consent.
(b) Notwithstanding subsection (a) of this Section 29, provided
that no Event of Default has occurred and is then continuing, Tenant shall have
the right, upon fifteen (15) days prior written
-18-
notice to Landlord, (i) to sublet all or part of the Demised Premises to Xxxxxx
& Xxxxx, Inc. or Bertlesmann, Inc., Tenant's parent companies (each a "Parent"),
or to any entity which is a direct or indirect wholly-owned subsidiary of Tenant
or of either Parent (any of such entities being herein called a "Parent
Affiliate"); or (ii) to assign this Lease (x) to a Parent or a Parent Affiliate
or to (y) a successor corporation into which or with which Tenant is merged or
consolidated or which acquired substantially all of Tenant's assets and property
or stock, provided that, with respect to an assignment pursuant to (ii)(y), such
successor corporation assumes substantially all of the obligations and
liabilities of Tenant and, after such transaction, shall have a tangible net
worth at least equal to $150,000,000.00, as determined in accordance with GAAP
(or a lesser amount if Tenant shall deliver to Landlord in connection therewith
a letter of credit in form and from a bank or other financial institution
reasonably satisfactory to Landlord in the amount of the lesser of Annual Base
Rent for the last full year of the then current Term, or Annual Base Rent for
the remainder of the then current Term (the latter, if applicable, to be
increased from time to time to the Annual Base Rent for the last full year of
any subsequent renewal Terms if and when applicable). Any sublease or assignment
pursuant to and in compliance with this subsection (b) shall be referred to
herein as a "Related Assignment". With respect to any Related Assignment, Tenant
shall provide in its notice to Landlord such information as may be reasonably
required by Landlord to determine that the requirements of this subsection (b)
have been satisfied. Nothing in this Section 29 shall prohibit Tenant from (i)
allowing portions of the Demised Premises (not to exceed more than twenty-five
percent (25%) of the floor area thereof in the aggregate at any one time) to be
used by unrelated third parties for the warehousing and distribution of retail
consumer goods that are compatible with Tenant's consumer goods (and which are
to be distributed to Tenant's internet customers from the Demised Premises),
provided that the goods warehoused and sold and the other activities conducted
by such third parties in and from the Demised Premises are in compliance with
the Permitted Use provisions hereof and with all of the other terms and
conditions of this Lease,, and (ii) engaging a third party logistics manager to
coordinate Tenant's operations from the Demised Premises. Any third parties
using or operating from or within the Demised Premises pursuant to part (i)
and/or part (ii) of the immediately preceding sentence shall be deemed to
constitute "Tenant's Affiliates" or to otherwise constitute employees or agents
of Tenant for all purposes of this Lease.
(c) If Tenant desires to assign this Lease or sublet the Demised
Premises or any part thereof, Tenant shall give Landlord written notice no later
than thirty (30) days in advance of the proposed effective date of any proposed
assignment or sublease, specifying (i) the name and business of the proposed
assignee or sublessee, (ii) the amount and location of the space within the
Demised Premises proposed to be subleased, (iii) the proposed effective date and
duration of the assignment or subletting and (iv) the proposed rent or
consideration to be paid to Tenant by such assignee or sublessee. Tenant shall
promptly supply Landlord with financial statements and other information as
Landlord may reasonably request to evaluate the proposed assignment or sublease.
Landlord shall have a period of twenty (20) days following receipt of such
notice and other information requested by Landlord within which to notify Tenant
in writing that Landlord elects: (i) to terminate this Lease as to the space so
affected as of the proposed effective date set forth in Tenant's notice, in
which event Tenant shall be relieved of all further obligations hereunder as to
such space, except for obligations under Sections 11 and 28 and all other
provisions of this Lease which expressly survive the termination hereof; or (ii)
to permit Tenant to assign or sublet such space; or (iii) to refuse, in
Landlord's reasonable discretion, to consent to Tenant's assignment or
subleasing of such space and to continue this Lease in full force and effect as
to the entire Demised Premises. If Landlord should fail to notify Tenant in
writing of such election within the aforesaid twenty (20) day period, Landlord
shall be deemed to have elected option (ii) above. Tenant agrees to reimburse
Landlord for reasonable legal fees and any other reasonable costs incurred by
Landlord in connection with any requested assignment or subletting. Tenant shall
deliver to Landlord copies of all documents executed in connection with any
permitted assignment or subletting, which documents shall be in form and
substance reasonably satisfactory to Landlord and which shall require such
assignee to assume performance of all terms of this Lease on Tenant's part to be
performed. This subsection (c) shall not apply to any related assignment.
(d) No acceptance by Landlord of any rent or any other sum of
money from any assignee, sublessee or other category of transferee shall be
deemed to constitute Landlord's consent to any assignment, sublease, or
transfer. Permitted subtenants or assignees shall become liable directly to
Landlord for all obligations of Tenant hereunder, without, however, relieving
Tenant of any of its liability hereunder. No such assignment, subletting,
occupancy or collection shall be deemed the acceptance of the assignee, tenant
or occupant, as Tenant, or a release of Tenant from the further performance by
Tenant of Tenant's obligations under this Lease. Any assignment or sublease
consented to by Landlord shall not relieve Tenant (or its assignee) from
obtaining Landlord's consent to any subsequent assignment or sublease.
30. Termination or Expiration.
(a) No termination of this Lease prior to the normal ending
thereof, by lapse of time or otherwise, shall affect Landlord's right to collect
rent for the period prior to termination thereof.
(b) At the expiration or earlier termination of the Term of this
Lease, Tenant shall surrender the Demised Premises and all improvements,
alterations and additions thereto, and keys therefor to Landlord, clean and
neat, and in substantially the same condition (i.e., with substantially the same
Improvements and in good condition and repair) as existed at the Lease
Commencement Date, subject to any Tenant's Changes made in accordance with
Section 18 hereof, and excepting normal wear and tear, condemnation and casualty
other than that required to be insured against by Tenant hereunder.
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(c) If Tenant remains in possession of the Demised Premises
after expiration of the Term, with or without Landlord's acquiescence and
without any express agreement of the parties, Tenant shall be a
tenant-at-sufferance at the greater of (i) one hundred sixty-five percent (165%)
of the then current fair market base rental value of the Demised Premises or
(ii) one hundred sixty-five percent (165%) of the Base Rent in effect at the end
of the Term. Tenant shall also continue to pay all other Additional Rent due
hereunder during any holdover period described above or below in this
subparagraph (c) (including the Selected Holdover Period, and any holdover
period thereafter, as applicable), and there shall be no renewal of this Lease
by operation of law. Notwithstanding the foregoing, Tenant may notify Landlord
in writing at least one hundred eighty (180) days prior to the expiration of the
then current Term that Tenant desires to hold over in the Demised Premises for
between one (1) and six (6) months (such period selected by Tenant being the
"Selected Holdover Period"), whereupon Tenant shall be entitled to remain in
possession of the Demised Premises during such Selected Holdover Period and
shall pay to Landlord on the first day of each month during the Selected
Holdover Period Base Rent at the rate of one hundred twenty-five percent (125%)
of the Base Rent in effect at the end of the then current Term. If Tenant shall
remain in possession of the Demised Premises after the expiration of the
Selected Holdover Period with or without Landlord's acquiescence and without any
express agreement of the parties, then Tenant shall be a tenant-at-sufferance at
the greater of, (A) with respect to the first six (6) months of such additional
holdover period, (i) one hundred sixty-five percent (165%) of the then current
fair market base rental value of the Demised Premises or (ii) one hundred
sixty-five percent (165%) of the Base Rent that was in effect at the end of the
Term (exclusive of the Selected Holdover Period), and, (B) with respect to any
months thereafter, (i) two hundred fifteen percent (215%) of the then current
fair market base rental value of the Demised Premises or (ii) two hundred
fifteen percent (215%) of the Base Rent that was in effect at the end of the
Term (exclusive of the Selected Holdover Period). No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Demised Premises shall reinstate, continue or extend the Term
or Tenant's right of possession.
31. Intentionally Omitted.
32. Late Payments. In the event any installment of rent, inclusive of
Base Rent, or Additional Rent or other sums due hereunder, if any, is not paid
(i) within five (5) days after Tenant's receipt of written notice of such
failure to pay on the first two (2) occasions during any twelve (12) month
period, or (ii) as and when due with respect to any subsequent late payments in
any twelve (12) month period, Tenant shall pay an administrative fee equal to
three percent (3%) of such past due amount, plus interest on the amount past due
at the lesser of (i) the maximum interest rate allowed by law or (ii) a rate of
fifteen percent (15%) per annum (the "Interest Rate") to defray the additional
expenses incurred by Landlord in processing such payment.
33. Rules and Regulations. Tenant agrees to abide by the rules and
regulations set forth on Exhibit D attached hereto, as well as other rules and
regulations reasonably promulgated by Landlord from time to time, so long as
such rules and regulations are uniformly enforced against all tenants of
Landlord in the Building and do not materially diminish the rights or increase
the obligations of Tenant hereunder.
34. Quiet Enjoyment. So long as Tenant has not committed an Event of
Default hereunder, Landlord agrees that Tenant shall have the right to quietly
use and enjoy the Demised Premises for the Term.
35. Miscellaneous.
(a) The parties hereto hereby covenant and agree that, except as
otherwise provided herein, Landlord shall receive the Base Rent, Additional Rent
and all other sums payable by Tenant hereinabove provided as net income from the
Demised Premises, without any abatement, reduction, set-off, counterclaim,
defense or deduction whatsoever.
(b) If any clause or provision of this Lease is determined to be
illegal, invalid or unenforceable under present or future laws effective during
the Term, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and that in lieu of
such illegal, invalid or unenforceable clause or provision there shall be
substituted a clause or provision as similar in terms to such illegal, invalid
or unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
(c) All rights, powers, and privileges conferred hereunder upon
the parties hereto shall be cumulative, but not restrictive to those given by
law.
(d) Time is of the essence of this Lease.
(e) No failure of Landlord or Tenant to exercise any power given
Landlord or Tenant hereunder or to insist upon strict compliance by Landlord or
Tenant with its obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of Landlord's or
Tenant's rights to demand exact compliance with the terms hereof.
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(f) This Lease contains the entire agreement of the parties
hereto as to the subject matter of this Lease and no representations,
inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein shall be of any force and effect. This Lease, entered into as of
October 22, 1999, but with an effective date of July 27, 1999, is an amendment
to and restatement of that certain Industrial Lease Agreement between Landlord
and Tenant originally dated as of September 1, 1999 [but with a true effective
date of July, 1999 per the Amendment (as hereinafter defined)], the same having
been amended by Lease Amendment dated July, 1999 (the "Amendment"; as so
amended, the "Original Lease"); this Amended and Restated Industrial Lease
Agreement supercedes and replaces the Original Lease in its entirety, and such
Original Lease shall no longer be of any force or effect. The masculine (or
neuter) pronoun, singular number shall include the masculine, feminine and
neuter gender and the singular and plural number.
(g) This contract shall create the relationship of landlord and
tenant between Landlord and Tenant; no estate shall pass out of Landlord;
Tenant's interest shall not be subject to levy and sale, and shall not be
assignable by Tenant except as expressly set forth herein.
(h) Under no circumstances shall Tenant have the right to record
this Lease; provided, however, that upon Tenant's request, Landlord and Tenant
shall enter into a recordable Memorandum of Lease, provided such Memorandum of
Lease does not disclose the rent payable by Tenant hereunder, and further
provided that such Memorandum of Lease is in form reasonably acceptable to
Landlord (it being hereby agreed that any such Memorandum of Lease may reference
the Right of First Refusal contained in Special Stipulation 6 hereof, but shall
not reference the Right of First Notice contained in Special Stipulation 7
hereof).
(i) The captions of this Lease are for convenience only and are
not a part of this Lease, and do not in any way define, limit, describe or
amplify the terms or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.
(k) This Lease shall be interpreted under the laws of the State
where the Demised Premises are located.
(l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.
(m) The provisions of this Lease shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.
36. Special Stipulations. The Special Stipulations attached hereto as
Exhibit C, are incorporated herein and made a part hereof, and to the extent of
any conflict between the foregoing provisions and the Special Stipulations, the
Special Stipulations shall govern and control.
37. Intentionally omitted.
38. Authority. If Tenant is not a natural person, Tenant shall cause its
corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E-1. Tenant is authorized by all required
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms. Landlord shall cause its corporate secretary or the corporate secretary
of its general partner, as applicable, to execute the certificate attached
hereto as Exhibit E-2. Landlord is authorized by all required corporate or
partnership action to enter into this Lease and the individual(s) signing this
Lease on behalf of Landlord are authorized to bind Landlord to its terms.
39. No Offer Until Executed. The submission of this Lease to Tenant for
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seals, the day and year first above written.
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LANDLORD:
Industrial Developments International (Tennessee),
L.P., a Georgia limited partnership
By: IDI (Tennessee), Inc., a Georgia corporation,
its sole general partner
By: /s/Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
Attest: /s/G. Xxxxx Xxxxxxxxxx, Xx.
----------------------------
Name: G. Xxxxx Xxxxxxxxxx, Xx.
Title: Assistant Secretary
[Corporate Seal]
[Signatures continued on next page]
-22-
TENANT:
xxxxxxxxxxxxxx.xxx llc, a Delaware
limited liability company
By: xxxxxxxxxxxxxx.xxx inc., its Managing Member
By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Operations
[Corporate Seal]
-00-
XXXXXXXXXXX
Xxxxxxxx:
--------
STATE OF
---------------------------------
COUNTY OF
-----------------------------
BEFORE ME, a Notary Public in and for said County, personally appeared
__________________________ and, known to me to be the person(s) who, as
___________________________________ and ____________________________________,
respectively, of IDI (Tennessee), Inc., a Georgia corporation, the corporation
which executed the foregoing instrument in its capacity as general partner of
Landlord, signed the same, and acknowledged to me that they did so sign said
instrument in the name and upon behalf of said corporation, in its capacity as
general partner of Landlord, that the same is their free act and deed and they
were duly authorized thereunto by the corporation and the partnership.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this day __ of ____________________________, 19___.
__________________________________
Notary Public
My Commission Expires:
[Acknowledgments continued on next page]
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Tenant:
------
STATE OF
--------------------------------
COUNTY OF
----------------------------
BEFORE ME, a Notary Public in and for said County, personally appeared
__________________________, known to me to be the person who, as
___________________________________ of xxxxxxxxxxxxxx.xxx inc., the corporation
which executed the foregoing instrument in its capacity as the managing member
of Tenant, signed the same, and acknowledged to me that he did so sign said
instrument in the name and upon behalf of said corporation as an officer of said
corporation, that the same is his free act and deed as such officer and he was
duly authorized thereunto by its board of directors; and that the seal affixed
to said instrument is the corporate seal of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this day of _________________________, 19___ .
____________________________________
Notary Public
My Commission Expires:
-25-
EXHIBIT A
Demised Premises
[Diagram]
a-1
EXHIBIT B
[Diagram]
b-1
EXHIBIT C
Special Stipulations
The Special Stipulations set forth herein are hereby incorporated into
the body of the lease to which these Special Stipulations are attached (the
"Lease"), and to the extent of any conflict between these Special Stipulations
and the preceding language, these Special Stipulations shall govern and control.
1. Extension Option
(a) Landlord hereby grants to Tenant four (4) consecutive options to
extend the Term for a period of five (5) years each time (each such period to be
referred to herein as an "Option Period"), each such option to be exercised by
Tenant giving written notice of its exercise to Landlord in the manner provided
in this Lease at least two hundred ten (210) days prior to (but not more than
three hundred (300) days prior to) the expiration of the Term, as it may have
been previously extended. No extension option may be exercised by Tenant if an
Event of Default has occurred and is then continuing at the time of exercise of
the option.
(b) If Tenant exercises its option[s] to extend the Term, Landlord
shall, within thirty (30) days after the receipt of Tenant's notice of exercise,
notify Tenant in writing of the following:
(i) Landlord's reasonable determination of the Base Rent for
the Demised Premises (including any Refusal Space, as hereinafter
defined) during the applicable Option Period based on ninety-five
percent (95%) of the market rate for such space, as reasonably
determined by Landlord taking into account all relevant factors for
space of this type in the Memphis, Tennessee area (which notice shall
also remind Tenant that it has ten (10) days in which either to accept
Landlord's determination of the Base Rent for the Demised Premises
during the applicable Option Period or to select an appraiser pursuant
to this Special Stipulation 1 in the event Tenant disagrees with such
determination by Landlord of the Base Rent for the Demised Premises
during the applicable Option Period). Tenant shall have ten (10) days
from its receipt of Landlord's notice to notify Landlord in writing
that Tenant does not agree with Landlord's determination of ninety-five
percent (95%) of the market rate for such space and that Tenant elects
to determine the Prevailing Market Rate (as defined and calculated
below). If Tenant does not notify Landlord of such election within ten
(10) days of its receipt of Landlord's notice, Base Rent for the
applicable Option Period for purposes of this subpart (i) of this
Special Stipulation 1 shall be as set forth in Landlord's notice to
Tenant. The phrase "Prevailing Market Rate" shall mean ninety-five
percent (95%) of the then prevailing market rate for base minimum
rental calculated on a per square foot basis for leases covering
buildings comparable to the Building (as adjusted for any variances
between such buildings and the Building) located in the area of
Memphis, Tennessee (hereinafter referred to as the "Market Area"). The
Prevailing Market Rate shall be determined by an appraisal procedure as
follows: in the event that Tenant notifies Landlord that Tenant
disagrees with Landlord's determination of ninety-five percent (95%) of
the then market rate and that Tenant elects to determine the Prevailing
Market Rate, then Tenant shall specify, in such notice to Landlord,
Tenant's selection of a real estate appraiser who shall act on Tenant's
behalf in determining the Prevailing Market Rate. Within twenty (20)
days after Landlord's receipt of Tenant's selection of a real estate
appraiser, Landlord, by written notice to Tenant, shall designate a
real estate appraiser, who shall act on Landlord's behalf in the
determination of the Prevailing Market Rate. Within twenty (20) days of
the selection of Landlord's appraiser, the two (2) appraisers shall
render a joint written determination of the Prevailing Market Rate,
which determination shall take into consideration any differences
between the Building and those buildings comparable to the Building
located in the Market Area, including without limitation age, location,
setting and type of building. If the two (2) appraisers are unable to
agree upon a joint written determination within said twenty (20) day
period, the two appraisers shall select a third appraiser within such
twenty (20) day period. Within twenty (20) days after the appointment
of the third appraiser, the third appraiser shall render a written
determination of the Prevailing Market Rate by selecting, without
change, the determination of one (1) of the original appraisers as to
the Prevailing Market Rate and such determination shall be final,
conclusive and binding. All appraisers selected in accordance with this
subparagraph shall have at least ten (10) years prior experience in the
commercial leasing market of the Market Area and shall be members of
the American Institute of Real Estate Appraisers or similar
professional organization. If either Landlord or Tenant fails or
refuses to select an appraiser, the other appraiser shall alone
determine the Prevailing Market Rate. Landlord and Tenant agree that
they shall be bound by the determination of Prevailing Market Rate
pursuant to this paragraph. Landlord shall bear the fee and expenses of
its appraiser; Tenant shall bear the fee and expenses of its appraiser;
and Landlord and Tenant shall share equally the fee and expenses of the
third appraiser, if any;
(ii) Landlord's determination of Base Rent for the Demised
Premises during the applicable Option Period based on CPI (as
hereinafter defined), which amount shall be determined by multiplying
the Annual Base Rent in effect during the Lease Year in which the
determination is made (blended to take into account any space added to
the Demised Premises pursuant to Special Stipulations 6 or 7 or
otherwise, and, for purposes of the first (1st) renewal Term only,
using $2.79 as the deemed "Annual Base Rental" rate in effect for the
initial Demised Premises during the Lease Year in which the
determination is made notwithstanding anything in Section 1 of this
Lease
c-1
to the contrary) by a fraction, the numerator of which shall be
the CPI most recently published prior to the date on which Landlord's
determination is made and the denominator of which shall be the CPI on
the first day of the immediately preceding "five (5) year" Term, or
extended Term, as the case may be. In making such calculations, no
effect shall be given to existing rent concessions or abatements, if
any. For purposes of this section, "CPI" shall mean the Consumer Price
Index published by the Bureau of Labor Statistics of the United States
Department of Labor for Urban Wage Earners and Clerical Workers:
Selected Areas, All Items Index, U.S. City Average (1982-84=100); and
(iii) Landlord's determination of Base Rent for the Demised
Premises during the applicable Option Period based on a fixed increase,
which amount shall be determined by multiplying the Annual Base Rent in
effect during the Lease Year in which such determination is made
(blended to take into account any space added to the Demised Premises
pursuant to Special Stipulations 6 or 7 or otherwise, and, for purposes
of the first (1st) renewal Term only, using $2.79 as the deemed "Annual
Base Rental" rate in effect for the initial Demised Premises during the
Lease Year in which the determination is made notwithstanding anything
in Section 1 of this Lease to the contrary) by one hundred twelve and
one-half percent (112.5%).
Tenant shall have ten (10) days from its receipt of Landlord's notice to notify
Landlord in writing that Tenant elects to retract its option to extend the Term,
in which case (i) Tenant shall reimburse Landlord upon demand for Landlord's
actual out-of-pocket expenses associated with the appraisal approach set forth
in subpart (i) above, if applicable, and (ii) the Term, as it may have been
previously extended, shall expire on its scheduled expiration date and Tenant's
option (and any remaining subsequent options) to extend the Term shall be void
and of no further force and effect. If Tenant does not notify Landlord of such
retraction within ten (10) days of its receipt of Landlord's notice, Landlord
and Tenant hereby agree that the Base Rent that will be in effect for the
applicable Option Period shall be the lowest of the Base Rent determinations
made in accordance with clauses (i), (ii) and (iii) above; provided, however,
that (A) with respect to the first (1st) renewal Term only, an additional $.10
shall be added to the lowest of the per square foot rental rate determinations
made in accordance with clauses (i), (ii) and (iii) above, which additional $.10
per square foot shall later be backed out of the Annual Base Rental rate in
effect for the first (1st) renewal Term for purposes of making the per square
foot rental rate determinations for the second (2nd) renewal Term (if
applicable) in accordance with clauses (ii) and (iii) above, and (B) in no event
shall the Annual Base Rent for the applicable Option Period be less than the
Annual Base Rent rate in effect during the Lease Year immediately preceding the
applicable Option Period. In the event Tenant does not validly exercise (or
exercises but retracts as permitted herein) the first (1st) renewal option
granted herein, then prior to the expiration of the then current Term, Tenant
shall pay to Landlord the sum of One Hundred Ninety Thousand and No/100 Dollars
($190,000.00) in immediately available funds.
(c) Except for the Base Rent, which shall be determined as set forth in
subparagraph (b) above, leasing of the Demised Premises by Tenant for the
applicable Option Period shall be subject to all of the same terms and
conditions set forth in this Lease, including Tenant's obligation to pay
Tenant's share of Operating Expenses as provided in this Lease; provided,
however, that any improvement allowances, rent abatements or other concessions
applicable to the Demised Premises during the initial Term shall not be
applicable during any such extended term, nor shall Tenant have any additional
extension options unless expressly provided for in this Lease. Landlord and
Tenant shall enter into an amendment to this Lease to evidence Tenant's exercise
of its renewal option. If this Lease is guaranteed, it shall be a condition of
Landlord's granting the renewal that Tenant deliver to Landlord a reaffirmation
of the guaranty in which the guarantor acknowledges Tenant's exercise of its
renewal option and reaffirms that the guaranty is in full force and effect and
applies to said renewal.
2. Early Entry. Provided Tenant shall have first obtained any and all permits
and other governmental authorizations required in connection therewith, Tenant
shall have the right to enter the Demised Premises for the period commencing
October 1, 1999 and ending with the Lease Commencement Date (the "Early Entry
Period") in order to install its equipment and racking provided that during said
period: (i) Tenant shall comply with all terms and conditions of this Lease
other than the obligation to pay Base Rent or Additional Rent, (ii) Tenant shall
not begin operation of its business (Landlord hereby acknowledging that the
installation of racking and a conveyor system, and acceptance of inventory,
shall not constitute "operation of business"), and (iii) Tenant shall not
interfere with Landlord's completion of the Demised Premises. Landlord hereby
agrees that on or before the commencement of the Early Entry Period, as such
date may be extended by Construction Delay, Landlord shall deliver to Tenant
approximately 150,000 square feet of secure (i.e., all walls and doors
constructed) warehouse space within the Demised Premises, complete with lights,
floor, floor seal and sprinkler system installed in accordance with the Plans
and Specifications (and in compliance with applicable building codes to the
extent necessary to allow Tenant to exercise is rights under this Special
Stipulation 2), said space being delineated in the Operational Plan comprising a
part of the Performance Specifications.
3. Operating Expenses - Cap on Controllable Expenses. Landlord and Tenant hereby
acknowledge and agree that for purposes of calculating Tenant's proportionate
share of Operating Expenses (as Tenant's proportionate share may have been
adjusted to account for any changes in the size of the Demised Premises due to
any expansions or reductions) for the Building and the Building Common Area
attributable to all items except taxes, utilities, insurance, and snow removal
(which four (4) items shall be referred to collectively herein as the
"Non-Controllable Expenses," and Operating Expenses attributable to all items
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other than the Non-Controllable Expenses being referred to collectively herein
as "Controllable Expenses"), such Controllable Expenses shall not exceed $0.05
per square foot of the Building in calendar year 1999 (the "Initial Cap"), which
Initial Cap shall be increased each calendar year thereafter by the lesser of
(a) the increase, if any, in CPI for the period beginning with December 31 of
the previous calendar year and ending with December 31 of the calendar year in
question, or (b) ten percent (10%) (such lesser amount for the calendar year in
question being referred to as the "Cap" for such calendar year). The amount
attributable to Controllable Expenses for the Building and the Building Common
Area for any calendar year after 1999, for purposes of determining the amount of
Tenant's proportionate share of Operating Expenses for such calendar year only
(as Tenant's proportionate share may have been adjusted to account for any
changes in the size of the Demised Premises due to any expansions or
reductions), shall never exceed the Cap applicable to such calendar year. Any
proration of Tenant's share of Operating Expenses for any partial calendar year
included within the Term shall be prorated in accordance with the last sentence
of Section 6(a) of the Lease.
4. Reimbursable Costs and Tenant Allowance Work.
(a) Landlord and Tenant hereby agree that Landlord shall pay for and
install the heating, air conditioning and ventilation system (such installation
to be in accordance with Section 14.4 of the Performance Specifications) and the
energy management system in the warehouse portion of the Demised Premises, and
that the combined cost thereof, less the sum of $90,000.00 (the "Net Combined
Cost"), shall be reimbursed by Tenant to Landlord in full within ten (10)
calendar days following Tenant's receipt of a xxxx therefor from Landlord
(accompanied by a paid invoice or other evidence reasonably satisfactory to
Tenant of the cost incurred by Landlord for such work), which xxxx may be
delivered by Landlord at any time after substantial completion of the
Improvements.
(b) Landlord and Tenant hereby acknowledge that Landlord is providing
an allowance with respect to the following portions of Landlord's work within
the Demised Premises (collectively, the "Allowance Work"): electrical
distribution for Tenant's equipment, the alarm system, the mezzanine related
sprinkler system and the computer room; the total allowance with respect to the
Allowance Work being in the amount of $290,000.00 (which total is hereinafter
referred to as the "Maximum Allowance", and which Maximum Allowance may be
allocated between and among the Allowance Work items, and/or any upgrades or
changes made by Tenant in the Plans and Specifications for which Tenant would be
obligated to pay pursuant to the terms and conditions hereof, in such manner as
Tenant may elect). Upon substantial completion of the Improvements, Landlord
shall deliver to Tenant a xxxx for all amounts expended in connection with the
Allowance Work and/or such upgrades or changes in excess of the Maximum
Allowance, and Tenant agrees to pay such xxxx in full to Landlord within ten
(10) calendar days following receipt of such xxxx. If the actual aggregate cost
attributable to the Allowance Work, less any cost savings resulting solely from
any reduction in the scope of the Plans and Specification made by Tenant (the
"Net Work Cost"), is less than the Maximum Allowance, the difference between the
Maximum Allowance and such Net Work Cost (such difference being referred to
herein as the "Net Savings"), up to a maximum equal to the Net Combined Cost,
shall be credited by Landlord against the Net Combined Cost owing from Tenant to
Landlord pursuant to part (a) of this Special Stipulation 4 above. Tenant shall
not be entitled to any payment or other remuneration from Landlord for any Net
Savings in excess of The Net Combined Cost. For an illustration of the operation
of this Stipulation 4 (and for illustration purposes only), if (i) the Net
Combined Cost under subparagraph (a) above is $700,000.00, and (ii) the actual
aggregate cost attributable to the Allowance Work is $300,000.00, and there is a
cost savings resulting solely from a reduction in the scope of the Plans and
Specification made by Tenant equal to $100,000.00, for a Net Work Cost of
$200,000.00, then the Net Savings would be calculated as follows: $290,000.00
(the Maximum Allowance) - $200,000.00 (the Net Work Cost) = $90,000.00 (the Net
Savings), and Tenant would only be responsible for reimbursing Landlord for
$610,000.00 of the Net Combined Cost [i.e., $700,000.00 - $90,000.00 =
$610,000.00]. For purposes of this Special Stipulation 4, the cost of
performance of the Allowance Work shall be deemed to include, but not be limited
to, the cost of plans and specifications, permits and all tenant buildout
attributable or allocable thereto.
(c) After a final determination is made pursuant to this Special
Stipulation 4 regarding any amounts or credits owing from one party to the other
and after all such payments or credits are made, Landlord and Tenant shall, upon
request of either Landlord or Tenant, execute and deliver an amendment and
restatement of this Lease which will delete this Special Stipulation 4 in its
entirety and any reference elsewhere in this Lease to the provisions of this
Special Stipulation 4.
5. Intentionally omitted.
6. Right of First Refusal. So long as the Lease is in full force and effect and
no Event of Default has occurred and is then continuing, Landlord hereby grants
to Tenant a right of first refusal (the "Right of First Refusal") to expand the
Demised Premises to include all or any portion of the remaining 160,000 square
feet of space within the Building (the "Refusal Space"), subject to the terms
and conditions set forth herein. The Right of First Refusal shall be subject to
the following terms and conditions:
(a) Tenant's then current financial condition, as revealed by its most
current financial statements (which shall include quarterly and annual financial
statements, including income statements, balance sheets, and cash flow
statements, as required by Landlord), must demonstrate that Tenant meets
financial criteria reasonably acceptable to Landlord.
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(b) The term of the Right of First Refusal shall commence as of the
Lease Date and continue throughout the first eleven (11) Lease Years of the Term
(the "Refusal Period"), assuming any such Lease Years after the initial Term are
in effect as a result of Tenant having exercised the applicable extension
options hereunder.
(c) Subject to the other terms of this Right of First Refusal, after
any part of the Refusal Space has or will become "Available Refusal Space" (as
defined herein) for leasing by Landlord, Landlord shall not, during the Refusal
Period, lease to another tenant that available portion of the Refusal Space
without first offering Tenant the right to lease such Refusal Space.
(i) Space shall be deemed to become "Available Refusal Space"
in the event Landlord, during the Refusal Period, either (1) receives a bona
fide proposal for the lease of some or all of the Refusal Space from a third
party that Landlord desires to secure, the terms of which are acceptable to
Landlord, or (2) makes a bona fide proposal for the lease of some or all of the
Refusal Space to a third party that Landlord desires to secure and that such
third party is willing to accept.
(ii) Notwithstanding subsection (c)(i) above, the Refusal
Space shall not be deemed to become "Available Refusal Space" if the space is
assigned or subleased by the current tenant of the space; or re-let by a current
tenant of the space by renewal, extension, or renegotiation.
(d) Consistent with subsection (c) above, Landlord shall not lease any
such Available Refusal Space to another tenant unless and until Landlord has
first offered the Available Refusal Space to Tenant in writing (the "Offer").
The Offer shall contain the following terms that have been offered by Landlord
to the third party and that such third party is willing to accept, or by the
third party to Landlord and such terms are acceptable to Landlord: (i) a
description of the Available Refusal Space (which description shall include the
square footage amount and location of such Available Refusal Space) and an
attached floor plan that shows the Available Refusal Space; (ii) the date on
which Landlord expects the Available Refusal Space to be leased; (iii) the Base
Rent for the Available Refusal Space; and (iv) the increase in Tenant's
Operating Expense Percentage as defined in Paragraph 1(j) of the Lease. Upon
receipt of the Offer, Tenant shall have the right, for a period of three (3)
business days after receipt of the Offer, to exercise the Right of First Refusal
by giving Landlord written notice that Tenant desires to lease the Available
Refusal Space upon the terms and conditions as are contained in the Offer.
(e) If, within such three (3) business-day period, Tenant exercises the
Right of First Refusal, then Landlord and Tenant shall amend the Lease to
include the Available Refusal Space subject to the same terms and conditions as
the Lease, as modified by the terms and conditions of the Offer.
(f) If, within such three (3) business-day period, Tenant declines or
fails to exercise the Right of First Refusal, Landlord shall then have the right
to lease the Available Refusal Space as long as Landlord enters into a lease
with a third party under the basic terms and conditions contained in the Offer.
If Landlord does not enter into a lease with a third party under the terms and
conditions contained in the Offer within one hundred eighty (180) days after
Tenant receives the Offer, or if Landlord desires to materially alter or modify
the terms and conditions of the Offer, Landlord shall be required to present the
altered or modified Offer to Tenant pursuant to this Right of First Refusal, in
the same manner that the original Offer was submitted to Tenant.
.
(g) In the event that the Available Refusal Space is leased to such a
third party, this Right of First Refusal shall continue throughout the Refusal
Term, but shall be subordinate to any extension or renewal options contained in
said third party lease. Further, if at the end of the term of said third party
lease, said third party tenant desires to remain in the Available Refusal Space,
Landlord shall be entitled to renew said lease and this Right of First Refusal
shall be subject and subordinate to said renewal.
(h) Without limiting the foregoing, Landlord hereby agrees that, if as
of the beginning of the second Lease Year of this Lease or at any time
thereafter during the remainder of the Refusal Period the Refusal Space is or
becomes "Available Offer Space" (as defined herein), Landlord shall provide
Tenant with prompt written notice thereof (provided that IDI shall thereafter be
under no obligation whatsoever to accept, entertain, or negotiate or enter into
any agreement in respect of any such Available Offer Space other than in
accordance with the foregoing right of first refusal provisions of this Special
Stipulation 6, if and when applicable). The Refusal Space shall be deemed to be
"Available Offer Space" if and when there exists no written lease or occupancy
agreement in full force and effect with respect thereto, provided that the
Refusal Space shall not be deemed to be "Available Offer Space" if the space is
(a) assigned or subleased by the current tenant of the space; or (b) re-let by
the current tenant of the space by renewal, extension, or renegotiation or (c)
leased on a temporary basis for a period of less than twelve (12) months without
any right to extend.
(i) This Right of First Refusal is personal to xxxxxxxxxxxxxx.xxx llc
(and any assignee pursuant to part (ii) of the first sentence of subsection
29(b) of this Lease) and shall become null and void upon the occurrence of an
assignment of the Lease (except for an assignment allowed without Landlord's
consent under part (ii) of the first sentence of subsection 29(b) of this Lease)
or a sublet of all of the Demised Premises (other than pursuant to part (i) of
the first sentence of subsection 29(b) of the Lease).
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The parties shall promptly execute an amendment to this Lease to reflect the
addition of any portion of the Refusal Space to the Demised Premises pursuant to
the terms of this Special Stipulation 6.
7. Right of First Notice.
(a) So long as the Lease is in full force and effect and no Event of
Default has occurred and is then continuing, and so long as Industrial
Developments International (Tennessee), L.P. ("IDI") is the "Landlord" under
this Lease, IDI hereby agrees to notify Tenant in writing prior to IDI 's sale,
lease or commencement of development of the adjacent site within the Project
located to the west of the Building, which site is currently owned by IDI and is
designated as the "Building A Site" on the Site Plan. Tenant shall have the
right to respond to such notice, within ten (10) calendar days after IDI 's
delivery of such notice, by delivering to IDI a proposal for the lease
(including an expansion of the Building onto the Building A Site) or purchase of
such site by Tenant. Tenant hereby acknowledges that IDI shall be under no
obligation whatsoever to accept, entertain, or negotiate or enter into any
agreement in respect of, Tenant's proposal. If within such ten (10)-day period,
Tenant declines or fails to submit such proposal, or IDI and Tenant do not enter
into any binding agreement to the contrary, then IDI shall be entitled to
proceed with the sale, lease or development of the Building A Site upon such
terms and conditions as IDI may elect in its sole and absolute discretion, and
shall no longer be subject to this Special Stipulation 7. Tenant's right to
receive notice of the sale, lease or development of the Building A Site is
personal to xxxxxxxxxxxxxx.xxx llc (and any assignee pursuant to part (ii) of
the first sentence of subsection 29(b) of this Lease) and shall become null and
void upon the occurrence of an assignment of the Lease (except for an assignment
allowed without Landlord's consent under part (ii) of the first sentence of
subsection 29(b) of this Lease) or a sublet of all of the Demised Premises
(other than pursuant to part (i) of the first sentence of subsection 29(b) of
the Lease).
(b) The following transactions shall be excluded from IDI's obligation
to provide Tenant with the notice set forth in subsection (a) above:
(i) A sale of the Building A Site by foreclosure or transfer
in lieu of foreclosure of a deed to secure debt loan.
(ii) A sale of the Building A Site to the appropriate
condemning authority pursuant to eminent domain or under threat of
eminent domain.
8. PILOT Program. Tenant shall have the right to attempt to reduce the real
estate taxes and other impositions for the Demised Premises by participating in
the Payment In Lieu Of Taxes ("PILOT Program") available through the City of
Memphis and Shelby County, Tennessee. Tenant shall be responsible for preparing
and filing the application for such PILOT Program and paying all fees in
connection therewith. Landlord will cooperate with Tenant (which cooperation
shall include attendance at meetings or hearings, supplying supporting
documentation and executing documents reasonably required to obtain the benefits
of the Pilot Program) in its attempt to participate in the PILOT Program but
Landlord shall not be obligated to incur any expenses in connection with such
cooperation. Tenant shall promptly reimburse to Landlord any and all of
Landlord's expenses related to the PILOT Program, including, but not limited to,
attorneys' fees and the cost of a leasehold title insurance policy insuring
Landlord's interest in the Demised Premises if the PILOT Program requires
Landlord to convey title to the Building (any such conveyance to be subject to
Bank of America's, or any other then current Lender's, prior written consent,
which consent Landlord hereby agrees to diligently and in good faith pursue,
and, if so consented to, to be subject to Bank of America's, or such other
Lender's, Mortgage; provided, however, that in the event any such Lender does
not consent to any such conveyance upon the terms and conditions set forth
herein, Landlord shall and does hereby agree promptly to pay the note evidenced
by any such Mortgage, and to satisfy or release the Building from the lien of
such Mortgage, in full). Tenant agrees to prepare and file such application and
pursue participation of the Demised Premises in the PILOT Program in a manner
reasonably acceptable to Landlord so as to minimize to the greatest extent
reasonably possible any adverse affect on Landlord's ability to sell, finance or
market the Demised Premises. If the City of Memphis or Shelby County, Tennessee
elects not to include the Demised Premises in the PILOT Program or Tenant is
unable to qualify the Demised Premises for participation in the PILOT Program,
Tenant shall nevertheless remain fully obligated to pay the real estate taxes
and other impositions as described in Section 6 of this Lease without any change
or reduction in such obligations and such Tenant's obligations under this Lease
shall not be affected in any way whatsoever. In the event that Tenant is
successful in making the Demised Premises part of the PILOT Program, (a)
Landlord shall pass through to Tenant all reductions or abatements applicable to
the Demised Premises, and (b) Landlord and Tenant agree and acknowledge that:
(i) Participation in the PILOT Program requires Landlord to
convey title to the Demised Premises to The Industrial Development
Board of the City of Memphis and County of Shelby, Tennessee (the
"IDB") with a leaseback of the Demised Premises to Landlord (the "PILOT
Lease") and thus, this Lease shall automatically become a sublease for
the term of the PILOT Lease and subject to the terms and conditions of
the PILOT Lease. Tenant shall execute any and all documents reasonably
necessary to confirm the status of this Lease as a sublease of the
PILOT Lease, and that this Lease shall survive and become a prime lease
if the Term shall extend beyond the term of the PILOT Lease.
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(ii) Tenant shall review and approve the PILOT Lease and shall
comply with all terms and conditions thereof. Tenant acknowledges that
Additional Rent under this Lease to be paid by Tenant shall include any
payments Landlord is required to make under the PILOT Lease. Tenant
shall indemnify Landlord from and against all claims, damages, costs
and expenses, including, without limitation, reasonable attorneys' fees
and court costs, which Landlord may suffer as a result of a default
under the PILOT Lease caused by the acts or omissions of Tenant.
(iii) The documents to be executed by Landlord to implement
the PILOT Program must be in a form reasonably acceptable to Landlord.
The PILOT Lease must contain an option in favor of Landlord to purchase
the Demised Premises for One Dollar (or such greater amount acceptable
to Landlord and Tenant, which shall be paid by Tenant) (the "Option")
and Landlord shall receive a leasehold title insurance policy, the cost
of which shall be paid by Tenant, insuring Landlord's interest as
tenant under the PILOT Lease and the Option.
9. Measurement of Demised Premises. Within sixty (60) calendar days after
substantial completion of the Demised Premises, either party may have the
Demised Premises and Building measured by a licensed architect other than the
project architect for the initial design of the Demised Premises, based on a
"drip-line" measurement from the outside of the exterior walls of the Building
and the Demised Premises and to the middle of any demising wall of the Demised
Premises. The architect shall be subject to the other party's prior approval,
which approval shall not be unreasonably withheld or delayed. The square footage
so certified by such architect shall conclusively determine the square footage
of the Building (the "Building Square Footage") and the square footage of the
Demised Premises (the "Demised Premises Square Footage") for all purposes under
this Lease, including, without limitation, calculation of Annual Base Rent and
Monthly Base Rent Installments. If the Building Square Footage and the Demised
Premises Square Footage differ from the amounts set forth in Sections 1(b) and
1(c) above, the Annual Base Rent and Monthly Base Rent Installments shall be
adjusted on the basis of the square footage of the Building and the Demised
Premises so certified by such architect, using the rental rates per square foot
set forth in Section 1(d) above. In addition, Tenant's Operating Expense
Percentage in Section 1(j) shall be adjusted as necessary. If neither party
elects to have the Demised Premises and Building measured in accordance with
this Special Stipulation 9, then the square footage of the Demised Premises and
Building shall be deemed to be as set forth in Sections 1(b) and 1(c) above.
10. Operating Expense Exclusions. Notwithstanding any contrary provision in
the Lease, Operating Expenses for any calendar year shall exclude (in addition
to any exclusions set forth in Section 6 of this Lease) the following:
(a) work that Landlord performs for any other tenant or prospective
tenant of the Project;
(b) repairs or other work (including rebuilding) occasioned by fire,
windstorm or other casualty or by condemnation to the extent that Landlord is
reimbursed by insurance proceeds or would have been reimbursed if Landlord had
maintained the insurance policies required herein;
(c) any costs that are separately charged to and payable by tenants
or for which Landlord is compensated by insurance proceeds or warranties (or
would have been compensated if Landlord had maintained the insurance policies
required herein);
(d) leasing commissions and expenses of procuring tenants, including
lease concessions;
(e) advertising or promotional costs including advertising or
promotional costs incurred by any owners' or tenant association;
(f) depreciation, 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 would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
GAAP, and when depreciation is permitted or required, the item shall be
amortized over its reasonably anticipated useful life;
(g) interest on debts or amortization on any mortgage or other debt
instrument encumbering the Building;
(h) rent payable under any lease to which this Lease is subject;
(i) costs and expenses of enforcing leases against tenants,
including legal fees;
(j) any administrative fee, office overhead and/or managing agents'
commissions, and salaries of off-premises personnel (other than maintenance
personnel, which shall be prorated on a reasonable basis to account for any
other Buildings owned by Landlord and maintained by such maintenance personnel);
(k) expenses resulting from any violation by Landlord of the terms
of any lease of space in the Project or of any ground or underlying lease or any
mortgage;
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(l) the repair of any part of the Building Common Area that was
inadequately designed or defectively constructed;
(m) expenses for vacant or vacated space, including utility,
security and renovating costs for such space;
(n) reserves for future expenses;
(o) all costs and expenses associated with compliance with
Environmental Laws; and
(p) assessments under the Declaration.
For purposes of determining Tenant's share of Operating Expenses, but
without limiting anything in Section 6(c) of this Lease, taxes shall not include
any: (1) income, excise, profits, estate, inheritance, succession, gift,
transfer, franchise, capital, or other tax or assessment upon Landlord; (2)
fine, penalty, cost or interest for any tax or assessment, or part thereof,
which Landlord or Lender failed to timely pay (except if same are caused solely
by Tenant's failure to timely pay its taxes); (3) assessment for a public
improvement arising from the initial construction of the Building or Project;
and (4) fees imposed upon Landlord in connection with Landlord's development of
the Building and/or Project. All assessments imposed during the Term which are
permitted to be included within taxes hereunder shall, for the purposes of
computing Tenant's share of Operating Expenses, be deemed to have been paid in
the maximum number of installments permitted by the applicable taxing authority.
11. Inspection Rights.
(a) Landlord's books and records pertaining to the calculation of
Operating Expenses for any calendar year within the Term may be inspected by
Tenant (or by an independent certified accountant) at Tenant's expense, at any
reasonable time within one (1) year after Tenant's receipt of Landlord's
statement for Operating Expenses; provided that Tenant shall give Landlord not
less than fifteen (15) days' prior written notice of any such inspection. If
Landlord's calculation of Tenant's share of Operating Expenses for the inspected
calendar year was incorrect, then Tenant shall be entitled to a credit against
future Base Rent for said overpayment (or a refund of any overpayment if the
Term has expired) or Tenant shall pay to Landlord the amount of any
underpayment, as the case may be. If Tenant's inspection proves that Landlord's
calculation of Tenant's share of Operating Expenses for the inspected calendar
year resulted in an overpayment by more that five percent (5%) of Tenant's
share, Landlord shall also pay the reasonable fees and expenses of Tenant's
independent professionals, if any, conducting said inspection.
(b) All of the information obtained through Tenant's inspection with
respect to financial matters (including, without limitation, costs, expenses,
income) and any other matters pertaining to Landlord, the Demised Premises, the
Building and/or the Project as well as any compromise, settlement, or adjustment
reached between Landlord and Tenant relative to the results of the inspection
shall be held in strict confidence by Tenant and its officers, agents, and
employees; and Tenant shall cause its independent professionals and any of its
officers, agents or employees to be similarly bound. The obligations within this
subsection (b) shall survive the expiration or earlier termination of the Lease.
12. Parking. Landlord acknowledges and agrees that Tenant shall have the
exclusive use of (i) forty-five (45) loading docks serving the Demised Premises,
and (ii) the parking area located within that portion of the Building Common
Area labeled "Tenant's Exclusive Parking Area" on Exhibit A (which shall contain
approximately 300 parking spaces). During the initial Term or any extended term
of this Lease, Tenant shall have the right to construct and maintain, at its
sole cost and expense, a fence either around Tenant's Exclusive Parking Area or
in such a manner as to divide and separate it from the remainder of the Building
Common Area. Any such construction shall be performed pursuant to plans and
specifications reasonably satisfactory to Landlord and in compliance with any
and all applicable laws, statutes, ordinances, regulations and protective
covenants (including any architectural review requirements thereof). If Tenant
elects to install any such fence, Tenant shall, at its sole cost and expense,
keep and maintain such fence in good condition and repair, and shall, to the
extent any such fencing fully encloses any portions of the Building Common Area,
provide Landlord with access to such portions of the Building Common Area in
order to perform Landlord's repair, replacement and maintenance obligations with
respect thereto. Nothing herein shall limit Tenant's obligation to pay its
proportionate share of Operating Expenses for the entire Building Common Area
pursuant to Section 6 of this Lease. If Tenant should fail to perform its
obligations in the immediately preceding sentence as to maintenance of the
fencing, Landlord shall have the right, following reasonable prior notice to
Tenant and Tenant's failure to cure or to undertake to cure such failure and to
diligently pursue same to completion, to enter into any such fenced in area,
without liability or trespass therefor, and to perform such obligations of
Tenant, and Tenant shall reimburse Landlord upon demand for all reasonable
amounts incurred by Landlord in so doing, which amounts shall bear interest at
the lesser of (i) the maximum interest rate allowed by law or (ii) a rate of
fifteen percent (15%) per annum, from the date of such demand by Landlord until
paid. prior to the expiration of the Term or within ten (10) days following any
earlier termination of this Lease, Tenant shall, at Landlord's option, remove
any such fencing and repair any damage to the Building or the Building Common
Area resulting from such removal, all at Tenant's sole cost and expense. The
obligations of Tenant in this Special Stipulation 12 which, by their nature, are
to survive the expiration or any earlier termination of the Lease, shall so
survive. Landlord agrees that, during the Term of this Lease, it will not
construct or permit to be constructed any building,
c-7
tower or other such structure or improvement of a permanent nature, or plant any
tree or other growing plant, or make any other material change whatsoever in
Tenant's Exclusive Parking Area, except as necessitated by any Governmental
Requirement. Notwithstanding the foregoing, Landlord shall have the right within
such area to plant trees and other growing plants pursuant to a landscape plan
which provides for the uniform distribution of trees throughout the Building
Common Area, and which has been approved by Tenant (such approval not to be
unreasonably withheld or delayed).
13. Building Compliance With Law. Landlord represents and warrants to Tenant
that, to Landlord's actual knowledge, the design and construction of the
Building and the Improvements materially complies with all applicable federal,
state, county and municipal laws, ordinances and codes in effect as of the Lease
Commencement Date relating to warehousing and distribution buildings similar to
the Building generally and/or relating to Tenant's use of the Demised Premises
in accordance with the Operational Plan.
14. Landlord Insurance.
(a) Landlord shall maintain at all times during the Term of this Lease,
with such deductible as Landlord in its sole judgment determines advisable,
insurance on the "All-Risk" or equivalent form on a Replacement Cost Basis
against loss or damage to the Building. Such insurance shall be in the amount of
80% of the replacement value of the Building (excluding all fixtures and
property required to be insured by Tenant under this Lease).
(b) Landlord shall maintain at all times during the Term commercial
liability insurance with limits at least equal to the amount as Tenant is
required to maintain pursuant to Section 8(a)(i) of this Lease.
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EXHIBIT D
Rules And Regulations
These Rules and Regulations have been adopted by Landlord for the mutual benefit
and protection of all the tenants of the Building in order to insure the safety,
care and cleanliness of the Building and the preservation of order therein. In
the event of any conflict between the terms of this Exhibit D and the terms of
the Lease, the terms of the Lease shall control.
1. The sidewalks shall not be obstructed or used for any purpose other
than ingress and egress. No tenant and no employees of any tenant shall go upon
the roof of the Building without the consent of Landlord.
2. No awnings or other projections shall be attached to the outside
walls of the Building without Landlord's prior written consent, which consent
shall not be unreasonably withheld.
3. The plumbing fixtures shall not be used for any purpose other than
those for which they were constructed, and no sweepings, rubbish, rags or other
substances, including Hazardous Substances, shall be thrown therein.
4. No tenant shall cause or permit any objectionable or offensive odors
to be emitted from the Demised Premises.
5. The Demised Premises shall not be used for lodging or sleeping or for
any immoral or illegal purposes.
6. No tenant shall make, or permit to be made any unseemly or disturbing
noises, sounds or vibrations or disturb or interfere with tenants of this or
neighboring buildings or premises or those having business with them, except
warehouse noises and sounds customarily associated with operation of a warehouse
facility for the uses permitted in this Lease.
7. Each tenant must, upon the termination of this tenancy, return to
Landlord all keys of stores, offices, and rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay to Landlord the cost of replacing the same or
of changing the lock or locks opened by such lost key if Landlord shall deem it
necessary to make such change.
8. Canvassing, soliciting and peddling in the Building and the Project
are prohibited and each tenant shall cooperate to prevent such activity.
9. Landlord will direct electricians as to where and how telephone or
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without written consent of Landlord, which
consent is not to be unreasonably withheld or delayed.
10. Parking spaces associated with the Building are intended for the
exclusive use of passenger automobiles. Except for intermittent deliveries, no
vehicles other than passenger automobiles may be parked in a parking space
without the express written permission of Landlord. Trucks and tractor trailers
may only be parked at designated areas of the Building. Trucks and tractor
trailers shall not block access to the Building.
11. No tenant shall use any area within the Project for storage purposes
other than the interior of the Demised Premises.
d-1
EXHIBIT E-1
TENANT'S CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of XXXXXXXXXXXXXX.XXX LLC, a Delaware
limited liability company ("Tenant"), hereby certifies as follows to Industrial
Developments International (Tennessee), L.P., a Georgia limited partnership
("Landlord"), in connection with Tenant's proposed lease of premises in Building
G, at Chickasaw Distribution Center, Shelby County, Tennessee (the "Premises"):
1. Tenant is duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has applied for qualification to do
business in the State of Tennessee (and will provide Landlord with evidence of
such qualification having been achieved within fifteen (15) days of the Lease
Date).
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of Tenant, a lease
of the Premises and that the signature opposite the name of each individual is
an authentic signature:
-------------------- -------------------- ---------------------
(name) (title) (signature)
-------------------- -------------------- ---------------------
(name) (title) (signature)
-------------------- -------------------- ---------------------
(name) (title) (signature)
3. That the foregoing authority was conferred upon the person(s) named
above by the Board of Directors of Tenant's managing member, at a duly convened
meeting held _____________, 19___.
--------------------------------
Secretary
[CORPORATE SEAL]
- 1 -
EXHIBIT E-2
LANDLORD'S CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of IDI (Tennessee), Inc., a Georgia
corporation, as sole general partner of INDUSTRIAL DEVELOPMENTS INTERNATIONAL
(TENNESSEE), L.P., a Georgia limited partnership ("Landlord"), hereby certifies
as follows to xxxxxxxxxxxxxx.xxx llc, a Delaware limited liability company
("Tenant"), in connection with Tenant's proposed lease of premises in Building
G, at Chickasaw Distribution Center, Shelby County, Tennessee (the "Premises"):
1. Landlord is duly formed, validly existing and in good standing under
the laws of the State of Georgia, and duly qualified to do business in the State
of Tennessee.
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of IDI (Tennessee),
Inc., as the general partner of Landlord, a lease of the Premises and that the
signature opposite the name of each individual is an authentic signature:
-------------------- -------------------- ---------------------
(name) (title) (signature)
-------------------- -------------------- ---------------------
(name) (title) (signature)
-------------------- -------------------- ---------------------
(name) (title) (signature)
3. Landlord has obtained all requisite partnership consent to enter
into the lease of the Premises and IDI (Tennessee), Inc. is authorized to
execute the lease on behalf of Landlord.
--------------------------------
Secretary
[CORPORATE SEAL]
-1-
Exhibit F
Sign Criteria
General Requirements. All signs, including directional and temporary
signs, must be approved in writing by the Architectural Committee prior to
installation. The location, size, color and construction of signs must be in
keeping with the character of the park. Unless otherwise approved in writing by
the Architectural Committee, only one (1) Structure-mounted sign per tenant is
acceptable. Additionally, unless otherwise approved in writing by the
Architectural Committee, the only ground-mounted signs that are permissible are
those belonging to a tenant who occupies more than forty percent (40%) of the
total square footage of the Structure located on a particular Lot. Except as set
forth herein, only signs identifying the occupant's name shall be permitted. All
signs must be either attached to the Structure or ground-mounted and adhere to
the guidelines set forth herein.
Structure-Mounted Signs. All signs to be mounted on a Structure shall:
(a) be installed so as to be parallel to and contiguous with the
Structure wall;
(b) not project more than fifteen (15) inches from the Structure
wall;
(c) at its tallest and widest points, the sign dimensions
shall not exceed 66% of the height, nor 66% of the
width, of the face of the structure above the
storefront;
(d) have letters constructed as separate pieces of individual
construction (pieces may match xx.xxx's logo);
(e) be of a design and material compatible with the design of the
structure on which it will be installed;
(f) be of a color matching the structures' primary accent color
(i.e., painted reveal) or a dark bronze color to match the
storefronts. The sign colors may match xx.xxx's prototype
colors including the orange accent; and
(g) not contain any internal lighting, unless the Architectural
Committee allows any other tenant to do so.
Ground-Mounted Signs. All ground-mounted signs shall:
--------------------
(a) be installed at least ten (10) feet away from any boundary of
the Lot in which sign is erected;
(b) not be closer than three (3) feet from a driveway or
parking area serving the lot in which such sign is to
be installed;
(c) not have a gross surface area of more than fifty (50) square
feet;
(d) not exceed six (6) feet in height from ground elevation; and
(e) be connected to the ground along the entire base length of the
sign;
(f) have a base being of a design and material similar to that of
the Structure located on the Lot on which such sign is to be
installed, with the face of such sign being of a design and
material compatible with the design of said Structure;
(g) be surrounded by landscaping; and
(h) not contain any internal lighting.
-1-
EXHIBIT G
---------
Form of SNDA
Bank of America Tennessee Form SNDA
This Instrument Prepared By And
Return To:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance and Attornment Agreement (this
"Agreement") dated ___________________, 1999, is made among xxxxxxxxxxxxxx.xxx
llc ("Tenant"), Industrial Developments International (Tennessee), L.P.
("Landlord"), and Bank of America, N.A., a national banking association formerly
known as NationsBank, N.A., a national banking association ("Mortgagee").
WHEREAS, Mortgagee is the owner of a promissory note (herein, as it may
have been or may be from time to time renewed, extended, amended or
supplemented, called the "Note") dated September 30, 1998, executed by Landlord,
payable to the order of Mortgagee, bearing interest and payable as therein
provided, and secured by, among other things, a Tennessee Construction Mortgage,
Deed of Trust, Assignment, Security Agreement and Financing Statement (herein,
as it may have been or may be from time to time renewed, extended, amended or
supplemented, called the "Mortgage"), recorded or to be recorded in the real
property records of Shelby County, Tennessee, covering, among other property,
the land (the "Land") described in Exhibit "A" of the Mortgage, and the
improvements ("Improvements") now and hereafter located thereon (such Land and
Improvements being herein together called the "Property");
WHEREAS, Tenant is the tenant under a lease from Landlord dated
____________, 1999 (herein, as it may from time to time be renewed, extended,
amended or supplemented, called the "Lease"), covering a portion of the Property
(said portion being herein referred to as the "Premises"); and
WHEREAS, the term "Landlord" as used herein means the present landlord
under the Lease or, if the landlord's interest is transferred in any manner, the
successor(s) or assign(s) occupying the position of landlord under the Lease at
the time in question;
THEREFORE, in consideration of the mutual agreements herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Subordination. Tenant agrees and covenants that the Lease and the
rights of Tenant thereunder, all of Tenant's right, title and interest in and to
the property covered by the Lease, and any lease thereafter executed by Tenant
covering any part of the Property, are and shall be subordinate and inferior to
(a) the Mortgage and the rights of Mortgagee thereunder, and all right, title
and interest of Mortgagee in the Property, and (b) all other security documents
now or hereafter securing payment of any indebtedness of the Landlord (or any
prior landlord) to Mortgagee which cover or affect the Property (the "Security
Documents"). This Agreement is not intended and shall not be construed to
subordinate the Lease to any mortgage, deed of trust or other security document
other than those referred to in the preceding sentence, securing the
indebtedness to Mortgagee. Without limitation of any other provision hereof,
Mortgagee may, at its option and without joinder or further consent of Tenant,
Landlord, or anyone else, at any time after the date hereof subordinate the lien
of the Mortgage (or any other lien or security interest held by Mortgagee which
covers or affects the Property) to the Lease by executing an instrument which is
intended for that purpose and which specifies such subordination; and, in the
event of any such election by Mortgagee to subordinate, Tenant will execute any
documents required to
- 1 -
evidence such subordination; provided however, notwithstanding that the Lease
may by unilateral subordination by Mortgagee hereafter be made superior to the
lien of the Mortgage, the provisions of the Mortgage relative to the rights of
Mortgagee with respect to proceeds arising from an eminent domain taking
(including a voluntary conveyance by Landlord) and/or insurance payable by
reason of damage to or destruction of the Premises shall be prior and superior
to and shall control over any contrary provisions in the Lease.
2. Non-Disturbance. Mortgagee agrees that so long as the Lease is in
full force and effect and Tenant is not in default in the payment of rent,
additional rent or other payments or in the performance of any of the other
terms, covenants or conditions of the Lease on Tenant's part to be performed
(beyond the period, if any, specified in the Lease within which Tenant may cure
such default),
a. Tenant's possession of the Premises under the Lease
shall not be disturbed or interfered with by Mortgagee in the exercise of any of
its rights under the Mortgage, including any foreclosure or conveyance in lieu
of foreclosure, and
b. Mortgagee will not join Tenant as a party defendant
for the purpose of terminating Tenant's interest and estate under the Lease in
any proceeding for foreclosure of the Mortgage.
3. Attornment.
----------
a. Tenant covenants and agrees that in the event of
foreclosure of the Mortgage, whether by power of sale or by court action, or
upon a transfer of the Property by conveyance in lieu of foreclosure (the
purchaser at foreclosure or the transferee in lieu of foreclosure, including
Mortgagee if it is such purchaser or transferee, being herein called "New
Owner"), Tenant shall attorn to the New Owner as Tenant's new landlord, and
agrees that the Lease shall continue in full force and effect as a direct lease
between Tenant and New Owner upon all of the terms, covenants, conditions and
agreements set forth in the Lease and this Agreement, except for provisions
which are impossible for New Owner to perform; provided, however, that in no
event shall the New Owner be:
(1) liable for any act, omission, default,
misrepresentation, or breach of warranty, of any previous landlord (including
Landlord) or obligations accruing prior to New Owner's actual ownership of the
Property;
(2) subject to any offset, defense, claim or
counterclaim which Tenant might be entitled to assert against any previous
landlord (including Landlord);
(3) bound by any payment of rent, additional
rent or other payments, made by Tenant to any previous landlord (including
Landlord) for more than one (1) month in advance;
(4) bound by any amendment, or modification of
the Lease hereafter made, or consent by any previous landlord (including
Landlord) under the Lease to any assignment or sublease hereafter granted,
without the written consent of Mortgagee; or
(5) liable for any deposit that Tenant may have
given to any previous landlord (including Landlord) which has not, as such, been
transferred to New Owner.
b. The provisions of this Agreement regarding attornment by
Tenant shall be self-operative and effective without the necessity of execution
of any new lease or other document on the part of any party hereto or the
respective heirs, legal representatives, successors or assigns of any such
party. Tenant agrees, however, to execute and deliver at any time and from time
to time, upon the request of Landlord or of any holder(s) of any of the
indebtedness or other obligations secured by the Mortgage, any instrument or
certificate which, in the reasonable judgment of Landlord or of such holder(s),
may be necessary or appropriate in any such foreclosure proceeding or otherwise
to evidence such attornment, including, if requested, a new lease of the
Premises on the same terms and conditions as the Lease for the then unexpired
term of the Lease.
4. Estoppel Certificate. Tenant agrees to execute and deliver from time
to time, upon the request of Landlord or of any holder(s) of any of the
indebtedness or other obligations secured by the Mortgage, a certificate
regarding the status of the Lease, consisting of statements, if true (or if not,
specifying why not), () that the Lease is in full force and effect, (b) the date
through which
- 2 -
rentals have been paid, (c) the date of the commencement of the term of the
Lease, (d) the nature of any amendments or modifications of the Lease, (e) that
no default, or state of facts which with the passage of time or notice (or both)
would constitute a default, exists under the Lease, and (f) such other matters
as may be reasonably requested including any certifications required under
Section 25 of the Lease.
5. Acknowledgment and Agreement by Tenant. Tenant acknowledges
and agrees as follows:
a. Tenant acknowledges that Landlord has executed and
delivered to Mortgagee in connection with the financing of the Property an
Assignment of Lessor's Interest in Leases. Tenant hereby expressly consents to
such assignment and agrees that such assignment shall, in all respects, be
superior to any interest Tenant has in the Lease of the Property, subject to the
provisions of this Agreement. Tenant will not amend, alter, terminate, or waive
any provision of, or consent to the amendment, alteration, termination or waiver
of any provision of the Lease without the prior written consent of Mortgagee,
and no termination of the Lease, whether pursuant to the terms of the Lease or
otherwise, will be effective without the prior written consent of Mortgagee.
Tenant shall not prepay any rents or other sums due under the lease for more
than one (1) month in advance of the due date therefor. Tenant acknowledges that
Mortgagee will rely upon this instrument in connection with such financing.
b. Mortgagee, in making any disbursements to Landlord, is
under no obligation or duty to oversee or direct the application of the proceeds
of such disbursements, and such proceeds may be used by Landlord for purposes
other than improvement of the Property.
c. From and after the date hereof, in the event of any act or
omission by Landlord which would give Tenant the right, either immediately or
after the lapse of time, to terminate the Lease or to claim a partial or total
eviction, Tenant will not exercise any such right (i) until it has given written
notice of such act or omission to the Mortgagee; and (ii) until the same period
of time as is given to Landlord under the Lease to cure such act or omission
shall have elapsed following such giving of notice to Mortgagee and following
the time when Mortgagee shall have become entitled under the Mortgage to remedy
the same, but in any event 30 days after receipt of such notice or such longer
period of time as may be necessary to cure or remedy such default, act, or
omission including such period of time necessary to obtain possession of the
Property and thereafter cure such default, act, or omission, during which period
of time Mortgagee shall be permitted to cure or remedy such default, act or
omission; provided, however, that Mortgagee shall have no duty or obligation to
cure or remedy any breach or default. It is specifically agreed that Tenant
shall not, as to Mortgagee, require cure of any such default which is personal
to Landlord, and therefore not susceptible to cure by Mortgagee.
d. In the event that Mortgagee notifies Tenant of a default
under the Mortgage, Note, or Security Documents and demands that Tenant pay its
rent and all other sums due under the Lease directly to Mortgagee, Tenant shall
honor such demand and pay the full amount of its rent and all other sums due
under the Lease directly to Mortgagee or as otherwise required pursuant to such
notice beginning with the payment next due after such notice of default, without
inquiry as to whether a default actually exists under the Mortgage, Security
Documents or otherwise in connection with the Note, and notwithstanding any
contrary instructions of or demands from Landlord.
e. Tenant shall send a copy of any notice or statement under
the Lease to Mortgagee at the same time such notice or statement is sent to
Landlord if such notice or statement has a material impact on the economic
terms, operating covenants or duration of the Lease.
f. Tenant has no right or option of any nature whatsoever,
whether pursuant to the Lease or otherwise, to purchase the Premises or the
Property, or any portion thereof or any interest therein, and to the extent that
Tenant has had, or hereafter acquires, any such right or option, same is hereby
acknowledged to be subject and subordinate to the Mortgage and is hereby waived
and released as against Mortgagee.
g. This Agreement satisfies any condition or requirement in
the Lease relating to the granting of a non-disturbance agreement and Tenant
waives any requirement to the contrary in the Lease.
h. Mortgagee and any New Owner shall have no liability to
Tenant or any other party for any conflict between the provisions of the Lease
and the provisions of any other lease affecting the Property, including, but not
limited to, any provisions relating to exclusive or
- 3 -
non-conforming uses or rights, renewal options and options to expand, and in the
event of such a conflict, Tenant shall have no right to cancel the Lease or take
any other remedial action against Mortgagee or New Owner, or against any other
party for which Mortgagee or any New Owner would be liable.
i. Mortgagee and any New Owner shall have no obligation nor
incur any liability with respect to the erection or completion of the
improvements in which the Premises are located or for completion of the Premises
or any improvements for Tenant's use and occupancy, either at the commencement
of the term of the Lease or upon any renewal or extension thereof or upon the
addition of additional space, pursuant to any expansion rights contained in the
Lease.
j. Mortgagee and any New Owner shall have no obligation nor
incur any liability with respect to any warranties of any nature whatsoever,
whether pursuant to the Lease or otherwise, including, without limitation, any
warranties respecting use, compliance with zoning, Landlord's title, Landlord's
authority, habitability, fitness for purpose or possession.
k. In the event that Mortgagee or any New Owner shall acquire
title to the Premises or the Property, Mortgagee or such New Owner shall have no
obligation, nor incur any liability, beyond Mortgagee's or New Owner's then
equity interest, if any, in the Property or the Premises, and Tenant shall look
exclusively to such equity interest of Mortgagee or New Owner, if any, for the
payment and discharge of any obligations imposed upon Mortgagee or New Owner
hereunder or under the Lease or for recovery of any judgment from Mortgagee, or
New Owner, and in no event shall Mortgagee, New Owner, nor any of their
respective officers, directors, shareholders, agents, representatives, servants,
employees or partners ever be personally liable for such judgment.
l. Nothing herein contained is intended, nor shall it be
construed, to abridge or adversely affect any right or remedy of Landlord under
the Lease in the event of any default by Tenant in the payment of rent and/or
any other sums due under the Lease or in the performance of any of the other
terms, covenants or conditions of the Lease on Tenant's part to be performed.
m. Landlord has not agreed to any abatement of rent or other
sums or period of "free rent" for the Premises unless same is specifically
provided in the Lease, and Tenant agrees that in the event Mortgagee, or any New
Owner becomes the owner of the Property, no agreement for abatement of rent or
any other sum not specifically provided in the Lease will be binding on
Mortgagee or New Owner.
n. Tenant has never permitted, and will not permit, the
generation, treatment, storage or disposal of any hazardous substance as defined
under federal, state, or local law, on the Premises or Property except for such
substances of a type and only in a quantity normally used in connection with the
occupancy or operation of buildings (such as non-flammable cleaning fluids and
supplies normally used in the day to day operation of first class establishments
similar to the Improvements), which substances are being held, stored, and used
in strict compliance with federal, state and local laws. Tenant shall be solely
responsible for and shall reimburse Landlord for any loss, liability, claim or
expense, including without limitation, cleanup and all other expenses, that
Landlord may incur by reason of Tenant's violation of the requirements of this
Paragraph 5(n).
6. Acknowledgment and Agreement by Landlord. Landlord, as landlord
under the Lease and grantor under the Mortgage, acknowledges and agrees for
itself and its heirs, representatives, successors and assigns, that: (a) this
Agreement does not constitute a waiver by Mortgagee of any of its rights under
the Mortgage, Note, or Security Documents, or in any way release Landlord from
its obligations to comply with the terms, provisions, conditions, covenants,
agreements and clauses of the Mortgage, Note, or Security Documents; (b) the
provisions of the Mortgage, Note, or Security Documents remain in full force and
effect and must be complied with by Landlord; and (c) Tenant is hereby
authorized to pay its rent and all other sums due under the Lease directly to
Mortgagee upon receipt of a notice as set forth in paragraph 5(d) above from
Mortgagee and that Tenant is not obligated to inquire as to whether a default
actually exists under the Mortgage, Security Documents or otherwise in
connection with the Note. Landlord hereby releases and discharges Tenant of and
from any liability to Landlord resulting from Tenant's payment to Mortgagee in
accordance with this Agreement. Landlord represents and warrants to Mortgagee
that a true and complete copy of the Lease has been delivered by Landlord to
Mortgagee.
7. Lease Status. Landlord and Tenant certify to Mortgagee that neither
Landlord nor Tenant has knowledge of any default on the part of the other under
the Lease, that the Lease is
- 4 -
bona fide and contains all of the agreements of the parties thereto with respect
to the letting of the Premises and that all of the agreements and provisions
therein contained are in full force and effect.
8. Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder shall be in
writing and shall be deemed sufficiently given or furnished if delivered by
personal delivery, by telegram, telex, or facsimile, by expedited delivery
service with proof of delivery, or by registered or certified United States
mail, postage prepaid, at the addresses specified at the end of this Agreement
(unless changed by similar notice in writing given by the particular party whose
address is to be changed). Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram, telex or
facsimile, upon receipt. Notwithstanding the foregoing, no notice of change of
address shall be effective except upon receipt. This Paragraph 8 shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in this Agreement or in the lease or in any document evidencing, securing or
pertaining to the loan evidenced by the Note or to require giving of notice or
demand to or upon any person in any situation or for any reason.
9. Miscellaneous.
a. This Agreement supersedes any inconsistent provision of the
Lease.
b. Nothing contained in this Agreement shall be construed to
derogate from in any way impair, or affect the lien, security interest or
provisions of the Mortgage, Note, or Security Documents.
c. This Agreement shall inure to the benefit of the parties
hereto, their respective successors and permitted assigns, and any New Owner,
and its heirs, personal representatives, successors and assigns; provided,
however, that in the event of the assignment or transfer of the interest of
Mortgagee, all obligations and liabilities of the assigning Mortgagee under this
Agreement shall terminate, and thereupon all such obligations and liabilities
shall be the responsibility of the party to whom Mortgagee's interest is
assigned or transferred; and provided further that the interest of Tenant under
this Agreement may not be assigned or transferred without the prior written
consent of Mortgagee.
d. THIS AGREEMENT AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TENNESSEE AND
APPLICABLE UNITED STATES FEDERAL LAW EXCEPT ONLY TO THE EXTENT, IF ANY, THAT THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED NECESSARILY CONTROL.
e. The words "herein", "hereof", "hereunder" and other similar
compounds of the word "here" as used in this Agreement refer to this entire
Agreement and not to any particular section or provision.
f. This Agreement may not be modified orally or in any manner
other than by an agreement in writing signed by the parties hereto or their
respective successors in interest.
g. If any provision of the Agreement shall be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not apply to or affect any other provision hereof, but
this Agreement shall be construed as if such invalidity, illegibility, or
unenforceability did not exist.
h. If any bankruptcy proceedings shall hereafter commence with
respect to Landlord, and if the Lease is rejected by the trustee pursuant to
Section 365(h) of the United States Bankruptcy Code, Tenant agrees with
Mortgagee (i) not to treat such lease as terminated and (ii) to remain in
possession of the Premises.
[SIGNATURES BEGIN ON NEXT PAGE]
- 5 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and sealed as of the date first above written.
TENANT:
------
Xxxxxxxxxxxxxx.xxx LLC
By:__________________________________
Name:
Title:
Attest:______________________________
Name:
Title:
[CORPORATE SEAL]
STATE OF ____________
COUNTY OF _________
Personally appeared before me, ________________, a Notary Public in and
for said State and County duly commissioned and qualified,
______________________ and ______________________, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who upon
oath acknowledged that they executed the within instrument for the purposes
therein contained and who further acknowledged that they are the
___________________ and _______________ respectively of xxxxxxxxxxxxxx.xxx llc,
a Delaware limited liability company (the "Tenant"), and are authorized by the
Tenant to execute this instrument on behalf of the Tenant.
Witness my hand, at office, this ____ day of ___________, 1999.
__________________________________
NOTARY PUBLIC
[AFFIX NOTARIAL SEAL]
My Commission Expires:
__________________________
LANDLORD:
Industrial Developments
International (Tennessee), L.P.,
a Georgia limited partnership
By: IDI (Tennessee), Inc., a Georgia
corporation, its sole general
partner
By:____________________________
Name:_____________________
Title:____________________
Attest:________________________
Name:_____________________
Title:____________________
[Corporate Seal]
- 6 -
STATE OF ____________
COUNTY OF _________
Personally appeared before me, ________________, a Notary Public in and
for the said State and County duly commissioned and qualified,
______________________ and _________________________ with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who upon
oath acknowledged that they executed the within instrument for the purposes
therein contained and who further acknowledged that they are the
___________________ and __________________ respectively of IDI (Tennessee),
Inc., a Georgia corporation and sole general partner of Industrial Developments
International (Tennessee), L.P., a Georgia limited partnership (the "Landlord"),
and are authorized by IDI (Tennessee), Inc. as sole general partner of the
Landlord to execute this instrument on behalf of the Landlord.
Witness my hand, at office, this ____ day of ___________, 1999.
NOTARY PUBLIC
[AFFIX NOTARIAL SEAL]
My Commission Expires:
_____________________________
MORTGAGEE:
---------
BANK OF AMERICA, N.A., formerly known
as NationsBank, N.A.
By:
Name:
Title:
[BANK SEAL]
STATE OF ____________
COUNTY OF _________
Personally appeared before me, ________________, a Notary Public in and
for the said State and County duly commissioned and qualified,
___________________, with whom I am personally acquainted (or proved to me on
the basis of satisfactory evidence), and who upon oath acknowledged that
_____________________ executed the within instrument for the purposes therein
contained and who further acknowledged that _________________ is the
________________ of Bank of America, N.A., formerly known as NationsBank, N.A.
(the "Mortgagee"), and is authorized by the Mortgagee to execute this instrument
on behalf of the Mortgagee.
Witness my hand, at office, this ____ day of ___________, 1999.
NOTARY PUBLIC
[AFFIX NOTARIAL SEAL]
My Commission Expires:
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ADDRESS OF TENANT:
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xxxxxxxxxxxxxx.xxx llc
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
ADDRESS OF LANDLORD:
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Industrial Developments International (Tennessee), L.P.
c/o Industrial Developments International, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Vice President - Operations
ADDRESS OF MORTGAGEE:
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NationsBank, N.A.
NationsBank Plaza - Sixth Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Real Estate Banking Group
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