Exhibit 10.5
LEASE
1. PARTIES. WESTERN PROPERTIES MASTER LLC, a Delaware limited liability
company, ("LESSOR"), which expression shall include its heirs, successors and
assigns where the context so permits, does hereby lease to ROWECOM INC., a
Massachusetts corporation, ("LESSEE"), which expression shall include its
successors, administrators, and assigns where the context so permits, and the
LESSEE hereby leases and shall peaceably hold and enjoy the following described
premises:
2. PREMISES. Portions of the first and second floor, of the building at 00
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxxx, ("The Building")
containing forty thousand and seventy-six (40,076) rentable square feet of space
more or less, all as described in Exhibit A attached hereto and shown on the
plan in said Exhibit A (the "Leased Premises"), together with all improvements
therein and together with all appurtenances thereto, including but not limited
to the right to use in common, with others entitled thereto, the entrances,
lobby, hallways, stairways, loading docks, and elevators, necessary for access
to and enjoyment of said Leased Premises.
The Leased Premises shall have as appurtenant thereto: (a) the right to
use in common with others entitled thereto, the entrances, lobbies, hallways,
stairways, bathrooms, walkways, sidewalks, driveways, loading docks, elevators
and other common facilities in the building containing any portion of the Leased
Premises necessary for access to and enjoyment of the Leased Premises, or
portion, and (b) the pipes, conduits, wires, and appurtenant equipment
1
serving the Leased Premises, or portion thereof, in common with other portions
of the building containing any part of the Leased premises, subject, however, to
the following rights which are expressly excepted and reserved by LESSOR: (i)
the right, from time to time and upon reasonable advance notice to LESSEE, to
install, maintain, use, repair, relocate, place and replace utility lines,
pipes, ducts, conduits, wires, gas, electric, or any other meters and fixtures
located on or passing through any portion of the Leased Premises to serve other
portions of the LESSOR's property of which the Leased Premises, or a portion
thereof, are a part; (ii) the right to enter into, upon and across any portion
of the Leased Premises, and upon reasonable advance notice to LESSEE, to
exercise any reserved right of LESSOR hereunder or to complete LESSOR's
construction in or adjacent to the Leased Premises, or part thereof, and the
Building; and (iii) the right from time to time to make alterations or additions
to the Building and to make additions to such buildings or improvements, and to
permit others to do so from time to time and upon reasonable advance notice to
LESSEE all as LESSOR may determine in its sole discretion, and without LESSEE's
consent in any instance; any such alterations or additions being performed in a
manner so as not unreasonably to interfere with the LESSEE's use and occupancy
of the Leased Premises and access to the Leased Premises.
Subject to LESSOR's reserved rights specified above, there shall be
appurtenant to the Leased Premises the right to park three (3) passenger motor
vehicles per every one thousand (1,000) rentable square feet occupied at any
given time in the parking lot adjacent to the Building. By way of example, at
full occupancy of 40,076 rentable square feet, LESSEE may use one hundred twenty
(120) spaces (40.076 times 3 = 120). LESSOR reserves the right, in its
reasonable discretion, to designate the locations of the spaces to be utilized
for such parking
2
rights by written notice to LESSEE, and to change the location of any or all of
such spaces, in its reasonable discretion, by notice to LESSEE at any time and
from time to time as LESSOR shall determine in its reasonable discretion. The
parking spaces provided hereunder need not be contiguous.
3.1 TERM. The Term of this Lease shall be for a term ending on the last
day of the eighty-fifth (85th) month, such term commencing on the Commencement
Date. The Commencement Date shall be the sooner of:
(a) the date the LESSEE first occupies space in the Building; or
(b) May 1, 1999.
3.1.1. PHASED OCCUPANCY. In the event (as is contemplated herein) that the
LESSEE occupies a portion of the Leased Premises, then LESSEE shall have the
right to commence use and occupancy of such portion of the Leased Premises
subject to the terms and conditions of this Lease. [During the period of such
partial use and occupancy, Base Rent and additional rent payable under
Paragraphs 4 and 5 hereof shall be payable on a pro rata basis in the same
proportion as the square footage of the space being used and occupied bears to
the total square footage of the Leased Premises as outlined in Paragraph 4
below]. LESSOR shall deliver to LESSEE the following spaces on the following
dates:
Second floor (formerly Phar Lap) space (7,577 RSF) - May 1, 1999
First floor (formerly IONA Technologies) space (19,872 RSF) - July 16,
1999
Second floor space (4,500 RSF) - June 0, 0000
Xxxxxx xxxxx (xxxxxxxx Xxxx Xxx) space (8,127 RSF) - September 1, 2001
3
If the LESSOR for any reason cannot deliver possession of any of the
above-referenced spaces by the corresponding delivery dates, there shall be an
abatement of Base Rent and additional rent due on the space which has not been
delivered on time under this Lease for the period between the delivery date and
the time when LESSOR does deliver possession of the subject space, provided that
if LESSOR fails to deliver possession of the 19,872 RSF first floor space on or
before August 30, 1999, LESSEE shall have the option to terminate this Lease
upon written notice to LESSOR on or before August 31, 1999. In the event that
LESSOR fails to deliver possession of the 19,872 RSF first floor space by
October 14, 1999 then LESSEE shall have the option to terminate this Lease upon
written notice to LESSOR on or before October 15, 1999. In the event that LESSOR
fails to deliver possession of the 19,872 RSF first floor space by October 14,
1999 because IONA has not vacated said space, then LESSOR shall have the option
to terminate this Lease by written notice to LESSEE on or before October 15,
1999. If the LESSOR for any reason cannot deliver possession of any of the other
above-referenced spaces within forty-five (45) days of the corresponding
delivery dates, there shall be an additional one (1) day of free rent on that
space for each day over the forty-five (45) days that the space was delivered
late.
3.2.1 CONDITION OF LEASED PREMISES. The Leased Premises shall be delivered
to LESSEE in their current "as is" condition, in broom clean condition. In
addition, LESSOR shall provide LESSEE with the following tenant improvement
allowances on a space by space basis, said allowances to be made as
reimbursements to LESSEE upon receipt by LESSOR of approved construction
requisitions. Allowances for specified spaces shall become available
4
thirty (30) days before the occupancy date of said space (as indicated in
Section 3.1.1 above). All work shall be performed in a good and workmanlike
manner. LESSOR shall have the right to reasonably approve all interior work and
shall have approval in its sole discretion of any work altering structural
components of the Building. LESSEE acknowledges that the 4,500 square foot
second floor space will require new HVAC installation as part of LESSEE's work
in that space and that the cost of that work will be LESSEE's (and can be drawn
out of LESSEE's tenant improvement allowance). The allowances are in the
following amounts:
First floor space (19,872 RSF) - $100,000
Second floor space (1999 occupancy) (7,577 RSF) - $152,500
Second floor space (2001 occupancy) (8,127 RSF) - $162,500
Second floor bathrooms (June 1, 2001) - $40,000
Second floor space (2000 occupancy) (4,500 RSF) - $135,000
Any allowance funds not previously used in the build-out of an already occupied
space may be requisitioned by LESSEE for other work during the term of this
Lease.
3.2.2 COMPLETION OF LANDLORD IMPROVEMENTS. Upon execution of this Lease,
the LESSOR shall diligently pursue approvals for and construction of a passenger
elevator from the first floor to the second floor, access to the elevator from
the first floor space, and a second floor lobby. LESSOR shall use best efforts
to obtain all necessary permits and approvals to commence such work. As part of
the elevator construction, LESSOR shall create a second floor lobby, which
space, upon full second floor occupancy by LESSEE in 2001, shall become part of
LESSEE's Leased Premises. The LESSOR shall notify LESSEE in writing prior to
obtaining permits for the construction and installation of such elevator and
shall deliver copis of
5
the plans to LESSEE showing locations of the elevator. Failure by LESSOR to
complete said improvements on or before December 31, 1999 shall result in a rent
reduction for LESSEE for each day after December 31, 1999 that the improvements
are not completed (i.e. elevator is not in service) equal on an annual basis to
$2.00 times the actual space occupied on the second floor by LESSEE (to be pro
rated as appropriate for square footage occupied). For example, if LESSEE
occupied 15,000 square feet for a year on the second floor, the rent reduction
if the elevator were not complete would be $30,000 (representing 15,000 square
feet times $2.00 per square foot).
4. RENT. LESSEE covenants and agrees to pay to LESSOR annual base rent
("Base Rent") in the amounts set forth or provided for below, by equal payments
of one-twelfth of such annual rate on the first day of each calendar month in
advance, the first monthly payment to be made on the Commencement Date, and by
payment, in advance, of a pro-rata portion of a monthly payment for any portion
of a month at the beginning or end of the Term; all payments to be made to
LESSOR or such agent, and at such place, as LESSOR shall from time to time in
writing designate, the following being now so designated:
WESTERN PROPERTIES MASTER LLC
XX XXX 000000
XXXXXXXXX, XX 00000-0000
The annual Base Rent during the Term is the following:
(a) From June 1, 1999 through July 31, 1999, $ 197,002.00,
($16,416.83 per month) (representing $26.00 per square foot
times 7,577 square feet);
(b) From August 1, 1999 through May 31, 2000, $ 713,674.00
($59,472.83 per month), (representing $26.00 per square foot
times 27,449 square feet);
(c) From June 1, 2000 through August 31, 2001, $ 830,674.00
($69,222.83 per month) (representing $26.00 per square foot
times 31,949 square feet); and
6
Next page is page 6A
Notwithstanding the Base Rent specified in subparagraph (a) above, the
Base Rent for the period June 1, 1999 until the first to occur of either (i) the
lease is terminated pursuant to Paragraph 3.1.1 above or (ii) Iona vacates the
first floor, the Base Rent shall be $174,271 per annum ($14,522.58 per month)
(representing $23.00 per square foot times 7,577 square feet).
Under no circumstances shall any allowance referred to in 3.2.1 be
available to be drawn down by LESSEE until the first to occur of either (i) the
lease is terminated pursuant to Paragraph 3.1.1 above or (ii) Iona vacates the
first floor.
6A
(d) From September 1, 2001 through May 31, 2006, $ 1,041,976.00
($86,831.33 per month) (representing $26.00 per square foot
times 40,076 square feet);
Each rent payment shall be due and payable on the first of the month for
which the rent payment is applicable. Any installment not paid within five (5)
days of when due will be subject to a late charge of five (5%) percent.
5. RENT ADJUSTMENT - TAXES.
5.1. LESSOR TO PAY TAXES. The LESSOR shall be responsible for the payment,
before the same become delinquent, of all general and special taxes of every
kind and nature, including assessments for local improvements, and other
governmental charges which may be lawfully charged, assessed or imposed other
than exclusively in areas occupied by tenants other than LESSEE (herein
collectively called the "Taxes") upon the Building and land.
At any time during the Term the present system of ad valorem taxation of
real property shall be changed to that in lieu of the whole or any part of the
ad valorem tax on real property, there shall be assessed on LESSOR a capital
levy or other tax on the gross rents received with respect to the Building or a
federal, state, county, municipal, or other local income, franchise, excise or
similar tax, assessment, levy or charge (distinct from any now in effect)
measured by or based, in whole or in part, upon any such gross rents, then any
and all of such taxes, assessments, levies or charges to the extent so measured
or based, shall be deemed to be included within the term "Taxes" but only to the
extent that the same would be payable if the land and the Building were the only
property of LESSOR.
7
5.2 LESSEE's SHARE OF TAXES. The LESSEE shall pay to the LESSOR, as
additional rent, the LESSEE's Proportionate Building Share of any increase over
the Fiscal Year 2000 (July 1, 1999 through June 30, 2000) Taxes. LESSEE's
Proportionate Building Share shall be defined as follows:
First floor space (19,872 RSF) 49.59%
Second floor space (1999 occupancy) (7,577 RSF) 18.90%
Second floor space (2001 occupancy) (8,127 RSF) 20.28%
Second floor space (2000 occupancy) (4,500 RSF) 11.23%
5.3 RENT ADJUSTMENT - PAYMENT. Beginning with the fiscal year commencing
on July 1, 2000 and in subsequent years during the Term of this Lease, LESSEE
shall pay to the LESSOR monthly installments of one-twelfth of the amounts due
to LESSOR under Paragraph 5.2 on account of projected Taxes for such year,
calculated by the LESSOR on the basis of the best and most recent data available
as set forth in a statement from LESSOR (and, when available, based upon the
real estate tax xxxx covering any such period). Appropriate adjustments of
estimated amounts shall be made between LESSOR and LESSEE promptly after LESSOR
shall have received the tax xxxx covering any such period.
5.4 TAX ADJUSTMENT. If the LESSOR or any other tenant (excluding LESSEE)
in the Building shall construct an addition to the Building (other than as set
forth in Paragraph 3.2.2 above), or construct improvements within the Building
of unusual value so as to result in an increase in Taxes over the Taxes which
would have been assessed to that Building but for such construction, there shall
not be included in Taxes for purposes of this Lease the amount of such
8
increase in Taxes unless such additions or improvements directly benefit the
LESSEE. If the LESSEE, or the LESSOR at the direction of the LESSEE, shall
construct improvements within the Leased Premises, or any part thereof, of
unusual value so as to result in an increase in Taxes over the Taxes which would
have been assessed to the Building, or part, but for such unusually valuable
improvements, the LESSEE shall be responsible for the payment of the full amount
of such increase. In the event LESSOR seeks and receives any abatement on such
Taxes, LESSOR shall refund to LESSEE its Proportionate Building Share of all
abatements for any period of the Term, less LESSEE's Proportionate Building
Share of LESSOR's out of pocket expenses for said abatement process.
6. UTILITIES AND OTHER SERVICES.
(a) The LESSEE shall pay charges for all heat, air-conditioning,
electricity, and water and sewer use charges and all other utilities separately
metered or sub-metered to the Leased Premises, and LESSEE shall be responsible
for all utility company deposits applicable to the supply of such services to
the Leased Premises. LESSEE shall also be responsible for the payment of its
proportionate share of all water and sewer use and utilities not separately
metered or sub-metered to the Leased Premises all as reasonably determined by
LESSOR. Upon written request by the LESSOR, the LESSEE shall provide the LESSOR
with evidence of payment of such charges. LESSEE shall defend, indemnify and
hold LESSOR harmless from and against any claim or liability arising for such
charges which LESSEE is responsible for. LESSEE hereby confirms that the
existing electrical service provided by LESSOR to the Leased Premises is as
9
follows: first floor - 800 amps; second floor - three (3) 200 amp services; and
second floor roof for HVAC units - 300 amps. All service is 120/208 volts, three
(3) phase, four (4) wire.
(b) LESSOR agrees to furnish reasonable heat to the stairways,
elevators and other common areas in the Building, or portions thereof, as
necessary for comfortable occupancy and to provide lighting and life safety
systems to passageways and stairways and all parking areas and walkways
providing access from the Building to the parking area in the evening during
customary business hours on regular business days, and to furnish ordinary
repairs and cleaning of the common areas and facilities in and around the
Building and including the parking lot and landscaped areas and removal of snow
and ice reasonably promptly after snowfall and ice accumulation have ended to
all walkways, access ways and approaches to the Building and the parking lots as
is customary in or about similar buildings in Cambridge. Notwithstanding the
above, during the time period LESSEE and Phar Lap Software Inc. ("Phar Lap")
share occupancy of the second floor, Phar Lap shall continue to maintain the
second floor common area (including restrooms) pursuant to its lease obligations
with LESSOR. LESSOR shall not be liable to LESSEE for any compensation or
reduction of rent by reason of inconvenience or annoyance or for loss of
business arising from the necessity of LESSOR or its agent entering the Leased
Premises, or for LESSOR's repairing the Leased Premises if such repair is not
performed by LESSEE, or for making repairs or renovations to any portion of the
Building, however, the necessity may occur. In case LESSOR is prevented or
delayed from making any such repairs or alterations, or supplying the utilities
or services provided for herein, or performing any other covenant or duty to be
performed on LESSOR's part, by reason of any cause beyond LESSOR's
10
control, LESSOR shall not be liable to LESSEE therefor, nor shall LESSEE be
entitled to any abatement or reduction of rent by reason thereof, nor shall the
same give rise to a claim in LESSEE's favor that such failure constitutes actual
or constructive, total or partial, eviction from the Leased Premises, or any
portion thereof LESSOR reserves the right to stop any service or utility system,
when necessary by reason of accident or emergency, or until necessary repairs
have been completed. Notwithstanding the above provisions, in the event that
LESSOR's failure to repair, alter or supply the utilities or services provided
for herein, or the failure of LESSOR to perform any other covenant or duty
required by this Lease (subject to the provisions of the Lease) continues for a
period of greater than thirty (30) days, LESSEE shall have the right to make
such repairs and offset the cost of such repairs against Base Rent.
(c) To the extent that LESSOR has installed separate meters for all
utilities including heat, electricity, water and sewer, and air-conditioning,
the LESSEE shall pay its utility charges directly to the suppliers of such
utility services, as billed by the LESSOR within ten (10) days of receipt of
said xxxx and at least before the same become delinquent. If there are not
separate meters, then LESSEE shall pay its pro rata share of the utility cost,
as billed by LESSOR. The LESSEE shall have the right to audit said charges and
payments upon reasonable notice.
7. USE OF LEASED PREMISES. The LESSEE shall use the Leased Premises only
for the purpose of general office, research and development associated with its
software business and other appurtenant uses.
8. COMPLIANCE WITH LAWS. The LESSEE acknowledges that no trade or
occupation shall be conducted in the Leased Premises or use made thereof which
shall be unlawful
11
or be contrary to any law or any municipal by-law or ordinance in force in the
city in the City of Cambridge. LESSEE shall keep the Leased Premises equipped
with all safety appliances and shall procure and keep in force all licenses and
permits required by law or ordinance of any public authority because of the uses
made of the Leased Premises by LESSEE and shall maintain in good condition on
the Leased Premises all safety and fire protection devices required by the Board
of Fire Underwriters, or other body having similar functions, and of every
insurance company and policy by which LESSOR or LESSEE is insured. If any use of
the Leased Premises by LESSEE results in the cancellation of any insurances
carried by LESSOR, or increases the cost thereof, the LESSEE shall on demand
reimburse the LESSOR all extra insurance premiums incurred as a result of such
use of the Leased Premises by the LESSEE. To the best of LESSEE's knowledge, it
has not received any written notice from any governmental agency or department
alleging that the premises are in violation of any law and/or ordinance.
9. RISK OF LOSS OF PERSONAL EFFECTS. LESSEE acknowledges and agrees that
all of the furnishings, equipment, effects and property of LESSEE and of all
persons claiming by through or under LESSEE which may be on the Leased Premises
or elsewhere in the Building, shall be at the sole risk and hazard of LESSEE and
if the whole or any part thereof shall be destroyed or damaged by fire, water or
otherwise, or by the leakage or bursting of water pipes, steam pipes, or other
pipes, by theft or from any other cause, no part of said loss or damage is to be
charged to or to be borne by LESSOR, except that LESSOR shall in no event be
indemnified or held harmless or exonerated from any liability to LESSEE or to
any other person, arising from any injury, loss, damage or liability caused by
LESSOR's intentional act or negligence or the intentional act or negligence of
the agents, assigns or invitees of LESSOR.
12
9A. INSURANCE - WAIVER OF SUBROGATION. LESSOR agrees to keep the Building
and LESSEE agrees to keep the Leased Premises, and all equipment, machinery and
fixtures therein insured in amounts equal to the replacement cost of the same,
against fire and other perils included in a standard extended coverage
endorsement, and against breakdown of boilers and other machinery and equipment,
and LESSEE agrees to procure and keep in force comprehensive general liability
insurance indemnifying LESSEE against all claims and damages for any injury to
or death of person or damage to property which may be claimed to have occurred
upon or to have been caused by activities or conditions within the Leased
Premises and indemnifying LESSOR to the extent any such claims and demands are
the responsibility or obligation of LESSEE pursuant to this Lease or as a matter
of law, in amounts not less than One Million ($1,000,000) Dollars for property
damage, One Million ($1,000,000) Dollars for injury or death of one person, and
Two Million ($2,000,000) Dollars for injury or death of more than one person in
a single accident.
All insurance required hereunder shall be written by insurance carriers
qualified to do business and in good standing in Massachusetts and approved by
LESSOR, which approval shall not be unreasonably withheld, delayed or
conditioned. All policies of insurance, shall name LESSOR and LESSEE as the
insured parties. Each required policy of insurance shall provide that,
notwithstanding any act or omission of LESSEE which might otherwise result in
forfeiture of said insurance: (A) it shall not be canceled nor its coverage
reduced without at least ten (10) days prior written notice to each insured
named therein, and (B) any proceeds shall be first payable to LESSOR or to
holder of any mortgage encumbering the Leased Premises, as their respective
interests may appear.
13
As of the commencement of the Term hereof, and thereafter prior to the
expiration dates of the expiring policies, the photocopies of the policies to be
obtained by LESSEE hereto issued by the respective insurers or certificates
thereof shall be delivered to LESSOR.
Any insurance carried by either party with respect to the Leased Premises
or property therein or occurrences thereon shall include a clause or endorsement
denying to the insurer rights of subrogation against the other party to the
extent rights have been waived by the insured prior to occurrence of injury or
loss. Each party, notwithstanding any provisions of this Lease to the contrary,
hereby waives any rights of recovery against the other for injury of loss due to
hazards covered by such insurance to the extent of the indemnification received
thereunder.
10. MAINTENANCE OF PREMISES. The LESSEE agrees to maintain the Leased
Premises in the same condition as they are at the commencement of the Term or as
they may be put in during the Term of this Lease, reasonable wear and tear,
damage by fire, other casualty and eminent domain, and matters for which LESSOR
is responsible hereunder only excepted, to provide its own interior janitorial
service, to install and maintain its own security system as it considers
appropriate and, whenever necessary, to replace plate glass and other glass
therein with that of the same quality as that damaged or injured. LESSOR shall
maintain and pay for the maintenance of the HVAC System servicing the Leased
Premises. The LESSEE shall not permit the Leased Premises to be overloaded,
damaged, stripped, or defaced, nor suffer any waste. LESSEE shall obtain written
consent of LESSOR before erecting any sign on or about the Leased Premises,
which consent shall not be unreasonably withheld, conditioned or delayed. LESSEE
shall have the right, subject to LESSOR's reasonable approval of size, to
utilize upon their respective cessation of building occupancy the signage
locations currently utilized by IONA
14
Technologies Inc. and Phar Lap. LESSEE further covenants and agrees: to take all
reasonably necessary actions to insure that smoke, fumes, vapors and odors will
not permeate any building containing the Leased Premises and will be removed
only through the exhaust and ventilating system servicing the Leased Premises;
to keep the Leased Premises free of pests, roaches and vermin; to keep all trash
garbage and debris stored on the Leased Premises (and not in any other portions
of the Building) in adequate covered containers, reasonably approved by LESSOR
and placed in locations or areas reasonably approved by LESSOR in writing and to
arrange for the regular removal thereof once each day; to provide for the
frequent and adequate cleaning of the Leased Premises and all walls, floors,
fixtures and equipment therein consistent with its use. LESSOR shall maintain in
good condition the structural elements and the roof of the Building, the
mechanical equipment and systems in the Building (other than such non-HVAC
equipment and systems which are located within or exclusively serve the Leased
Premises, and other than LESSEE's maintenance obligations otherwise provided
herein), and the common areas of the Building.
11. ALTERATIONS - ADDITIONS. The LESSEE shall not make structural
alterations or additions to the Leased Premises, but may make nonstructural
alterations and improvements having an aggregate cost of less than five thousand
($5,000.00) dollars without LESSOR's consent. All other nonstructural
alterations and improvements may be made to the Leased Premises by LESSEE,
provided the LESSOR consents thereto in advance in writing in each instance,
which consent shall not be unreasonably withheld, conditioned or delayed
provided that LESSOR is furnished with detailed plans and specifications
reasonably approved by LESSOR. All such allowed alterations or additions shall
be at LESSEE's expense (except to the
15
extent of LESSOR's tenant improvement allowances as defined in Paragraph 3.2.1
above) and shall be in quality at least equal to the present first floor
construction (although second floor construction does not require dropped
ceilings if LESSEE so decides). LESSEE shall not permit any mechanics' liens, or
similar liens, to remain upon the Leased Premises for labor and materials
furnished to LESSEE or claimed to have been furnished to LESSEE in connection
with work of any character performed or claimed to have been performed at the
direction of LESSEE, and shall cause any such lien to be released of record or
bonded-off in a manner acceptable to LESSOR and its title insurance company
forthwith without cost to LESSOR. Any alterations, or improvements made by the
LESSEE, except for moveable partitions and furnishings, installed at the
LESSEE's cost, shall become the property of the LESSOR at the termination of
Lease as provided herein.
With respect to all such LESSEE work, LESSEE further agrees as follows:
that such work shall commence only after all required municipal and other
governmental permits and authorizations have been obtained (the LESSOR agreeing
to join in any application therefor at the LESSEE's expense, whenever necessary)
and all such work shall be done in a good and workmanlike manner in compliance
with building and zoning laws and with all other laws, ordinances, regulations
and requirements of all federal, state and municipal agencies, and in accordance
with the requirements and policies issued by any insurer of LESSOR or LESSEE;
that all such work shall be prosecuted with reasonable dispatch to completion;
that at all times when any such work is in progress, LESSEE shall maintain or
cause to be maintained adequate worker's compensation insurance for those
employed in connection therewith with respect to whom death or injury claims
could be asserted against LESSOR, the LESSEE or the Leased Premises and
comprehensive general liability or builder's risk insurance (for mutual benefit
of
16
LESSEE and LESSOR) in coverages reasonably approved by LESSOR; and that all such
work of LESSEE shall be coordinated with any work being performed by LESSOR and
other tenants of the building in which the work is taking place in such manner
as to maintain harmonious labor relations and not to interfere with the
operation of the Building or the Complex or the construction work of others.
12. ASSIGNMENT - SUBLETTING. The LESSEE shall not assign or sublet the
whole or any part of the Leased Premises without the LESSOR's prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Except, however, such consent is not required for a Sublease to any
entity which is majority-owned by the Sublessor. Notwithstanding the foregoing
provision, LESSEE may, without the consent of (but upon notice to) LESSOR,
assign this Lease or sublet all or a part of the Leased Premises to a business
entity which (a) acquires the LESSEE through acquisition or merger, (b) is the
parent business of LESSEE, (c) is an affiliated (by stock ownership) business
entity of LESSEE and/or (d) is a majority-owned business subsidiary of LESSEE.
Notwithstanding such consent or assignment or subletting, LESSEE shall remain
liable to LESSOR for the payments of all rent and for the full performance of
the covenants and conditions of this Lease. LESSOR shall share equally with
LESSEE in the receipt of any sublet proceeds in excess of LESSEE's pro rata rent
cost to LESSOR after deducting LESSEE's sublet costs including but not limited
to brokerage fees, legal fees, and tenant improvement costs for the portion of
the Leased Premises being sublet.
12A. QUIET ENJOYMENT COVENANT OF TITLE. The LESSEE, on paying the rent and
other charges hereunder, as and when the same shall become due and payable and
17
observing and performing the covenants, conditions and agreements contained in
this Lease on the part of the LESSEE to be observed and performed, all as herein
provided, shall and may lawfully, peaceably and quietly have, hold and enjoy the
Leased Premises during the Term, subject to all of the terms and provisions
hereof, without hindrance, ejection or disturbance by the LESSOR or by any
person or persons claiming by, through or under the LESSOR or by anyone claiming
paramount title.
13. SUBORDINATION.
13.1 (a) SUBORDINATION AND ATTORNMENT. This Lease is subject and
subordinate to all mortgages and superior leases provided that the LESSOR,
LESSEE and any mortgage lender on premises execute and deliver a Subordination,
Non-Disturbance and Attornment agreement in substantially the same form as
Exhibit B annexed hereto, and, at the request of any mortgagee or LESSOR, LESSEE
shall attorn to such mortgagee or LESSOR, its successors in interest or any
purchaser in a foreclosure sale.
(b) If a LESSOR or mortgagee or any person or entity shall succeed
to the rights of LESSOR under this Lease, whether through possession or
foreclosure action or delivery of a new lease or deed, then at the request of
the successor LESSOR and upon such successor LESSOR's written agreement to
accept LESSEE's attornment and to recognize LESSEE's interest under this Lease,
LESSEE shall be deemed to have attorned to and recognized such successor LESSOR
as the LESSOR under this Lease. The provisions of this Article are
self-operative requiring no further instruments to give effect thereto;
provided, however, LESSEE shall promptly execute and deliver any instrument that
such successor LESSOR may reasonably request (i) evidencing such attornment,
(ii) setting forth the terms and conditions of LESSEE's
18
tenancy, and (iii) containing such other terms and conditions as may be required
by such mortgagee or LESSOR, provided such terms and conditions do not
materially increase LESSEE's obligations or materially and adversely affect the
rights of LESSEE under this Lease. Upon such attornment this Lease shall
continue in full force and effect as a direct lease between such successor
LESSOR and LESSEE upon all of the terms, conditions and covenants set forth in
this Lease except that such successor LESSOR shall not:
(i) be liable for any act or omission of LESSOR (except to the
extent such act or omission continues beyond the date when such successor LESSOR
succeeds to LESSOR's interest and LESSEE gives notice to successor LESSOR of
such act or omission);
(ii) be subject to any defense, counterclaim, setoff or offset
which LESSEE may have against LESSOR;
(iii) be bound by any prepayment of more than one month's Rent
to any prior LESSOR;
(iv) be bound by any obligation to make any payment to LESSEE
which was required to be made prior to the time such successor LESSOR succeeded
to LESSOR's interest;
(v) be bound by any obligation to perform any work or to make
improvements to the Premises except this Lease, and (y) repairs to the Premises
as a result of damage by fire or other casualty or a partial condemnation
pursuant to the provisions of this Lease, but only to the extent that such
repairs can reasonably be made from the net proceeds of any insurance or awards,
respectively, actually make available to such successor LESSOR, or
19
(vi) be bound by any modification, amendment or renewal of
this Lease made without successor LESSOR's consent.
13.2 MORTGAGE AND/OR SUPERIOR LEASE DEFAULTS. LESSEE shall not cause a
default under any superior lease or mortgage, or omit to do anything that LESSEE
is obligated to do under the terms of this Lease so as to cause LESSOR to be in
default thereunder. Any mortgagee may elect that this Lease shall have priority
over the mortgage that it holds and, upon notification to LESSEE by such
mortgagee, this Lease shall be deemed to have priority over such mortgage,
regardless of the date of this Lease. In connection with the financing of the
real property, the Building or the interest of the LESSEE under any superior
Lease, LESSEE shall consent to any reasonable modifications of this Lease
requested by any lending institution provided such modifications do not
materially increase the obligations, or materially and adversely affect the
rights, of LESSEE under this Lease.
13.3 LESSEE's TERMINATION RIGHT. As long as any superior lease or mortgage
shall exist, LESSEE shall not seek to terminate this Lease by reason of any act
or omission of LESSOR (i) until LESSEE shall have given written notice of such
act or omission to all LESSORS and/or mortgagees, and (ii) until a period of
thirty (30) days shall have elapsed following the giving of such notice and the
expiration of the LESSOR's time within which to remedy such act or omission,
during which period such LESSORS and/or mortgagees shall have the right, but not
the obligation, to remedy such act or omission and thereafter diligently proceed
to so remedy such act or omission.
13.4 PROVISIONS. The provisions of this Article shall (i) inure to the
benefit of
20
LESSOR, any future owner of the Building or the real property, LESSOR or
mortgagee and any sublessor thereof and (ii) apply notwithstanding that, as a
matter of law, this Lease may terminate upon the termination of any such
superior lease or mortgage.
14. LESSOR'S ACCESS. The LESSOR or agents of the LESSOR may, at reasonable
times, upon reasonable prior notice to LESSEE, enter to view the Leased
Premises, and may remove placards and signs not approved and affixed as herein
provided, and make repairs and alterations as LESSOR should elect or be required
to do, and may show the Leased Premises to others, with reasonable prior notice
at any time within six (6) months before the expiration of the term, may affix
to any suitable part of the Leased Premises a notice for letting or selling the
Leased Premises or property of which the Leased Premises are a part and keep the
same so affixed without hindrance or molestation.
15. INDEMNIFICATION AND LIABILITY. The LESSEE shall defend, save harmless
and indemnify LESSOR from any claims of liability for injury, loss, accident or
damage to any person or property while on the Leased Premises, if not due to the
negligence or intentional act of LESSOR, or LESSOR's employees, assigns or
agents, and to any person or property anywhere occasioned by any omission,
fault, negligence or other misconduct of LESSEE and persons for whose conduct
LESSEE is legally responsible.
The LESSOR shall defend, save harmless and indemnify LESSEE from any
claims of liability for injury, loss, accident or damage to any person or
property while on the common areas, if not due to the negligence or intentional
act of LESSEE, or LESSEE's employees, assigns or agents, and to any person or
property anywhere occasioned by any omission, fault, negligence or other
misconduct of LESSOR and persons for whose conduct LESSOR is legally responsible
21
** The foregoing indemnity is expanded to include Exhibit "C" attached hereto.
until such time as LESSEE leases the entire building. The within indemnity from
LESSOR specifically includes damages for the environmental issues discussed in
Paragraph 26 below. **
16. HOLDING OVER. LESSEE agrees to pay to LESSOR one and one-half times
the total of the Base Rent set forth in Paragraph 4 in effect for the period
immediately prior to LESSEE's holding over and one and one-half times the
additional rent provided for under this Lease then applicable for each month or
portion thereof LESSEE shall retain possession of the Leased Premises or any
part thereof after the termination of this Lease, whether by lapse of time or
otherwise, and also to pay all damages sustained by LESSOR on account thereof,
the provisions of this Paragraph shall not operate as a waiver by LESSOR of any
right of reentry provided in this Lease.
16A. FURTHER LESSEE COVENANTS. LESSEE further covenants and agrees during
the Term and such further time as LESSEE holds any part of the Leased Premises:
(a) to pay when due all rent and other sums herein specified,
without offset, deduction or counterclaim except as otherwise specifically
provided in this Lease;
(b) not to obstruct in any manner any portion of any building not
hereby leased or the sidewalks or approaches to such building or any inside
windows or doors;
(c) that neither the original LESSOR nor any successor LESSOR who or
which is a trustee or a partnership, nor any beneficiary or member of the
original LESSOR or any successor LESSOR nor any partner, general or limited, or
such partnership shall be personally liable under any term, condition, covenant,
obligation or agreement expressed herein or implied hereunder or for any claim
or damage or cause at law or in equity arising out of the occupancy of the
Leased Premises or the use or maintenance of the Building and LESSEE
specifically agrees to
22
look solely to the LESSOR's interest in the Building for the recovery of any
judgment against LESSOR; and
(d) if any payment of rent or other sums due hereunder is not paid
within five (5) days of when due, LESSEE shall pay to LESSOR a late charge equal
to five (5%) percent of the unpaid amount per month, or part thereof, that such
amount remains unpaid.
17. FIRE. CASUALTY.
17.1 DEFINITION OF "SUBSTANTIAL DAMAGE" AND "PARTIAL DAMAGE." The term
"substantial damage", as used herein, shall refer to damage which is of such a
character that the same cannot, in ordinary course, be expected to be repaired
within ninety (90) calendar days from the time that such repair work would
commence. Any damage which is not "substantial damage "is "partial dam age." In
the event of substantial damage to the Building, the LESSOR shall notify the
LESSEE as soon as is practicable and in no event later than thirty (30) days
after such damage of LESSOR's estimated time for repair of such damage.
17.2 PARTIAL DAMAGE TO THE BUILDING. If during the Lease Term there shall
be partial damage to the Building by fire or other casualty and if such damage
shall materially interfere with the LESSEE's use of the Leased Premises as
contemplated by this Lease, the LESSOR shall, to the extent insurance proceeds
are available to LESSOR, promptly proceed to restore the Building to
substantially the condition in which it was immediately prior to the occurrence
of such damage. Notwithstanding the foregoing, if there shall be partial damage
to the Building, and if such damage shall materially interfere with LESSEE's use
of the Leased Premises as contemplated by this Lease occurring during the last
twelve (12) months of the Lease Term of
23
such a character that the same cannot, in ordinary course, be expected to be
repaired within thirty (30) days from the time such repair work would begin, the
LESSEE may, within ten (10) days of the date of such damage, elect to terminate
this Lease. If such election is not made, the LESSOR shall promptly proceed with
such restoration.
17.3 SUBSTANTIAL DAMAGE TO THE BUILDING. If during the Lease Term there
shall be substantial damage to the Building by fire or other casualty and if
such damage shall materially interfere with the LESSEE's use of the Leased
Premises as contemplated by this Lease, the LESSOR shall, to the extent
insurance proceeds are available to LESSOR, promptly restore the Building to an
architectural unit that is not less suitable than that which existed prior to
such fire or casualty, unless the LESSOR or the LESSEE, within forty-five (45)
days after the occurrence of such damage, shall give notice to the other of its
election to terminate this Lease. If at any time during such forty-five (45) day
period the LESSOR notifies the LESSEE of its intention to restore the Building,
the LESSEE must then give notice to the LESSOR, within ten (10) days of its
receipt of the LESSOR's notice of intention to restore the Building, as to
whether the LESSEE will elect to terminate the Lease. Should the LESSEE fail to
elect to terminate the Lease within such ten (10) day period, the LESSEE's right
to terminate under this Paragraph 17.3 shall expire. If the LESSOR proceeds with
the restoration of the Building and if such damage shall not have been repaired
to the extent necessary for the LESSEE to resume its normal business operations
at the Leased Premises by the end of the 180th day following the date of such
fire or casualty, or if the LESSOR shall fail diligently to cause such repair
and restoration work to be performed, then the LESSEE may, at any time
thereafter while the damage remains unrepaired, terminate this Lease upon notice
to the LESSOR. If the LESSOR or the LESSEE shall give such
24
notice of termination, then this Lease shall terminate as of the date of such
notice with the same force and effect as if such date were the date originally
established as the expiration date hereof.
17.4 ABATEMENT OF RENT. If during the Lease Term the Building shall be
damaged by fire or casualty and if such damage shall materially interfere with
the LESSEE's use of the Leased Premises as contemplated by this Lease, a just
proportionate amount of the Base Rent, additional rent and other charges payable
by the LESSEE hereunder shall xxxxx proportionately for the period in which, by
reason of such damage, there is such interference with the LESSEE's use of the
Leased Premises.
17A. EMINENT DOMAIN. If the Building is totally taken by condemnation or
right of eminent domain, this Lease shall terminate as of the date of such
taking. If the Building, or such portion thereof as to render the balance (if
reconstructed to the maximum extent practicable in the circumstances) physically
unsuitable in the LESSEE's reasonable judgment for the LESSEE's purposes, shall
be taken by condemnation or right of eminent domain (including a temporary
taking in excess of 180 days), the LESSEE or the LESSOR shall have the right to
terminate this Lease by notice to the other of its desire to do so, provided
that such notice is given not later than (10) days after the LESSEE has been
deprived of possession.
Should any part of the Building be so taken or condemned or receive such
damage and should this Lease not be terminated in accordance with the foregoing
provisions, the LESSOR shall, to the extent condemnation proceeds are available
to LESSOR, promptly restore the Leased Premises to an architectural unit that is
suitable to the uses of the LESSEE permitted hereunder.
25
In the event of a taking described in this Paragraph 17A, the rent and
other charges payable hereunder, or a fair and just proportion thereof according
to the nature and extent of the loss or use, shall be suspended or abated.
The LESSOR reserves, and the LESSEE grants to the LESSOR, all rights which
the LESSEE may have for damages or injury to the Leased Premises for any taking
by eminent domain, except for damage to the LESSEE's trade fixtures, personal
property or equipment, if any, the LESSEE's right to relocation expenses, if
any, and the LESSEE's right for business interruption, if any.
18. DEFAULT AND BANKRUPTCY. In the event that:
(a) The LESSEE shall default in the payment of any installment of
rent or other sum herein specified; or
(b) The LESSEE shall default in the observance or performance of the
LESSEE's covenants, agreements, or obligations hereunder (except as provided in
Paragraph 18(a) above) and the LESSEE shall not cure such default within thirty
(30) days after written notice thereof or if such default cannot be cured within
thirty (30) days, then if LESSEE shall not commence to cure the same within
thirty (30) days and diligently pursue the curing of the same; or
(c) LESSEE or any guarantor of LESSEE's obligations under this Lease
makes a general assignment for the benefit of creditors, commits any act of
bankruptcy or files a petition under any bankruptcy or insolvency law; or if
such a petition is filed against LESSEE or any guarantor of LESSEE's obligations
under this Lease and is not dismissed within sixty (60) days; or if a receiver
or similar officer becomes entitled to LESSEE's leasehold hereunder and it is
not
26
returned to LESSEE within sixty (60) days, or if such leasehold is taken on
execution or other process of law in any action against LESSEE;
then in any such case the LESSOR shall have the right after the expiration
of any applicable grace or cure periods set forth herein, while such default
continues, to reenter and take complete possession of the Leased Premises, to
declare the term of this Lease ended, and remove the LESSEE's effects at
LESSEE's sole cost and expense, without prejudice to any remedies which might be
otherwise used for arrears of rent or other default. The LESSEE shall indemnify
the LESSOR against all loss and reasonable payment of rent and other payments
which the LESSOR may incur by reason of such termination during the residue of
the term, such as Base Rent, additional rent and other charges to be paid in the
same increments and on the same dates and terms as provided herein. In the event
of default, LESSOR shall use its reasonable efforts to re-let the Leased
Premises so as to mitigate any damages to the LESSEE hereunder.
If the LESSEE shall default, in the observance or performance of any
conditions or covenants on its part to be observed or performed under or by
virtue of any of the provisions of this Lease and after the expiration of any
period within which the LESSEE is entitled to cure such default as is provided
above in this Paragraph 18, the LESSOR, without being under any obligation to do
so and without thereby waiving such default, may remedy such default for the
account and at the expense of the LESSEE. If the LESSOR makes any expenditures
or incurs any obligations for the payment of money in connection therewith,
including but not limited to, reasonable attorney's fees, (except for
unsuccessful suits against the LESSEE) in instituting, prosecuting, or defending
any action or proceeding, such sums paid or obligations incurred, with
27
interest at the rate of twelve (12%) per annum and costs, shall be paid to the
LESSOR by the LESSEE as additional rent.
Nothing contained in this Lease shall limit or prejudice the right of
LESSOR to claim and obtain in proceedings for bankruptcy, insolvency or like
proceedings by reason of the termination of this Lease, an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which the damages are to be claimed or proved,
whether or not the amount be greater, equal to, or less than the amount of the
loss or damages referred to above.
18A. DEFAULT OF LESSOR AND MORTGAGE RIGHTS. LESSOR shall in no event be in
default in the performance of any of LESSOR's obligations hereunder unless and
until LESSOR shall have failed to perform such obligations within thirty (30)
days, or such additional time as is reasonably required to correct any such
default, after receipt of written notice by LESSEE to LESSOR properly specifying
wherein LESSOR has failed to perform any such obligation. LESSEE agrees to give
any mortgagee, by registered mail, a copy of any notice of default served upon
the LESSOR, provided that prior to such notice the LESSEE has been notified in
writing of the identity and address (by way of Notice of Assignment of Rents and
Leases, or otherwise) of the address of such mortgagee. The LESSEE further
agrees that if the LESSOR shall have failed to cure such default within the time
provided for in this Lease, then the mortgagee shall have an additional thirty
(30) days within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be necessary if within thirty
(30) days the mortgagee has commenced and is diligently pursuing the remedies
necessary to cure such default (including but not limited to commencement of
foreclosure proceedings, if
28
necessary to effect such cure) in which event this Lease shall not be terminated
while such remedies are being so diligently pursued.
18B. BANKRUPTCY OR INSOLVENCY.
(a) LESSEE's INTEREST NOT TRANSFERABLE. Neither LESSEE's interest in
this Lease nor any estate hereby created in LESSEE nor any interest herein or
therein shall pass to any trustee, except as may specifically be provided
pursuant to the Bankruptcy Code (11 USC Sec. 101, et seq.) or to any receiver or
assignee for the benefit of creditors or otherwise by operation of law.
(b) TERMINATION OF LEASE. Notwithstanding anything to the contrary
contained in this Lease, in the event the interest or estate created in LESSEE
hereby shall be taken in execution or by other process of law or if LESSEE or
LESSEE's guarantor, if any, or LESSEE's executors, administrators or assigns, if
any, shall be adjudicated insolvent or bankrupt pursuant to the provisions of
any state law of an order for the relief of such entity shall be entered
pursuant to the Bankruptcy Code, or if a receiver or trustee of the property of
LESSEE or LESSEE's guarantor, if any, shall be appointed by reason of the
insolvency or inability of LESSEE or LESSEE's guarantor, if any, to pay its
debts or if a general assignment shall be made of the property of LESSEE or
LESSEE's guarantor, if any, for the benefit of creditors, then and in any such
events this Lease and all rights of LESSEE hereunder shall automatically cease
and terminate with the same force and effect as though the date of such event
were the date originally established herein and fixed for the expiration of the
term and LESSEE shall vacate and surrender the Leased Premises but shall remain
liable as herein provided.
(c) LESSEE's OBLIGATION TO AVOID CREDITORS' PROCEEDINGS.
29
LESSEE or LESSEE's guarantor, if any, shall not cause or give cause for the
appointment of a trustee or receiver of the assets of LESSEE or LESSEE's
guarantor, if any, and shall not make a general assignment for the benefit of
creditors or become or be adjudicated insolvent. The allowance of any petition
under any insolvency law, except under the Bankruptcy Code or the appointment of
a trustee or receiver of LESSEE or LESSEE's guarantor, if any, or of the assets
of either of them, shall be conclusive evidence that LESSEE caused or gave cause
therefor, unless such allowance of the petition or the appointment of a trustee
or receiver is vacated within ninety (90) days after such allowance or
appointment. Any act described in this paragraph shall be deemed a material
breach of LESSEE's obligations hereunder and this Lease shall thereupon
automatically terminate. LESSEE does, in addition, reserve any and all other
remedies provided in this Lease or in the law.
(d) RIGHTS AND OBLIGATIONS UNDER THE BANKRUPTCY CODE. Upon the
filing of a petition by or against LESSEE under the Bankruptcy Code, LESSEE, as
debtor and as debtor-in-possession, and any trustee who may be appointed agree
as follows: (i) to perform each and every obligation of LESSEE under this Lease
including, but not limited to, the manner of operation of this Lease, until such
time as this Lease is either rejected or assumed by order of the United States
Bankruptcy Court; (ii) to pay monthly, in advance, on the first day of each
month, as reasonable compensation for use and occupancy of the Leased Premises,
an amount equal to all fixed annual Base Rent, additional rent and other charges
otherwise due pursuant to this Lease; (iii) to reject or assume this Lease
within sixty (60) days of the appointment of such trustee under Chapter 7 of the
Bankruptcy Code or within one hundred twenty (120) days (or such shorter term as
LESSOR, in its sole discretion, may deem reasonable,
30
so long as notice of such period is given) of the filing of a petition under any
other chapter; (iv) to give LESSOR at least forty-five (45) days' prior written
notice of any proceeding relating to any assumption of this Lease; (v) to give
at least thirty (30) days' prior written notice of any abandonment of the Leased
Premises, with any such abandonment to be deemed a rejection of this Lease and
an abandonment of any property not previously removed from the Leased Premises;
(vi) to do all other things of benefit to LESSOR otherwise required under the
Bankruptcy Code; (vii) to be deemed to have rejected this Lease in the event of
the failure to comply with any of the above; and (viii) to have consented to the
entry of any order by an appropriate United States Bankruptcy Court providing
all of the above, waiving notice and hearing of the entry of same.
No default of this Lease by LESSEE, either prior to or subsequent to the
filing of such a petition, shall be deemed to have been waived unless expressly
done so in writing by LESSOR. It is understood and agreed that this is a Lease
of real property and that, therefore, Sec. 365(b) (3) of the Bankruptcy Code is
applicable to any proposed assumption of this Lease in a bankruptcy case.
Included within and in addition to any other conditions or obligations
imposed upon LESSEE or its successor in the event of assumption and/or
assignment are the following: (i) the cure of any monetary defaults and the
reimbursement of pecuniary loss immediately upon entry of a court order
providing for assumption and/or assignment; (ii) the use of the Leased Premises
as set forth in the reference data section of this Lease and the quality,
quantity and/or lines of merchandise of any goods or services required to be
offered for sale are unchanged; (iii) the payment of any sums which may then be
due or which may thereafter become due under the provisions of this Lease; (iv)
the debtor, debtor-in-possession, trustee or assignee of such entity
31
demonstrates in writing that it has sufficient background, including, but not
limited to, substantial commercial experience in buildings of comparable size
and financial ability to operate a commercial establishment out of the Leased
Premises in the manner contemplated in this Lease, and meets all other
reasonable criteria of LESSOR as did LESSEE upon execution of this Lease; (v)
the prior written consent of any mortgagee to which this Lease has been assigned
as collateral security; and (vi) the Leased Premises at all times remains a
single store (if retail) and no physical changes of any kind may be made to the
Leased Premises unless in compliance with the applicable provisions of this
Lease.
Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall, upon demand, execute and
deliver to LESSOR an instrument confirming such assumption in accordance with
the terms of Paragraph 21 hereof.
19. NOTICE. Any notice from the LESSOR to the LESSEE relating to the
Leased Premises or to the occupancy thereof shall be deemed duly served, if
mailed, registered or certified mail, return receipt requested, postage prepaid,
or by a nationally-recognized overnight delivery service, addressed to
ROWECOM INC.
00 XXXXXXXX XXXXXX, XXXXXXXXX, XX 00000
ATTENTION: PRESIDENT
Any notice from the LESSEE to the LESSOR relating to the Leased Premises
or to the occupancy thereof, shall be deemed duly served, if mailed to the
LESSOR by registered or certified mail, return receipt requested, postage
prepaid, addressed to the LESSOR at such
32
address as the LESSOR may from time to time advise in writing. All rent and
notices shall be paid and sent to the LESSOR at.
WESTERN PROPERTIES MASTER LLC
XX XXX 000000
XXXXXXXXX, XXXXXXXXXXXXX 00000-0000
20. RULES AND REGULATIONS. The LESSOR shall have the right to institute
and to change from time to time, rules and regulations for the use of the
Building by commercial office Lessees, which rules and regulations shall be
reasonable in all instances and shall be uniformly applicable to all commercial
Lessees in the Building and the LESSEE agrees to abide thereby, so long as such
rules and regulations are not inconsistent with the terms and provisions and do
not interfere with the rights of LESSEE under this Lease.
21. PARAGRAPH HEADINGS. The paragraph headings throughout this instrument
are for convenience and reference only, and the words contained therein shall in
no way be held to explain, modify, amplify or aid in the interpretation,
construction or meaning of the provisions of this Lease.
22. SURRENDER. The LESSEE shall at the expiration or other termination of
this Lease remove all LESSEE's goods and effects from the Leased Premises
(including, without hereby limiting the generality of the foregoing, all signs
and lettering affixed or painted by the LESSEE, either inside or outside the
Leased Premises). LESSEE shall deliver to the LESSOR the Leased Premises and all
keys, locks thereto, and other fixtures connected therewith, and all alterations
and additions made to or upon the Leased Premises, in the same condition as they
were at the commencement of the term, or as they were put in during the term
hereof, reasonable wear and tear and damage by fire or other casualty only
excepted. In the event of the LESSEE's failure
33
to remove any of the LESSEE's property from the Leased Premises, LESSOR is
hereby authorized without liability to LESSEE for loss or damage thereto, and at
the sole risk of LESSEE, to remove and store any of the property at LESSEE's
expense or to retain the same under LESSOR's control or to sell at public or
private sale, with reasonable notice any or all of the property not so removed,
and to apply the net proceeds of such sale to the payment of any sum due
hereunder.
23. BROKER. The LESSOR and LESSEE each represent and warrant to the other
that each has had no dealings with any Brokers concerning this Lease other than
CB Xxxxxxx Xxxxx/Whittier (Xxxxxx Xxxx and Xxxxxx Xxxxxxx), and each party
agrees to indemnify and hold the other harmless for any damages occasioned to
the other by reason of a breach of this representation and warranty. LESSOR
shall be solely responsible for payment of a leasing commission to CB Xxxxxxx
Xxxxx/Whittier.
24. ESTOPPEL CERTIFICATE. LESSOR and LESSEE each agree at any time from
time to time, upon not less than fifteen (15) days prior notice to execute,
acknowledge and deliver to the other, a statement in writing, certifying to the
extent possible that 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 and stating such modifications and otherwise certifying if there exists
any default under the terms of this Lease and such other information as may be
reasonably requested concerning this Lease by the other party or any other third
party with a bona fide interest. Should either party fail to deliver to the
other party any such statement within fifteen (15) days of receipt of a written
notice requesting any such statement, the party failing to deliver any such
statement shall pay to the requesting party, the sum of $500.00 per day (as
liquidated
34
damages and not as a penalty), for each day after such fifteenth (15th) day
during which such failure continues.
25. SECURITY DEPOSIT. Upon execution of the Lease, LESSEE shall deposit
eighty thousand ($80,000.00) dollars with the LESSOR as security for LESSEE's
payment of rent and performance of its other obligations under this Lease and
any renewals or extensions of this Lease. If LESSEE defaults in its payment of
rent or performance of its other obligations under this Lease, LESSOR may use
all or part of the security deposit for the payment of rent or any other amount
in default, or for the payment of any other amount that LESSOR may spend or
become obligated to spend by reason of LESSEE's default, or for the payment to
LESSOR or any other loss or damage that LESSOR may suffer by reason of LESSEE's
default. If LESSOR so uses any portion of the security deposit, LESSEE will
restore the security deposit to its original amount within five (5) days after
written demand from LESSOR. The security deposit will not be a limitation on
LESSOR's damages or other rights under this Lease, or a payment of liquidated
damages, or an advance of the rent. If LESSEE pays the rent and performs all of
its other obligations under this Lease, LESSOR will return the unused portion of
the security deposit to LESSEE within ten (10) days after the end of the term or
such earlier time as provided for hereunder; however, if LESSOR has evidence
that the security deposit has been assigned to an assignee of the Lease, LESSOR
will return the security deposit to the assignee. LESSOR may deliver the
security deposit to a purchaser of the premises and be discharged from further
liability with respect to it.
LESSEE may, at its option, provide LESSOR with an irrevocable letter of
credit in lieu of a cash security deposit provided that the letter of credit is
in the same amount
35
($80,000.00) and is from a bank which shall be acceptable to LESSOR in its
reasonable discretion. The letter of credit shall be made payable to LESSOR or
its successors or assigns as the Lessor under this Lease and shall be freely
transferable without cost to any such successor or assignee of LESSOR. Any
letter of credit provided shall be good for a period of at least one year. The
letter of credit shall only require the presentation to the issuer of a duly
authorized certificate of the holder of the letter of credit stating that a
default has occurred under this Lease, that all applicable notice and cure
periods have expired without cure, and stating the amount of the default and
requested draw. LESSEE shall provide a replacement or extended letter of credit
(or a cash security deposit) to LESSOR not less than thirty (30) days prior to
the expiration of any letter of credit then held by LESSOR. Failure to do so
shall be a default under this Lease and LESSOR shall have the right to draw down
the full amount of the letter of credit and hold the proceeds as a cash security
deposit.
26. HAZARDOUS WASTE INDEMNITY. LESSEE hereby agrees to indemnify and hold
LESSOR harmless from and against any and all demands, claims, actions, losses,
damages and liabilities (the "Claims"), which may be imposed on, asserted
against or incurred by LESSOR arising from or out of LESSEE's use and occupancy
of the Leased Premises, including, without limitation, any and all liabilities
pertaining to any present or future use (within the term of this Lease) in
violation of any Federal, state, local or other laws, relating to pollution or
protection of the environment, including, without limitation, laws relating to
emissions, discharges releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
36
*** arising out of LESSEE'S use and occupancy of leased premises as referenced
above
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
If any actions or proceeding is brought against LESSOR by reason of any
claim***, LESSEE, upon notice from LESSOR, shall defend such action or
proceeding by counsel reasonably satisfactory to LESSOR, and LESSEE shall pay
all reasonable expenses incurred in connection with defending against such
action or proceeding.
LESSOR has advised LESSEE of the existence of certain environmental
conditions released from an underground oil tank, which oil tank was removed
from the property in 1972. LESSOR has retained GZA GeoEnvironmental Inc. as its
Licensed Site Professional ("LSP"). The LSP has analyzed the site conditions,
completed and filed all required regulatory filings, made reccomendations as to
various alternatives for remediation of the site, and will supervise and
coordinate the performance of said remediation (including removal of oil
contaminated soil and the replacement of clean fill), which work is expected to
commence in July 1999 and be completed within thirty (30) days. The work
contemplated herein shall not materially and adversely affect access to the
Leased Premises, and/or the permitted uses or LESSEE's right to use parking
spaces except that during a period of not more than thirty (30) days, the LESSOR
reserves the right too provide LESSEE with substituted parking spaces provided
the same are located within a two (2) block radius of the parking area.
27. MISCELLANEOUS.
(a) LESSEE shall submit annual financial statements to the LESSOR
including statements of cash flow. If the LESSEE is a publicly traded
corporation it shall supply LESSOR, on a quarterly basis, with its 10Q filings.
37
(b) The LESSOR reserves the right to assign or transfer any and all
of its right, title and interest under the Lease, including but not limited to
the benefit of all covenants of the LESSEE hereunder. Notwithstanding anything
contained in this Lease to the contrary, it is specifically understood and
agreed that the obligations imposed under the LESSOR hereunder shall be binding
upon the LESSOR and LESSOR's successors in interest only with respect to
breaches occurring during and prior to LESSOR's and LESSOR's successors'
ownership of LESSOR's interest hereunder and LESSOR and its said successors in
interest shall not be liable for acts and occurrences arising from and after the
transfer of their interest as LESSOR hereunder.
(c) This Lease shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, as the same may from time to time
exist.
(d) This Lease contains all of the agreements of the parties with
respect to the subject matter thereof and supersedes all prior oral and written
negotiations and dealings between them with respect to such subject matter. The
agreement of the parties contained in this Lease shall not be modified or
amended unless such modification or amendment is in writing and signed by the
parties.
(e) The LESSEE acknowledges that LESSEE has not been influenced to
enter into this Lease nor has it relied upon any warranties or representations
not set forth or incorporated in this Lease or previously made in writing.
(f) If any term or provision of this Lease or the application
thereof to any person or circumstances shall to any extent be invalid or
unenforceable, the remainder of this
38
Lease or the application of such term or provisions to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
(g) LESSOR shall execute and deliver to LESSEE a notice of this
Lease in a form suitable for registering and filing.
IN WITNESS WHEREOF, the LESSOR and LESSEE have hereunto set their hands
and common seals this 30th day of April 1999.
LESSOR:
WESTERN PROPERTIES MASTER LLC
/s/ Xxxxx X. Xxxxx /s/ [ILLEGIBLE]
---------------------------------- ----------------------------------
NAME: Xxxxx X. Xxxxx WITNESS
OFFICE: Manager - Member
Hereunto Duly Authorized
LESSEE:
ROWECOM INC.
By /s/ [ILLEGIBLE] /s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------- ----------------------------------
NAME: WITNESS
OFFICE: President
Hereunto Duly Authorized
By /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-------------------------------- ----------------------------------
NAME: WITNESS
OFFICE: Treasurer
Hereunto Duly Authorized
39
"EXHIBIT A" (pg 1)
LEASED PREMISES - FIRST FLOOR
[GRAPHIC OF FLOOR PLAN]
00 Xxxxxxxx Xxxxxx Xxxxxxxxx, XX.
The Athenaeum Group 000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000 617-492-2155
"EXHIBIT A" (PG 2) 00 XXXXXXXX XXX.
LEASED PREMISES - SECOND FLOOR CAMBRIDGE, MA.
SECOND FLOOR
[GRAPHIC OF FLOOR PLAN]
00 XXXXXXXX XXXXXX XXXXXXXXX, XX. - 2ND FLOOR SPACE
[GRAPHIC OF FLOOR PLAN]
EXHIBIT A (pg 3)
[GRAPHIC OF FLOOR PLAN]
EXHIBIT A (pg 4)
"EXHIBIT B"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
LESSOR: WESTERN PROPERTIES MASTER LLC, a Delaware limited
company.
LESSEE: ROWECOM INC. a Massachusetts corporation.
MORTGAGEE: Century Bank and Trust Company, a Massachusetts trust
company.
MORTGAGED PREMISES: The land and improvements at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx, as more particularly on
Exhibit A attached to this Agreement.
LEASE: Lease dated as of April __, 1999 between Lessor and
Lessee.
LEASED PREMISES:
AGREEMENT made between Lessor, the Lessee and the Mortgagee named above.
Lessor is the present owner of the Mortgaged Premises. Mortgagee is the
present owner and holder of a mortgage on the Mortgaged Premises as evidenced by
a Mortgage and Security Agreement (the "Mortgage") from the Lessor dated
____________ and recorded with the Middlesex South Registry District of the Land
Court as Document No. __________ Lessee is the present holder of all rights of
the Lessee under the Lease.
Lessor, Lessee and Mortgagee desire to confirm their understanding with
respect to the Lease and the Mortgage.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Lessor, Mortgagee and Lessee hereby agreed and covenant as
follows:
1. Lessor and Lessee agree with Mortgagee that (a) the Lease is in full
force and effect and is binding upon Lessee, (b) to the best of
Lessee's knowledge there exists no default nor state of facts
(including without limitation the granting of the Mortgage to the
Mortgagee) which, with the passage of time, could ripen into a
default, on the part of either Lessor or Lessee under the Lease, (c)
Lessee is obligated o pay rent as provided in the Lease without
right of offset or defense, except as provided in the Lease, (d) all
rent payable to date has been paid by Lessee, and (e) rent has not
been paid for any period beyond the now current rent period.
-2-
2. Subject to the terms hereof, Lessee agrees with Lessor and Mortgagee
that the Lease, the leasehold estate created thereby, and all of
Lessee's rights thereunder, shall in all respects be subordinate,
inferior and subject to the Mortgage and lien and rights of
Mortgagee thereunder and any modifications, renewals and extensions
thereof. The Mortgagee hereby consents to the Lease.
3. Notwithstanding that the interest of the Lessor in the Mortgaged
Premises shall be transferred to and owned by Mortgagee by reason of
foreclosure or other proceedings brought by it, or if by any other
manner the Mortgagee succeeds to the interest of the Lessor under
the Lease, so long s Lessee is not in default (beyond any period
given Lessee to cure such default) in the payment of rent or
additional rent or in the performance of any of the terms, covenants
or conditions of the Lease on Lessee's part to be performed,
Mortgagee shall recognize Lessee's rights under the Lease and
Lessee's possession of the Leased Premises and Lessee's rights and
privileges under the Lease, or any extensions or renewals thereof
which may be effected in accordance with any option therefor in the
Lease, shall not be diminished or interfered with by Mortgagee, and
Lessee's occupancy of the Leased Premises shall not be disturbed by
Mortgagee for any reason whatsoever during the term of the Lease or
any such extensions or renewals thereof.
4. If the interest of Lessor in the Mortgaged premises shall be
transferred to and owned by Mortgagee by reason of foreclosure or
other proceedings brought to it, or if by any other manner the
Mortgagee succeeds to the interest of the Lessor under the Lease,
Lessee shall be bound to Mortgagee under all of the terms, covenants
ad conditions of the Lease for the balance of the term thereof
remaining and any extensions thereof which may be effected in
accordance with any option therefor in the Lease, with the same
force and effect as if Mortgagee were the Lessor under the Lease,
and Lessee does hereby attorn to Mortgagee as its Lessor, said
attornment to be effective and self-operative without the execution
of any further instruments on the part of any of the parties hereto
immediately upon Mortgagee's succeeding to the interest of the
Lessor under the Lease; provided, however, that Lessee shall be
under no obligation to pay rent to Mortgagee until Lessee receives
written notice from Mortgagee that it has succeeded to there
interest of the Lessor under the Lease, which notice shall be
binding on Lessor. The respective rights and obligation so Lessee
and Mortgagee upon such attornment, to the extent of the then
remaining balance of the term of the Lease and any such extensions,
shall be and are the same as now set forth therein, it being the
intention of the parties hereto for this purpose to incorporation
the Lease in this Agreement by reference with the same force and
effect as if set forth at length herein.
-3-
5. If Mortgagee shall succeed to the interest of Lessor under the
Lease, Mortgagee shall be bound to Lessee under all the terms,
covenants ad conditions of the Lease and Lessee shall, from and
after Mortgagee's succession to the interest of Lessor under the
Lease, have the same remedies against Mortgagee for the breach of an
agreement contained in the Lease occurring after the Mortgage has
succeeded to the interest of the Lessor that Lessee might have had
under the Lease against Lessor if Mortgagee had not succeeded to the
interest of Lessor; provided however, that Mortgage shall not be
(a) liable for any act or omission of any prior landlord, subject
to Lessor's continuing repair obligations under the Lease
(including the Lessor) (but Mortgagee shall be liable for
defaults occurring after Mortgagee succeeds t Lessor's
interest under the Lease).
(b) subject to any offsets or defenses which Lessee might have
against any prior landlord, except as otherwise provided under
the Lease (including Lessor); or
(c) bound by any rent which Lessee might have paid for more than
30 days in advance t any prior landlord (including Lessor); or
(d) bound by any amendment or modification of the Lease made
without its written consent.
6. The term "Mortgagee" shall be deemed to include the Mortgagee named
above and any of its successors and assigns, including anyone who
shall ave succeeded to Lessor's interest by, through or under
foreclosure of the Mortgage, or by deed in lieu of such foreclosure
or otherwise.
7. This Agreement shall inure to the benefit of and by binding upon the
parties hereto, and upon their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this agreement
to be duly executed this ________ day of __, 1999.
LESSOR: WESTERN PROPERTIES MASTER LLC
By:_______________________
Xxxxx X. Xxxxx
Manager-Member
-4-
LESSEE: ROWECOM INC.
By:________________________
MORTGAGEE: CENTURY BANK AND TRUST
COMPANY
By:________________________
Senior Vice President
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss ________________, 1999
Then personally appeared the above named Xxxxx X. Xxxxx, Manager - Member
of Western Properties Master LLC and acknowledged the foregoing instrument to be
his free act and deed and the free act and deed of said corporation, before me,
____________________________
Notary Public
My commission expires:
EXHIBIT C
Additionally, LESSOR shall defend, with counsel reasonably acceptable to
LESSEE, all actions against LESSEE, its directors, stockholders, officers,
employees and agents (the "LESSEE Indemnified Parties") with respect to the
following matters only, and pay, protect, indemnify and save harmless, to the
extent permitted by law, the LESSEE Indemnified Parties from and against any and
all costs and expenses of any nature arising out of or claimed to be arising out
of, any actual or alleged liability for the cleanup or removal of, or death or
injury to person or property or other damages and expenses as a result of an
Environmental Condition in each instance to the extent such liability arises out
of (a) any matter that occurred or existed on or before the Term Commencement
Lease of this Lease, (b) any matter that occurred or exists after the Term
Commencement Lease of this Lease (except to the extent that such Environmental
Condition results from the acts or omissions of the LESSEE or any third party
other than LESSOR), and (c) those matters referenced in Paragraph 26 below.
Notwithstanding anything to the contrary contained in this Lease, LESSEE agrees
that LESSOR shall not be responsible for, and this indemnity shall not include
any Environmental Conditions to the extent that such Environmental Conditions
resulted from the actions or omissions of LESSEE or LESSEE's agents, employees,
subtenants, contractors, or invitees.
For purposes of this Section, "Environmental Laws" shall mean any federal,
state and/or local statute, ordinance, bylaw, code, rule and/or regulation, now
or hereafter enacted, pertaining to any aspect of the environment or human
health, including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 00 X.X. X.xx.0000 et seq., the Resource
Conservation and Recovery Act of 1976, 00 X.X. X.xx.0000 et seq., the Federal
Water Pollution Control Act and the Federal Clean Air Act. Provided, however,
that the term "Environmental Laws" shall not include the Occupational Safety and
Health Act of 1970, PL 91-596, 84 Stat. 1590.
For purposes of this Section, "Hazardous Substances" shall mean any "oil,"
"hazardous material," "hazardous waste," or "hazardous substance" (collectively
referred to herein as "Hazardous Substances"), as the foregoing terms (in
quotations) are defined in the Environmental Laws.
For purposes of this Section, "Environmental Conditions" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
storing, escaping, leaking, migrating, disposal, release or threat of release of
Hazardous Substances on, in, under or from the Demised Premises, or storage of
Hazardous Substances on or from the Demised Premises, in each instance, other
than in compliance with Environmental Laws.
