EXHIBIT 10.6
NORTH CAROLINA LEASE AGREEMENT
WAKE COUNTY SINGLE STORY FLEX BUILDING
THIS LEASE AGREEMENT ("Lease"), made and entered into as of the day of the 19th
day of April, 2000, by and between
SOUTHPORT BUSINESS PARK LIMITED PARTNERSHIP
Hereinafter referred to as "Landlord,"
AND:
HOME DIRECTOR, INC.
a Delaware corporation, hereinafter referred to as "Tenant;"
STATEMENT OF PURPOSES
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Landlord is the owner of Southport, an office, research and development and
distribution park located in Wake County, North Carolina ("Property"). Landlord
and Tenant have agreed that Landlord shall lease to Tenant and Tenant shall
lease from Landlord certain space at 1015 Aviation Parkway, Suites 100 --500,
Morrisville, North Carolina and have agreed to enter into this Lease to evidence
the tern and conditions of the leasing of space by Landlord to Tenant.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
conditions and agreements herein contained and other good and valuable
consideration the receipt and sufficiency of which are mutually acknowledged,
Landlord and Tenant hereby agree as follows:
ARTICLE 1
BASIC PROVISIONS
SECTION 1.01 - THE DEMISED PREMISES
Subject in all respects to the terms, conditions, agreements and limitations of
this Lease, the Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the following described space, hereinafter referred to as the "Demised
Premises":
Approximately THIRTY-ONE THOUSAND THREE HUNDRED EIGHT (31,308) SQUARE FEET (as
measured from the centerline of all demising and exterior walls) of space
located in the building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇--▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (such building in the lot or lots in which is
located collectively, hereinafter referred to as the "Building") in Morrisville,
Wake County, North Carolina. The location of the Demised Premises within the
Building shall be as shown on EXHIBIT A attached hereto and hereby made a part
hereof. The Demised Premises shall consist of3l,000 rentable square feet of
space within Suites 100-500, and 308 rentable square feet of the Interior
Hallway (as described in EXHIBIT C allocated to Tenant.
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SECTION 1.02 - TERM OF THE LEASE
Subject in all respects to the terms, limitations, conditions and agreements
contained herein, the term of this Lease (herein referred to as the "Term")
shall commence on the earlier of the date that the Tenant takes possession of
any part of the Demised Premises or JULY 1, 2000 provided that the Demised
Premises are "ready for occupancy" (as defined in Section 3.03 below), whichever
first occurs, and shall terminate (unless extended as herein provided) at
midnight on JUNE 30, 2005 Landlord and Tenant each agrees to sign a statement
confirming the actual date on which the Term begins (herein referred to as the
"Commencement Date") as soon as it is determined. If Tenant remains in
possession of the Demised Premises after the end of the Term or any renewal or
extension thereof with Landlord's consent but without a new lease reduced to
writing and duly executed, Tenant shall be deemed to be occupying the Demised
Premises as a tenant from month- to-month only, but otherwise subject to all the
covenants, conditions, and agreements of this Lease.
SECTION 1.03 - USE OF THE DEMISED PREMISES
Subject to the general limitations of Section 4.01 and to the terms,
limitations, conditions and agreements contained herein, Tenant may use the
Demised Premises for the following purposes but for none other without
Landlord's prior written consent: TENANT MAY OCCUPY THE PREMISES FOR OFFICES,
SALES, DISPLAY, STORAGE, SERVICE, REPAIR AND USE OF TENANT'S PRODUCTS AND
EQUIPMENT, ENGINEERING, TRAINING OF TENANT'S CUSTOMERS AND EMPLOYEES FOR A
COMPUTER, OFFICE ELECTRONICS AND TELECOMMUNICATIONS COMPANY.
SECTION 1.04 - MONTHLY MINIMUI' RENT AND ADJUSTED MONTHLY MINIMUM RENT
Rents shall be payable as follows:
For the first twelve full months, TWENTY SIX THOUSAND SEVEN HUNDRED
FORTY-TWO AND 25/100 DOLLARS ($26,742.25) (hereinafter referred to as the
"Monthly Minimum Rent").
For the next TWELVE months, TWENTY-SEVEN THOUSAND FIVE HUNDRED
FORTY-FOUR AND 52/100 DOLLARS ($27,544.52) (hereinafter referred to as an
"Adjusted Monthly Minimum Rent").
For the next TWELVE months, TWENTY-EIGHT THOUSAND THREE HUNDRED SEVENTY
AND 86/100 DOLLARS, ($28,370.86) (hereinafter referred to as an "Adjusted
Monthly Minimum Rent").
For the next TWELVE months, TWENTY-NINE THOUSAND TWO HUNDRED TWENTY-ONE
AND 09/100 DOLLARS ($29,221.09) (hereinafter referred to as an "Adjusted Monthly
Minimum Rent").
For the next TWELVE months, THIRTY THOUSAND ONE HUNDRED SEVEN AND
86/100 DOLLARS ($30,107.86) (hereinafter referred to as an "Adjusted Monthly
Minimum Rent").
Such Monthly Minimum Rent or the Adjusted Monthly Minimum Rents, together with
any Additional Rents then due as specified in Article 2 of this Lease, shall be
payable on or before the first day of each calendar month during the Term of
this Lease.
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If the Term commences on any day other than of the first day of a calendar month
then, in lieu of the Minimum Monthly Rent specified above, the Tenant shall pay
for the initial partial month (being the period from the Commencement Date until
the end of that month) a prorated Monthly Minimum Rent computed based upon the
Monthly Minimum Rent specified above prorated for the number of days during such
period.
SECTION 1.05 - SECURITY DEPOSIT
Landlord acknowledges receipt of the sum of SIXTY THOUSAND D NO/100 DOLLARS
($60,000.00) which is the same sum delivered to Landlord as the "Holding Fee"
described in Paragraph 1 of EXHIBIT C attached hereto. Provided that Tenant
satisfies the conditions set forth in EXHIBIT C and the parties proceed with the
leasing in the manner contemplated by EXHIBIT C, then Landlord shall retain such
sum as security for the performance by Tenant of each of its obligations
hereunder, and it shall be referred to thereafter as the "Security Deposit".
Such Security Deposit shall be held, applied and refunded in the manner and
subject to the conditions hereinafter provided.
SECTION 1.06 - RENT ABATEMENT
No Monthly Minimum Rent shall be due for the first three weeks from the
Commencement Date (the "Abatement Period"). Tenant shall not be obligated to pay
any Additional Rent (as defined in Article 2) on the Demised Premises during the
Abatement Period. During the Abatement Period, all terms and conditions of this
Lease, except for payment of Monthly Minimum Rent and Additional Rent, shall
apply to Tenant's use and occupancy of the Demised Premises.
ARTICLE 2
ADDITIONAL RENT
SECTION 2.01 - THIS SECTION HAS BEEN INTENTIONALLY DELETED.
SECTION 2.02 - SHARE OF DIRECT EXPENSES
The Tenant agrees to pay to Landlord, as Additional Rent, each year, Tenant's
proportionate share of any Direct Expenses incurred by or accrued as an expense
of Landlord or its agents on account of the operation or maintenance of the
Building and all appurtenances thereto and including a portion of any charges
attributable to Common Areas, as hereinafter defined, and an allocable portion
of any and all other charges incurred by or accrued as an expense of Landlord in
connection with the operation or maintenance of the Building; provided, however
in the cases of expenses which benefit portions of Southport Business Park other
than the Building, the portion allocated to the Building shall be based upon
sound accounting principles adopted by the Landlord for the purpose of making a
reasonable allocation.
Attached hereto as EXHIBIT F is the estimated 1999 Direct Expenses for the
Building.
Tenant's proportionate share of the total of all Direct Expenses allocable to
the Building shall be calculated by dividing the total square feet of the
Demised Premises stated at Section 1.01 hereof by an amount which is equal to
the total net rentable square feet of the Building. It is agreed that the net
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rentable square feet of the Building is FORTY FIVE THOUSAND EIGHT HUNDRED
(45,880) SQUARE FEET.
Notwithstanding the foregoing, in the event the usage of any utility, equipment
or other Direct Expense by Tenant shall be determined by Landlord to be
disproportionate to the amount of space leased by Tenant, the Landlord reserves
the right to make an allocation of such Direct Expense to Tenant based upon
actual usage by Tenant, as reasonably determined by the Landlord. Tenant agrees
to pay such specially allocated amount in the event Landlord determines such
usage is disproportionate and so advises Tenant.
The term "Direct Expense" as used herein, shall include all direct costs of
operation and maintenance as determined by Generally Accepted Accounting
Principles (GAAP) and shall include without limitation the following: building
supplies; ad valorem real and personal property taxes and other governmental
charges; utility and service charges attributable to Common Areas or paid by
Landlord; property, casualty, liability and other insurance premiums; repairs,
reserves for major repairs, maintenance and service contracts for the Building,
Common Areas and all related mechanical equipment; property management charges;
grounds maintenance, security, removal of snow and ice, parking maintenance and
striping, landscaping; and all other similar costs and expenses. ATTACHED HERETO
AS EXHIBIT C ARE ITEMS EXCLUDED FROM TENANT'S SHARE OF DIRECT EXPENSES.
If the State of North Carolina or any political subdivision thereof or any
governmental or quasi- governmental authority having jurisdiction over the
Building, should specifically impose a tax, assessment charge or fee or
specifically increase a then existing tax assessment, charge or fee, which
Landlord shall be required to pay, either by way of substituting for said real
estate taxes or assessed against the Building, or in addition thereto, or impose
an income or franchise tax or tax on rents in substitution for a general tax
levied against the Building or in addition thereto, such taxes, assessments,
charges or fees shall be deemed to constitute a real property tax hereunder to
the extent said taxes are in substitution therefore or in addition thereto. A
copy of THE ACTUAL tax bills or assessment bills submitted by Landlord to Tenant
shall at all times be sufficient evidence of the amount of taxes and/or
assessments levied or assessed against the property to which such ▇▇▇▇ relates.
Landlord's reasonable expenditures for attorney's fees, appraiser's fees,
consultant's fees and other costs incurred during the Term of this Lease without
regard to the tax year involved, in any efforts by Landlord to minimize ad
valorem personal and real property taxes, and other governmental charges, which
rights are reserved to Landlord, shall be included in the definition of ad
valorem real and personal property taxes and other governmental charges for the
purposes of this Section. If Landlord should receive a refund of any such taxes
or charges, the Tenant will share proportionately in same, after deduction for
all of Landlord's expenses in obtaining any such refund. Landlord's and Tenant's
obligations under this Section shall survive the expiration of the Term of this
Lease.
The term "Direct Expense" shall not include any income tax of Landlord, any
depreciation on the Building or any depreciation on equipment therein, interest,
or real estate broker's commission for any sale or for securing the execution of
any Lease.
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SECTION 2.03 - ADDITIONAL RENT - CERTAIN TAXES
Tenant shall further pay as Additional Rent any sales or use tax imposed on
rents due from Tenant (other than City, State or Federal Income Tax), and to the
fullest extent lawful; any tax or rents in lieu of ad valorem taxes on the
Building, even though laws imposing such taxes attempt to require Landlord to
pay the same.
SECTION 2.04 - NOTICE
Landlord shall from time to time send to Tenant, in writing, a statement of the
amount of any Additional Rent plus any applicable sales or use taxes payable by
Tenant under Sections 2.02, 2.03, or 2.05 hereof.
LANDLORD SHALL PROVIDE A STATEMENT OF RECONCILIATION TO TENANT PRIOR TO APRIL
FIRST OF EACH YEAR, BEGINNING IN 2001, WHICH COMPARES ACTUAL TO ESTIMATED DIRECT
EXPENSES FOR THE PRIOR CALENDAR YEAR. IN THE EVENT THAT TENANT'S SHARE OF ACTUAL
DIRECT EXPENSES FOR SUCH YEAR EXCEED ESTIMATED DIRECT EXPENSES PAID BY TENANT
DURING THAT YEAR, THEN TENANT SHALL HAVE THIRTY (30) DAYS TO EITHER PAY THE
EXCESS OR TO ASK TO AUDIT THE BACKUP INFORMATION TO SUCH STATEMENT. IF TENANT
ASKS TO AUDIT SUCH BACKUP INFORMATION, IT SHALL BE COMPLETED WITHIN SIXTY (60)
DAYS OF THE REQUEST AND BE CONDUCTED AT LANDLORD'S OFFICES DURING NORMAL
BUSINESS HOURS. TENANT, MAY REVIEW BACKUP INFORMATION FROM THE NEXT PRIOR YEAR,
BUT MAY NOT DISPUTE STATEMENTS FOR THAT YEAR NOT MADE IN A TIMELY MANNER.
SECTION 2.05 - PAYMENT IN ADVANCE
Tenant shall pay to Landlord each month, one twelfth (1/12) of the amounts, if
any, reasonably computed by Landlord to be Tenant's anticipated annual charges
for Additional Rents, in anticipation of Additional Rents due for the then
current calendar year and all such monthly payments shall be applied to Tenant's
Additional Rent for the then current calendar year.
FOR INFORMATIONAL PURPOSES ONLY, A COPY OF THE ESTIMATED COST OF DIRECT EXPENSES
FOR THE DEMISED PREMISES FOR THE 1999 CALENDAR YEAR IS ATTACHED HERETO AS
EXHIBIT F; HOWEVER, SUCH SCHEDULE IS NOT INTENDED TO BE, AND SHALL NOT BE
CONSTRUED BY TENANT TO BE, A LIMITATION ON THE TYPE OR LEVEL OF DIRECT EXPENSES
FOR WHICH TENANT IS RESPONSIBLE UNDER THIS LEASE, WHICH SHALL BE GOVERNED BY THE
TERMS AND CONDITIONS OF THIS LEASE.
SECTION 2.06 - PAYMENT OF RENTS. LATE PAYMENT. NON-PAID CHECK
All rents shall be paid at the address from time to time specified by Landlord
by written notice to Tenant. The covenant of Tenant to pay rents is and shall be
independent of any and all other covenants of this Lease and all rents shall be
payable when due without prior notice or demand and without offset or deduction
whatsoever, in legal tender of the United States of America for the payment of
public or private debts.
In addition to such remedies as may be provided under Article 12, Default by
Tenant and Landlord's Remedies, Landlord shall be entitled to, as further
Additional Rent, a late charge of two (2%) per cent of any amount due hereunder,
if not received within fifteen (15) days of when due, and a charge of two (2%)
per cent of any amount due hereunder, for any check given by Tenant not paid
when first presented to the financial institution on which the check is drawn.
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In addition, in the event the Tenant fails to pay any amount due hereunder
including, but not limited to any Monthly Minimum Rent, Adjusted Monthly Minimum
Rent, Additional Rents, or other monetary payment as and when provided in this
Lease (which shall include a failure to pay by reason of the failure to honor
any check), the Tenant shall pay to the Landlord as Additional Rent, interest
daily at the annual rate of four (4%) per cent in excess of the prime interest
rate from time to time in effect, by CitiBank N.A., New York, New York. Any
payment by Tenant or acceptance by Landlord of a lesser amount than shall be due
from Tenant to Landlord shall, be treated as a payment on account. The
acceptance by Landlord of a check for a lesser amount with an endorsement or
statement thereon, or upon any letter accompanying such check, that such lesser
amount is payment in full shall be given no effect, and Landlord may accept such
check without prejudice to any other rights or remedies which Landlord may have
against Tenant.
SECTION 2.07 - OTHER CHARGES TO BE TREATED AS RENTS
All charges, costs and sums required to be paid by Tenant to Landlord hereunder
shall be considered Additional Rent and shall be collectible by and with the
same rights held by the Landlord for the collection of rents.
ARTICLE 3
IMPROVEMENTS TO THE DEMISED PREMISES
SECTION 3.01 - TENANT'S ACCEPTANCE OF PREMISES
Tenant represents to the Landlord that it has examined and inspected the Demised
Premises and finds them to be as represented by the Landlord, satisfactory for
Tenant's intended use, and free from existing violations of Section 4.02. Tenant
hereby accepts the Demised Premises "as is". Any additional improvements to be
performed by Landlord are separately identified in EXHIBIT B.
SECTION 3.02 - SCOPE OF LANDLORD'S WORK
Landlord shall, at its own expense, perform the additional work described as
"Landlord's Work" in EXHIBIT B attached hereto and made a part hereof. LANDLORD
SHALL PROVIDE TENANT AN ALLOWANCE UP TO, BUT NOT TO EXCEED, $5.00 PER SQUARE
FOOT OF DEMISED PREMISES LEASED, IN ORDER TO PERFORM LANDLORD'S WORK. TENANT, AT
ITS EXPENSE, SHALL PAY ANY ADDITIONAL COST INCURRED TO COMPLETE LANDLORD'S WORK.
SUCH ADDITIONAL COSTS SHALL BE PAID BY TENANT WITHIN THIRTY (30) DAYS OF RECEIPT
OF ▇▇▇▇ FROM LANDLORD. It is expressly understood and agreed that Landlord's
obligation with respect to construction of the Demised Premises shall be limited
to the scope of work described as Landlord's Work in EXHIBIT B and shall in no
event include any work not described on EXHIBIT B and shall not include the
performance, procurement and/or installation of any other work, fixtures or
equipment. All Landlord's Work shall constitute improvements to the Demised
Premises and shall remain upon expiration of the Term of the Lease.
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SECTION 3.03 - NOTICE OF COMPLETION OF LANDLORD'SWORK
Landlord shall notify Tenant upon completion of Landlord's Work. The Demised
Premises shall be deemed "ready for occupancy" under the terms of this Lease if
the Demised Premises are "Systems Ready" (as defined in Section 13.12 below) and
if Landlord has substantially completed its work in accordance with the terms
and conditions of EXHIBIT B attached hereto, which can be accomplished prior to
and independently of any construction or installation required to be performed
by Tenant. The occupancy and use of the additional improvements by the Tenant
shall be deemed conclusive evidence that the Demised Premises are Systems Ready
and that Landlord's Work has been substantially completed in accordance with
EXHIBIT B.
The failure by Tenant to give notice within thirty (30) days of the delivery of
possession of the Demised Premises specifying in detail those items of
Landlord's Work which are not then complete shall be deemed conclusive evidence
that Tenant has accepted the Demised Premises with all items of Landlord's Work
completed. Provided, however, that the foregoing sentence shall not be construed
as limiting Tenant's right to make additional improvements to the Demised
Premises for a period of twelve (12) months from the Commencement Date, and to
be reimbursed therefor, subject to the terms and conditions of Paragraph 3 of
EXHIBIT B attached hereto.
LANDLORD SHALL WARRANT LANDLORD'S WORK AND THE HVAC SYSTEM FOR THE DEMISED
PREMISES (BUT NOT THE SEPARATE UVAC SYSTEM FOR THE LAN ROOM) TO BE FREE FROM
DEFECTS IN MATERIALS AND WORKMANSHIP FOR ONE (1) YEAR FROM THE COMMENCEMENT DATE
OF THIS LEASE. PROVIDED, HOWEVER, THAT THE FOREGOING WARRANTY SHALL NOT EXTEND
TO THE LANDLORD'S PERSONAL PROPERTY OR THE TENANT'S PERSONAL PROPERTY, AS EACH
IS DESCRIBED ON EXHIBIT H ATTACHED HERETO, NOR TO ANY WORK DONE BY LANDLORD OR
THE PRIOR TENANT TO MAKE THE DEMISED PREMISES "SYSTEMS READY".
SECTION 3.04 - LATEST COMPLETION DATE
The Landlord shall exercise reasonable care to cause the Landlord's Work at the
Demised Premises to be substantially complete on or prior to the Latest
Completion Date (as defined on EXHIBIT B attached hereto). The parties confirm
and agree that the completion of Landlord's Work may be delayed for reasons
beyond the Landlord's control, Force Majeure, and hereby agree that the Latest
Completion Date shall automatically be extended if and to the extent that any
delays are encountered which are not within the control of the Landlord.
Notwithstanding the foregoing, in the event Landlord's Work is not completed
within FORTY FIVE (45) days following the Latest Completion Date, provided that
Landlord has diligently and continuously pursued completion of the Landlord's
Work during such period and that Tenant has not commenced occupancy of the
Demised Premises, then this Lease Agreement shall automatically become null and
void and neither party hereto shall have any further rights or obligations
hereunder. Under no circumstances shall Landlord be liable to Tenant for any
damages including, but not limited to direct, indirect, and consequential or
incidental damages, which may be caused by any delay in commencing or completing
its construction of the Demised Premises or for a total failure to complete
same.
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ARTICLE 4
USE OF THE PROPERTY BY THE TENANT
SECTION 4.01 - USE GENERALLY
Tenant may use the Demised Premises for the purposes stated in Section 1.03
hereof, but for none other without Landlord's prior written consent, provided,
however, notwithstanding the generality of the foregoing, in no event shall
Tenant make any use of the Demised Premises, the Building or the Common Areas
which is in violation of any applicable laws, ordinances, statutes, rules or
regulations affecting the Demised Premises, the Building or the Common Areas,
including without limitation general rules and regulations proscribed from time
to time by Landlord for the use of the Demised Premises, the Building or the
Common Areas and restrictions with respect to employee parking in designated
employee parking areas as may be developed from time to time by Landlord and
delivered t Tenant or posted on the Building insofar as they might relate to
Tenant's use and occupancy of the Demised Premises, nor may Tenant make any use
of the Demised Premises not permitted by any present or future lawful
restrictive covenants which apply to the Demised Premises, or which is or might
constitute a nuisance, or which increases the property, casualty or other
insurance premiums (or makes any such insurance unavailable to Landlord or other
tenants) on the Building.
Tenant shall not permit its agents, employees, or invitees to place excessive
loads on the parking lots and drives.
Tenant shall not permit its agents, employees, or invitees to place excessive
loads on the floors of the Buildings, the maximum load shall not exceed Eight
Hundred (800) pounds per square foot.
TENANT SHALL MAINTAIN AND CARE FOR ITS PERSONAL PROPERTY ON THE DEMISED PREMISES
INSURE THE SAME AND SHALL NEITHER HAVE NOR MAKE ANY CLAIM AGAINST LANDLORD FOR
ANY LOSS OR DAMAGE TO THE SAME.
Tenant may not allow any animals in the Demised Premises or on the Property
EXCEPT FOR SEEING EYE DOGS. Tenant may not allow unusual odors, noise,
vibration, or dust to emanate from the Demised Premises. No cooking is allowed
in the Demised Premises other than by household type microwave. To the extent of
insurance proceeds actually received by Landlord, but subject to the terms of
Section 8.06 of this Lease, LANDLORD SHALL REMAIN LIABLE FOR ALL DIRECT DAMAGES
SUFFERED BY TENANT BY AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY
LANDLORD AND/OR ITS AGENTS.
SECTION 4.02 - HAZARDOUS WASTE AND RELATED MATFERS
The Tenant shall not permit any violation to exist with respect to the Demised
Premises, Building, or Property under any federal, state or local laws, rules
and regulations now or hereafter in effect with respect to oil, hazardous wastes
or hazardous materials, or toxic substances, or the release or disposal thereof.
Tenant shall not use all or any portion of the Demised Premises, Building, or
Property for the generation, storage, treatment, use of disposal of any
substance for which a license or permit is required by North Carolina or Federal
Laws, without the prior written consent of the Landlord. Without limitation
express or implied upon any other requirements of this Lease, the Tenant shall
pay all such sums and take all such actions as may be required to avoid or
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discharge the imposition of any lien on the Demised Premises Building, or
Property under North Carolina Laws, or applicable federal law as the same may be
amended from time to time, and the Tenant shall indemnify and save harmless the
Landlord from any arid all liens, claims, liabilities and expenses, including
without limitation attorneys' fees incurred or suffered by the Landlord by
virtue of the provisions thereof as applied to the Demised Premises, Building,
or Property.
(a) The Tenant shall not:
(i) generate (except with the proper written consent of
the Landlord and in compliance with all laws,
ordinances, and regulations pertaining thereto), or
dispose of any hazardous material or oil on the
Demised Premises, Building or Property.
(ii) store (except with the prior written consent of
Landlord and in compliance with all laws, ordinances,
and regulations pertaining thereto), or dispose of
any hazardous material or oil on the Demised
Premises, Building or Property
(iii) directly or indirectly transport or arrange for the
transport of any hazardous material or oil (except
with the prior written consent of the Landlord and in
compliance with all laws, ordinances, and regulations
pertaining thereto); on the Demised Premises,
Building or Property.
(b) The Tenant shall indemnify, defend, and hold the Landlord
harmless of and from any claim brought or threatened against
the Landlord by the Tenant, any guarantor or endorser of the
obligation of Tenant, or any governmental agency or authority
or any other person (as well as from attorneys' reasonable
fees and expenses in connection therewith) on account of the
presence of hazardous material or oil on the Demised Premises,
Building or Property, or the failure by the Tenant to comply
with the terms and provisions hereof. This indemnification
shall survive any termination of this Lease.
Failure of Tenant to comply with this Section 4.02 of the Lease shall be an
Event of Default under this Lease.
As of the Commencement Date, Landlord represents that Landlord has not used,
generated, stored, treated, or disposed of any hazardous substance, material or
waste, or any oil or toxic substance, in or on any portion of the Demised
Premises which resulted in a release or contamination in violation of any
federal, state or local laws, rules or regulations, nor has Landlord received
any written notice from any federal, state or local governmental agency or
authority regarding any such release or contamination. Further, Landlord
represents that the generator installed on the exterior of the Demised Premises
and the batteries related to the UPS that supports the Demised Premises
generally are not in violation of any federal, state or local laws, rules or
regulations relating to the use, generation, storage, treatment and disposal of
such hazardous and toxic substances.
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SECTION 4.03 - PAYMENT FOR UTILITIES FOR DEMISED PREMISES
Tenant shall pay promptly and before any delinquency for nonpayment all charges
for utilities serving the Demised Premises, including without limitation,
electricity, gas, telephone, and/or oil bills. In the event that any utilities
are not separately metered for Tenant, Tenant shall pay its proper pro-rata
portion of such utilities in common with others using such utilities off the
same meter as provided in Section 2.02. On request of Landlord or Tenant,
Tenant's use of any particular utility shall be determined by appropriate survey
of Tenant's equipment, by monitoring of submeters, or other method fairly
evaluating Tenant's use, and after such determination, Tenant's charges for
utilities uses surveyed shall be adjusted in accordance with such
determinations. In the event Tenant's use of any utilities on a common meter are
irregular or disproportionate, either Landlord or Tenant shall have the option
as to future charges to have installed at its expense separate meters for the
utilities in question.
ARTICLE 5
REPAIRS AND MAINTENANCE BY THE TENANT
SECTION 5.01 - REPAIRS AND MAINTENANCE
Tenant shall maintain, repair, or replace, (and so deliver at the end of the
Lease) each and every part of the Demised Premises, including without
limitation, all glass, doorways and doors, interior walls, interior ceilings,
interior floors, plumbing, electrical, HYAC, and all equipment located within
the Demised Premises, in first class repair and condition, and shall make at
Tenant's sole cost and expense such replacements, restorations, renewals or
repairs, in quality equivalent to the original work replaced, as may be required
to so maintain the same, ordinary wear and tear only excepted. Equipment
servicing the Demised Premises that is located outside the Demised Premises
shall be maintained by Tenant, if it was installed by the Tenant or by the
Landlord as part of Landlord's Work (e.g. HVAC equipment located on the roof).
Tenant, however, shall make no exterior or structural alterations, other than as
required pursuant to Tenant's obligations to make repairs and maintain the
Demised Premises, without Landlord's prior written consent. ANY INTERIOR
ALTERATION BY TENANT SHALL REQUIRE LANDLORD'S WRITTEN CONSENT, SUCH CONSENT NOT
TO BE UNREASONABLY WITHHELD. In any case, all work performed by Tenant shall be
done in a good and workmanlike manner, and so as not to disturb or inconvenience
other Tenants in the Building. Tenant shall not at any time permit any work to
be performed on the Demised Premises except by duly licensed contractors or
artisans, each of whom must carry general public liability insurance, in such
amounts as are reasonably directed by Landlord and under which Landlord is an
additional insured, certificates of which shall be furnished Landlord. At no
time may Tenant do any work that results in a claim of lien against Landlord,
and if requested by Landlord on termination of the Lease or vacation of the
Demised Premises by Tenant, Tenant shall restore at Tenant's sole expense the
Demised Premises to the same condition as existed at the completion of work
described in EXHIBIT ▇-▇ and B-2 ordinary wear and tear only excepted. SUCH
ELECTION WILL BE MADE BY LANDLORD AT THE TIME THAT TENANT REQUESTS PERMISSION TO
MAKE AN ALTERATION. LANDLORD, HOWEVER, MAY ELECT TO REQUIRE TENANT TO LEAVE
ALTERATIONS PERFORMED BY TENANT.
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ARTICLE 6
REPAIRS. MAINTENANCE AND SERVICES BY THE LANDLORD
SECTION 6.01 - SERVICES TO THE DEMISED PREMISES
Landlord shall, subject to interruptions beyond his control and to the
scheduling of repairs by providers of such services, cause to be furnished to
the Demised Premises in common with other Tenants, the following connections:
water and sewer connections, telephone line connections providing access to the
local public telephone company, normal electrical connections, and natural gas
connections.
SECTION 6.02 - LANDLORD'S REPAIRS
Landlord will be responsible for keeping the foundations, water mains, sewer and
sprinkler lines, roof and structural portions of the exterior roof and walls of
the Demised Premises in good order and repair. Landlord shall not, however, be
responsible for any repairs occasioned by reasons of the acts of Tenant, its
employees, agents, invitees, licensees, contractors or other agents, nor for any
repairs, regardless of the cause therefor, to the Tenant's Personal Property or
the Landlord's Personal Property, as each is described on EXHIBIT H attached
hereto. Tenant agrees to give Landlord written notice of the necessity for any
repairs required to be made by Landlord, and Landlord shall have a reasonable
period of time thereafter to make such repairs.
ARTICLE 7
COMMON AREAS
SECTION 7.01 - DEFINITION OF COMMON AREAS
For purpose of this Lease, the term "Common Areas" shall mean all areas,
improvements, space, equipment and special services in or adjacent to the
Building provided by Landlord for the common or joint use and benefit of
tenants, customers, and other invitees, including without limitation any
existing or future entrance ways, exits, roads, parking lots, walkways and other
common spaces in the Property from time to time designated as Common Areas by
the Landlord.
SECTION 7.02 - USE OF COMMON AREAS
Provided Tenant is not in default under this Lease, Tenant shall be entitled to
use, in common with others entitled thereto, so much of the Common Areas as may
be designated from time to time by the Landlord, subject, however to the terms
and conditions of this Lease and to such rules and regulations for the use
thereof as may be proscribed from time to time by Landlord.
SECTION 7.03 - CHANGES AND ALTERATIONS OF COMMON AREAS
The Landlord reserves the rights, at any time and from time to time to increase
or decrease the size of and to alter the configuration of the Common Areas, SO
LONG AS SUCH CHANGE WILL NOT INTERFERE WITH TENANT'S USE OF THE DEMISED PREMISES
AND SUCH CHANGES MAINTAIN THE BUILDING AS A FIRST CLASS BUSINESS PARK. In the
event of any such change or alteration, Landlord shall not be liable to Tenant
therefore, and Tenant shall not be entitled to any compensation or diminution or
abatement of Monthly Minimum Rent, nor shall such diminution or alteration of
the Common Areas be considered a constructive or actual eviction.
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ARTICLE 8
INSURANCE AND INDEMNITY
SECTION 8.01 - INSURANCE ON THE BUILDING AN]) CERTAIN IMPROVEMENTS
During the Term of this Lease and any extensions or renewals thereof, the
Landlord shall maintain property and casualty insurance on the Building and on
so much of the upfit and additional real and personal property improvements and
appurtenances thereto as shall be installed by or at the expense of Landlord and
constitute the property of Landlord, but not on the Landlord's Personal Property
as described on EXHIBIT H attached hereto. Such insurance shall be maintained in
an amount, not to exceed the replacement cost thereof, and shall provide fire
and extended peril coverage and coverage against such further and additional
perils, as Landlord shall from time to time determine in its sole discretion to
be appropriate.
The amount of any insurance premiums incurred by or accrued as an expense of
Landlord in securing such coverage shall constitute a direct expense within the
meaning of Section 2.02 hereof and the Tenant shall pay its allocable portion of
such cost as a part of the Direct Expenses allocated to Tenant in the manner
provided in Section 2.02.
SECTION 8.02 - PUBLIC LIABILITY INSURANCE
Tenant shall, at all times during the Term hereof, at its sole cost and expense,
procure and maintain in force and effect a policy or policies of comprehensive
public liability insurance issued by a company or companies from time to time
approved by Landlord NOT TO BE UNREASONABLY WITHHELD, which companies must be
authorized to transact business in North Carolina. Such policy or policies shall
insure, under valid and enforceable policies against loss, damage or liability
for injury to or death of persons and loss or damage to property CAUSED BY
TENANT AND ITS AGENTS. Such policies of liability insurance shall name Landlord
and its designated property manager as an additional insured and shall be in
amounts and afford coverage against perils all as is reasonably required from
time to time by Landlord. Coverage shall initially be in the single limit amount
of ONE MILLION DOLLARS ($1,000,000.00).
SECTION 8.03 - INSURANCE RATING
Tenant will not conduct, or permit to be conducted, any activity, will not place
any equipment or materials in or about the Demised Premises, Building, or
Property, and will not take nor allow its employees, agents, or invitees to take
any action which will, in any way, violate any requirement of Landlord's
insurance policies or which will increase the rate of property, casualty,
liability or other insurance on the Demised Premises or on the Building or their
operation, or which makes any property, casualty, liability or other insurance
on the Demised Premises or Building unavailable to Landlord from companies
acceptable to the Landlord. However, in the event the Tenant shall take any such
action then, in addition to and not in limitation of any other rights pursuant
to this Lease, the Landlord may require the Tenant, upon demand, to separately
pay or reimburse to Landlord the amount of any increased insurance premiums
attributable to such action which are in excess of those charged at the
Commencement Date, resulting from such activity.
SECTION 8.04 - POLICIES OR CERTIFICATES OF INSURANCE
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Tenant will furnish the Landlord prior to the delivery of the Demised Premises
to Tenant, and thereafter not fewer than thirty (30) days prior to the
expiration date of any expiring policies, certified copies of policies or
certificates of insurance bearing notations evidencing the payment of premiums
and evidencing the insurance coverage required to be carried by Tenant. Each
policy and certificate shall contain an endorsement or provision requiring not
fewer than thirty (30) days written notice to Landlord prior to the
cancellation, diminution in the perils insured against or reduction of the
amount of coverage of the particular policy in question.
SECTION 8.05 - INSURANCE OF TENANT'S PROPERTY
Tenant hereby acknowledges and agrees that it will secure and maintain insurance
upon its fixtures, trade fixture, personal property and any and all other
property of the Tenant or of any third parties which may from time to time be
stored or maintained in, on or around the Demised Premises and Building, except
that Tenant shall not be obligated to maintain insurance on the Tenant's
Personal Property, as described on EXHIBIT H attached hereto. Such insurance
shall be maintained in such amounts as shall be necessary to cover the
replacement cost thereof.
All such policies shall include a waiver of subrogation of any and all claims
against the Landlord. The Tenant hereby agrees that it will look solely to its
insurance policies for recovery of any loss for any such property and further
confirms and agrees that in no event will it make any claim against the Landlord
for any loss to any such property and that it will indemnify and hold the
Landlord harmless from and against any claim arising out of its failure to
maintain such insurance.
SECTION 8.06 - WAIVER OF SUBROGATION
Landlord hereby releases Tenant, but only to the extent of Landlord's insurance
coverage, from any liability for loss or damage caused by fire or any of the
extended coverage perils included in Landlord's insurance policies covering the
Demised Premises and Building even if the insured peril shall be brought about
by the default, negligence or other action of the Tenant, its agents, employees;
provided, this release shall be in effect only with respect to an insured loss
and only so long as Landlord's policy applicable to such loss shall contain a
clause to the effect that this release shall not affect the right of Landlord to
recover under such policy. Landlord does not waive and hereby reserves the right
to secure compensation from Tenant for any uninsured loss, any amounts not paid
because of deductibles and other amounts not paid for any reason whatsoever:
Tenant hereby releases Landlord, but only to the extent of Tenant's insurance
coverage, from any liability for loss Or damage caused by fire or any of the
extended coverage perils included in Tenant's insurance policies covering any
property of Tenant stored at the Demised Premises and Building even if the
insured peril shall be brought about by the default, negligence or other action
of the Landlord, its agents, employees or any of them; provided, this release
shall be in effect only with respect to an insured loss and only so long as
Tenant's policy applicable to such loss shall contain a clause to the effect
that this release shall not affect the right of Tenant to recover under such
policy. Notwithstanding anything to the contrary herein, Tenant shall make no
claim against Landlord or its insurer for damage to or loss of the Tenant's
Personal Property or the Landlord's Personal Property, as each is described in
EXHIBIT H ATTACHED HERETO, WHETHER BROUGHT ABOUT BY THE DEFAULT, NEGLIGENCE, OR
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OTHER ACT OR OMISSION OF THE LANDLORD, OR FOR ANY OTHER CAUSE, AND WHETHER OR
NOT INSURED BY EITHER PARTY.
SECTION 8.07 - INDEMNIFICATION
Tenant will indemnify and hold the Landlord harmless from any and all claims,
actions, damages, liability and expense in connection with loss of life,
personal injury, or damage to property arising from or out of any occurrence in,
upon or at the Demised Premises or out of the occupancy or use by Tenant of the
Demised Premises or Building or any part thereof, and occasioned wholly or in
part by an act or omission of Tenant, its subtenants, concessionaires, agents,
contractors, employees, invitees, or licensees, or any one or more of them,
including reasonable attorney's fees, incurred by or accrued as an expense of
Landlord in defending any such claim or action.
Landlord will indemnify and hold Tenant harmless from any and all actual costs
and expenses incurred by Tenant in defending any claim or action for loss of
life, personal injury or damage to property arising out of an act or omission of
Landlord; provided, however, that Landlord's liability shall be limited to the
extent that Landlord is determined by a final judgment issued by a court of
competent jurisdiction to be liable for such loss of life, personal injury or
damage to property, and then only to the extent of Landlord's proportionate
share of such liability. As conditions to Landlord's obligations under this
Section 8.07, Tenant shall (i) within sixty (60) days of receiving notice of any
such claim against Tenant, provide Landlord with written notice of such claim,
together with a copy of the complaint; and (ii) retain counsel reasonably
acceptable to Landlord.
SECTION 8.08 - NOTIFICATION
Tenant agrees to give Landlord prompt notice of any accidents or occurrences
subject to the provisions of this Article 8.
ARTICLE 9
LANDLORD'S RESERVED RIGHTS
SECTION 9.01 - ALTERATIONS AND ADDITIONS TO BUILDINGS AND SITE. Landlord hereby
reserves the right at any time and from time to time to make alterations or
additions to, and build additions on the Building and to build adjoining the
same, and to install, maintain, use and repair and replace pipes, ducts,
conduits and wires leading through the Demised Premises in locations serving
other parts of the Building which will not materially interfere with Tenant's
use of the Demised Premises. Landlord also reserves the right to construct other
buildings or improvements from time to time and to make alterations thereof or
additions thereto and to build additional stories on any such Building or
buildings and to build adjoining same and to construct such parking facilities
as may be necessary or desirable.
It is understood and agreed that the description of the Demised Premises as set
forth in EXHIBIT A hereof and the location of the Demised Premises in the
Building hereof shall be subject to such changes as m be certified by Landlord's
architect as necessary for engineering or architectural purposes for the
construction of the improvements to be constructed thereon, so long as such
changes do not materially change the Demised Premises or adversely affect access
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to the Demised Premises. SUCH CHANGE WILL NOT ALTER THE SIZE OF THE DEMISED
PREMISES MORE THAN TWO PERCENT (2%) AND THE CALCULATION OF RENTS THAT ARE DUE
BASED UPON THAT SIZE. Any such changes so certified shall not invalidate this
Lease and the description and location of the Demised Premises shall be deemed I
have been expressly modified and amended herein in accordance with such changes.
All such changes shall maintain the first class status of the business park.
SECTION 9.02 - THIS SECTION HAS BEEN INTENTIONALLY DELETED.
SECTION 9.03 - ACCESS TO DEMISED PREMISES
Landlord shall have the right, either itself or through its authorized agents,
to enter the Demised Premises WITH PRIOR VERBAL NOTICE at all reasonable times,
to examine the same, to show them to prospective tenants for other spaces in the
Building or for the Demised Premises, to allow inspection by mortgagees, and to
make such repairs, alterations or changes as Landlord deems necessary. In case
of emergency, Landlord or Landlord's authorized agent may access the Demised
Premises at any time without any liability to the Tenant. Tenant, its agents,
employees, invitees, and guests, shall have the right of ingress and egress to
common and public areas of the Building, provided Landlord by reasonable
regulation may control such access for the comfort, convenience and protection
of all tenants in the Building.
Tenant agrees to provide Landlord with one (1) key to each lock in the Demised
Premises.
SECTION 9.04 - LANDLORD'S RULES AND REGULATIONS
Landlord reserves the right to establish (and change from time to time)
regulations it deems appropriate for the common use and benefit of all tenants,
with which regulations Tenant shall comply. Landlord may sell the Building
without affecting the obligations of Tenant hereunder. NO RULE OR REGULATION
SHALL UNREASONABLY, MATERIALLY OR ADVERSELY AFFECT TENANT'S RIGHTS HEREUNDER.
SECTION 9.05 - WINDOW TREATMENTS, SIGNS, AND EXTERIOR APPEARANCE
Tenant may not erect, install, or display any sign, advertising material, or
window treatment on any wall or window surface of the Demised Premises visible
from the exterior or on the Building, without the prior written consent of the
Landlord. Landlord will not approve any signs, advertising material or window
treatments which, in the sole discretion of the Landlord, are detrimental to a
consistent and well maintained external appearance of the Building, Property or
the Common Area. Landlord shall furnish, install, and maintain an individualized
Tenant identification sign, built to Landlord's specifications, on the facade of
the Building. Owner reserves the right, at anytime, to change the name by which
the Property is designated.
SECTION 9.06 - LANDLORD'S PERFORMANCE OF TENANT'S OBLIGATIONS
In the event the Tenant shall fail to discharge any duties and obligations
hereunder imposed upon Tenant, the Landlord shall have the right, but not the
obligation, to perform such duties or obligations and, in such event, the
Landlord and its agents shall be entitled to receive as reimbursement from the
Tenant, upon demand, an amount equal to One Hundred Twenty Percent (120%) of the
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total of all costs and expenses. Any such reimbursement and charge shall
constitute Additional Rents hereunder.
ARTICLE 10
FINANCING AND REFINANCING
SECTION 10.01 - SUBORDINATION- ATTORNMENT
This Lease shall be deemed subject and subordinate to any mortgage which may
heretofore or hereafter be executed by Landlord covering the Building and land
upon which the Building is located, and to all renewals, modifications or
extensions thereof. The Landlord's interest in this Lease may be assigned as
security for any financing now or hereafter required by Landlord. In the event
any proceedings are brought or notice given by any assignee for foreclosure of
any mortgage on the Building or for the exercise of any rights pursuant to any
mortgage or assignment, upon demand, Tenant will attorn to the mortgagee,
assignee or purchaser at a foreclosure sale as the case may be and will
recognize such assignee, mortgagee or purchaser as Landlord, providing such
assignee, mortgagee or purchaser agrees not to disturb Tenant's possession so
long as Tenant is not in default under the terms of this Lease. In the event
that Tenant refuses to or does not respond to Landlord's written request to
execute any documents required by any mortgagee, assignee or purchaser as
aforesaid within ten calendar days, Tenant shall be presumed to consent to the
contents thereof, and any such mortgagee, assignor or purchaser may conclusively
rely thereon.
SECTION 10.02 - ESTOPPEL CERTIFICATE
Tenant will furnish to Landlord and/or to the holder of any mortgage from time
to time encumbering the Demised Premises, a statement of the status of any
matter pertaining to this Lease, including, without limitation, acknowledgment
that (or the extent to which) the Lease is in full force and effect, that
Landlord is in compliance with its respective obligations thereunder, and that
Tenant has no offsets or claims against Landlord. Tenant agrees to execute and
deliver within fifteen (15) days after receipt thereof; an instrument of
estoppel in the form or substantially in the form annexed hereto as EXHIBIT D In
the event that Tenant refuses or does not respond to Landlord's written request
to execute and return the foregoing instrument within twenty (20) days after
Tenant's receipt thereof, the Tenant shall be presumed to consent to the
contents thereof, and any such mortgagee, assignor, or purchaser may
conclusively rely thereon.
SECTION 10.03 - CERTAIN CHANGES FOR FINANCING
If Landlord seeks a loan on the Demised Premises, Building or Property and the
proposed mortgagee requires as a condition of making the loan that this Lease be
modified, Tenant agrees to enter into such modification agreement providing that
the same does not increase the charges to Tenant, does not vary the areas
demised, does not change the Term of Tenant's Lease and does not materially
increase or vary Tenant's obligations, duties or covenants under this Lease.
ARTICLE 11
DESTRUCTION OR CONDEMNATION
SECTION 11.01 - DESTRUCTION OF PREMISES
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If the Demised Premises are totally destroyed by fire or other casualty not
resulting from the wrongful or negligent act of Tenant, either Landlord or
Tenant may by written notice, given not later than thirty (30) days after the
date of such total destruction, terminate this Lease, in which event rent paid
for the period beyond the date of destruction shall be refunded to Tenant. If
there is not total destruction and Tenant reasonably is required to close
operation during repairs, rent shall ▇▇▇▇▇ while so closed, but if Tenant is
able to continue its operations during repairs, rent shall be adjusted and
prorated in the proportion which the area of unusable leased space bears to the
total Demised Premises, providing that Landlord shall not in such case have any
liability for losses claimed by Tenant. However, if: (i) the damages are such
that Landlord concludes that restoration cannot be completed within one hundred
arid fifty (150) days; or (ii) less than ten percent (10%) of the Lease Term
Remains; or (iii) in Landlord's judgment, the cost of restoration will exceed
the amount of one (1) years minimum rent; or (iv) insurance carried by Landlord
is insufficient to restore the Premises, Landlord may at its option terminate
this Lease. If the Demised Premises are damaged by cause due to fault or neglect
of Tenant, its agents, employees, invitees, or licensees, there shall be no
apportionment or abatement of rent. Landlord shall not be required to restore
fixtures or improvements made or owned by Tenant that were not part of
Landlord's Work or subsequently constructed in the Demised Premises by Landlord
as part of the Lease terms. In the event of damage due to casualty, Landlord
shall not be obligated to restore any portion of the Tenant's Personal Property
or the Landlord's Personal Property, as each is described in EXHIBIT H attached
hereto.
SECTION 11.02 - CONDEMNATION
If the whole or more than twenty (20%) per cent of the Demised Premises is taken
by any governmental agency or corporation vested with the right of exercise of
eminent domain, whether such taking be effected by Court action or by settlement
with the agency exercising or threatening to exercise such power and if the
property so taken renders the remainder of the Demised Premises unfit for the
use thereof by Tenant, then Tenant shall have the option to terminate this
Lease, which option must be exercised by notice in writing, received by Landlord
within sixty (60) days of such taking. if the Tenant shall not elect to
terminate, or if the taking does not interfere with Tenant's use of the Demised
Premises to the extent Tenant does not have an option to terminate, there shall
be an adjustment of all rents reflecting on a pro-rata basis any reduction in
the Demised Premises.
If the whole of the Demised Premises shall be acquired or condemned by eminent
domain for any public or quasi-public use or purpose, then the Term of the Lease
shall cease and terminate as of the date of title vesting in such public or
quasi public entity and all rents shall be paid up to that date and Tenant shall
have no claim against Landlord nor the condemning authority for the value of any
unexpired Term of this Lease. In the event of a partial taking or condemnation
which is not extensive enough to render the Demised Premises unsuitable for the
business of the Tenant, the Landlord shall promptly restore the Demised Premises
to .a condition comparable to its condition at the time of such condemnation
less the portion lost in the taking, and this Lease shall continue in full force
and effect with the rents proportionally adjusted.
If the whole, or a substantial part, as determined by Landlord in its sole
discretion, of the common parking areas shall be acquired or condemned as
aforesaid, then the term of this Lease shall cease and terminate as of the date
of title vesting in such public or quasi public entity unless Landlord shall
take immediate steps to provide other suitable parking facilities, In the event
17
that Landlord shall provide such other parking facilities, then this Lease shall
continue in full force and effect without any reduction or abatement of rent.
In the event of any condemnation or taking as aforesaid, whether whole or
partial, the Tenant shall not be entitled to any part of the award paid for such
condemnation and Landlord is to receive the full amount of such award, the
Tenant hereby expressly waiving any right to claim to any part thereof. Although
all damages in the event of any condemnation are to belong to the Landlord,
whether such damages are awarded as compensation for diminution in value of the
leasehold or to the fee of the Premises, Tenant shall have the right to claim
and recover from the condemning authority, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in Tenant's
own on account of any and all damage to Tenant's business by reason of the
condemnation and for or on account of any cost or loss to which Tenant might be
put in removing Tenant's merchandise, furniture, fixtures, leasehold
improvements and equipment.
ARTICLE 12
DEFAULT BY TENANT AND LANDLORD'S REMEDIES
SECTION 12.01 - EVENTS OF DEFAULT
For purposes of this Lease, the occurrence of any one or more of the following
shall constitute an "Event of Default" hereunder:
(a) Tenant fails to pay any Monthly Minimum Rent, Adjusted Monthly
Minimum Rent, Additional Rents or other monetary payments as
and when provided in this Lease; or
(b) Tenant breaches any other covenant, term, condition agreement
or obligation herein set forth and shall fail to cure such
breach within ten (10) days after written notice; PROVIDED IF
TENANT COMMENCES A CURE WITHIN SUCH THIRTY (30) DAY PERIOD AND
DILIGENTLY AND IN GOOD FAITH CONTINUES TO EFFECT SAID CURE,
THE LANDLORD SHALL EXTEND THE PERIOD OF THE TIME TO CURE SAME;
(c) The commencement in any court or tribunal of any proceeding,
voluntary or involuntary, to declare Tenant insolvent or
unable to pay its debts as and when due;
(d) The assignment by Tenant of all or any part of its property or
assets for the benefit of creditors;
(e) The levy or execution, attachment, or taking of property,
assets, or the leasehold interest of Tenant by process of law
or otherwise in satisfaction of any judgment, debt, or claim;
(f) The filing by Tenant of any petition or action for relief
under any creditor's law (including bankruptcy,
reorganization, or similar actions), either in state or
federal court;
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(g) The filing against Tenant of any petition or action for relief
under any creditor's law (including bankruptcy,
reorganization, or similar actions), either in state or
federal court; which is not dismissed within sixty (60) days.
(h) Failure to comply with Section 4.02 Hazardous Waste and
Related Matters.
Upon the occurrence of any Event of Default, Landlord shall be entitled by
written notice to the Tenant to either (1) terminate the Term hereof or (ii) to
terminate Tenant's right to possession or occupancy only, without terminating
the Term of this Lease. Unless the Term is specifically- terminated by notice in
writing, it shall be assumed that the Landlord has elected to terminate
possession only, without terminating the Term.
The remedies of terminating the Term or of terminating possession shall be in
addition to and not in limitation of any rights otherwise available to the
Landlord and the exercise of any rights on default shall not preclude the
exercise of any other rights available to the Landlord at law or in equity.
SECTION 12.02 - LANDLORD'S RIGHTS ON TERMINATION OF TERM OR POSSESSION
Upon any termination of the Term hereof, whether by lapse of time or otherwise,
or upon any termination of Tenant's right to possession or occupancy only,
without terminating the Term hereof, Tenant shall surrender possession and
vacate the Demised Premises and shall deliver possession thereof to the
Landlord; and Tenant hereby grants to Landlord full and free license to enter
into and upon the Demised Premises in such event and with or without process of
law to repossess the Demised Premises as of Landlord's former estate and to
expel or remove Tenant and any others who may be occupying the Demised Premises
and to remove therefrom any and all property, using for such purpose such force
as may be necessary without being guilty of or liable for trespass, eviction or
forcible entry or detainer and without relinquishing Landlord's right to rent or
any other right given to Landlord hereunder or by operation of law. Except as
otherwise expressly provided in this Lease, Tenant hereby expressly waives the
service and demand for payment of rent or for possession of the Demised Premises
or to re-enter the Demised Premises, including any and every form of demand and
notice prescribed by any statute or any other law.
If Landlord elects to terminate Tenant's right to possession only as above
provided, without terminating the Term hereof, Landlord at its option may enter
into the Demised Premises, remove Tenants's property and other evidences of
tenancy and take and hold possession thereof without such entry and possession
terminating the Term hereof and without releasing Tenant from its obligation to
pay rents herein reserved for the full Term hereof. Upon and after entry into
possession without terminating such obligations, Landlord may, but shall not be
obligated to, relet the Demised Premises, or any part for the account of Tenant
to any person, firm or corporation other than Tenant for such rent, for such
time, and upon such terms as Landlord in its sole discretion shall determine. If
any rent collected by Landlord upon any such reletting for Tenant's account is
19
not sufficient to pay monthly the full amount of the rent herein reserved,
(including Monthly Minimum Rents, Adjusted Monthly Minimum Rents, Additional
Rents, and other charges), and not theretofore paid by Tenant, together with the
costs of any repairs, alterations, or redecoration necessary for such reletting,
Tenant shall pay to Landlord the amount of each monthly deficiency upon demand,
and if the rent so collected from such reletting is more than enough to pay the
full amount of the rents reserved hereunder and all of the aforementioned costs,
Landlord shall be entitled to retain such excess. Notwithstanding any
termination of the right to possession without termination of the Term, the
Landlord expressly reserves the right, at any time after there termination of
possession, to terminate the Term of this Lease by notice of such termination to
Tenant.
Tenant, upon expiration or termination of this Lease, either by lapse of time or
otherwise, agrees peaceably to surrender to Landlord the Demised Premises and
Landlord's Personal Property in broom-clean condition and in good repair, normal
wear and tear excepted. In the event Tenant shall fail to leave the Demised
Premises upon expiration or termination of this Lease, unless Landlord has
agreed in writing to permit Tenant to remain on the Demised Premises on a
month-to- month basis at the most recent rental rate, Landlord, in addition to
all other remedies available to it hereunder, shall have the right to receive,
as rents for all the time Tenant shall so retain possession of the Demised
Premises, or any part thereof, an amount equal to One Hundred Fifty Percent
(150%) of the Monthly Minimum Rent and Additional Rents specified in Sections
1.04, in Article 2 or otherwise in this Lease, as applied to such period.
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01 - ASSIGNMENT OF LEASE - SUBLEASE
Tenant may not assign or encumber this Lease, and may not sublet any part or all
of the Demised Premises without the written consent of Landlord, which shall NOT
BE UNREASONABLY WITHHELD OR DELAYED. LANDLORD'S CONSIDERATION OF REASONABLENESS
MAY INCLUDE THE ASSIGNEE OR SUBLESSEE'S COMPATIBILITY WITI4 EXISTING TENANTS AND
THE COMPATIBILITY OF LEASING SPACE TO NEW TENANTS. TENANT MAY ASSIGN OR SUBLET
THIS LEASE TO AN AFFILIATE PERSON OF TENANT PROVIDED THAT LANDLORD SHALL
DETERMINE IN ITS REASONABLE DISCRETION THAT SUCH AFFILIATE IS COMPATIBLE WITH
EXISTING TENANTS AND WITH THE LEASING OF SPACE TO NEW TENANTS. FOR PURPOSES OF
THIS SECTION 13.01, THE WORDS "AFFILIATE PERSON OF TENANT" MEANS A PERSON,
DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLLED BY TENANT
OR UNDER COMMON CONTROL WITH TENANT. Any assignment or sublease to which
Landlord may consent (one consent not being any basis to contend that Landlord
should consent to a further change) shall not relieve Tenant of any of its
obligations hereunder. In no event shall this Lease be assignable by operation
of any law, and Tenant's rights hereunder may not become, and shall not be
listed by Tenant as an asset under any bankruptcy, insolvency, or reorganization
proceedings. Tenant is not, may not become, and shall never represent itself to
be a agent of Landlord, and Tenant expressly recognizes that Landlord's title is
paramount, and that it can do nothing to affect or impair Landlord's title.
SECTION 13.02 - OUTET ENJOYMENT
If Tenant promptly and punctually complies with each of its obligations
hereunder, it shall peacefully have and enjoy the possession of the Demised
Premises during the Term hereof, providing that no action of Landlord in work in
other space in the Building, or in repairing or restoring the Demised Premises,
shall be deemed a breach of this covenant, or give Tenant any right to modify
this Lease either as to Term, rent payable, or other obligations to perform.
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However, Landlord shall not be responsible or liable to Tenant for injury or
damage resulting from acts or omissions of persons occupying property adjacent
to the Demised Premises or any part of the Building in which the Demised
Premises are a part, of for injury or damage resulting to Tenant or its property
from bursting, stoppage or leaking of water, gas, sewer or steam pipes, except
where such loss or damage arises from the willful misconduct of Landlord.
SECTION 13.03 - SECURITY DEPOSIT
Landlord shall retain the Security Deposit as additional security for the
performance by Tenant of each of its obligations hereunder. If Tenant fails at
any time to perform its obligations, Landlord may at its option apply said
deposit or so much thereof as is required, to cure Tenant's default, but if
prior to the termination of this Lease, Landlord depletes said deposit in whole
or in part, Tenant shall immediately restore the amount so used by Landlord, the
obligation to so restore to be regarded as the obligation to pay Additional
Rent. This deposit shall not bear interest, and unless the Landlord uses the
same to cure a default of Tenant, or to restore the Demised Premises to the
condition that Tenant is required to leave them at the conclusion of the Term,
Landlord shall, within thirty (30) days of the termination of the Lease, refund
to Tenant, so much of the deposit as it continues to hold. If Landlord transfers
its interest in the Premises during the Term, Landlord may assign the Security
Deposit to the transferee and thereafter shall have no further liability for the
return of such Security Deposit.
SECTION 13.04 - NOTICES
Any notices which Landlord or Tenant is required or desires to give to the other
shall be deemed sufficiently given or rendered if, in writing, delivered
personally, or sent by certified or registered mail, postage prepaid, to the
address listed after the respective signatures on the last page of this Lease.
Any notice given herein shall be deemed delivered when the return receipt
therefore is signed, or refusal to accept the mailing by the addressee is noted
thereon by the postal authorities.
SECTION 13.05 - LIABILITY OF LANDLORD
In the event Landlord shall fail to perform any covenant, term or condition of
this Lease upon Landlord's part to be performed, Tenant covenants and agrees to
look solely to Landlord's estate and interest in the Demised Premises and the
Building in which the Demised Premises are located for any recovery of money
judgment from Landlord from and after the date of this Lease Agreement. In no
event is Landlord, its officers or employees or an individual member,
shareholder, general or limited partner of Landlord, or any successor in
interest thereof, ever to be personally liable for any such judgment.
SECTION 13.06 - SALE BY LANDLORD
The Landlord may at any time assign or transfer its interest as Landlord or may
sell or transfer its interest in the property of which the Demised Premises is a
part. The term Landlord as used in this Lease so far as the and obligations on
the part of the Landlord are concerned, hall be limited to mean and include only
the owner or owners of the Demised Premises at the time in question and in the
event of any transfer or conveyance of the Landlord's title to such property,
other than by an assignment for security only, the grantee shall automatically
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be substituted and the grantor shall automatically be released from any and all
liability arising with respect to the performance of any covenants or
obligations after the effective date of any such sale.
SECTION 13.07 - BROKERAGE
Tenant warrants that it has had no dealings with any broker or agent in
connection with this Lease, other than ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ OF CAROLANTIC
REALTY, INC., and covenants to pay, hold harmless and indemnify Landlord from
and against, any and all cost, expense or liability for any compensation,
commissions and charges claimed by any other broker or agent with respect to
this Lease or the negotiation thereof.
SECTION 13.08 - ROOF AND WALLS
Landlord shall have the exclusive right to use all or any part of the roof of
the Building for any purpose; to erect other structures over all of any part of
the Building; and to erect in connection with the construction thereof temporary
scaffolds and other aids to construction on the exterior of the Demised
Premises, provided that access to the Demised Premises shall not be denied.
SECTION 13.09 - SPECIAL PROVISIONS - EXHIBIT C
Notwithstanding any contrary provisions hereof, the provisions, if any contained
within EXHIBIT C constitute special provisions and agreements of the parties
which shall supersede any provisions of this Lease which are inconsistent with
the provisions stated within EXHIBIT C.
SECTION 13.10 - GENERAL RULES FOR INTERPRETING THIS LEASE. Headings of
paragraphs are for convenience only and shall not be considered in construing
the meaning of the contents of such paragraph.
The acceptance of rentals and other payments by Landlord for any period or
periods after an Event of Default shall not be deemed a waiver of any rights on
the part of the Landlord to terminate this Lease for any other Event of Default.
No waiver by Landlord of any of the terms or conditions of this Lease shall be
construed as a waiver by Landlord of any subsequent Event of Default.
The invalidity of any provision of this Lease shall not have any effect on the
balance hereof.
Should Landlord or Tenant institute any legal proceedings against the other for
breach of any provision herein contained, and prevail in such action, the
non-prevailing party shall in addition.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in duplicate
originals, all as of the day and year first above written.
LANDLORD:
Southport Business Park Limited Partnership,
BY: Southport Business Park Investors
Corporation, General Partner
(SEAL)
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
[CORPORATE SEAL]
ATTEST:
BY: (SEAL)
----------------------------------
(Asst) Secretary
ADDRESS FOR LANDLORD FOR NOTICES UNDER LEASE:
SOUTHPORT BUSINESS PARK LIMITED PARTNERSHIP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GENERAL COUNSEL
General Investment & Development Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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TENANT:
Home Director, Inc.
BY: (SEAL)
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
ATTEST:
BY: (SEAL)
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
ADDRESS FOR TENANT FOR NOTICES UNDER THIS LEASE:
Director of Contracts and Legal Affairs
Home Director, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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