EXHIBIT 10.24
LEASE AGREEMENT
by and between
EGL TEXAS PARTNERS, L.P.,
Landlord
and
EGL EAGLE GLOBAL LOGISTICS, LP,
Tenant
TABLE OF CONTENTS
PAGE
ARTICLE 1. BASIC PROVISIONS AND CERTAIN DEFINED TERMS............................................................1
ARTICLE 2. PREMISES..............................................................................................4
ARTICLE 3. TERM..................................................................................................5
3.1 TERM5
ARTICLE 4. BASE RENT AND ADDITIONAL RENT.........................................................................5
4.1 BASE RENT...........................................................................................5
4.2 ADDITIONAL RENT.....................................................................................6
4.3 LATE PAYMENTS.......................................................................................7
4.4 NET LEASE...........................................................................................7
ARTICLE 5. UTILITIES.............................................................................................8
5.1 PAYMENT OF UTILITIES................................................................................8
5.2 INTERRUPTION OF UTILITIES...........................................................................8
5.3 PERSONAL PROPERTY TAXES.............................................................................8
5.4 RENT SALES TAX......................................................................................9
ARTICLE 6. USE; ENVIRONMENTAL.....................................................................................9
6.1 PERMITTED USE.......................................................................................9
6.2 ENVIRONMENTAL.......................................................................................9
ARTICLE 7. ASSIGNMENT AND SUBLETTING.............................................................................10
7.1 CONSENT OF LANDLORD................................................................................10
7.2 ASSIGNMENT; TRANSFER...............................................................................11
ARTICLE 8. REPAIR AND MAINTENANCE................................................................................11
8.1 LANDLORD REPAIRS...................................................................................11
8.2 TENANT REPAIRS AND MAINTENANCE.....................................................................12
8.3 PROPERTY CONDITION.................................................................................12
8.4 ENTRY BY LANDLORD..................................................................................12
8.5 LIENS..............................................................................................13
8.6 COSTS..............................................................................................13
ARTICLE 9. ALTERATIONS AND FIXTURES.............................................................................13
9.1 NO ALTERATIONS.....................................................................................13
9.2 REMOVABLE TRADE FIXTURES...........................................................................14
ARTICLE 10. FIRE AND DESTRUCTION OF PREMISES....................................................................14
10.1 DAMAGE OR DESTRUCTION OF LEASED PREMISES........................................................14
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10.2 RESTORATION OF LEASED PREMISES..................................................................15
10.3 FIRE AND EXTENDED COVERAGE INSURANCE............................................................15
10.4 WAIVER OF SUBROGATION...........................................................................16
ARTICLE 11. LIABILITY AND INDEMNITY; INSURANCE..................................................................16
11.1 MUTUAL INDEMNITY................................................................................16
11.2 TENANT'S INSURANCE..............................................................................17
ARTICLE 12. DEFAULT, REMEDIES AND DETERMINATION OF DAMAGES......................................................18
12.1 DEFAULT.........................................................................................18
12.2 TENANT DEFAULT AND LANDLORD REMEDIES............................................................19
12.3 LANDLORD DEFAULT AND TENANT REMEDIES............................................................21
12.4 ATTORNEY'S FEES.................................................................................21
ARTICLE 13. NON-WAIVER..........................................................................................21
ARTICLE 14. HOLDING OVER........................................................................................21
ARTICLE 15. LANDLORD-TENANT RELATION............................................................................22
ARTICLE 16. EMINENT DOMAIN......................................................................................22
16.1 EFFECT OF TAKING................................................................................22
16.2 CONDEMNATION AWARDS.............................................................................23
ARTICLE 17. LANDLORD'S MORTGAGEE................................................................................23
17.1 SUBORDINATION/NON-DISTURBANCE...................................................................23
17.2 ESTOPPEL CERTIFICATE............................................................................23
17.3 ATTORNMENT......................................................................................24
ARTICLE 18. NOTICE..............................................................................................24
ARTICLE 19. TENANT'S SIGNS......................................................................................24
ARTICLE 20. MISCELLANEOUS.......................................................................................24
20.1 CAPTIONS........................................................................................24
20.2 SEVERABILITY....................................................................................25
20.3 SUCCESSORS AND ASSIGNS..........................................................................25
20.4 NO CONSTRUCTIVE EVICTION........................................................................25
20.5 TIME OF THE ESSENCE.............................................................................25
20.6 LOCATION OF PERFORMANCE.........................................................................25
20.7 ENTIRE AGREEMENT; AMENDMENTS....................................................................25
20.8 FORCE MAJEURE...................................................................................26
20.9 QUIET ENJOYMENT.................................................................................26
20.10 TITLE...........................................................................................26
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20.11 COMPLIANCE WITH LAWS............................................................................26
20.12 STATEMENT OF INTENT.............................................................................27
20.13 PERMITTED ENCUMBRANCES..........................................................................27
20.14 NO REDEMPTION...................................................................................27
20.15 NO MERGER OF TITLE..............................................................................27
20.16 SPECIAL PROVISIONS REGARDING LANDLORD...........................................................27
20.17 MULTIPLE COUNTERPARTS...........................................................................28
20.18 MAINTENANCE ARBITRATION.........................................................................28
LIST OF EXHIBITS:
Exhibit "A" - Leased Premises
Exhibit "B" - [Intentionally Omitted]
Exhibit "C" - [Intentionally Omitted]
Exhibit "D" - Permitted Encumbrances
Exhibit "E" - Form of Subordination, Non-Disturbance and Attornment Agreement
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LEASE AGREEMENT
(Grapevine, Texas)
THIS LEASE AGREEMENT ("Lease") is entered into by and between Landlord
and Tenant effective as of this _____ day of November, 2002 in accordance with
the terms and conditions hereinafter set forth.
W I T N E S S E T H:
ARTICLE 1. BASIC PROVISIONS AND CERTAIN DEFINED TERMS
(a) "Landlord": EGL Texas Partners, L.P., a Texas limited partnership
(b) Notice Address of Landlord: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(c) "Tenant": EGL Eagle Global Logistics, LP, a Delaware limited
partnership, its successors and permitted assigns
(d) Notice Address of Tenant: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ Attention: General Counsel
(e) "Leased Premises": as more particularly described in Article 2
(f) "Term": From the Commencement Date through the Expiration Date
"Lease Year": Each calendar year during the Term
"Commencement Date": November __, 2002
"Expiration Date": December 31, 2013
"Renewal Option(s)": Four five (5) year renewal options, as more
particularly described in Article 3 hereof
(g) "Base Rent":
Monthly Annual
Lease Year Base Rent Base Rent
---------- --------- ---------
2002 $53,118.00 $637,416.00
2003 $53,118.00 $637,416.00
2004 $54,180.36 $650,164.32
2005 $55,263.97 $663,167.61
2006 $56,369.25 $676,430.96
2007 $57,496.63 $689,959.58
2008 $58,646.56 $703,758.77
2009 $59,819.50 $717,833.94
2010 $61,015.89 $732,190.62
2011 $62,236.20 $746,834.44
2012 $63,480.93 $761,771.12
2013 $64,750.55 $777,006.55
(h) "Additional Rent" as particularly described in Section 4.2 hereof
(i) "Building": shall refer to one or more buildings located on the
Property, as more particularly described in Exhibit "A" attached
hereto and made a part hereof
(j) [Intentionally Omitted]
(k) "FMRV" shall mean the fair market rental value as more
particularly described in Article 3 hereof
(l) "Impositions" as more particularly described in Section 4.2 hereof
(m) [Intentionally Omitted]
(n) Permitted Use: Use as an office, warehouse, freight forwarding,
facility for general distribution of products, and facility for
receiving and distribution of air cargo, as more particularly
described in Article 6 hereof
(o) Utilities: Utilities shall be separately metered and Tenant shall
be responsible for payment of all utilities.
(p) Additional Rent: In addition to the Base Rent due hereunder,
Tenant shall also pay on or before the due date thereof, or if
there is no due date specified, within ten (10) days after receipt
of ▇▇▇▇, as set forth in this Lease, all expenses and other items
related to the Leased Premises (unless Landlord is expressly
obligated to pay the same under this Lease), all of which shall
constitute Additional Rent.
(q) "Hazardous Materials" shall mean any hazardous substance (as
defined herein) on, under or about the Leased Premises which is
subject to one or more of the following federal laws or their
state equivalents: the Comprehensive Environmental Response,
Compensation and Liability Act, the Superfund Amendment and
Reauthorization Act, the Resource Conservation Recovery Act,
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The Toxic Substance Control Act, the Federal Water Pollution
Control Act, the Federal Environmental Pesticides Act, the Clean
Water Act and the Clean Air Act; any so-called federal, state or
local "Superfund" or "Superlien" statute; or any other statute,
law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability (including strict
liability) or standards of conduct concerning any hazardous
substances (collectively, the "Hazardous Substance Laws"). For
purposes of this Lease, the term "hazardous substances" shall mean
and include any substance, whether solid, liquid or gaseous: (i)
which is listed, defined or regulated as a "hazardous substance,"
"hazardous waste" or "solid waste," or otherwise classified as
hazardous or toxic, in or pursuant to any Hazardous Substance
Laws; (ii) which is or contains asbestos, radon, any
polychlorinated biphenyl, urea, formaldehyde, foam insulation, or
explosive or radioactive material; (iii) which is or contains
petroleum or petroleum products, including any fractions or
distillates thereof; or (iv) which causes or poses a threat to
cause a contamination or nuisance on the Leased Premises or on any
adjacent property or a hazard to the environment or to the health
or safety of persons on the Leased Premises. As used in this
definition, the word "on" when used with respect to the Leased
Premises or adjacent property means "on, in, under, above or
about."
(r) "Governmental Authority" shall mean any and all courts, boards,
agencies, commissions, offices, or authorities of any nature
whatsoever for any governmental unit (federal, state, county,
district, municipal, city, or otherwise) whether now or hereafter
in existence.
(s) "Legal Requirements": (i) Any and all present and future judicial
or administrative decisions, laws, statutes, rulings, rules,
regulations, permits, certificates, or ordinances of any
Governmental Authority in any way applicable to Landlord or
Tenant, the business of Landlord or Tenant, or the Building and
Leased Premises, including the ownership, use, occupancy,
operation, maintenance, repair, or reconstruction thereof, and
including, without limitation RCRA, CERCLA, TSCA, and any other
statutes, regulations, ordinances, or similar laws enacted by any
Governmental Authority relating to health or the environment, (ii)
Tenant's present or subsequently effective Bylaws and Articles of
Incorporation, (iii) any and all Leases and other contracts
(written or oral) of any nature to which Tenant may be bound, and
(iv) all agreements, covenants, restrictions and conditions of
record which may be applicable to Tenant, Landlord or to all or
any part of or interest in Leased Premises, being more
particularly described in Exhibit "D" hereto.
(t) "Prime Rate" shall mean that certain rate of interest per annum
established from time to time by Bank of America, N.A. and
designated as its "Prime Rate" regardless of whether such rate is
the lowest rate charged to its best customers. It is agreed that
in the event Bank of America, N.A. is no longer in business, then
the "Prime Rate" of the successor to Bank of America, N.A. shall
be used in this Lease, and if there is no such successor, then the
Prime Rate of the largest national bank in terms of assets having
offices in Houston, Texas shall be used for this Lease.
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(u) "Emergency" shall be deemed to exist if, in the good faith
judgment of Landlord, prompt repairs are needed in order to
prevent death or bodily injury or material property damage (other
than de minimis property damage).
Each of the foregoing provisions and defined terms shall be construed
in conjunction with the references thereto contained in the other sections of
this Lease. Each reference in this Lease to any of the foregoing basic Lease
provisions and defined terms shall be construed to incorporate each term set
forth above under such basic Lease provisions or defined term.
ARTICLE 2. PREMISES
(a) Landlord hereby leases and demises to Tenant, and Tenant hereby
leases from Landlord the real property described in Exhibit "A", such
exhibit being attached hereto and incorporated herein for all purposes,
together with the Building and all other improvements and fixtures
located thereon (to the extent the same are owned by Landlord)
(hereinafter called the "Leased Premises").
(b) The Leased Premises are demised and let subject to (i) the
Permitted Encumbrances described on Exhibit "D" hereto (the "Permitted
Encumbrances"), (ii) all Legal Requirements, including any existing
violation of any thereof, and (iii) the condition of the Leased
Premises as of the commencement of the Term; it being understood and
agreed, however, that the recital of the Permitted Encumbrances herein
shall not be construed as a revival of any thereof which for any reason
may have expired.
(c) LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE
LEASED PREMISES "AS IS", AND TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER
ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND
WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY
OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO ITS
FITNESS FOR USE OR PURPOSE, DESIGN OR CONDITION FOR ANY PARTICULAR USE
OR PURPOSE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN,
LATENT OR PATENT, AS TO LANDLORD'S TITLE THERETO, OR AS TO VALUE,
COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE, CONDITION,
MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR OPERATION, IT
BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT.
TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND
TO ITS SPECIFICATIONS, AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED
BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER PATENT
OR LATENT, AND EXCEPT TO THE EXTENT LANDLORD IS OBLIGATED UNDER SECTION
20.11, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH
RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION
2(c) HAVE BEEN NEGOTIATED, AND THE FOREGOING PROVISIONS ARE INTENDED TO
BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, ARISING
PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR OTHERWISE.
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ARTICLE 3. TERM
3.1 Term.
The Term of this Lease shall commence on the Commencement Date as
defined in Section 1.1(f) and shall terminate on the Expiration Date as defined
in Section 1.1(f) above unless sooner terminated or extended in accordance with
the terms and conditions hereinafter set forth. So long as no Event of Default
has occurred and this Lease has not been terminated, Tenant shall have the right
and option to renew this lease for four (4) additional consecutive periods of
five (5) years each, next immediately ensuing after the Expiration Date of the
initial Term of this Lease and the subsequent renewal periods by notifying
Landlord in writing not less than six (6) months before the expiration of the
immediately preceding initial Term or subsequent renewal Term of this Lease of
the Tenant's intention to exercise its option to renew, but Tenant shall have no
option to extend this Lease beyond four (4) renewal periods of five (5) years
each after the initial Term. If Tenant shall fail to properly exercise a Renewal
Option, then all options with regard to subsequent Renewal Terms shall expire
and be null and void. In the event that Tenant so elects to extend this Lease,
then, for such extended period of the Term, all of the terms, covenants and
conditions of this Lease shall continue to be, and shall be, in full force and
effect during such extended period of the Term hereof, except for the Base Rent
(which shall be adjusted as hereinafter provided). The Base Rent for the first
Lease Year of each extended period shall be as mutually agreed upon by Landlord
and Tenant not less than six (6) months prior to the expiration of the then
current Term hereof and shall be increased thereafter as set forth in Section 3
hereof. If Landlord and Tenant are unable to mutually agree on the new Base Rent
for the first Lease Year of such extended period then, within one hundred twenty
(120) days prior to the expiration of the then current Term of this Lease, each
of Landlord and Tenant shall select a duly qualified real estate appraiser. The
Base Rent shall be ninety-five percent (95%) of the annual fair market rental
value (the "FMRV') of the Leased Premises as determined by the two (2)
appraisers selected by Tenant and Landlord as of the date which is sixty (60)
days before the date of the expiration of the then existing Term of this Lease.
The appraisers shall issue their reports within twenty (20) days after their
appointment. If the higher of the two (2) appraisals is less than or equal to
one hundred ten percent (110%) of the lower, FMRV shall be the average of the
two; if not, the two (2) appraisers shall then mutually select the third (3rd)
appraiser within ten (10) days. The third (3rd) appraiser so selected shall
determine which of the two (2) appraisers' determination is closest to FMRV
within ten (10) days and such determination shall be deemed to be the FMRV.
Landlord shall pay the cost of the appraisal by the appraiser selected by
Landlord. Tenant shall pay the cost of the appraisal by the appraiser selected
by Tenant. Landlord and Tenant shall equally bear the cost of the third
appraiser.
ARTICLE 4. BASE RENT AND ADDITIONAL RENT
4.1 Base Rent.
As "Base Rent" (herein so called), Tenant covenants and agrees to pay
to Landlord at the notice address of Landlord set forth in Section 1.1(b) or at
such other address as Landlord may from time to time designate in writing, the
sum(s) set forth in Section 1.1(g) above for the respective periods set forth in
such Section 1.1(g). All such Base Rent payments shall be made on the first
(1st) day of each calendar month, monthly in advance, for each and every month
in the term of this Lease. On the Commencement Date, Tenant will pay Landlord
Base Rent for the first (1st) full calendar month of the Lease Term; plus if the
Lease Term does not commence on the first (1st) day of the calendar month,
Tenant will also pay in advance a pro rata part of such sum as Base Rent for
such partial month. During the Term of this Lease, the Base Rent shall be
increased for each succeeding Lease Year by an amount equal to the Base Rent for
the preceding Lease Year multiplied by two percent (2%), beginning on the first
anniversary of the
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Commencement Date and continuing on each anniversary thereafter. If requested by
Landlord, all payments of Base Rent shall be made by wire transfer in
immediately available federal funds to such account in such bank as Landlord
shall designate, from time to time, and such payment of Base Rent shall be made
on the first (1st) business day of each calendar month.
4.2 Additional Rent .
Tenant shall promptly pay all taxes, assessments, impositions, levies,
charges, excises, fees, licenses and other sums (collectively, "Impositions")
levied, assessed, charged or imposed by any Governmental Authority or other
taxing authority for any period prior to or during the Term of this Lease
against or with respect to the Leased Premises or the Base Rent or Additional
Rent payable hereunder. The amount to be paid by Tenant on account of taxes
during the last calendar years in which any portion of the Term falls shall be
prorated per diem so that Tenant is liable only for so much of such taxes as the
portion of the Term which falls within such calendar year bears to a full
calendar year. In case of special taxes which may be payable in installments,
only the amount of each installment payable during a calendar year shall be
included in taxes for that calendar year. If received by Landlord, Landlord
shall provide to Tenant a copy of all final tax ▇▇▇▇(s) for each calendar year
within ten (10) days after Landlord's receipt of such tax ▇▇▇▇(s). Tenant shall
prepare and file all reports required by governmental authorities which relate
to the Impositions to be paid hereunder. Tenant shall deliver to Landlord, (i)
within ten (10) days after Tenant's receipt thereof, copies of all settlements
and notices pertaining to the Impositions provided hereunder which may be issued
by any Governmental Authority, and (ii) receipts for payments of all such
Impositions made during each calendar year of the Term, within thirty (30) days
after payment. In the event that the Tenant fails to pay any Impositions prior
to becoming delinquent, Tenant shall also pay all interest, penalties and other
amounts payable as a result of such failure to pay when due.
The Tenant may contest the amount or validity of any Imposition
described in this Section 4.2 by appropriate proceedings. However, the Tenant
shall promptly pay such Imposition unless such proceedings shall operate to
prevent or stay the collection of the Imposition so contested. The Landlord, at
the Tenant's sole expense, shall join in any such contestation proceedings if
any Law shall so require. In no event shall Tenant pursue any contest with
respect to any Impositions referred to above in such manner that exposes
Landlord to (i) criminal liability, penalty or sanction, (ii) any civil
liability, penalty or sanction for which Tenant has not made provisions
reasonably acceptable to Landlord, or (iii) defeasance of its interest the
Leased Premises. Tenant agrees that each such contest shall be promptly and
diligently prosecuted to a final conclusion, except that Tenant shall, have the
right to attempt to settle or compromise such contest through negotiations.
Tenant shall pay and save Landlord harmless against any and all losses,
judgments, decrees and costs (including all attorneys' fees and expenses) in
connection with any such contest and shall, promptly after the final
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interest, costs
and expenses thereof or in connection therewith, and perform all acts the
performance of which shall be ordered or decreed as a result thereof.
All sums and charges of whatsoever nature required to be paid by
Tenant pursuant to the terms of this Lease other than Base Rent shall constitute
Additional Rent (whether or not same be designated "Additional Rent") and
failure by Tenant to timely pay such other sums or charges may be treated by
Landlord as a failure by Tenant to pay Base Rent. Tenant shall promptly deliver
to Landlord upon Landlord's request copies of actual paid receipts, bills or
other documentation evidencing all other charges which constitute Additional
Rent hereunder for which Tenant is responsible with respect to the Leased
Premises in accordance with the terms of this Lease.
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4.3 Late Payments .
If any installment of Base Rent is not paid within ten (10) days after
the same is due, Tenant shall pay to Landlord, within five (5) business days
after demand therefor, as Additional Rent, a late charge equal to five percent
(5%) (the "Late Charge") on such overdue installment of Base Rent. If Tenant
shall fail to make payment of any installment of Base Rent or any Additional
Rent after the date when each such payment is due, Tenant shall pay to Landlord
interest at a rate (herein called the "Default Rate") equal to the Prime Rate
(or, if less, the highest rate permitted by applicable law) on the amount unpaid
computed from the date such payment of Base Rent or Additional Rent was due to
and including the date of payment. Notwithstanding the foregoing, the first late
payment of Base Rent during any consecutive twelve (12) month period shall not
be subject to a Late Charge.
4.4 Net Lease; Non-Terminability .
(a) This is a net lease and all Base Rent, Additional Rent and all
other sums payable hereunder by Tenant shall be paid without notice
(except as otherwise specifically provided in this Lease), demand,
setoff, counterclaim, recoupment, abatement (except as otherwise
specifically provided in Sections 5.2, 8.4, 10.1 and 16.1 of this
Lease), suspension, deferment, diminution, deduction, reduction or
defense.
(b) This Lease shall not terminate (except as otherwise expressly
provided in Articles 10, 12 and 16 of this Lease), and Tenant shall not
have any right to terminate this Lease (except as expressly provided in
Articles 10 and 16 of this Lease), during the Term. Tenant shall not be
entitled to any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of
or to Base Rent, Additional Rent or any other sums payable under this
Lease; and the obligations of Tenant under this Lease shall not be
affected by any interference with Tenant's use of any of the Leased
Premises for any reason, including the following: (i) any damage to or
destruction of any of the Leased Premises by any cause whatsoever,
except as otherwise expressly provided in Article 10 hereunder, (ii)
any Condemnation (except as otherwise expressly provided in Article 16
hereof), (iii) the prohibition, limitation or restriction of Tenant's
use of any of the Leased Premises, (iv) any eviction by paramount title
or otherwise, (v) Tenant's acquisition of ownership of any of the
Leased Premises other than pursuant to an express provision of this
Lease, (vi) any latent or other defect in, or any theft or loss of any
of the Leased Premises, or (vii) any other cause, whether similar or
dissimilar to the foregoing, any present or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the
obligations of Tenant under this Lease shall be separate and
independent covenants and agreements, and that Base Rent, Additional
Rent and all other sums payable by Tenant hereunder shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts
equal thereto), and that the obligations of Tenant under this Lease
shall continue unaffected, unless this Lease shall have been terminated
pursuant to Articles 10 or 16 of this Lease.
(c) This Lease is the absolute and unconditional obligation of
Tenant. Tenant waives all rights which are not expressly stated in this
Lease but which may now or hereafter otherwise be conferred by Law (i)
to quit, terminate or surrender this Lease or any of the Leased
Premises, (ii) to any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of
or to Base Rent, Additional Rent or any other sums payable under this
Lease, and (iii) for any statutory lien or offset right against
Landlord or its property.
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ARTICLE 5. UTILITIES; TAXES
5.1 Payment of Utilities.
From and after the Commencement Date, the utilities in the Leased
Premises shall be separately metered at Tenant's cost and expense. Tenant will
at its own cost and expense pay for all water, sanitary sewer, gas, electricity,
telephone, and other utilities, janitorial services (if Tenant contracts for
such services) and grounds maintenance (exclusive of repairs to paving) used in
the Leased Premises. Such payments shall be made by Tenant directly to the
supplier of any utility or service provider to the Leased Premises. Tenant shall
make its own arrangements for, and shall be solely responsible for, delivery of
all utility services to the Leased Premises, and Landlord shall be under no
obligation to furnish any utilities to the Leased Premises and, except as
hereinafter expressly provided, shall not be liable for any interruption or
failure in the supply of any such utilities.
5.2 Interruption of Utilities.
Except for an interruption caused by the gross negligence or willful
misconduct of Landlord, its agents or employees, no interruption or malfunction
of any utility services (including, without limitation, water, sanitary sewer,
gas, and electricity services) shall constitute a breach by Landlord of any of
its obligations hereunder or render Landlord liable for any damages (except if
caused by the gross negligence or willful misconduct of Landlord, its agents or
employees.
Landlord shall use reasonable efforts to promptly restore any utility
service that becomes unavailable due to gross negligence or willful misconduct
of the Landlord, its agents or employees. However, if Tenant is prevented from
making reasonable use of all or a portion of the Leased Premises for more than
five (5) consecutive days because of the unavailability of the utility service
caused by the gross negligence or willful misconduct of Landlord, Tenant shall
be entitled to abatement of Base Rent, or the pro rata portion thereof
equivalent to the portion of the Leased Premises rendered reasonably unusable
for use in the manner theretofore customarily used by Tenant, for each
consecutive day (after such five (5) day period) that Tenant is so prevented
from making reasonable use of the Leased Premises or the applicable portion
thereof.
If Landlord fails to restore the utility service for a period in excess
of five (5) consecutive days due to an interruption caused by the gross
negligence or willful misconduct on the part of Landlord, its agents or
employees, Tenant shall additionally have the right to then expend reasonable
sums in the correction or curing of any such interruption, and Landlord shall be
obligated to pay such amounts to Tenant within fifteen (15) days after demand.
5.3 Personal Property Taxes.
Tenant shall pay the full amount of all taxes, assessments,
impositions, levies, charges, excises, fees, licenses and other sums levied,
assessed, charged or imposed by any Governmental Authority or other taxing
authority for any period prior to or during the Term of this Lease upon Tenant's
leasehold interest under this Lease and all alterations, additions, fixtures
(including Removable Trade Fixtures, as hereinafter defined), inventory and
other property installed or placed or permitted at the Leased Premises by
Tenant. Within thirty (30) days after notice from Landlord, Tenant shall furnish
Landlord a true copy of receipts evidencing such payment received by Tenant from
the Governmental Authority or other taxing authority assessing such charges.
Except for such insurance as required to be paid by Landlord, Tenant
will also pay all insurance premiums assessed or levied upon any alterations,
additions, fixtures or property installed in the Leased
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Premises by the Tenant and all insurance related to Tenant's use, occupancy and
operations within the Leased Premises.
5.4 Rent Sales Tax.
If there is presently in effect or hereafter adopted any nature of
sales tax or use tax or other tax on rents or other sums received by Landlord
under this Lease (herein referred to as "Rent Sales Tax"), then in addition to
all rent and other payments to be made by Tenant as provided above, Tenant will
also pay Landlord a sum equal to the amount of such Rent Sales Tax. The term
"Rent Sales Tax" shall not include any federal, state or local income taxes
applicable to Landlord.
ARTICLE 6. USE; ENVIRONMENTAL
6.1 Permitted Use.
(a) The Leased Premises may be used and occupied for any lawful
purposes during the Term of this Lease, including, without limitation,
the purposes specified in Section 1.1(n) above, and any other uses
selected by Tenant, in Tenant's sole discretion, which are not
otherwise prohibited at law and which relate to or supplement any of
the foregoing. It is hereby acknowledged that Tenant's initial use of
the Leased Premises will be for the purpose specified in Section
1.1(n), as well as for such other uses selected by Tenant, in Tenant's
sole discretion, which are not otherwise prohibited at law. Upon the
request of Tenant, Landlord will join with Tenant in applications or
proceedings to obtain any required or desired use permits or licenses
for the Leased Premises; provided, however, that Tenant shall bear all
costs in connection therewith. Notwithstanding the foregoing, Tenant
may not apply or seek to change the legal use of the Leased Premises
from that specified in Section 1.1(n) if such other use would: (A) have
an adverse effect on the fair market value of the Leased Premises, (B)
increase the likelihood that Tenant, Landlord or Lender would incur
liability under any provisions of any Hazardous Substance Laws, or (C)
result in or give rise to any environmental deterioration or
degradation of the Leased Premises, or (ii) any purpose which would
constitute a public or private nuisance or waste or which would violate
any of the provisions of any Permitted Encumbrance, any Legal
Requirements, any insurance requirements or any covenants, restrictions
or agreements hereafter created by or consented to by Landlord and
Tenant which are applicable to the Leased Premises.
(b) Notwithstanding anything contained or set forth in this Lease
to the contrary, nothing set forth in this Lease shall be construed, in
any manner whatsoever, as an express or implied covenant on the part of
Tenant to commence business operations or to thereafter continuously
operate any business operations on the Leased Premises, and Landlord
specifically acknowledges that there is no covenant of initial or
continuous operation on the part of the Tenant, express or implied.
6.2 Environmental.
Tenant shall not cause or permit any Hazardous Materials to be used,
generated, stored or disposed of in, on or under, or released from, or
transported to or from the Leased Premises unless such Hazardous Materials are
received, stored and shipped by Tenant in the ordinary course of Tenant's
business in accordance with all Hazardous Substance Laws; provided, however,
Tenant shall at all times and in all material respects comply with all Legal
Requirements and further provided that Tenant shall periodically cause to be
removed from the Leased Premises Hazardous Materials placed thereon by Tenant or
Tenant's agents, servants, employees, guests, invitees and/or independent or any
other persons or entities, such removal to be performed by persons or entities
duly qualified to handle and dispose of Hazardous Materials. Upon the expiration
or earlier termination of this Lease, Tenant shall cause all
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Hazardous Materials on the Leased Premises to be removed, at Tenant's cost and
expense, from the Leased Premises and disposed of in strict accordance with the
Hazardous Substance Laws.
Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord), protect, and hold Landlord harmless, from and against any and all
claims, liabilities, penalties, fines, judgment, forfeitures, losses, costs
(including clean-up costs) or expenses (including attorney's fees, consultant's
fees and expert's fees) for the death of or injury to any person or damage to
any property whatsoever, arising from or caused in whole or in part, directly or
indirectly, by (a) the presence before or after the Commencement Date in, on,
under, or about the Leased Premises of any Hazardous Materials; (b) any
discharge or release before or after the Commencement Date in or from the
Premises of any Hazardous Materials; (c) the use, storage, transportation,
generation, disposal, release or discharge before or after the Commencement Date
of Hazardous Materials, to, in, on, under, about or from the Leased Premises; or
(d) Tenant's failure after the Commencement Date to comply, or to cause the
Leased Premises to comply, with any Legal Requirements.
Landlord shall indemnify, defend (by counsel reasonably accepted to
Tenant), protect, and hold Tenant harmless, from and against any and all claims,
liabilities, penalties, fines, judgment, forfeitures, losses, costs (including
clean-up costs) or expenses (including attorney's fees, consultant's fees and
expert's fees) for the death of or injury to any person or damage to any
property whatsoever, arising from or caused in whole or in part, directly or
indirectly, by the use, storage, transportation, generation, disposal, release
or discharge of Hazardous Materials by Landlord or Landlord's employees, agents,
contractors, subcontractors or invitees during the Term of the Lease, to, in,
on, under, about or from the Leased Premises. Landlord agrees to remediate at
Landlord's expense immediately upon receipt of notice from Tenant any condition
described in the previous sentence.
Tenant has received no written notice from any governmental or private
entity relating to Hazardous Materials on the Leased Premises. Tenant shall
promptly deliver to Landlord copies of all notices made by Tenant to, or
received by Tenant from, any state, county, municipal or other agency having
authority to enforce any environmental law ("Enforcement Agency") or from the
United States Occupational Safety and Health Administration concerning
environmental matters or Hazardous Materials at the Leased Premises. Landlord
shall promptly deliver to Tenant copies of all notices received by Landlord from
any Enforcement Agency or from the United States Occupational Safety and Health
Administration concerning environmental matters or Hazardous Materials at the
Leased Premises.
ARTICLE 7. ASSIGNMENT AND SUBLETTING
7.1 Consent of Landlord.
Tenant shall not assign this Lease, or sublet the Leased Premises, or
any part thereof, without Landlord's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed; provided, however, Tenant
shall have the right to sublet up to fifty percent (50%) of the total rentable
square feet contained within the Leased Premises without the necessity of
obtaining Landlord's prior consent and without releasing the Tenant from
liability under this Lease. Prior to any sublease or assignment, Tenant shall
first notify Landlord in writing of its election to sublease all or a portion of
the Leased Premises or to assign this Lease or any interest hereunder, and shall
provide Landlord current financial information and other information requested
by Landlord regarding the proposed assignee or subtenant. At any time within
fifteen (15) days after service of said notice and delivery of such information,
Landlord shall notify Tenant that it consents or refuses to consent to the
sublease or assignment.
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Landlord shall not have the right to recapture any sublease or
assignment space. Any denial of such sublease or assignment by Landlord as
hereinabove provided must be predicated upon a "commercially reasonable basis"
for such denial. Tenant shall retain any profits paid in connection with a
sublease or assignment in excess of Tenant's Base Rent obligations hereunder,
which profits shall be calculated after deducting all costs incurred by Tenant
in connection with the space subject to the transfer, which shall include, but
not be limited to, tenant improvements, leasing commissions and the time to
sublease and remodel the Leased Premises.
Any assignment or subletting shall not release Tenant of its liability
under this Lease nor permit any subsequent assignment, subletting or other
prohibited act, unless specifically provided in such consent. Within thirty (30)
days of any assignment or subletting, Tenant shall provide to Landlord executed
copies of all assignment or subleasing documents.
7.2 Assignment; Transfer.
For purposes of this Lease, an "assignment" shall include (but shall
not be limited to) the following: (i) transfer of the majority of the ownership
interests in Tenant or any corporation which is a partner or member or other
beneficial owner of Tenant; (ii) transfer of a majority of the ownership
interests in Tenant or in any of the guarantors (whether or not Tenant or the
guarantors are a corporation). A "transfer" includes any sale, merger, share
exchange, consolidation, or dissolution. Notwithstanding the foregoing, no
consent of Landlord is required for Tenant to assign, sublet or otherwise
transfer (by operation of law or otherwise) this Lease or any of its rights
hereunder: (a) to any person, corporation, partnership or other entity which
acquires all or substantially all of the business or assets of Tenant or
ownership interest in Tenant; or (b) to any person, corporation, partnership or
other entity which controls, is controlled by or is under common control with
Tenant. Tenant and Tenant's transferee or assignee shall provide notice of any
transfer or assignment described in (a) or (b) hereof not less than fifteen (15)
days prior to the effective date of such transfer or assignment unless
prohibited by law and then, if so prohibited by law, within twenty (20) days
after the date of such transfer or assignment.
ARTICLE 8. REPAIR AND MAINTENANCE
8.1 Landlord Repairs.
(a) Upon Tenant giving Landlord prior written notice of the item
damaged, Landlord will, at its own cost and expense promptly repair and
make necessary replacements to the following damage to the Leased
Premises: damage to the roof, foundation, structural components,
exterior walls, exterior doors and windows (excluding glass), walks,
parking areas, driveways, and other exterior areas (including paving),
exterior plumbing lines (including water lines and gas lines);
provided, however, that if any such damage to the Leased Premises is
caused by the Tenant, its agents, employees, customers or invitees,
other than by normal wear and tear, or any burglar, vandal, or other
unauthorized entrant, or any other person (with the exception of damage
caused by gross negligence or willful misconduct of Landlord or of
Landlord's agents, employees, or contractors), then in such event, such
damage shall not be subject to this Section 8.1 and Tenant will bear
the cost of and be responsible to complete such repairs in accordance
with Section 8.2 hereof.
(b) Tenant will promptly give Landlord written notice of any
damage to the Leased Premises requiring repair by Landlord. If Landlord
shall not commence such repairs within the fifteen (15) days following
written notice from Tenant that such repairs are necessary then Tenant
may, at its option, cause such Landlord's repairs to be made and shall
furnish Landlord with a statement of the cost of such repairs upon
substantial completion thereof. Upon demand, Landlord shall reimburse
Tenant for the cost of such repairs plus a service charge to cover
Tenant's expenses in an amount equal to ten percent (10%) of the
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cost of such repairs within ten (10) days of the date of the statement
from Tenant setting forth the amount due.
8.2 Tenant Repairs and Maintenance.
All damage, other than that which Landlord undertakes to repair in
Section 8.1 and incurred after the Commencement Date will be promptly repaired
and all maintenance will be performed and replacements and renewals will be made
to the extent necessary to restore the Leased Premises to the condition existing
on the Commencement Date, except for reasonable wear and tear, by Tenant at
Tenant's sole cost and expense, including without limitation all other
maintenance and repairs necessary or appropriate to cause the Leased Premises to
remain suitable for Tenant's intended commercial purpose and occupancy. Without
limitation of the preceding sentence, Tenant shall be responsible for repairing
all damage to the Leased Premises caused by one or more negligent acts or
omissions of Tenant, its agents, employees, customers or invitees, or any
burglar or other unauthorized entrant, or any other person except for damage
caused by Landlord or of Landlord's agents, employees or contractors as
hereinafter expressly provided All damage to the Leased Premises caused by
Landlord or its agents, employees or contractors shall be repaired by Landlord
in accordance with its obligations under Section 8.1 hereof unless such damage
is caused by Landlord (i) in the exercise of its rights under Section 8.4(b) or
any other provision of this Lease allowing Landlord to cure any defaults of
Tenant, or (ii) in connection with its entry upon the Leased Premises after the
occurrence of an Event of Default under this Lease, in which cases (either (i)
or (ii) of the preceding) Tenant shall be obligated to promptly complete all
such repairs and replacements necessary as a result of any such damage unless
such damage was caused by the gross negligence or willful misconduct of Landlord
or its agents, employees or contractors.
8.3 Property Condition.
Tenant will not commit waste and will not injure the Leased Premises or
the Building of which they are a part, but will maintain the Leased Premises in
a safe and clean condition and in good repair and in compliance with all
applicable Legal Requirements. Upon termination of this Lease, Tenant will
surrender and deliver up the Leased Premises to Landlord broom-clean and in the
same condition in which they existed as of the Commencement Date, excepting only
ordinary wear and tear and repair and damage arising from a fire or other
casualty occurring to the Leased Premises, and excepting also any damage
required hereunder to be repaired by Landlord. Upon termination of this Lease,
Tenant will also surrender to Landlord all keys to the Leased Premises at the
place stated herein for the payment of rent and inform Landlord, in writing, of
all combinations on locks, safes and vaults, if any, remaining at the Leased
Premises.
8.4 Entry by Landlord.
(a) Landlord will have a right to enter the Leased Premises at any
reasonable time (including during Tenant's business hours) to inspect
the condition thereof, to show the Leased Premises to lenders and
prospective future lenders and tenants, or to make necessary repairs
and improvements allowed or required hereunder; provided, however, that
Landlord shall give Tenant at least twenty-four (24) hours prior
written notice of its intent to enter the Leased Premises, except in
cases of an Emergency. Landlord shall be responsible for any and all
damages, claims or costs incurred by Tenant or its employees or agents
caused by negligent or wrongful acts relating to Landlord's entry onto
the Leased Premises.
If Landlord's entry into the Leased Premises (to the extent due to
completing repair obligations under Section 8.1(a) of the Lease) renders the
Leased Premises unusable for its intended purpose as set forth in Section 1.1(n)
for five (5) or more business days, then Base Rent shall totally ▇▇▇▇▇ for each
day or portion thereof that such unusability continues; provided, however, that
Tenant shall not be permitted
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to ▇▇▇▇▇ Base Rent pursuant to this paragraph if Landlord's entry onto the
Leased Premises is required due to or in connection with Tenant's default under
this Lease.
(b) If Tenant shall be in default under any of the provisions of
this Lease, Landlord may after thirty (30) days written notice given to
Tenant and failure of Tenant to cure during said period (provided,
however, that if the nature of Tenant's default is such that more than
thirty (30) days are reasonably required to cure, then such thirty (30)
day period shall be extended for a reasonable time if Tenant commences
such performance within said thirty (30) day period and thereafter
diligently completes the required action within a reasonable time, but
not to exceed a period of one hundred eighty (180) days after notice
thereof from Landlord), but without notice in the event of an Emergency
or during the continuance of an Event of Default, and even though the
existence of such default or the nature thereof is denied or contested
by Tenant or any other person, do whatever is necessary to cure such
default as may be appropriate under the circumstances for the account
of and at the expense of Tenant. In the event of an Emergency, Landlord
shall make reasonable efforts to notify Tenant of the situation by
phone or other available communication before taking any action to cure
such default. All reasonable sums so paid by Landlord and all
reasonable costs and expenses (including attorneys' fees and expenses)
so incurred, together with interest thereon at the Default Rate from
the date of payment or incurring the expense, shall constitute
Additional Rent payable by Tenant under this Lease and shall be paid by
Tenant to Landlord on demand.
8.5 Liens.
Should any mechanic's liens or other liens or affidavits claiming liens
be filed against the Leased Premises or any portion thereof or interest therein
for any reason whatsoever incident to the acts or omissions of Tenant or any
contractor of Tenant or any such contractor's subcontractor or any laborer
performing labor or materialman furnishing materials at or for the Leased
Premises or by reason of any specially fabricated materials whether or not
placed at the Leased Premises, Tenant shall cause the same to be canceled and
discharged of record by payment, bonding or otherwise, within thirty (30) days
after notice by Landlord, or at such earlier time as is necessary to prevent the
foreclosure thereof, or Tenant shall timely contest the lien in a judicial
proceeding, or cause same to be discharged. Notice is hereby given that Landlord
shall not be liable for any labor, services or materials furnished or to be
furnished to Tenant, or to anyone holding any of the Leased Premises through or
under Tenant, and that no mechanic's or other liens for any such labor, services
or materials shall attach to or affect the interest of Landlord in and to any of
the Leased Premises.
8.6 Costs.
Notwithstanding the other items set forth in this Article 8, Tenant
shall be responsible, at its sole cost and expense, for all costs incurred or
associated with the maintenance, management, or operation of the fixtures and
equipment made a part of the Leased Premises (excluding, however, costs required
to be paid by Landlord under Section 8.1, Article 10, or Article 11).
ARTICLE 9. ALTERATIONS AND FIXTURES
9.1 No Alterations.
Tenant will make no alterations or additions to the Leased Premises
without the prior written consent of Landlord, which consent shall not
unreasonably be withheld, delayed or conditioned so long as Tenant is not in
default under this Lease and all other conditions of this Section 9.1 are
satisfied. At such time as Tenant requests such written consent of Landlord,
Tenant shall submit plans and specifications for such alterations or additions
to Landlord. Notwithstanding the foregoing, Tenant shall have the right to
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make non-structural alterations, which do not exceed in cost One Hundred
Thousand Dollars ($100,000.00) during each Lease Year without Landlord's
consent.
In the event that Landlord gives its prior written consent to any
alterations, or if such consent is not required, Tenant agrees that in
connection with any alteration: (i) the fair market value of the Leased Premises
shall not be decreased after the completion of any such alteration, and the
structural integrity of the Building or any other improvements shall not be
impaired; (ii) the alterations to be made will be constructed using new
materials of a quality and workmanship at least as good as the original work;
(iii) all such alterations shall be performed in a good and workmanlike manner,
and shall be expeditiously completed in a commercially reasonable time period in
compliance with all Legal Requirements; (iv) Tenant shall promptly pay all costs
and expenses of any such alteration, and shall discharge all liens filed against
any of the Leased Premises arising out of the same; (v) Tenant shall procure and
pay for all permits and licenses required in connection with any such
alteration; (vi) all such alterations shall be the property of Landlord and
shall be subject to this Lease; and (vii) all alterations, the estimated cost of
which in any one instance exceeds One Hundred Thousand and No/100 Dollars
($100,000.00), shall be made under the supervision of an architect or engineer
and, in accordance with plans and specifications which have been submitted to
and approved by Landlord prior to the commencement of the alterations.
9.2 Removable Trade Fixtures.
Tenant shall remove "Removable Trade Fixtures," as hereinafter defined
(excluding, however, ducts, conduits, wiring, pipes, paneling or other wall
covering or floor covering) and, in addition to other applicable provisions of
this Lease regarding such removal, the following shall apply: (i) Such removal
must be made on or before the Expiration Date or earlier date of termination of
this Lease; and (ii) such removal must be effected without damage to the Leased
Premises or the Building of which the Leased Premises are a part and Tenant must
promptly repair all damage caused by such removal. For the purposes hereof, the
phrase "Removable Trade Fixtures" means the following: all of Tenant's signs,
counters, tables, chairs, desks, racking, standards, wall brackets, hang-rods,
shelves, removable electrical control panels from Tenant's equipment (as opposed
to the electrical panels for the Leased Premises), equipment, security systems,
other business machines, and other equipment used by Tenant in its business
operations that can be removed without damaging the Leased Premises. All
alterations, additions, fixtures, equipment and other property (not constituting
Removable Trade Fixtures) installed or placed by Tenant or any subtenant or
assignee in the Leased Premises shall remain part of the Leased Premises and
Tenant shall have no obligation to remove the same unless Landlord notifies
Tenant (in writing) at the time of its approval thereof that such alterations,
additions, fixtures, equipment or other property must be removed before the end
of the Term.
ARTICLE 10. FIRE AND DESTRUCTION OF PREMISES
10.1 Damage or Destruction of Leased Premises.
Tenant shall give prompt written notice to Landlord of any damage
caused to the Leased Premises by fire or other casualty. In the event that the
Leased Premises shall be damaged or destroyed by fire or other casualty and
Landlord or Tenant does not elect to terminate this Lease as hereinafter
provided, Landlord shall proceed with reasonable diligence and at its sole cost
and expense (provided that Landlord shall receive and be entitled to use the
proceeds of the fire and extended coverage insurance carried by Landlord or
Tenant, as applicable, to complete such repairs) to rebuild and repair damage to
the roof, foundation, structural components, exterior walls, exterior doors and
windows (excluding glass), walks, parking areas, driveways, and other exterior
areas (including paving), exterior plumbing lines (including water lines and gas
lines) of the Leased Premises within a period of one hundred eighty (180) days
after the occurrence of the casualty and the Base Rent and other charges
provided for herein shall be
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abated during such period of rebuilding and restoration to the extent, and only
to the extent that the Leased Premises cannot be used for the purposes described
in Section 1.1(n) as a result thereof. Notwithstanding the foregoing, Tenant
shall be responsible for repairing damage caused by fire or other casualty to
those items set forth in Section 10.2 below. In the event (a) such Building
shall be destroyed or rendered untenantable to an extent in excess of fifty
percent (50%) of the floor area by a casualty covered by Landlord's insurance
and the Leased Premises cannot be restored within one hundred eighty (180) days
thereafter; or (b) the holder of a mortgage, deed of trust or other lien on the
Leased Premises at the time of the casualty elects pursuant to such mortgage,
deed of trust or other lien to require the use of all or part of Landlord's
insurance proceeds in satisfaction of all or part of the indebtedness secured by
the mortgage, deed of trust or other lien; or (c) the damage has occurred in the
last twelve (12) months of the Lease Term, then Landlord or Tenant may elect to
either terminate this Lease or Landlord may proceed to rebuild and repair the
Leased Premises. Either party shall give written notice to the other of such
election within thirty (30) days after the occurrence of such casualty and if it
elects to rebuild and repair shall proceed to do so with reasonable diligence
within a period of one hundred eighty (180) days after such casualty and at its
sole cost and expense.
10.2 Restoration of Leased Premises.
Landlord's obligation to rebuild and repair under this Article 10 shall
in any event be limited to restoring the Leased Premises, exclusive of any
alterations, additions, improvements, fixtures and equipment installed by
Tenant, to substantially the same condition in which the same existed prior to
the casualty. Tenant agrees that promptly after completion of such work by
Landlord, Tenant will proceed with reasonable diligence and at Tenant's sole
cost and expense to restore, repair and replace all alterations, additions,
improvements, fixtures, signs and equipment installed by Tenant.
10.3 Fire and Extended Coverage Insurance.
During the Term of this Lease, Tenant shall maintain fire and extended
coverage insurance covering the full replacement cost of the Building and all
other structures and improvements located on the Leased Premises.
Notwithstanding the provisions of Section 10.1, Landlord shall not be liable for
any damage to Tenant's property within the Leased Premises, regardless of cause,
unless due to the gross negligence of Landlord and its employees and agents.
In the event of a fire or other casualty during the Term of this Lease
and if Tenant obtains the fire and extended coverage insurance itself, Landlord
and Tenant shall proportionately allocate the amount of the deductible for which
each party shall be responsible based upon the amount of damage incurred that
would be the restoration responsibility of Landlord under Section 10.1 and the
amount of damage incurred that would be the restoration responsibility of Tenant
under Section 10.2. For purposes of this Lease, the maximum deductible that
Landlord would pay for purposes of this allocation will be $50,000.00,
regardless of the actual stated deductible in Tenant's fire and extended
coverage insurance policy for the Building and Leased Premises. Any remaining
deductible amount in excess of $50,000.00 shall be paid by Tenant.
For example, assume an event of fire or other casualty occurs during
the Term of this Lease to the Leased Premises and that the total damage to the
Leased Premises totals $1,000,000.00; the amount of damage incurred that is the
restoration responsibility of Landlord under Section 10.1 is determined to be
$600,000.00 and the amount of damage incurred that is the restoration
responsibility of Tenant under Section 10.2 is determined to be $400,000.00
(alternatively stated, 60% of the damage is a Landlord restoration
responsibility under Section 10.1 and 40% of the damage is a Tenant restoration
responsibility under Section 10.2). Given that the maximum deductible subject to
the allocation is $50,000.00, Landlord would pay $30,000.00 of the maximum
deductible ($50,000.00 x 60%) and Tenant would be
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$20,000.00 of the maximum deductible ($50,000.00 x 40%). As stated hereinabove,
any actual deductible amount owed to the insurance company in excess of
$50,000.00 shall be paid by Tenant.
Notwithstanding the foregoing, if Tenant elects not to obtain the
insurance itself, then upon Tenant's request, Landlord shall obtain, at Tenant's
expense as Additional Rent, such fire and extended coverage on Tenant's behalf
as of a mutually agreed upon reasonable date and thereafter maintain such
insurance on Tenant's behalf until (1) Tenant notifies Landlord to cease causing
such insurance to be so carried and (2) Tenant provides Landlord with
certificates of insurance coverage which Tenant obtains to replace such
Landlord's policies, which Tenant furnished certificates of coverage must be in
conformance with the requirements of this Lease. In the event that Landlord
obtains the insurance coverage, Landlord may elect such deductible as it deems
appropriate and shall be responsible for the deductible payment resulting from
an insured loss.
10.4 Waiver of Subrogation.
Landlord and Tenant hereby release each other and their respective
agents and employees from any and all liability to each other or anyone claiming
through or under them by way of subrogation or otherwise for any loss or damage
to property caused by or resulting from risks insured against under the property
insurance for loss, damage or destruction by fire or other casualty carried by
the parties hereto and which was in force at the time of any such loss or
damage; provided, however, that this release shall be applicable only with
respect to loss or damage occurring during such time as the releaser's policies
of insurance contain a clause or endorsement to the effect that any such release
shall not adversely affect or impair such policies or prejudice the right of the
releaser to recover thereunder. Landlord and Tenant each agree that it will
require its property insurance carriers to include in its policy such a clause
or endorsement. Nothing contained in this Section 10.4 shall be deemed to
relieve either party from any duty imposed elsewhere in this Lease to repair,
restore and rebuild.
ARTICLE 11. LIABILITY AND INDEMNITY; INSURANCE
11.1 Mutual Indemnity.
TENANT AGREES TO INDEMNIFY, DEFEND AND HOLD LANDLORD HARMLESS FROM ALL
CLAIMS, LIABILTIES, PENALTIES, FINES, JUDGMENTS, ACTIONS, CAUSES OF ACTION,
DAMAGES, LOSSES, EXPENSES AND COSTS ARISING (OR ALLEGED TO ARISE) FROM (A) THE
USE OR NON-USE OF THE LEASED PREMISES DURING THE TERM, (B) ANY BREACH OF
TENANT'S OBLIGATIONS UNDER THIS LEASE, (C) ANY WILLFUL MISCONDUCT OR NEGLIGENT
ACT OR OMISSION OF TENANT OR TENANT'S AGENTS, EMPLOYEES, ASSIGNEES, SUBTENANTS,
CONTRACTORS, CUSTOMERS OR INVITEES, OR (D) ANY INJURY TO OR DEATH OF ANY PERSON
OR PERSONS OR DAMAGE TO OR DESTRUCTION OF THE PROPERTY OF ANY PERSON OR PERSONS
OCCURRING IN OR ABOUT THE LEASED PREMISES, AND TENANT ASSUMES RESPONSIBILITY FOR
THE CONDITION OF THE LEASED PREMISES AND AGREES TO GIVE LANDLORD WRITTEN NOTICE
IN THE EVENT OF ANY DAMAGE, DEFECT OR DISREPAIR THEREIN. TENANT ACKNOWLEDGES
THAT THE COVENANTS OF TENANT CONTAINED IN THIS LEASE RELATING TO INDEMNITY BY
TENANT OF THE LANDLORD HAVE SERVED AS A MATERIAL INDUCEMENT TO LANDLORD TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS LEASE AND TENANT FURTHER
ACKNOWLEDGES AND AGREES THAT BUT FOR THE PROVISIONS OF THIS LEASE REGARDING
INDEMNITY, LANDLORD WOULD NOT HAVE CONSUMMATED THE TRANSACTIONS CONTEMPLATED BY
THIS LEASE.
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LANDLORD AGREES TO INDEMNIFY, DEFEND AND HOLD TENANT HARMLESS FROM ALL
CLAIMS AND COSTS ARISING (OR ALLEGED TO ARISE) FROM: (A) BREACH OF LANDLORD'S
OBLIGATIONS UNDER THIS LEASE; OR (B) ANY WILLFUL MISCONDUCT OR NEGLIGENT ACT OR
OMISSION OF LANDLORD OR LANDLORD'S AGENTS, EMPLOYEES, ASSIGNEES, CONTRACTORS,
CUSTOMERS OR INVITEES. LANDLORD ACKNOWLEDGES THAT THE COVENANTS OF LANDLORD
CONTAINED IN THIS LEASE RELATING TO INDEMNITY BY LANDLORD OF THE TENANT HAVE
SERVED AS A MATERIAL INDUCEMENT TO TENANT TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS LEASE AND LANDLORD FURTHER ACKNOWLEDGES AND AGREES THAT BUT
FOR THE PROVISIONS OF THIS LEASE REGARDING INDEMNITY, TENANT WOULD NOT HAVE
CONSUMMATED THE TRANSACTIONS CONTEMPLATED BY THIS LEASE.
THE PROVISIONS OF THIS SECTION 11.1 SHALL SURVIVE THE EXPIRATION OR
EARLIER TERMINATION OF THIS LEASE. LANDLORD'S INDEMNITY OBLIGATIONS UNDER THIS
SECTION 11.1 WILL APPLY WITH RESPECT TO ITS ACTIONS OR OMISSIONS CONSTITUTING
SIMPLE NEGLIGENCE IN CONNECTION WITH PERFORMING ANY DUTY OR RESPONSIBILITY OF
LANDLORD UNDER THIS LEASE; BUT LANDLORD'S INDEMNITY OBLIGATIONS UNDER THIS
SECTION 11.1 WILL APPLY ONLY WITH RESPECT TO ITS ACTIONS OR OMISSIONS
CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IN CONNECTION WITH ANY
ACTIONS TAKEN AS A RESULT OF OR IN CONNECTION WITH TENANT'S DEFAULT UNDER THIS
LEASE.
11.2 Tenant's Insurance.
Tenant, in order to insure against the liabilities specified in this
Lease, shall at all times during the term of this Lease carry, at its own
expense, one or more policies of general public liability and property damage
insurance, issued by one or more insurance companies acceptable to Landlord,
with the following minimum coverages:
(a) Worker's Compensation: Five Hundred Thousand and No/100
Dollars ($500,000.00) or, if greater, the amount required by applicable
Legal Requirements.
(b) Commercial General Liability Insurance, including blanket,
contractual liability, broadform property damage, personal injury,
completed operations, products liability, and fire damage: Not less
than One Million and No/100 Dollars ($1,000,000.00) Combined Single
Limit for both bodily injury and property damage per occurrence.
(c) Excess liability (umbrella) insurance of at least Four Million
and No/100 Dollars ($4,000,000.00).
(d) Fire and extended coverage insurance covering the full
replacement cost of all of the Building and all other structures and
improvements located on the Leased Premises and all of Tenant's
improvements, personal property, and trade fixtures contained within
the Leased Premises.
(e) Insurance for the removal and replacement of plate glass in
and around the Leased Premises.
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(f) Whenever Tenant shall be engaged in making any Alteration or
Alterations, repairs or construction work of any kind ("Work"), Tenant
or its contractor shall obtain worker's compensation insurance or other
adequate insurance coverage covering all persons employed in connection
with the Work, whether by Tenant, its contractors or subcontractors and
with respect to whom death or bodily injury claims could be asserted
against Tenant or Landlord, and Tenant shall obtain or cause its
contractor to obtain completed value builder's risk insurance when the
estimated cost of the Work in any one instance exceeds the sum of One
Hundred Thousand and No/100 Dollars ($100,000.00).
(g) Business interruption insurance in amounts sufficient to
compensate Landlord for all Base Rent, Additional Rent and other
amounts payable hereunder for a period of not less than three (3)
months, the amount of such coverage to be adjusted annually to reflect
the Base Rent, Additional Rent and other amounts payable during the
succeeding three (3) month period.
The insurance policy or policies shall protect Tenant and Landlord (and
Landlord's lender) as their interests may appear, naming Landlord and Landlord's
mortgagee as additional insureds, and shall provide that they may not be
canceled on less than thirty (30) days prior written notice to Landlord. Tenant
shall furnish Landlord with Certificates of Insurance evidencing all required
coverage. Should Tenant fail to carry such insurance and furnish Landlord with
such Certificates of Insurance after a request to do so, Landlord shall have the
right to obtain such insurance and collect the cost thereof from Tenant as
additional rent.
Landlord may, at its option, elect to obtain all or any portion of the
insurance required to be obtained by Tenant pursuant to the terms of this Lease
(other than the insurance required under Section 11.2(a) above). If Landlord
exercises such option to obtain any such insurance, then Tenant shall pay all
premiums and other costs of all such insurance within ten (10) days after
request for payment thereof from Landlord (provided, however, that if the
premiums and other costs for such insurance obtained by Landlord exceed the
premiums and other costs Tenant would have paid for such insurance, as
established by Tenant to Landlord's reasonable satisfaction, then such excess
premiums shall be paid by Landlord). If Landlord has elected to provide
insurance as permitted by this paragraph, Landlord may, at any time, terminate
such election by providing thirty (30) days' prior written notice to Tenant, in
which case Tenant shall thereafter be obligated and required to provide all
insurance required pursuant to the terms of this Lease and to comply with the
provisions of this Lease regarding such insurance coverage.
ARTICLE 12. DEFAULT, REMEDIES AND DETERMINATION OF DAMAGES
12.1 Default.
The occurrence of any of the following, and the continuance thereof
after the expiration of any applicable cure periods set forth in this Section
12.1, shall be deemed an "Event of Default:"
(a) Tenant shall fail to pay any Base Rent or Additional Rent
within ten (10) days after written notice thereof from Landlord to
Tenant, or Tenant shall fail to pay any Additional Rent within ten (10)
days after written notice thereof from Landlord to Tenant.
(b) Tenant shall fail to maintain or renew insurance as required
by this Lease, within fifteen (15) days following written notification
from Landlord that Landlord has received a written notice of
cancellation or nonrenewal from the applicable insurance carrier; or
Tenant shall fail to maintain insurance as required by this Lease
within five (5) business days after written notice from Landlord to
Tenant if such insurance has lapsed or expired.
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(c) Tenant shall fail to perform or observe any term, condition,
covenant or obligation (other than the failure to pay Base Rent or
Additional Rent or to maintain or renew insurance under this Lease,
which are subject to subsections (a) and (b) of this Section 12.1) as
required under this Lease for a period of thirty (30) days after
written notice thereof from Landlord; provided, however, that if the
nature of Tenant's default is such that more than thirty (30) days are
reasonably required to cure, then such thirty (30) day period shall be
extended for a reasonable time if Tenant commences such performance
within said thirty (30) day period and thereafter diligently completes
the required action within a reasonable time, but not to exceed a
period of one hundred eighty (180) days after notice thereof from
Landlord; provided, that Landlord acknowledges in making a
determination that an Event of Default has occurred under this
subsection (c), to the extent that Landlord exercises discretion in
making such determination, it shall exercise such discretion in a
commercially reasonable manner.
(d) All or substantially all of Tenant's assets in the Leased
Premises or Tenant's interest in this Lease are attached or levied
under execution (and Tenant does not discharge the same within sixty
(60) days thereafter); a petition in bankruptcy, insolvency, or for
reorganization or arrangement is filed by or against Tenant or any
guarantor of Tenant's obligations under this Lease (and Tenant or such
guarantor fails to secure a discharge thereof within sixty (60) days
thereafter); Tenant or any guarantor of Tenant's obligations under this
Lease shall be insolvent and unable to pay its debts as they become
due; Tenant or any guarantor of Tenant's obligations under this Lease
makes a general assignment for the benefit of creditors; Tenant or any
guarantor of Tenant's obligations under this Lease takes the benefit of
any insolvency action or law; the appointment of a receiver or trustee
in bankruptcy for Tenant or any guarantor of Tenant's obligations under
this Lease or any of their respective assets if such receivership has
not been vacated or set aside within sixty (60) days thereafter;
dissolution or other termination of Tenant's or any guarantor of
Tenant's obligations under this Lease corporate charter if Tenant or
such guarantor is a corporation.
12.2 Tenant Default and Landlord Remedies.
Upon the occurrence of any Event of Default, Landlord shall have the
following rights and remedies, in addition to those allowed by law, any one or
more of which may be exercised without further notice to or demand upon Tenant:
(a) in accordance with applicable laws, Landlord may reenter the
Leased Premises and cure any default of Tenant, and Tenant shall
reimburse Landlord within ten (10) days after written notice as
Additional Rent for any costs and expenses which Landlord thereby
incurs.
(b) Landlord may terminate this Lease or, without terminating this
Lease, terminate Tenant's right to possession of the Leased Premises as
of the date of such default, and thereafter (i) neither Tenant nor any
person claiming under or through Tenant shall be entitled to possession
of the Leased Premises, and Tenant shall immediately surrender the
Leased Premises to Landlord; and (ii) in accordance with applicable
laws, Landlord may reenter the Leased Premises and dispossess Tenant
and any other occupants of the Leased Premises by any lawful means and
may remove and dispose of their effects, without prejudice to any other
remedy which Landlord may have. Upon the termination of this Lease,
Landlord may declare the discounted present value (as reasonably
determined by Landlord using a discount rate of five percent (5%) per
annum) of all Base Rent and Additional Rent which would have been due
under this Lease for the balance of the Lease Term to be immediately
due and payable, whereupon Tenant shall be obligated to pay the same to
Landlord, together with all loss or damage which Landlord may sustain
by reason of Tenant's default ("Default Damages"), which shall include
without limitation expenses of
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preparing the Leased Premises for re-letting, demolition, repairs,
tenant finish improvements, and brokers' and attorneys' fees, it being
expressly understood and agreed that the liabilities and remedies
specified in this subsection (b) shall survive the termination of this
Lease.
(c) In accordance with applicable laws, Landlord may, without
terminating this Lease, re-enter the Leased Premises and re-let all or
any part thereof for a term different from that which would otherwise
have constituted the balance of the Lease Term and for rent and on
terms and conditions different from those contained herein, whereupon
Tenant shall be obligated to pay to Landlord as liquidated damages the
difference between the Base Rent and Additional Rent provided for
herein and that provided for in any lease covering a subsequent
re-letting of the Leased Premises, for the period which would otherwise
have constituted the balance of the Lease Term, together with all of
Landlord's Default Damages.
(d) Landlord may ▇▇▇ for injunctive relief or to recover damages
for any loss resulting from the breach including, but not limited to,
Base Rent and Additional Rent payable under this Lease.
(e) Landlord may exercise any other right or remedy now or
hereafter existing at law or in equity.
(f) Upon and after any termination of this Lease by Landlord,
Landlord shall use commercially reasonable efforts to relet the Leased
Premises or any portion thereof to the extent required by law to any
person, firm or corporation other than the Tenant for a fair market
rent and upon such terms and conditions as are commercially reasonable.
(g) Notwithstanding the foregoing, if, and only if, (i) one or
more Events of Default specified in subsection (d) of Section 12.1
(herein referred to as the "Limited Remedy Defaults") has occurred and
is continuing and has not been waived by Landlord, and (ii) no Event of
Default specified in subsection (a), (b) or (c) of Section 12.1 (herein
referred to as the "Unlimited Remedy Defaults") has occurred, then the
present value as of the Occurrence Date (as hereinafter defined),
discounted from the date of payment at the annual rate of seven percent
(7%) per annum, of the aggregate amount Tenant pays and shall be
required to pay to Landlord from and after the date of the occurrence
of such Limited Remedy Default (the "Occurrence Date") with respect to
Base Rent and Additional Rent (subject to the following provisos),
shall be limited to the present value as of the Occurrence Date,
discounted at the annual rate of seven percent (7%), of all Base Rent
reserved hereunder for the unexpired portion (after the Occurrence
Date) of the Term devised herein as if this Lease had not expired or
been terminated. In addition to the above, the Tenant shall be
obligated for (i) any amounts of Additional Rent which are due and
payable or have accrued under this Lease through the Occurrence Date,
and (ii) any amounts of Additional Rent which are due and payable or
have accrued under this Lease after the Occurrence Date while the
Tenant remains in possession of the Leased Premises after any Limited
Remedy Default that relate to Impositions, insurance, utilities,
repairs, maintenance, environmental maintenance, remediation and
compliance and other routine and customary costs and expenses of
operating and maintaining the Leased Premises. Notwithstanding the
foregoing, if the Tenant remains in possession of the Leased Premises
and assumes, ratifies or affirms this Lease during any pending
bankruptcy or other event described in subsection 12.1(d), then Tenant
shall be obligated to pay all amounts of Base Rent and Additional Rent
which become due and payable under this Lease without limitation by
this subsection (g). Nothing contained in this subsection 12.2(g) shall
limit any amounts payable by Tenant with respect to Base Rent or
Additional Rent if any Unlimited Remedy Default has occurred.
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12.3 Landlord Default and Tenant Remedies.
Subject to the terms and provisions hereinbelow, and in addition to any
other remedy expressly available to Tenant pursuant to this Lease or at law or
in equity, should Landlord fail to perform any term or covenant under this Lease
(each and any such failure being herein sometimes referred to as a "Landlord
Default") and if any such Landlord Default shall not be cured and shall
accordingly be continuing thirty (30) days following written notice by certified
mail by Tenant to Landlord of such Landlord Default (in the event that such
Landlord Default consists of a breach or failure by Landlord to pay any monetary
amount due and payable by Landlord to Tenant), or sixty (60) days (provided,
however, that if Landlord shall commence curing of such default and such default
cannot be cured within said sixty (60) day period, Landlord shall be given up to
one hundred eighty (180) days following original written notice to cure said
default) following written notice by certified mail by Tenant to Landlord of
such Landlord Default (in the event such default consists of a breach or failure
by Landlord to comply with any obligation of Landlord other than one involving
the payment of a monetary amount payable by Landlord to Tenant hereunder), then,
in either such event, Tenant shall have the option (at Tenant's sole discretion)
of remedying such Landlord Default and, in connection therewith, incurring
expenses for the account of Landlord, and any and all such sums expended or
obligations incurred by Tenant in connection therewith shall be paid by Landlord
to Tenant upon demand (together with interest thereon at the Default Rate from
the date of any such expenditure by Tenant until the date of repayment thereof
by Landlord to Tenant). Notwithstanding the foregoing, in all events Tenant
shall have the right to remedy any Landlord Default without prior notice in the
event of an Emergency (so long as Tenant gives notice within a reasonable period
of time thereafter) and invoice Landlord in the manner set forth in the
preceding sentences of this Section.
12.4 Attorney's Fees.
In the event that either party institutes any action or proceeding to
enforce any provision of this Lease and prevails in such action then, in such
event, the prevailing party in such action will be entitled to all reasonable
costs incurred by such party including reasonable attorney's fees.
ARTICLE 13. NON-WAIVER
Neither acceptance of rent by Landlord nor failure by Landlord to
complain of any action, non-action or default of Tenant shall constitute a
waiver as to any breach of any covenant or condition of Tenant contained herein
nor a waiver of any of Landlord's rights hereunder. Waiver by Landlord of any
right for any default of Tenant shall not constitute a waiver of any right for
either a prior or subsequent default of the same obligation or for any prior or
subsequent default of any other obligation. No right or remedy of Landlord
hereunder or covenant, duty or obligation of Tenant hereunder shall be deemed
waived by Landlord unless such waiver be in writing, signed by Landlord.
ARTICLE 14. HOLDING OVER
If Tenant should remain in possession of the Leased Premises after the
expiration of the Lease Term or termination of this Lease for any other reason,
without the execution of a new Lease, then Tenant shall be deemed to be
occupying the Leased Premises as a Tenant from month to month at sufferance,
subject to all the covenants and obligations of this Lease, except that as
liquidated damages by reason of such holding over, the amounts payable by Tenant
under this Lease shall be increased such that the Base Rent payable during such
period shall be equal to one hundred twenty-five percent (125%) of the monthly
Base Rent in effect as of the expiration of the Lease Term or earlier date of
termination.
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ARTICLE 15. LANDLORD-TENANT RELATION
The relation created by this Lease contract is that of Landlord and
Tenant. No provision of this Lease shall be construed in such a way as to
constitute Landlord and Tenant joint venturers or co-partners or to make either
party the agent of the other party or to make either party liable for the debts
of the other party.
ARTICLE 16. EMINENT DOMAIN
16.1 Effect of Taking.
If there shall be taken (the term "taken" including a voluntary
conveyance in lieu thereof) during the Term of this Lease all of the Leased
Premises (other than a temporary taking), by any authority having the power of
eminent domain, then and in that event, the term of this Lease shall cease and
terminate, and the date of such termination shall be, the date upon which
possession is taken by such authority. If less than all but a substantial and
material portion of the Leased Premises should be so taken which, in the sole
but reasonable judgment of Tenant, renders the Leased Premises in such a
condition that it can no longer be used for its intended uses as set forth in
Section 1.1(n) (and Tenant must deliver notice to Landlord of such determination
within thirty (30) days after such portion of the Leased Premises is taken),
either Landlord or Tenant may elect to terminate this Lease or to continue this
Lease in effect, but if neither Landlord nor Tenant elects to terminate this
Lease within sixty (60) days after such taking, this Lease shall continue in
effect and if the portion of the Leased Premises so taken diminishes the
commercial value of the right to use the Leased Premises for the purposes
described in Section 1.1(n) of this Lease, then a portion of the Base Rent shall
be reduced by Landlord to the extent necessary to reflect such decreased value,
but in no event shall the Base Rent be reduced by a proportion greater than a
fraction equal to: (i) the square feet of any portion of the Building so taken
divided by (ii) the total square feet of the Building. When any such reduction
in Base Rent has been computed by Landlord, Landlord shall notify Tenant as to
the amount of such Base Rent after the reduction and such sum shall become the
Base Rent hereunder and shall be due and payable by Tenant to Landlord in
accordance with the provisions of Article 4 relating to the time and manner of
Tenant's payment of Base Rent. At the request of Landlord, Tenant will execute a
letter or other memorandum setting forth the amount of such Base Rent payable by
Tenant. In the event that Landlord has elected to continue this Lease in effect,
then neither the restoration work, if any, by Landlord with respect to the
Leased Premises shall constitute an eviction or disturbance of Tenant's use and
possession of the Leased Premises or a breach by Landlord of any of its
obligations hereunder or render Landlord liable for damages or entitle Tenant to
be relieved from any of its obligations hereunder (with the exception of the
aforesaid proportionate reduction in Base Rent) or grant Tenant any right of
off-set or recoupment. In the event that any condemnation proceeds, whether by
way of compensation or damages, are collected by any party holding a lien on
Landlord's interest in the Leased Premises, whether or not the payment to such
lienholder is with the approval of Landlord, then Landlord shall have the right
to terminate this Lease within 60 days following such taking. If less than a
substantial and material portion of the Leased Premises should be so taken, then
neither party may terminate this Lease as a result thereof; provided, however,
that if less than a substantial and material portion of the Leased Premises is
taken and said condemned portion detrimentally affects Tenant's access to the
Leased Premises and/or the ability of Tenant's delivery trucks and/or vehicles
to properly access the Leased Premises for its intended use as set forth in
Section 1.1(n) hereof to a material extent, then Landlord and Tenant shall
mutually agree upon a fair and reasonable reduction in Base Rent to the extent
necessary to reflect such decreased value, within thirty (30) days following the
date of such taking. In no event shall Base Rent be reduced by an amount greater
than the amount of the net condemnation award paid to Landlord amortized over
the remaining Term of this Lease on a straight line basis.
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16.2 Condemnation Awards.
All sums awarded or agreed upon between Landlord and the condemning
authority for the taking of the fee or the leasehold interest, whether as
damages or as compensation, will be the property of Landlord except to the
extent any such award attributes value to Tenant's personal property or
relocation expenses. Tenant hereby assigns to Landlord all proceeds, whether by
way of compensation or damages, payable to Tenant for the Leasehold interest by
reason of such taking; provided, however, Tenant shall be entitled to an award
expressly made to Tenant by any Governmental Authority for the cost of or the
removal of Tenant's equipment, trade fixtures and other moving expenses.
ARTICLE 17. LANDLORD'S MORTGAGEE
17.1 Subordination/Non-Disturbance.
Tenant shall, upon request of the holder of a mortgage or deed of trust
in the nature of a mortgage, which holder is a commercial or institutional
lender ("Mortgagee") subordinate any interest which it has by virtue of this
Lease, and any extensions and renewals thereof to any mortgages or deeds of
trust placed upon the Leased Premises by Landlord, if and only if such Mortgagee
shall execute, deliver and record in the appropriate registry of deeds a
Subordination, Non-disturbance and Attornment Agreement in the form attached
hereto as Exhibit "E", or in such other form and content generally used in
commercial loan transactions and approved by Tenant, such approval not to be
unreasonably withheld. Such agreements shall provide by their terms that
notwithstanding any foreclosure of such mortgage or deed of trust, Tenant may
continue to occupy the Leased Premises during the term of this Lease or any
extensions or renewals thereof under the same terms, conditions and provisions
of this Lease unless Tenant shall be in default beyond any applicable grace
periods provided for herein. Landlord shall at or prior to the Commencement
Date, secure from Landlord's present mortgagee of the Premises a non-disturbance
agreement in the form attached hereto as Exhibit "E", or in such other form as
is reasonably acceptable to Tenant.
17.2 Estoppel Certificate.
Landlord and Tenant shall execute and deliver to each other (or to such
other parties as the requesting party may reasonably designate), at such time or
times as either Landlord or Tenant may request, a certificate stating:
(a) Whether or not the Lease is in full force and effect;
(b) Whether or not the Lease has been modified or amended in any
respect, and submitting copies of such modifications or amendments, if
any;
(c) Whether or not there are any existing defaults under this
Lease to the knowledge of the party executing the certificate, and
specifying the nature of such defaults, if any; and
(d) Such other information as may be reasonably requested.
The aforesaid certificate(s) shall be delivered to Landlord or Tenant,
as the case may be, promptly upon receipt of a written request therefor, but in
no event more than twenty (20) days following receipt of such request.
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17.3 Attornment.
By its execution hereof, Tenant expressly promises, covenants and
agrees that in the event any person, firm, corporation or other party shall
succeed to all or any part of Landlord's interest in the Leased Premises or any
part thereof, whether by purchase, foreclosure, deed in lieu of foreclosure,
power of sale, termination of Lease or otherwise, that Tenant shall attorn to
such successor in interest, and if requested or required by Landlord or such
successor in interest, Tenant shall, upon such demand, immediately attorn to
such successor in interest and shall execute such written agreement and in
confirmation of such attornment as Landlord or such successor in interest shall
request.
ARTICLE 18. NOTICE
Any notice which may or shall be given under the terms of this Lease
shall be in writing and shall be either delivered to the Notice Address of
either Landlord or Tenant, by hand, overnight delivery or sent by United States
Registered or Certified Mail, adequate postage prepaid. So long as Tenant is
occupying the Leased Premises, the Notice Address for Tenant shall be the
address set forth in Section 1.1(d) above. Either party's address may be changed
from time to time by such party by giving notice as provided above. No change of
address of either party shall be binding on the other party until notice of such
change of address is given as herein provided. A post office receipt for
registration of such notice or signed return receipt shall be conclusive that
such notice was delivered in due course of mail if mailed as provided above. For
purposes of the calculation of various time periods referred to herein, notice
delivered by hand shall be deemed received when delivered to the place for
giving notice to a party referred to above; notice mailed in the manner provided
above shall be deemed completed upon the earlier to occur of (i) actual receipt
as indicated on the signed return receipt, or (ii) three (3) days after posting
as herein provided. Finally, any written notice addressed as provided
hereinabove and actually received by the addressee, shall constitute sufficient
notice for all purposes under this Lease. If any Lender shall have advised
Tenant that it is the holder of a mortgage or deed of trust secured by the
Leased Premises and states in said notice its address for the receipt of
notices, then simultaneously with the giving of any notice by Tenant to
Landlord, Tenant shall send a copy of such notice to such lender in the manner
aforesaid. Any notice may be given on behalf of any party by its counsel.
ARTICLE 19. TENANT'S SIGNS
Tenant shall be responsible for the costs and repair of building signs,
if any, unless any damage to the building signs is caused by the acts, omissions
or misconduct of Landlord, its agents, employees or invitees. Landlord consents
to the current signs on the Leased Premises; however, sign plans for any
alterations to existing signs or contemplated signs shall be prepared by Tenant
and submitted to Landlord for Landlord's prior written approval, which approval
shall be exercised in Landlord's reasonable judgment and will not be
unreasonably delayed, conditioned or withheld so long as such signs will comply
with all applicable Legal Requirements.
ARTICLE 20. MISCELLANEOUS
20.1 Captions.
With respect to terminology in this Lease, each number (singular or
plural) shall include all numbers, and each gender (male, female or neuter)
shall include all genders. The titles of the Articles and Sections in this Lease
shall have no effect and shall neither limit nor amplify the provisions of the
Lease itself. The words "hereof," "herein," "hereunder," "hereinafter" and the
like refer to this entire instrument, not just to the specific Article, section
or paragraph in which such words appear. As used herein, the term "including"
shall mean "including but not limited to".
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20.2 Severability.
If any provision of this Lease shall ever be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions of the Lease, but such other provisions shall continue in full force
and effect.
20.3 Successors and Assigns.
This Lease shall be binding upon and shall accrue to the benefit of
Landlord, its successors and assigns, and Tenant, its successors and assigns (or
heirs, executors, administrators and assigns, as the case may be); however, this
clause does not constitute a consent by Landlord to any assignment by Tenant,
but instead refers only to those instances in which an assignment by Tenant is
hereafter made in strict compliance with Article 7 above. Landlord may convey
the Leased Premises and assign its interest in this Lease without the consent of
Tenant.
20.4 No Constructive Eviction.
In any circumstances where Landlord is permitted to enter upon the
Leased Premises during the Term of the Lease, whether for the purpose of curing
any default of Tenant, repairing damage resulting from fire or other casualty or
an eminent domain taking or is otherwise permitted hereunder to go upon the
Leased Premises and, except and as to the extent expressly provided under
Section 8.4, no such entry shall constitute an eviction or disturbance of
Tenant's use and possession of the Leased Premises or a breach by Landlord of
any of its obligations hereunder or render Landlord liable for damages for loss
of business or otherwise (unless such damages are caused by the gross negligence
or willful misconduct of the Landlord, its agents, employees or invitees) or
entitle Tenant to be relieved from any of its obligations hereunder or grant
Tenant any right of set-off or recoupment or other remedy. In connection with
any such entry incident to performance of repairs, replacements, maintenance or
construction, all of the aforesaid provisions shall be applicable
notwithstanding that Landlord may elect to take building materials in, to or
upon the Leased Premises that may be required or utilized in connection with
such entry by Landlord; provided however, that so long as Tenant is not in
default of its obligations under this Lease, such entry shall be made by
Landlord in such a manner as is calculated to minimize the effect upon Tenant's
business.
20.5 Time of the Essence.
In all instances where Tenant is required hereunder to pay any sum or
do any act at a particular indicated time or within an indicated period, it is
understood that time is of the essence.
20.6 Location of Performance.
All monetary obligations of Landlord and Tenant (including, without
limitation, any monetary obligation of Landlord or Tenant for damages for any
breach of the respective covenants, duties or obligations of Landlord or Tenant
hereunder) and this Lease shall be governed by the laws of the state in which
the Leased Premises are located.
20.7 Entire Agreement; Amendments.
This instrument (including all Exhibits) constitutes the entire
agreement between Landlord and Tenant; no prior written or prior or
contemporaneous oral promises or representations shall be binding. This Lease
shall not be amended, changed or extended except by written instrument signed by
both parties hereto.
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20.8 Force Majeure.
If either party hereto shall be delayed or hindered in or prevented
from the performance of any obligation required hereunder by reason of strikes,
lock-outs, labor troubles, inability to procure materials, failure of power,
restrictive governmental laws or regulations, riots, acts of terrorism,
insurrection, war, military or usurped power, sabotage, unusually severe
weather, fire or other casualty or other reason (but excluding inadequacy of
insurance proceeds, financial inability or the lack of suitable financing) of a
like nature beyond the reasonable control of the party delayed in performing its
obligations under this Lease ("force majeure"), the time for performance of such
obligation shall be extended for the period of the delay. The provisions of the
preceding sentence however shall not excuse Tenant from the prompt and timely
payment of the Base Rent or Additional Rent when due under this Lease.
20.9 Quiet Enjoyment.
Tenant, upon paying the Base Rent, Additional Rent and other sums due
under this Lease, and performing all of the terms and covenants of this Lease on
Tenant's part to be kept, observed, and performed, shall quietly have and enjoy
the Leased Premises during the Term of this Lease without interference from
anyone claiming by, through or under Landlord; subject, however, to Landlord's
rights of entry in Section 8.4 or any other provision of this Lease. Landlord
agrees that Tenant shall have continuous, peaceful, uninterrupted and exclusive
possession and quiet enjoyment of the Leased Premises during the Term of the
Lease.
20.10 Title.
Landlord hereby represents that Landlord has the right and authority to
enter into this Lease. Landlord further represents that Landlord and those
signatories executing this Lease on behalf of Landlord have full power and
authority to execute this Lease.
20.11 Compliance with Laws.
Tenant, at its own expense, will comply with all applicable federal,
state, municipal and other laws, ordinances, rules and regulations and other
Legal Requirements applicable to Tenant's use of the Leased Premises and the
business conducted therein by Tenant. Landlord, at its own expense, will comply
with all applicable federal, state, municipal and other laws, ordinances, rules
and regulations and other Legal Requirements (excluding matters included within
items (ii) and (iii) of the definition of Legal Requirements) generally
applicable to the roof, foundation, structural components, exterior walls,
exterior doors and windows (excluding glass), walks, parking areas, driveways,
and other exterior areas (including paving), exterior plumbing lines (including
water lines and gas lines) of the Leased Premises; provided, however, that
Landlord shall have no obligation to cause the Leased Premises to comply with
any Legal Requirements to the extent the Leased Premises were not in compliance
with such Legal Requirements on the date hereof unless Landlord is ordered to do
so by a Governmental Authority with jurisdiction over such matter. Tenant, at
its own expense, will comply with, and will cause the Leased Premises to comply
with, all applicable federal, state, municipal and other laws, ordinances, rules
and regulations and other Legal Requirements applicable to the Building, the
Leased Premises and any common areas, including, but not limited to, all fire,
health, safety, environmental and other local codes and the American With
Disabilities Act of 1990, as amended (the "ADA"), and the regulations
promulgated thereunder. During the Term of the Lease, Tenant will be responsible
for any upgrades or modifications to the exterior, public or common areas of the
Building or the property required pursuant to changes in the ADA and applicable
regulations thereunder, if applicable to Tenant's use of the Leased Premises.
During the Term of the Lease, Landlord will be responsible for any upgrades or
modifications to the exterior, public or common
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areas of the Building or the Leased Premises required pursuant to changes in the
ADA and applicable regulations thereunder, if generally applicable to the
portions of the Leased Premises which Landlord is obligated to repair under
Section 8.1 hereof. Tenant will be responsible for any ADA upgrades to the
interior of the Leased Premises with respect to improvements or alterations made
by Tenant to the Premises during the Term of this Lease.
20.12 Statement of Intent. It is Tenant's and Landlord's intent that this Lease
will qualify as an operating lease under the applicable financial and regulatory
accounting rules and guidelines. In addition, Landlord shall not be consolidated
into Tenant under the applicable tax, financial and accounting rules and
regulations.
20.13 Permitted Encumbrances. Tenant agrees that with respect to the Permitted
Encumbrances and any covenants, restrictions or agreements affecting the Leased
Premises which are hereafter created by or consented to (in writing) by Tenant,
Tenant shall observe, perform and comply with, and cause the Leased Premises to
comply with, and carry out the provisions thereof required therein to be
observed and performed by the owner of the Leased Premises thereunder, and shall
pay all actual and reasonable costs and expenses required to be paid by the
owner of the Leased Premises thereunder.
20.14 No Redemption. Tenant hereby waives and surrenders for itself and all
those claiming under it, including creditors of all kinds, any right and
privilege which it or any of them may have under any present or future law to
redeem any of the Leased Premises or to have a continuance of this Lease after
termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof.
20.15 No Merger of Title. There shall be no merger of this Lease nor of the
leasehold estate created by this Lease with the fee estate in or ownership of
any of the Leased Premises by reason of the fact that the same person,
corporation, firm or other entity may acquire or hold or own, directly or
indirectly, (a) this Lease or the leasehold estate created by this Lease or any
interest in this Lease or in such leasehold estate and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such fee estate or
ownership. No such merger shall occur unless and until all persons,
corporations, firms and other entities having any interest in (i) this Lease or
the leasehold estate created by this Lease and (ii) the fee estate in or
ownership of the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly record the
same.
20.16 Special Provisions Regarding Landlord.
(a) Anything contained herein to the contrary notwithstanding, any
claim based on or in respect of any liability of Landlord under this
Lease shall be enforced only against the Landlord's interest in the
Leased Premises and shall not be enforced against the Landlord
individually or personally.
(b) The term "Landlord" as used in this Lease so far as covenants
or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or owners of the Leased Premises or
holder of the Mortgage in possession at the time in question of the
Leased Premises and so long as the assignee or transferee of Landlord
shall expressly assume (in writing) all duties and obligations of
Landlord thereafter accruing under this Lease, in the event of any
transfer or transfers of the title of the Leased Premises, the Landlord
herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall be automatically freed and relieved from and
after the date of such transfer and conveyance of all personal
liability as respects the performance of any covenants or obligations
on the part of Landlord contained in
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this Lease thereafter to be performed, except to the extent of any
preexisting obligation not expressly assumed by the subsequent assignee
or purchaser.
20.17 Multiple Counterparts. To facilitate execution, this Lease may be executed
in as many counterparts as may be convenient or required. It shall not be
necessary that the signature or acknowledgment of, or on behalf of, each party,
or that the signature of all persons required to bind any party, or the
acknowledgment of such party, appear on each counterpart. All counterparts shall
collectively constitute a single instrument. It shall not be necessary in making
proof of this Lease to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, and the respective
acknowledgments of, each of the parties hereto. Any signature or acknowledgment
page to any counterpart may be detached from such counterpart without impairing
the legal effect of the signatures or acknowledgments thereon and thereafter
attached to another counterpart identical thereto except having attached to it
additional signature or acknowledgment pages.
20.18 Maintenance Arbitration.
(a) In the event that Tenant has made a request or demand to
Landlord that Landlord perform any specific maintenance or repair
obligations under Section 8.1(a) hereof (the "Subject Repairs") and
Landlord disputes whether it is obligated to make the Subject Repairs
under this Lease, then Tenant may make a written demand for arbitration
under this Section 20.18, and such dispute between Landlord and Tenant
shall be settled by arbitration as provided in this Section 20.18;
provided, that the only issues to be the subject of such arbitration
are whether the items, manner and extent of the Subject Repairs are
required to be made by Landlord. Any demand for arbitration under this
Section 20.18 must be made, if at all, not later than fifteen (15) days
after Landlord disputes its obligation to make the Subject Repairs, or
such right of arbitration shall be forever barred with respect to such
Subject Repairs, and Landlord shall not be obligated to make such
Subject Repairs.
(b) Any disputes to be resolved under this Section 20.18 shall be
settled by American Arbitration Association under its Commercial
Arbitration Rules then pertaining. The parties also agree that the
American Arbitration Association Optional Rules for Emergency Measures
of Protection then pertaining shall apply to the proceedings. The
parties hereby agree that any dispute under this Section 20.18 shall be
submitted to one (1) arbitrator, selected by the parties from a list of
qualified American Arbitration Association arbitrators in the Houston
(▇▇▇▇▇▇ County) Texas area. The decision of the arbitrator shall be
binding, final and conclusive on the parties and judgment on the award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(c) Notwithstanding anything to the contrary herein, in the
Commercial Arbitration Rules of the American Arbitration Association,
or in the Optional Rules for Emergency Measures of Protection, (i) all
fees, costs and expenses (including Landlord's reasonable attorney's
fees and expenses) arising in connection with any arbitration
proceeding pursuant to this Section 20.18 shall be borne and paid
solely by the party prevailing in such arbitration proceeding, and (ii)
under no circumstances shall Landlord or Tenant be required to provide
any security or bond in connection with any such arbitration
proceeding.
(d) If in an arbitration proceeding under this Section 20.18, the
arbitrator orders that the Landlord is required to make the Subject
Repairs which are the subject of such arbitration proceeding, then
Landlord shall be obligated to make such repairs under and in
accordance with Section 8.1(a) of this Lease. If Landlord thereafter
fails to make such Subject Repairs in accordance with Section 8.1(a)
and Tenant exercises its right under Section 8.1(b) to cause such
Subject Repairs to be made, then if Landlord fails to reimburse the
Tenant for the cost of such
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Subject Repairs as required by Section 8.1(b) within ten (10) days
after the date Landlord receives the statement from Tenant setting
forth the amount due, then Tenant may, at its option, offset such
amounts against subsequent Base Rent due under this Lease.
(e) The provisions of this Section 20.18 shall apply only with
respect to demands or requests for Landlord to perform its repair and
maintenance obligations under Section 8.1(a) of this Lease, and shall
not apply with respect to any other matters hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXECUTED in multiple counterparts, each of which shall have the force
and effect of an original, on the day and year first written above.
LANDLORD:
EGL TEXAS PARTNERS, L.P.,
a Texas limited partnership
By: EGL Texas GP, L.L.C.,
a Texas limited liability company,
its general partner
By:_____________________________
Name:___________________________
Title:__________________________
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TENANT:
EGL EAGLE GLOBAL LOGISTICS, LP,
a Delaware limited partnership
By: EGL Management, LLC,
a Delaware limited liability company
By:_____________________________
Name:___________________________
Title:__________________________
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EXHIBIT "A"
LEASED PREMISES
EXHIBIT "B"
INTENTIONALLY OMITTED
EXHIBIT "C"
INTENTIONALLY OMITTED
EXHIBIT "D"
PERMITTED ENCUMBRANCES
EXHIBIT "E"
FORM OF
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[Attached Hereto]