EXHIBIT 10.40
[Net Lease]
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LEASE AGREEMENT
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THIS LEASE AGREEMENT is made this _____ day of February, 2000, between MBC
SPRINGBELT, LLC, a Delaware limited liability company ("Landlord"), and the
Tenant named below.
Basic Lease Provisions:
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Tenant: ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation
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Tenant's representative, ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
address, and phone no.: Attention: Vice President of Operations
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Premises: That portion of the Building, containing approximately 102,800 rentable
square feet as shown on Exhibit A attached hereto. The actual square
footage of the premises shall be measured in accordance with the Washington
D.C. Association of Realtors method at such time as the demising wall to be
erected by Landlord has been installed as further described in Paragraph 53
hereof. Upon completion of the measurement, the parties will execute a
certificate in the form of Exhibit B hereto agreeing to the measurement and
revising the figures contained below relating to Base Rent, Tenant's
Proportionate Share and Estimated Operating Expenses.
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Project: GPO Warehouse
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Building: GPO Warehouse
Springbelt Industrial Park
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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Tenant's Proportionate Share N/A
of Project:
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Tenant's Proportionate Share 41%
of Building:
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Lease Term: Beginning on the Commencement Date and ending on February 28, 2010, with two
consecutive options to extend the term hereof for five (5) years each, on
the terms and conditions described herein.
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Commencement Date: March 1, 2000.
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Initial Monthly Base Rent: Months 1 through 12 $56,968.33
Months 13 through 24 $58,677.38
Months 25 through 36 $60,437.71
Months 37 through 48 $62,250.84
Months 49 through 60 $64,118.36
Months 61 through 72 $66,041.91
Months 73 through 84 $68,023.17
Months 85 through 96 $70,063.86
Months 97 through 108 $72,165.78
Months 109 through 120 $74,330.75
Option Terms: To be determined in accordance with paragraph 51 herein.
Month 1 referred to above shall be March 2000. Months ▇, ▇, ▇, ▇▇▇., ▇▇▇▇▇
▇▇ the consecutive months after Month 1. Lease Year 1 shall be the period
commencing on the Commencement Date and ending on the last day Month 12.
Lease Years 2, 3, 4, etc., shall be the succeeding twelve month periods
thereafter.
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Initial Estimated Monthly 1. Utilities: To be paid direct by Tenant.
Operating Expense Payments:
(estimates only and subject 2. Common Area Charges: $0.39 per square foot per annum.
to adjustment to actual
costs and expenses according 3. Taxes $0.37 per square foot per annum.
to the provisions of this
Lease) 4. Insurance: $0.05 per square foot per annum.
5. Others: $0.00
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Initial Estimated Monthly $6,939.00
Operating Expense Payments:
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Initial Monthly Base Rent and $63,907.33
Operating Expense Payments:
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Security Deposit: See paragraph 7 hereof.
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Landlord's Broker: Transwestern ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Addenda: Exhibit A - Premises
Exhibit B - Certificate
Exhibit C - Land
Exhibit D - Form of Letter of Credit
Exhibit E - Initial Tenant Made Improvements
Exhibit F - Parking Area to be Resurfaced
Exhibit G - "Green Space"
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1. Granting Clause. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises, located on that tract of land which is more
particularly described in Exhibit C; together with the non-exclusive right to
all appurtenances thereunto appertaining, including, but not limited to, rights
of access, ingress and egress at the points shown on Exhibit C in, to, from and
over any and all streets, ways or alleys adjoining, abutting or adjacent to the
Project, together with the right to use, in common with other occupants of the
Project, any and all of the common areas pertaining to the Project. Landlord
represents to Tenant that the Premises and Project as shown on Exhibit C are
fully described in the legal description shown on Exhibit C, and that such legal
description does not include any property interest not disclosed in Exhibit C,
to have and to hold for the Lease Term, subject to the terms, covenants and
conditions of this Lease.
2. Acceptance of Premises. Tenant shall accept the Premises in its condition
as of the Commencement Date, subject to all applicable laws, ordinances,
regulations, covenants and restrictions, except for latent defects not readily
discernible by a reasonable observation of the Premises. Landlord has made no
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant's intended purposes. Except as provided in this
paragraph and Paragraph 14, in no event shall Landlord have any obligation for
any defects in the Premises or any limitation on its use. The taking of
possession of the Premises shall be conclusive evidence that Tenant accepts the
Premises and that the Premises were in good condition at the time possession was
taken except for items that are Landlord's responsibility under this paragraph
or Paragraph 14 and any punchlist items identified in writing by Tenant and
Landlord within thirty (30) days of the Commencement Date. In addition,
Landlord agrees to install, at Landlord's sole cost and expense, a demising wall
of at least 8 inches (8") from the floor slab to the ceiling joists in the
approximate location
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shown on Exhibit A, which demising wall shall be installed in a good,
workmanlike manner in accordance with all applicable laws. In the event that the
demising wall is not completed on or before April 1, 2000, then Tenant's
obligations to pay Base Rent and Operating Expenses hereunder shall ▇▇▇▇▇ until
the demising wall is completed.
3. Delay in Possession. Landlord and Tenant acknowledge that the Premises is
currently leased by the United States Government Printing Office (the "GPO").
Tenant further acknowledges that as of the date hereof, Landlord has asked the
GPO to surrender the Premises, and the GPO has agreed to do so, but formal
documentation surrendering the Premises has not been completed. In the event
that Landlord has not been able on or before March 1, 2000 to obtain the formal
documentation from the GPO to surrender the Premises at a specific date no later
than one month thereafter (the "Target Delivery Date"), Tenant shall have the
continuing right at any time thereafter until Landlord has obtained the GPO's
agreement, to terminate this Lease by providing written notice thereof to
Landlord. Tenant's right to terminate this Lease as provided in the preceding
paragraph shall cease, and be of no further force or effect at such time as
Landlord shall have obtained the GPO's agreement to surrender the Premises as
described above. Landlord agrees to use its best commercially reasonable
efforts to deliver possession of the Premises to Tenant upon or before the
Target Delivery Date for the installation of tenant improvements, equipment,
communication and security systems, and Trade Fixtures (as hereinafter defined).
However, if the Landlord has not delivered the Premises to Tenant by the Target
Delivery Date, then Tenant shall be entitled to a rental abatement equal to one
day's Base Rent for each day after the Target Delivery Date that the
Commencement Date occurs. In addition, in the event that Landlord has not
delivered possession of the Premises within sixty (60) days of the Target
Delivery Date, Tenant shall have the right to provide written notice that if the
Landlord fails to deliver possession of the Premises to Tenant within thirty
days after such notice, that this Lease will be terminated, in which event the
Security Deposit and the first month's rent and operating expenses will be
promptly returned to Tenant.
In addition, Landlord agrees to attempt to provide access to the Premises to
Tenant from and after the date hereof to allow Tenant to begin its planning and
design process. Any such access to the interior of the Premises which Landlord
may be able to obtain for Tenant shall be only during the normal operating hours
of the GPO, and shall be conditioned upon Tenant not interfering with the
operations of the GPO. In addition, Tenant's access t the Premises from and
after the Commencement Date until the demising wall described in paragraph 2
above is completed, shall be only during the normal operating hours of the GPO,
and shall be conditioned upon Tenant not interfering with the operations of the
GPO. Tenant may make other arrangements as may be mutually agreed upon to
accommodate Tenant's requirements for the construction of its tenant
improvements, equipment, communication, security systems and Trade Fixtures.
4. Use. The Premises shall be used only for the purpose of receiving,
storing, and shipping retail products, materials and merchandise made and/or
distributed by Tenant (which may include distribution of alcoholic beverages as
part of its home grocery distribution business for off-site consumption),
product preparation, grocery store services (for off-site delivery), and for
such other lawful purposes as may be incidental thereto. In addition, to the
extent legally necessary to enable Tenant to sell off-site distribution of
alcoholic beverages as part of its home grocery distribution business, Tenant
may operate an on-site store for the retail sale of alcoholic beverages, of a
size and capacity not larger than the minimum reasonably necessary, in the
opinion of Tenant's counsel to qualify the license needed for the sale of off-
site delivery of alcoholic beverages as part of Tenant's grocery distribution
business, provided that the same complies with all applicable legal requirements
and that any alterations to the Building, Premises or lot on which the building
stands which may be required as the result of operating a retail alcoholic
beverage store in the Premises are paid by Tenant at its sole cost and expense.
Tenant shall not conduct or give notice of any auction (other than internet
related for delivery by Tenant to its customers), liquidation, or going out of
business sale on the Premises. Tenant will use the Premises in a careful, safe
and proper manner and will not commit waste, overload the floor or structure of
the Premises or subject the Premises to use that would damage the Premises.
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
noise, or vibrations to emanate from the Premises, or take any other action that
would constitute a nuisance or would disturb, unreasonably interfere with, or
endanger Landlord or any tenants of the Project. Outside storage, including
without limitation, storage of trucks and other vehicles (other than Tenant's
delivery vehicles to be stored in a designated truck parking area to be
constructed by Tenant), is prohibited without Landlord's prior written consent.
Tenant, at its sole expense, shall use and occupy the Premises in compliance
with all laws, including, without limitation, the Americans With Disabilities
Act, orders, judgments, ordinances, regulations, codes, directives, permits,
licenses,
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covenants and restrictions now or hereafter applicable to the Premises
(collectively, "Legal Requirements"). The Premises shall not be used as a place
of public accommodation under the Americans With Disabilities Act or similar
state statutes or local ordinances or any regulations promulgated thereunder,
all as may be amended from time to time. Tenant shall, at its expense, make any
alterations or modifications, within or without the Premises, that are required
by Legal Requirements related to Tenant's use or occupation of the Premises.
Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant's or Landlord's insurance, increase the insurance
risk, or cause the disallowance of any sprinkler credits. If any desired use of
the Premises permitted hereby would void Landlord's insurance as provided in the
preceding sentence, Tenant shall have the right to find other insurance for
Landlord providing the same coverages as Landlord's insurance and from an
insurance company having a rating equal or greater than the rating enjoyed by
Landlord's insurance carrier, in order for Tenant to so use the Premises. If any
increase in the cost of any insurance on the Premises or the Project is caused
by Tenant's use or occupation of the Premises, or because Tenant vacates the
Premises, then Tenant shall pay the amount of such increase to Landlord. Any
occupation of the Premises by Tenant prior to the Commencement Date shall be
subject to all obligations of Tenant under this Lease, other than any obligation
to pay Base Rent and Operating Expenses.
5. Base Rent. Tenant shall pay Base Rent in the amount set forth above. The
first month's Base Rent and the first monthly installment of estimated Operating
Expenses (as hereafter defined) shall be due and payable upon execution hereof,
and Tenant promises to pay to Landlord in advance, without demand, deduction or
set-off, monthly installments of Base Rent on or before the first day of each
calendar month succeeding the Commencement Date. Payments of Base Rent for any
fractional calendar month shall be prorated. All payments required to be made
by Tenant to Landlord hereunder shall be payable at such address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
The obligation of Tenant to pay Base Rent and other sums to Landlord and the
obligations of Landlord under this Lease are independent obligations. Tenant
shall have no right at any time to ▇▇▇▇▇, reduce, or set-off any rent due
hereunder except as may be expressly provided in this Lease. If Tenant is
delinquent in any monthly installment of Base Rent or of estimated Operating
Expenses for more than five (5) days following Tenant's receipt of notice of
non-payment, Tenant shall pay to Landlord on demand a late charge equal to five
percent (5%) of such delinquent sum. The provision for such late charge shall
be in addition to all of Landlord's other rights and remedies hereunder or at
law and shall not be construed as a penalty.
6. Security Deposit. The Security Deposit shall be held by Landlord, in the
form of a stand-by, unconditional, irrevocable, transferable letter of credit
(the "Letter of Credit") in the form of Exhibit D hereto, as security for the
performance of Tenant's obligations under this Lease. Tenant shall within five
(5) business days of the date that Landlord notifies Tenant that it has obtained
the consent of the GPO described in paragraph 3 hereof, deliver to Landlord the
Letter of Credit, naming Landlord as beneficiary, and issued by a financial
institution ("Issuer"), reasonably satisfactory to Landlord. The Security
Deposit is not an advance rental deposit or a measure of Landlord's damages in
case of Tenant's default. Upon each occurrence of an Event of Default
(hereinafter defined), Landlord shall be entitled to draw on all or part of the
Letter of Credit to pay delinquent payments due under this Lease, and the cost
of any damage, injury, expense or liability caused by such Event of Default,
without prejudice to any other remedy provided herein or provided by law. The
Letter of Credit shall provide for partial draws by Landlord in accordance with
this paragraph. Any such draws when made shall be deemed applied to the amounts
owing and past due under this Lease (in such order as Landlord may reasonably
elect). Except as otherwise provided herein, in the event of any draw under the
Letter of Credit, it shall be only in an amount reasonably necessary to cure an
Event of Default by Tenant, beyond any applicable cure periods and, Tenant shall
within ten (10) business days after such draw, cause the amount remaining
available to be drawn under the Letter of Credit to be increased by an amount
equal to the amount drawn. Any improper draws by Landlord upon the Letter of
Credit shall be deemed an Event of Default by Landlord, and as Tenant's remedy
therefor, Tenant shall be entitled to an offset, equal to the amount of the
improper draw, on the Base Rent. Landlord's obligation respecting the Security
Deposit is that of a debtor, not a trustee; and no interest shall accrue
thereon. Landlord shall be released from any obligation with respect to the
Security Deposit upon transfer of this Lease and the Premises to a person or
entity assuming all of Landlord's obligations under this Paragraph and the
tender of the Letter of Credit to such person or entity for transfer by the
issuing bank.
In the event of a sale or other transfer of the Building, Tenant shall, if
requested by Landlord in writing, at Landlord's sole cost and expense within ten
(10) business days after receiving such request, cause the issuing bank
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of the Letter of Credit to consent to the assignment or to issue a substitute
letter of credit on identical terms to the Letter of Credit as the same may have
been decreased as provided herein, and other than the stated beneficiary, from
the same issuing bank naming such transferee as the beneficiary thereof, upon
delivery by Landlord of the then outstanding Letter of Credit. The provisions of
this paragraph are contingent upon the acceptance by the transferee of all
provisions of this Lease.
7. Failure to Renew Letter of Credit. In the event that Tenant fails to renew
or otherwise replace an existing Letter of Credit with a new letter of credit
meeting the terms and conditions hereof by the date which is thirty (30) days
prior to its expiration, notwithstanding any other provisions hereof, Landlord
shall be entitled to draw the full amount available under the Letter of Credit
and to hold and apply the same as the "Security Deposit" hereunder until such
time as Tenant shall have delivered to Landlord the Letter of Credit required
hereby. The Security Deposit shall be the property of Landlord, but shall be
paid to Tenant when Tenant's obligations under this Lease have been completely
fulfilled. Landlord shall be released from any obligation with respect to the
Security Deposit upon transfer of this Lease and the Premises to a person or
entity assuming Landlord's obligations under this Lease and the tender of the
Letter of Credit to such person or entity for transfer by the issuing bank. In
the event that Landlord is holding cash as the Security Deposit in lieu of a
letter of credit, Landlord shall be entitled to hold and apply the same in the
same manner as it may make draws under the Letter of Credit.
8. Amount of the Letter of Credit. The Letter of Credit shall initially be in
the amount of One Million Two Hundred Thousand Dollars ($1,200,000). Provided
that all of the conditions listed below under the caption "Conditions" shall
have been satisfied prior to the commencement of the Lease Year listed, the
amount of the Letter of Credit may be reduced to the amount listed under the
column captioned "Letter of Credit Amount" as of the beginning of the Lease Year
listed opposite the reduced amount. If any of the conditions described below to
be met prior to the commencement of that Lease Year are not met prior to the
commencement of the specified Lease Year, the Letter of Credit for that Lease
Year shall not be reduced. Any reduction of the amount of the Letter of Credit
shall be accomplished by delivery of a substitute letter of credit.
Lease Year Letter of Credit Amount Conditions
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2 $1,100,000.00 A
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3 $1,100,000.00 A
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4 $ 900,000.00 A & B
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5 $ 800,000.00 A & B
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6 $ 500,000.00 A & B & C
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7 $ 400,000.00 A & B & C
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8 $ 300,000.00 A & B & C
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9 $ 200,000.00 A & B & C
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10 $ 100,000.00 A & B & C
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Option Periods $ 100,000.00
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As used in the above chart in the column captioned "Conditions", the
letters "A", "B" and "C" shall have the following meanings:
"A" shall mean that during the prior Lease Year, the Tenant shall have
timely paid all sums due and owing under this Lease, shall not have committed
any defaults under any documents or instruments evidencing, securing or relating
to its indebtedness for borrowed money as certified in writing by Tenant's
outside auditors, and the Tenant shall have been in occupancy of the Premises
for the entire Lease Year. With respect to Tenant's occupancy of the Premises
during Lease Year 1, Tenant shall be deemed to be in occupancy from the
Commencement Date provided that Tenant promptly thereafter begins its planning
and design for the Premises and diligently continues with such planning, design
and construction thereafter. With respect to occupancy during any Lease Year,
Tenant shall be deemed to be in occupancy during any period of time that the
Premises are unavailable for occupancy as a result of any casualty or
condemnation;
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"B" shall mean that the market capitalization of Tenant's outstanding
equity shares as traded on a recognized national exchange shall have an
aggregate value of One Billion Dollars ($1,000,000,000) as of the date thirty
(30) days prior to the beginning of the specified Lease Year, and that Tenant
shall have audited positive earnings after interest expense, but before income
taxes, depreciation and amortization, as determined in accordance with generally
accepted accounting principles consistently applied; and
"C" shall mean that for Tenant's four (4) complete fiscal quarters
immediately preceding the commencement of the applicable Lease Year, Tenant
shall have audited earnings before interest, income taxes, depreciation and
amortization greater than Fifty Million Dollars ($50,000,000).
9. Operating Expense Payments. During each month of the Lease Term, on the
same date that Base Rent is due, Tenant shall pay Landlord an amount equal to
1/12 of the annual cost, as estimated by Landlord from time to time (but subject
to the limitations herein described), of Tenant's Proportionate Share
(hereinafter defined) of Operating Expenses for the Project. Payments thereof
for any fractional calendar month shall be prorated. The term "Operating
Expenses" means all costs and expenses incurred by Landlord with respect to the
ownership, maintenance, and operation of the Project including, but not limited
to costs of: Taxes (hereinafter defined) and fees payable to tax consultants and
attorneys for consultation and contesting taxes; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs, alleys, and
driveways, mowing, landscaping, exterior painting, utility lines, heating,
ventilation and air conditioning systems, lighting, electrical systems and other
mechanical and building systems; amounts paid to contractors and subcontractors
for work or services performed in connection with any of the foregoing; charges
or assessments of any association to which the Project is subject; property
management fees payable to a property manager, including any affiliate of
Landlord, in an amount not in excess of four percent (4%) of total rent
collected, security services, if any; trash collection, sweeping and removal;
and additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) or that are appropriate to the continued operation
of the Project or the Building as a bulk warehouse facility in the market area,
provided that the cost of additions or alterations that are required to be
capitalized for federal income tax purposes shall be amortized on a straight
line basis over a period equal to the useful life thereof for federal income tax
purposes. Operating Expenses do not include costs, expenses, depreciation or
amortization for capital repairs and capital replacements required to be made by
Landlord under Paragraph 14 of this Lease, debt service under mortgages or
ground rent under ground leases, costs of restoration to the extent of net
insurance proceeds received by Landlord with respect thereto, the costs
(including leasing commissions, legal fees and other expenses) of leasing space
to tenants, advertising and promotional expenses, the costs (including permit,
license and inspection fees) of renovating space for tenants, or any costs or
expenses which Landlord may incur in connection with the any item not available
to all Tenants at the Project. In addition, Operating Expenses shall not
include the costs and expenses incurred by Landlord in correcting any latent
defects in the Premises except to the extent that the same constitutes repair
and maintenance expenses in the ordinary course of business.
Without in any way impairing Tenant's liability to pay Operating Expenses
as provided herein, Landlord agrees that it will not in any Lease Year increase
its Estimated Operating Expenses (without regard to Taxes, which Landlord agrees
to estimate based upon the Project's assessed value from time to time) to an
amount which would exceed One Hundred Five percent (105%) of the prior Lease
Year's actual Operating Expenses (again, without regard to Taxes). The
provisions of this paragraph are merely an accommodation to Tenant for cash flow
and planning purposes, and at the end of each Lease Year, Tenant shall be liable
for its Proportionate Share of Operating Expenses as otherwise provided herein.
If Tenant's total payments of Operating Expenses for any year are less than
Tenant's Proportionate Share of actual Operating Expenses for such year (without
taking into account the limitation contained in the prior paragraph concerning
limitations on the increases in estimates), then Tenant shall pay the difference
to Landlord within 30 days after demand, and if more, then Landlord shall retain
such excess and credit it against Tenant's next payments of Base Rent and
Operating Expenses. For purposes of calculating Tenant's Proportionate Share of
Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease. With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant's "Proportionate Share" shall
be the percentage set forth on the first
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page of this Lease as Tenant's Proportionate Share of the Project as reasonably
adjusted by Landlord in the future for changes in the physical size of the
Premises or the Project; and, with respect to Operating Expenses which Landlord
allocates only to the Building, Tenant's "Proportionate Share" shall be the
percentage set forth on the first page of this Lease as Tenant's Proportionate
Share of the Building as reasonably adjusted by Landlord in the future for
changes in the physical size of the Premises or the Building. Landlord may
equitably increase Tenant's Proportionate Share for any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Project or Building that
includes the Premises or that varies with occupancy or use. The estimated
Operating Expenses for the Premises set forth on the first page of this Lease
are only estimates, and Landlord makes no guaranty or warranty that such
estimates will be accurate.
Provided no default has occurred and remains uncured, Tenant shall have the
right, at Tenant's expense, to audit Landlord's books and records of the
Project's annual Operating Expenses. No subtenant shall have any right to
conduct an audit, and no assignee shall conduct an audit for any period during
which such assignee was not in possession of the Premises. Tenant shall provide
written notice for such audit within thirty (30) days following the date that
Landlord or its agent shall have delivered to Tenant the statement of annual
Operating Expenses with respect to which Tenant desires to make such audit.
Such audit shall cover only the immediately preceding calendar year for the
statement being audited and shall be conducted by a principal or employee of
Tenant or an independent certified public accountant at the offices of Landlord,
Landlord's managing agent or accountant during normal business hours at a time
mutually convenient to Landlord and Tenant. Landlord may require as a condition
of permitting such audit that Tenant, its principals, employees, and accountants
enter into a confidentiality agreement reasonably acceptable to Landlord. Such
audit shall be conducted in accordance with generally accepted auditing
standards of the AICPA. Tenant shall deliver to Landlord a copy of the results
of such audit within five (5) days of its receipt by Tenant. If Tenant's audit
reveals that Landlord's calculation of additional rent is in error, the
corrected amount shall be paid by Tenant to Landlord within ten (10) days after
the completion of the audit, or if Tenant has already paid the additional rent,
the overpayment will be credited to the next payments of Base Rent and Operating
Expenses due under this Lease. Notwithstanding anything to the contrary in this
paragraph, in the event that any such audit reveals that Landlord's calculation
of Annual Operating Charges was overstated by ten percent (10%) or more,
Landlord, not Tenant, shall pay for all actual and reasonable audit expenses
described in this paragraph, in an amount not in excess of the amount by which
Tenant was overcharged.
10. Utilities. Tenant shall pay for all water, gas, electricity, heat, light,
power, telephone, sewer, sprinkler services, refuse and trash collection, and
other utilities and services used on the Premises, all maintenance charges for
utilities, and any storm sewer charges or other similar charges for utilities
imposed by any governmental entity or utility provider, together with any taxes,
penalties, surcharges or the like pertaining to Tenant's use of the Premises.
Landlord shall cause the electrical and gas service to the Premises to be
separately metered at its sole cost and expense. Landlord and Tenant
acknowledge that Tenant plans to upgrade the electrical service and HVAC
servicing the Premises. In that regard, Landlord and Tenant agree to cooperate
with each other concerning Landlord's obligation to separately meter the
electrical and gas serving the Premises so as to do so in the most efficient and
economical manner for both parties. Tenant agrees to separately meter the water
and sewer serving the Demised Premises at its sole cost and expense. Until such
time as the utilities described herein have been separately metered, Tenant
agrees to pay its share of all charges for jointly metered utilities based upon
consumption, as reasonably determined by Landlord. No interruption or failure
of utilities shall result in the termination of this Lease or the abatement of
rent unless due to the gross negligence or willful misconduct of Landlord, in
which event, the Base Rent due hereunder shall be equitably abated. Until such
time as the water is separately metered, Tenant agrees to use reasonable efforts
to limit use of water and sewer for normal restroom use and in connection with
its improvements to the Premises.
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11. Taxes. Landlord shall pay all taxes, assessments and governmental charges
(collectively referred to as "Taxes") that accrue against the Project during the
Lease Term, which shall be included as part of the Operating Expenses charged to
Tenant, provided, however, that any tax, levy or fee associated with the
transfer of the Project shall not be included in Operating Expenses. Landlord
may contest by appropriate legal proceedings the amount, validity, or
application of any Taxes or liens thereof. All capital levies or other taxes
assessed or imposed on Landlord upon the rents payable to Landlord under this
Lease and any franchise tax, any excise, transaction, sales or privilege tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rents from the Premises and/or the Project or any portion thereof shall be paid
by Tenant to Landlord monthly in estimated installments or upon demand, at the
option of Landlord, as additional rent; provided, however, in no event shall
Tenant be liable for any net income taxes imposed on Landlord unless such net
income taxes are in substitution for any Taxes payable hereunder. If any such
tax or excise is levied or assessed directly against Tenant, then Tenant shall
be responsible for and shall pay the same at such times and in such manner as
the taxing authority shall require. Tenant shall be liable for all taxes levied
or assessed against any personal property or fixtures placed in the Premises,
whether levied or assessed against Landlord or Tenant.
12. Contesting of Taxes. In any year for which Landlord does not protest the
real property tax assessment levied against the real property Tenant may choose
to protest the assessment in Landlord's name. If Tenant chooses to protest the
assessment, Landlord shall fully cooperate with Tenant's efforts provided Tenant
pays all costs and expenses incurred in the conduct of such protest. In the
event Landlord protests such assessment and a reduction in the taxes for the
Project results, Tenant shall be entitled to its pro-rata share of the benefit
of such reassessment, either as a credit against the next payments of Rent and
Additional Rent due under this Lease or as a refund if this Lease has expired.
If Tenant protests the assessment t and the taxes for the Property are reduced
as a result of such protest, Landlord and Tenant shall each be entitled to the
benefit of such reassessment. Tenant shall also be entitled to reimbursement of
it reasonable out-of-pocket expenses in conducting such protest, such
reimbursement to be in the form of a credit against Rent and Additional Rent,
but Tenant shall not be entitled to a credit in excess of the reduced taxes
which accrue to Landlord's benefit during the remainder of the Lease term.
13. Insurance. Landlord shall maintain all risk property insurance covering
the full replacement cost of the Building with a commercially reasonable
deductible. Landlord may, but is not obligated to, maintain such other
insurance and additional coverages as it may deem necessary, including, but not
limited to, commercial liability insurance and rent loss insurance, but Landlord
shall maintain commercial liability insurance with a minimum limit of $2,000,000
per occurrence. All such insurance shall be included as part of the Operating
Expenses charged to Tenant. The Project or Building may be included in a
blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord may be required to carry as reasonably
determined by its lenders, mortgagees or insurance broker as a result of
Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $2,000,000 per
occurrence (together with such additional umbrella coverage as Landlord may
reasonably require) for property damage, personal injuries, or deaths of persons
occurring in or about the Premises. Landlord may from time to time require
reasonable increases in any such limits. The commercial liability policies
shall name Landlord as an additional insured, insure on an occurrence and not a
claims-made basis, be issued by insurance companies which are reasonably
acceptable to Landlord, not be cancelable unless 30 days prior written notice
shall have been given to Landlord, contain a hostile fire endorsement and a
contractual liability endorsement and provide primary coverage to Landlord (any
policy issued to Landlord providing duplicate or similar coverage shall be
deemed excess over Tenant's policies). Such policies or certificates thereof
shall be delivered to Landlord by Tenant upon commencement of the Lease Term and
upon each renewal of said insurance.
The all risk property insurance obtained by Landlord and Tenant shall
include a waiver of subrogation by the insurers and all rights based upon an
assignment from its insured, against Landlord or Tenant, their officers,
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directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its
officers, directors, employees, managers, agents, invitees or contractors shall
be liable to the other for loss or damage caused by any risk coverable by all
risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors. This waiver of claims and subrogation applies even if one or
either party does not carry the required insurance.
14. Landlord's Repairs. Landlord shall maintain, at its expense but as part of
Operating Expenses (except as otherwise provided in paragraph 9 hereof), the
structural soundness of the roof, roof membrane, foundation, demising walls and
exterior walls of the Building in good repair, reasonable wear and tear and
uninsured losses and damages caused by Tenant, its agents and contractors
excluded. The term "walls" as used in this Paragraph 14 shall not include
windows, glass or plate glass, doors or overhead doors, special store fronts,
dock bumpers, dock plates or levelers, or office entries. Tenant shall promptly
give Landlord written notice of any repair required by Landlord pursuant to this
Paragraph 14, after which Landlord shall have a reasonable opportunity to
repair. In addition, Landlord, at its cost and expense, but as part of
Operating Expenses, shall maintain the Common Areas (as defined in section 18
hereof) in good repair so that Tenant, on a non-exclusive basis, can use and
enjoy the same. The obligation of Landlord pursuant hereto shall include, but
not be limited to, cleaning of the Common Areas, removal of trash and debris
from the Common Areas, repairing the asphalt and concrete portions of the Common
Areas (including potholes, curbs and sidewalks), repairing common utility lines
and facilities, repairing storm drains, repairing the existing exterior lighting
on the Building, maintaining the landscaped portions of the Common Areas
(including regular grass cutting), removal of snow and ice on every occasion
where safety of the Common Areas is impeded, and periodically restriping the
parking area. Landlord shall not in any manner change the size, location,
nature, design or use of the Common Areas if the proposed change would reduce
the number of parking spaces or truck operating areas, or otherwise materially
and adversely affect the access to the Premises.
15. Tenant's Repairs. Subject to Landlord's obligation in Paragraph 14 and
subject to Paragraphs 22 and 23, Tenant, at its expense, shall repair, replace
and maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, interior plumbing, water and
sewer lines up to points of common connection, fire sprinklers and fire
protection systems, entries, doors, ceilings and penetrations through the roof
membrane, windows, interior walls (other than demising walls), and the interior
side of demising walls, and heating, ventilation and air conditioning systems.
Such repair and replacements include capital expenditures and repairs whose
benefit may extend beyond the Term. Heating, ventilation and air conditioning
systems and other mechanical and building systems serving the Premises shall be
maintained at Tenant's expense pursuant to maintenance service contracts entered
into by Tenant or, at Landlord's election, by Landlord. The scope of services
and contractors under such maintenance contracts shall be reasonably approved by
Landlord. At Landlord's request, Tenant shall enter into a joint maintenance
agreement with any railroad that services the Premises. If Tenant fails to
perform any repair or replacement for which it is responsible, Landlord may
perform such work and be reimbursed by Tenant within 30 days after demand
therefor. Subject to Paragraphs 22 and 23, Tenant shall bear the full cost of
any repair or replacement to any part of the Building or Project that results
from damage caused by Tenant, its agents, contractors, or invitees and any
repair that benefits only the Premises.
16. Tenant-Made Alterations and Trade Fixtures. Any alterations, additions, or
improvements, excluding Trade Fixtures the installation of which does not
require penetration of the roof, floor, exterior walls or demising walls, made
by or on behalf of Tenant to the Premises ("Tenant-Made Alterations") shall be
subject to Landlord's prior written consent, which consent will not be
unreasonably withheld, delayed or conditioned. However, if such Tenant-Made
Alterations are no greater than Fifty Thousand Dollars ($50,000) and do not
require penetration of the roof, floor, exterior walls or demising walls, Tenant
shall not require Landlord's prior written consent to perform such Tenant-Made
Alterations. Notwithstanding the foregoing, Tenant shall be required to notify
Landlord fifteen
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(15) days prior to the commencement of construction of its intent to construct
such Tenant-Made Alterations. For those Tenant-Made Alterations that require
notification, but not approval of Landlord, Landlord shall have fifteen (15)
days, subsequent to Tenant's notification to notify Tenant, in writing, whether,
at the end of the Term or any extensions, Tenant shall be required to remove
such Tenant-Made Alterations and restore the Premises to the original condition.
All Tenant-Made Alterations in excess of Fifty Thousand Dollars ($50,000) shall
require the written consent of Landlord, which shall also state whether, at the
end of the Term or any extensions, Tenant shall be required to restore such
Tenant-Made Alterations to the original condition. Notwithstanding the
foregoing, any Tenant-Made Alterations that affect the Building's structural
integrity or affect mechanical systems, regardless of the cost, shall require
the written consent of Landlord which shall not be unreasonably conditioned,
delayed or withheld. Failure, in any instance, by Landlord to notify Tenant of
its obligation to restore a Tenant-Made Alterations to its original conditions
shall be deemed a waiver by Landlord to require Tenant to restoration. Tenant
shall cause, at its expense, all Tenant-Made Alterations to comply with
insurance requirements and with Legal Requirements and shall construct at its
expense any alteration or modification required by Legal Requirements as a
result of any Tenant-Made Alterations. All Tenant-Made Alterations shall be
constructed in a good and workmanlike manner by contractors reasonably
acceptable to Landlord and only good grades of materials shall be used. All
plans and specifications for any Tenant-Made Alterations that require Landlord's
consent shall be submitted to Landlord for its approval. Landlord may monitor
construction of the Tenant-Made Alterations. Except for the costs incurred by
Landlord in connection with those Tenant made improvements described on Exhibit
E, to the extent the same are made within the First Lease Year, Tenant shall
reimburse Landlord for its actual and reasonable costs in reviewing plans and
specifications for all Tenant made improvements. Landlord's right to review
plans and specifications and to monitor construction shall be solely for its own
benefit, and Landlord shall have no duty to see that such plans and
specifications or construction comply with applicable laws, codes, rules and
regulations. Tenant shall provide Landlord with the identities and mailing
addresses of all persons performing work or supplying materials, prior to
beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord written statements setting forth the names of all
contractors and subcontractors who did work on the Tenant-Made Alterations and
final lien waivers from all such contractors and subcontractors. Upon surrender
of the Premises, all Tenant-Made Alterations and any leasehold improvements
constructed by Landlord or Tenant (excluding Trade Fixtures, whether affixed to
the Premises or not) shall remain on the Premises as Landlord's property, except
to the extent Landlord requires removal at Tenant's expense of any such items or
Landlord and Tenant have otherwise agreed in writing in connection with
Landlord's consent to any Tenant-Made Alterations. Tenant shall repair any
damage caused by such removal.
Landlord conceptually approves the anticipated tenant improvements
described on Exhibit E hereto. Such conceptual approval shall not be deemed a
waiver of Landlord's right to review the plans and specifications for those
anticipated improvements nor of Landlord's right to require that such
improvements be removed at the end of the Lease Term as provided in this
paragraph 17.
Tenant, at its own cost and expense and without Landlord's prior approval,
may erect such shelves, bins, machinery, refrigeration and freezer units and
trade fixtures (collectively "Trade Fixtures") in the ordinary course of its
business provided that such items do not alter the basic character of the
Premises, do not overload or damage the Premises, and may be removed without
injury to the Premises, and the construction, erection, and installation thereof
complies with all Legal Requirements, does not penetrate the roof, floor,
demising walls or exterior walls, and with Landlord's requirements set forth
above. Tenant shall remove its Trade Fixtures and shall repair any damage
caused by such removal.
17. Signs. Tenant shall not make any changes to the exterior of the Premises,
install any exterior lights, decorations, balloons, flags, pennants, banners, or
painting, or erect or install any signs, windows or door lettering, placards,
decorations, or advertising media of any type which can be viewed from the
exterior of the Premises, without Landlord's prior written consent, which shall
not be unreasonably withheld, delayed or conditioned. Upon
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surrender or vacation of the Premises, Tenant shall have removed all signs and
repair, paint, and/or replace the building facia surface to which its signs are
attached. Tenant shall obtain all applicable governmental permits and approvals
for sign and exterior treatments. All signs (including monument or pylon signs),
decorations, advertising media, blinds, draperies and other window treatment or
bars or other security installations visible from outside the Premises shall be
subject to Landlord's approval, which shall not be unreasonably withheld,
delayed or conditioned, and conform in all respects to Landlord's reasonable
requirements.
18. Common Areas. The term "Common Areas" shall mean the parking areas,
driveways, truck and delivery passages, customer pick-up and loading zones,
truck loading areas, vehicular entrances and exits, utility and drainage lines
and facilities, sidewalks, and landscaped and planted areas as shown on the Site
Plan, and such other exterior land areas of the Project as are designed for
common use by the occupants of the Project.
19. Parking. Promptly after the execution hereof, Landlord will solicit three
bids to resurface the portion of the paved area at the Project outlined on
Exhibit E. The bids shall be solicited from qualified, bondable paving
contractors, and Landlord shall share with Tenant the specifications for such
resurfacing. Landlord will provide Tenant with a paving allowance (the "Paving
Allowance") in an amount equal to the lowest of those three bids. In addition,
Landlord will reserve and set aside for Tenant's use the paved area outlined on
Exhibit E and up to 29,000 square feet of "green space" generally as outlined on
Exhibit F. Tenant shall, at its sole cost and expense (except for the Paving
Allowance), construct such car and truck parking areas and truck courts as
Tenant may require and as may be required by applicable law for the conduct of
Tenant's business at the Premises. Tenant's construction of its parking areas
and truck courts shall be done in accordance with all applicable laws and
subject to Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. After completion of Tenant's
parking area and truck courts, and within ten (10) business days of the
presentation to Landlord of paid receipts and lien waivers therefor, Landlord
shall disburse the Paving Allowance to Tenant. This parking area shall not be
disturbed without Tenant's consent which consent shall be withheld in Tenant's
sole discretion. Landlord further agrees that it shall not impose any charge
for parking or for any other use of the Common Areas, during the initial term
hereof; provided however, Landlord and Tenant may mutually agree upon a form of
controlled parking access as circumstances may warrant in order to assure use of
parking areas only by the employees and invitees of the tenants of the Project.
20. Ingress and Egress. During the Lease Term, Landlord shall maintain the
driveways at the Project which exist at the date hereof. During the Lease Term,
unless Tenant shall have consented thereto in writing, which consent shall not
be unreasonably withheld, delayed or conditioned, Landlord agrees not to modify
or alter the paved driveways existing at the Project at the date hereof in such
a manner as would impede Tenant's ingress and egress to the Premises, except as
may be required by applicable law.
In making any permitted or required replacement,
change, restoration, alteration, improvement,
enlargement or repair of or to the Premises,
Landlord and Tenant and their contractors and
suppliers may use the portion of the Common Area
adjacent to Tenant's Premises for the parking of
trucks and delivery vehicles, storage of
materials, temporary structures and other matters
incidental to such work, provided that no such use
shall unreasonably interfere with the operation of
the business of any tenant. In making any
permitted or required replacement, change,
restoration, alteration, improvement or repair of
or to any portion of the Project other than the
Premises, Landlord, or any tenant in the Project
and their contractors and suppliers may use such
portions of the Common Areas as will not
materially block the access to Tenant's Premises,
for the parking of trucks and delivery vehicles,
storage of materials and other matters incidental
to such work, provided that no such use shall
unreasonably
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interfere with the operation of the business of
Tenant or any subtenant or licensee of Tenant.
Throughout the Lease Term, no entrance, exit, approach or means of entrance,
exit or approach to and from the Premises shall be interfered with or disturbed
by Landlord or anyone claiming by, through or under Landlord. Tenant, its
customers, subtenants, licensees, employees and invitees, shall have
unobstructed vehicular and pedestrian ingress and egress at all times between
each of the entrances and exits servicing the Premises, except for reasonable
periods during which repairs, maintenance or other work are being performed by
utility companies or municipal authorities or repairs for maintenance are being
performed by Landlord.
21. Use of Common Areas. Subject to the terms of Paragraphs 20, 22 and 23,
Landlord hereby gives and grants unto Tenant and its officers, employees,
agents, customers, invitees and licensees, the non-exclusive right to use the
Common Areas in the Project, in common with Landlord and other tenants, if any,
of the Project.
22. Restoration. If at any time during the Lease Term, the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within sixty
(60) days after such damage as to the amount of time Landlord reasonably
estimates it will take to restore the Premises. If the restoration time is
estimated to exceed six (6) months, either Landlord or Tenant may elect to
terminate this Lease upon notice to the other party given no later than thirty
(30) days after Landlord's notice. If neither party elects to terminate this
Lease or if Landlord estimates that restoration will take six (6) months or
less, then, subject to receipt of sufficient insurance proceeds, Landlord shall
promptly restore the Premises excluding the improvements installed by Tenant or
by Landlord and paid by Tenant, subject to delays arising from the collection of
insurance proceeds or from Force Majeure events. Tenant at Tenant's expense
shall promptly perform, subject to delays arising from the collection of
insurance proceeds, or from Force Majeure events, all repairs or restoration not
required to be done by Landlord and shall promptly re-enter the Premises and
commence doing business in accordance with this Lease. Notwithstanding the
foregoing, either party may terminate this Lease if the Premises are materially
damaged during the last year of the Lease Term (as the same may have been
extended) and Landlord reasonably estimates that it will take more than one
month to repair such damage. If Landlord elects to terminate this Lease
pursuant to the preceding sentence, Tenant shall have the right exercisable
within ten (10) days of the receipt of Landlord's notice to terminate, to cause
this Lease to not be terminated by electing to repair the damage at Tenant's
sole cost and expense, in which event Tenant shall promptly and continuously
repair such damage at its sole cost and expense and this Lease shall remain in
full force and effect. Base Rent and Operating Expenses shall be abated for the
period of repair and restoration in the proportion which the area of the
Premises, if any, which is not usable by Tenant bears to the total area of the
Premises. Such abatement shall be the sole remedy of Tenant, and except as
provided herein, Tenant waives any right to terminate the Lease by reason of
damage or casualty loss.
23. Condemnation. If any part of the Premises or the Project should be taken
for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises as reasonably determined by Tenant,
or in Landlord's judgment would materially interfere with or impair its
ownership or operation of the Project, then upon written notice by either party
this Lease shall terminate and Base Rent shall be apportioned as of said date.
If part of the Premises shall be Taken, and this Lease is not terminated as
provided above, the Base Rent payable hereunder during the unexpired Lease Term
shall be reduced to such extent as may be fair and reasonable under the
circumstances. In the event of any such Taking, Landlord shall be entitled to
receive the entire price or award from any such Taking without any payment to
Tenant, and Tenant hereby assigns to Landlord Tenant's interest, if any, in such
award. Tenant shall have the right, to the extent that same shall not diminish
Landlord's award, to make a separate claim against the condemning authority (but
not Landlord) for such compensation as may be separately awarded or recoverable
by Tenant for moving expenses, taking of personal property and Tenant's Trade
Fixtures, business interruption expenses, damage to Tenant's Trade Fixtures, or
other lawful claim, if a separate award for such items is made to Tenant.
24. Assignment and Subletting. Without Landlord's prior written consent,
Tenant shall not assign this Lease or sublease the Premises or any part thereof
or mortgage, pledge, or hypothecate its leasehold interest or grant any
concession or license within the Premises and any attempt to do any of the
foregoing shall be void and of no effect.
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For purposes of this paragraph, a transfer of the ownership interests
controlling Tenant shall be deemed an assignment of this Lease unless such
ownership interests are publicly traded or is permitted without Landlord's
consent as hereafter provided. Notwithstanding the above and without Landlord's
consent, Tenant may assign its leasehold to: (a) a parent, subsidiary sibling or
affiliate corporation controlling, controlled by, or under common control with,
Tenant; (b) a successor corporation related to Tenant by reincorporation,
merger, consolidation, non-bankruptcy reorganization or government action; or
(c) a purchaser of substantially all of Tenant's assets. In addition, the
restrictions on transfer shall not apply to (i) a public offering of Tenant's
stock, (ii) any transfer of Tenant's stock among existing shareholders, (iii) a
private placement of Tenant's stock where current shareholders retain over 50%
of the voting stock, or (iv) any activity in any company stock option programs.
The assignee or sublessee under clauses (b) or (c) in the preceding sentence
must have a net worth or at least $100,000,000, or Landlord's consent will be
required. Tenant shall reimburse Landlord for all of Landlord's reasonable out-
of-pocket expenses in connection with any assignment or sublease.
Notwithstanding any assignment or subletting, Tenant shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or
assignment plus any bonus or other consideration therefor or incident thereto,
after Tenant's recovery of all reasonable costs of marketing, commissions,
rental concessions, tenant improvements, etc.) exceeds the rental payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord as
additional rent hereunder fifty percent (50%) of such excess rental and other
excess consideration within 10 days following receipt thereof by Tenant.
If this Lease be assigned or if the Premises be subleased (whether in whole
or in part) or in the event of the mortgage, pledge, or hypothecation of
Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other than
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from
the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant, however,
once the default has been cured or remedied, Landlord will resume collecting
rent from Tenant and, except to the extent set forth in the preceding paragraph,
apply the amount collected to the next rent payable hereunder; and all such
rentals collected by Tenant shall be held in trust for Landlord and immediately
forwarded to Landlord. No such transaction or collection of rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a
release of Tenant from the further performance by Tenant of its covenants,
duties, or obligations hereunder.
25. Indemnification. Except for the negligence or willful misconduct of
Landlord, its agents, employees or contractors, and to the extent permitted by
law, Tenant agrees to indemnify, defend and hold harmless Landlord, and
Landlord's agents, employees and contractors, from and against any and all
losses, liabilities, damages, costs and expenses (including attorneys' fees)
resulting from claims by third parties for injuries to any person and damage to
or theft or misappropriation or loss of property occurring in or about the
Project and arising from the use and occupancy of the Premises or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Premises or due to any other act or omission of Tenant, its subtenants,
assignees, invitees, employees, contractors and agents. The furnishing of
insurance required hereunder shall not be deemed to limit Tenant's obligations
under this Paragraph 25.
26. Inspection and Access. Landlord and its agents, representatives, and
contractors may enter the Premises at any reasonable time upon 48 hours prior
written notice, to inspect the Premises and to make such repairs as may be
required or permitted pursuant to this Lease and for any other business purpose;
provided, however, that Landlord shall not have to provide any notice in the
case of an emergency and during the initial construction of the Premises by
Tenant. Landlord and Landlord's representatives may enter the Premises during
business hours for the purpose of showing the Premises to prospective purchasers
and, during the last year of the Lease Term, to prospective tenants. Landlord
may erect a suitable sign on the Premises stating the (a) Premises are available
to let, which sign may be posted only during the last 12 months of the Lease
Term, as the same may have been extended, or (b) that the Project is available
for sale. Landlord may grant easements, make public dedications, designate
common areas and create restrictions on or about the Premises, provided that no
such easement, dedication, designation or
-13-
restriction materially interferes with Tenant's use or occupancy of the Premises
or that portion of the Common Areas reserved for Tenant's parking or access. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.
27. Quiet Enjoyment. If Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or under
Landlord.
28. Surrender. Upon termination of the Lease Term or earlier termination of
Tenant's right of possession, Tenant shall surrender the Premises to Landlord in
the same condition as received, broom clean, ordinary wear and tear and casualty
loss and condemnation covered by Paragraphs 22 and 23 excepted. Any Trade
Fixtures, Tenant-Made Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored,
removed, and disposed of by Landlord at Tenant's expense, and Tenant waives all
claims against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and obligations concerning the
condition and repair of the Premises.
29. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal to one
hundred fifty percent (150%) the Base Rent in effect on the termination date,
computed on a monthly basis for each month or part thereof during such holding
over. All other payments shall continue under the terms of this Lease. In
addition, if Tenant is in possession of the Premises without the prior written
consent of Landlord, Tenant shall be liable for all legally recoverable damages
incurred by Landlord as a result of such holding over. No holding over by
Tenant, whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Paragraph 29 shall
not be construed as consent for Tenant to retain possession of the Premises.
30. Events of Default. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:
A. Tenant shall fail to pay any installment of Base Rent or any other
payment required herein when due, and such failure shall continue for a period
of 5 days following Tenant's receipt of notice of non-payment.
B. Tenant or any guarantor or surety of Tenant's obligations hereunder
shall (A) make a general assignment for the benefit of creditors; (B) commence
any case, proceeding or other action seeking to have an order for relief entered
on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or of any substantial part
of its property (collectively a "proceeding for relief"); (C) become the subject
of any proceeding for relief which is not dismissed within 60 days of its filing
or entry; or (D) die or suffer a legal disability (if Tenant, guarantor, or
surety is an individual) or be dissolved or otherwise fail to maintain its legal
existence (if Tenant, guarantor or surety is a corporation, partnership or other
entity).
C. Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or shall be reduced or
materially changed, except, in each case, as permitted in this Lease.
D. Tenant shall not occupy or shall vacate the Premises or shall fail to
continuously operate its business at the Premises for the permitted use set
forth herein, whether or not Tenant is in monetary or other default under this
Lease, unless while the Premises are vacant, Tenant continues to perform its
maintenance obligations hereunder and provides security for the Premises to the
reasonable satisfaction of Landlord, subject to the notice and cure provisions
contained in paragraph G below.
-▇▇-
▇. ▇▇▇▇▇▇ shall attempt or there shall occur any assignment, subleasing
or other transfer of Tenant's interest in or with respect to this Lease except
as otherwise permitted in this Lease.
F. Tenant shall fail to discharge any lien placed upon the Premises in
violation of this Lease within 60 days after any such lien or encumbrance is
filed against the Premises; provided, however, Tenant may contest such lien as
long as such contest prevents foreclosure of the lien and Tenant causes such
lien to be bonded or insured over in a manner satisfactory to Landlord within
such 60 day period.
G. Tenant shall fail to comply with any provision of this Lease other
than those specifically referred to in this Paragraph 30, and except as
otherwise expressly provided herein, such default shall continue for more than
30 days after Landlord shall have given Tenant written notice of such default
(unless the cure of such default will, due to the nature thereof, require a
period of time in excess of 30 days, then, provided that Tenant shall have
commenced the cure within such thirty (30) day period and shall thereafter
diligently and continuously proceed to cure the same, after such period of time
as is reasonably necessary).
31. Landlord's Remedies. Upon each occurrence of an Event of Default and so
long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: terminate this Lease or Tenant's right of
possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and equipment
at the Premises.
If Landlord terminates this Lease, Landlord may recover from Tenant the sum
of: (a) all Base Rent and all other amounts accrued hereunder to the date of
such termination; (b) the cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing commissions
incurred by Landlord, and costs of removing and storing Tenant's or any other
occupant's property, repairing the Premises and restoring the same to the
condition it was in prior to the execution hereof, (c) in lieu of remodeling the
Premises to a condition acceptable to a new tenant or tenants, paying to the
Landlord the "Unamortized Tenant Improvement Allowance" which shall be an amount
equal to the product of (1) a fraction, the numerator of which is the number of
days remaining in the initial Lease Term (without taking into account extension
options contained herein) and the denominator of which is the total number of
days in the original Lease Term (without taking into account extension options
contained herein), and (2) the total Tenant Improvement Allowance provided by
Landlord to Tenant pursuant to paragraph 52 hereof, (d) all reasonable expenses
incurred by Landlord in pursuing its remedies, including reasonable attorneys'
fees and court costs; and (e) the excess of the then present value of the Base
Rent and other amounts payable by Tenant under this Lease as would otherwise
have been required to be paid by Tenant to Landlord during the period following
the termination of this Lease measured from the date of such termination to the
expiration date stated in this Lease, over the present value of any net amounts
which Tenant establishes Landlord can reasonably expect to recover by reletting
the Premises for such period, taking into consideration the availability of
acceptable tenants and other market conditions affecting leasing. Such present
values shall be calculated at a discount rate equal to the 90-day U.S. Treasury
▇▇▇▇ rate at the date of such termination.
If Landlord terminates Tenant's right of possession (but not this Lease),
Landlord may, but shall be under no obligation to, relet the Premises for the
account of Tenant for such rent and upon such terms as shall be satisfactory to
Landlord without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant. For the purpose of such
reletting Landlord, at Landlord's cost, but preserving Landlord's right to
collect the damages specified in the preceding paragraph, is authorized to make
any repairs, changes, alterations, or additions in or to the Premises as
Landlord deems reasonably necessary or desirable. If the Premises are not
relet, then Tenant shall pay to Landlord as damages a sum equal to the amount of
the rental reserved in this Lease for such period or periods, plus the cost of
recovering possession of the Premises (including attorneys' fees and costs of
suit), the unpaid Base Rent and other amounts accrued hereunder at the time of
repossession, and the costs described in the preceding paragraph incurred in any
attempt by Landlord to relet the
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Premises. If the Premises are relet and a sufficient sum shall not be realized
from such reletting [after first deducting therefrom, for retention by Landlord,
the unpaid Base Rent and other amounts accrued hereunder at the time of
reletting, the cost of recovering possession (including attorneys' fees and
costs of suit), all of the costs and expense of repairs and restoration, the
Unamortized Tenant Improvement Allowance the expense of such reletting
(including without limitation brokerage fees and leasing commissions) and the
cost of collection of the rent accruing therefrom] to satisfy the rent provided
for in this Lease to be paid, then Tenant shall immediately satisfy and pay any
such deficiency. Any such payments due Landlord shall be made upon demand
therefor from time to time and Tenant agrees that Landlord may file suit to
recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination
can be effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, are
not restricted to their technical legal meanings. Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, lease of
less than the entire Premises to any tenant and leasing any or all other
portions of the Project before reletting the Premises). Landlord shall not be
liable, nor shall Tenant's obligations hereunder be diminished because of,
Landlord's failure to relet the Premises or collect rent due in respect of such
reletting.
32. Tenant's Remedies/Limitation of Liability. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its obligations
hereunder within thirty (30) days after written notice from Tenant specifying
such failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then, provided that Landlord
shall have commenced the cure within such thirty (30) day period, after such
period of time as is reasonably necessary). All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and, except as may be
otherwise expressly provided in this Lease, Tenant may not terminate this Lease
for breach of Landlord's obligations hereunder. All obligations of Landlord
under this Lease will be binding upon Landlord only during the period of its
ownership of the Premises and not thereafter. The term "Landlord" in this Lease
shall mean only the owner, for the time being of the Premises, and in the event
of the transfer by such owner of its interest in the Premises, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Lease Term upon each
new owner for the duration of such owner's ownership. Any liability of Landlord
under this Lease shall be limited solely to its interest in the Project, and in
no event shall any personal liability be asserted against Landlord in connection
with this Lease nor shall any recourse be had to any other property or assets of
Landlord.
33. Performance by Tenant on Behalf of Landlord. In the event that Landlord
fails to cure said breach within thirty (30) days after receipt of said notice,
or, if having commenced said cure, Landlord does not diligently pursue it to
completion, then Tenant may elect to cure said breach at Tenant's expense and
offset from Rent until Tenant's reasonable damages caused by such breach are
recovered. If Tenant's reasonable damages exceed the remaining financial
obligations of Tenant under this Lease, Landlord shall reimburse any remaining
balances to
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Tenant upon the expiration or early termination of this Lease. Prior to seeking
such offset or reimbursement, Tenant shall document the damages and supply said
documentation to Landlord.
34. Mitigation. Notwithstanding any other provision of this Lease, provided
that Tenant reasonably cooperates with Landlord, Landlord shall take all
commercially reasonable steps to mitigate its damages to the extent required by
applicable law.
35. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY
OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
36. Subordination. This Lease and Tenant's interest and rights hereunder are
and shall be subject and subordinate at all times to the lien of any first
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant
agrees, at the election of the holder of any such mortgage, to attorn to any
such holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Notwithstanding anything herein to the
contrary, Tenant shall not be required to subordinate to any future mortgage or
attorn to any mortgage holder unless such mortgage holder shall grant to Tenant
a commercially reasonable nondisturbance agreement on terms reasonably
acceptable to Tenant. In addition, Tenant shall not be required to execute any
instrument which materially increases Tenant's obligations or decreases Tenant's
rights under this Lease. Notwithstanding the foregoing, any such holder may at
any time subordinate its mortgage to this Lease, without Tenant's consent, by
notice in writing to Tenant, and thereupon this Lease shall be deemed prior to
such mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust. Promptly after execution hereof, Landlord shall use reasonable
efforts to obtain for Tenant's benefit a Subordination, Non-Disturbance and
Attornment Agreement in form reasonably acceptable to Tenant.
37. Mechanic's Liens. Tenant has no express or implied authority to create or
place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs. Tenant covenants and agrees that it will pay or cause to be paid all
sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises and
that it will save and hold Landlord harmless from all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold estate
or against the interest of Landlord in the Premises or under this Lease. Tenant
shall give Landlord immediate written notice of the placing of any lien or
encumbrance against the Premises and cause such lien or encumbrance to be
discharged within 60 days of the filing or recording thereof; provided, however,
Tenant may contest such liens or encumbrances as long as such contest prevents
foreclosure of the lien or encumbrance and Tenant causes such lien or
encumbrance to be bonded or insured over in a manner satisfactory to Landlord
within such 60 day period.
38. Estoppel Certificates. Tenant agrees, from time to time, within 10
business days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating (to
the extent true) that this Lease is in full force and effect, the date to which
rent has been paid, that to Tenant's knowledge Landlord is not in default
hereunder (or specifying in detail the nature of Landlord's default), the
termination date of this Lease and such other matters pertaining to this Lease
as may be requested by Landlord. Tenant's obligation to furnish each estoppel
certificate in a timely fashion is a material inducement for
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Landlord's execution of this Lease. No cure or grace period provided in this
Lease shall apply to Tenant's obligations to timely deliver an estoppel
certificate.
39. Environmental Requirements. Except for Hazardous Material contained in
products used by Tenant in reasonable quantities for ordinary cleaning and
janitorial supplies or for office purposes, and (so long as Tenant secures all
necessary approvals from all applicable governmental jurisdictions regarding the
use and store on the Premises) except for Hazardous Material contained in
packaged products stored, used or handled by Tenant and intended for resale to
customers (including, but not limited to hair spray, household cleaners,
automotive products, antifreeze, dog food, fertilizer), Tenant shall not permit
or cause any party to bring any Hazardous Material upon the Premises or
transport, store, use, generate, manufacture or release any Hazardous Material
in or about the Premises without Landlord's prior written consent. Tenant, at
its sole cost and expense, shall operate its business in the Premises in strict
compliance with all Environmental Requirements and shall remediate in a manner
satisfactory to Landlord any Hazardous Materials released on or from the Project
by Tenant, its agents, employees, contractors, subtenants or invitees. Tenant
shall complete and certify to reasonable disclosure statements as requested by
Landlord from time to time relating to Tenant's transportation, storage, use,
generation, manufacture or release of Hazardous Materials on the Premises. The
term "Environmental Requirements" means all applicable present and future
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any governmental authority or agency regulating or
relating to health, safety, or environmental conditions on, under, or about the
Premises or the environment, including without limitation, the following: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; and all state and local counterparts
thereto, and any regulations or policies promulgated or issued thereunder. The
term "Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas), or any
radioactive materials. As defined in Environmental Requirements, Tenant is and
shall be deemed to be the "operator" of Tenant's "facility" and the "owner" of
all Hazardous Materials brought on the Premises by Tenant, its agents,
employees, contractors or invitees, and the wastes, by-products, or residues
generated, resulting, or produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless from and against
any and all losses (including, without limitation, diminution in value of the
Premises or the Project and loss of rental income from the Project), claims,
demands, actions, suits, damages (including, without limitation, punitive
damages), expenses (including, without limitation, remediation, removal, repair,
corrective action, or cleanup expenses), and costs (including, without
limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
39, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 39 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligations of Tenant under this Paragraph 39 shall survive
any termination of this Lease.
Landlord shall have access to, and a right to perform inspections and tests
of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 39, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations.
Such inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.
40. Landlord's Environmental Representation. Except for Hazardous Material
contained in products used by other tenants at the Building in reasonable
quantities for ordinary cleaning, maintenance and janitorial supplies or for
office purposes and diesel fuel stored in an above ground storage tank located
in the generator room,
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Landlord represents to Tenant that to the best of Landlord's knowledge there are
no Hazardous Materials in the Premises or the Building in violation of
applicable law. Landlord further represents to Tenant that it has received no
written notice of the presence of any Hazardous Materials in violation of law in
the Premises or the Building.
41. Landlord Indemnification. Landlord and its successors and assigns shall
indemnify, defend, reimburse and hold Tenant, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, loss or expense (including attorneys' fees) which arise as a
result of Hazardous Substances, known or unknown, on the Premises caused by the
acts or omissions of Landlord, its agents or employees. Landlord's obligations,
as and when required by applicable law, shall include, but not be limited to,
the cost of investigation, removal, remediation, restoration and/or abatement,
and shall survive the expiration or termination of this Lease. In addition,
with respect to any Hazardous Substances (a) which existed, known or unknown, on
the Premises prior to the Commencement Date or (b) placed on or after the
Commencement Date upon or within the Premises by any third party unrelated to
and not claiming by, through or under Tenant, Landlord, or any other tenant at
the Project, Landlord, to the extent and as and when required by applicable law,
will be responsible for the cost of investigation, removal, remediation,
restoration and/or abatement of any such Hazardous Substances, unless the
Hazardous Substances shall have been placed upon or within the Premises by any
such third party with the intent to target Tenant or anyone claiming by, through
or under Tenant. Finally, Landlord shall use reasonable efforts to inform
Tenant of any Hazardous Substances discovered within the Premises to the extent
the same were not placed there by Tenant, its employees, agents or assigns.
42. Rules and Regulations. Tenant shall, at all times during the Lease Term
and any extension thereof, comply with all reasonable rules and regulations at
any time or from time to time reasonably established in a non-discriminatory
fashion, by Landlord covering use of the Premises and the Project. The current
rules and regulations are attached hereto. The current rules and regulations
shall not be changed in such a manner as would materially impair Tenant's rights
hereunder. In the event of any conflict between said rules and regulations and
other provisions of this Lease, the other terms and provisions of this Lease
shall control. Landlord shall not have any liability or obligation for the
breach of any rules or regulations by other tenants in the Project.
43. Security Service. Tenant acknowledges and agrees that, while Landlord may
patrol the Project, Landlord is not providing any security services with respect
to the Premises and that Landlord shall not be liable to Tenant for, and Tenant
waives any claim against Landlord with respect to, any loss by theft or any
other damage suffered or incurred by Tenant in connection with any unauthorized
entry into the Premises or any other breach of security with respect to the
Premises.
44. Force Majeure. Neither party hereunder shall be held responsible for
delays in the performance of its obligations hereunder when caused by strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, delay in issuance of permits, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of such party ("Force Majeure"), provided
the party shall have attempted diligently and in good faith to perform or
satisfy such obligation, but Force Majeure shall never justify a delay in either
party's monetary obligations hereunder.
45. Entire Agreement. This Lease constitutes the complete agreement of
Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.
46.. Severability. If any clause or provision of this Lease is illegal, invalid
or unenforceable under present or future laws, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease shall not be
affected thereby. It is also the intention of the parties to this Lease that in
lieu of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there be added, as a part of this Lease, a clause or provision as
similar
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in terms to such illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.
47. Brokers. Tenant and Landlord each represents and warrants to the other
that it has dealt with no broker, agent or other person in connection with this
transaction and that no broker, agent or other person brought about this
transaction, other than the broker, if any, set forth on the first page of this
Lease, and Tenant and Landlord each agrees to indemnify, protect, defend and
hold the other harmless from and against any claims by any other broker, agent
or other person claiming a commission or other form of compensation by virtue of
having dealt with such party with regard to this leasing transaction. Landlord
shall be responsible for paying a leasing commission to the broker named in the
Basic Lease Provisions in accordance with the terms of a separate agreement.
48. Miscellaneous.
A. Any payments or charges due from Tenant to Landlord hereunder shall be
considered rent for all purposes of this Lease.
B. If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.
C. All notices required or permitted to be given under this Lease shall
be in writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses set
forth below. Either party may by notice given aforesaid change its address for
all subsequent notices. Except where otherwise expressly provided to the
contrary, notice shall be deemed given upon delivery.
To Landlord: MBC Springbelt, LLC
c/o MBC Realty Advisors, L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Tenant: ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Attention: Legal Department
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Tenant as a courtesy copy: ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Attention: Vice President of Operations
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
D. Except as otherwise expressly provided in this Lease or as otherwise
required by law, Landlord retains the absolute right to withhold any consent or
approval.
E. At Landlord's request from time to time Tenant shall furnish Landlord
with true and complete copies of its most recent annual and quarterly financial
statements prepared by Tenant or Tenant's accountants and any other financial
information or summaries that Tenant typically provides to its lenders or
shareholders ("Statements"), solely for the review of bona fide prospective
purchasers and encumbrancers, which such prospective purchasers and
encumbrancers shall agree to preserve the confidentiality of the substance and
contents of the Statements and terms and conditions of this Lease. Except in
connection with determining compliance with the financial tests described in
paragraph 8 hereof, or a potential sale or financing of the Project, Tenant
shall not be obligated to provide the foregoing financial information more than
once each Lease Year.
F. Neither this Lease nor a memorandum of lease shall be filed by or on
behalf of Tenant in any public record without the written consent of Landlord.
Landlord agrees not to unreasonably withhold, delay or condition its consent to
the recording of a memorandum of this Lease at Tenant's sole cost and expense
provided that Tenant deliver to Landlord an executed release of such memorandum
in recordable form and substance acceptable to Landlord. Landlord may prepare
and file, and upon request by Landlord Tenant will execute, a memorandum of
lease.
G. The normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
H. The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party until
execution of this Lease by both parties.
I. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
J. Any amount not paid by either party hereunder to the other within 5
days after receipt of notice of non-payment shall bear interest from such due
date until paid in full at the lesser of the (a) highest rate permitted by
applicable law or (b) the sum of the "prime rate" as published in The Wall
Street Journal on the date the payment was due plus seven (7) percentage points.
It is expressly the intent of Landlord and Tenant at all times to comply with
applicable law governing the maximum rate or amount of any interest payable on
or in connection with this Lease. If applicable law is ever judicially
interpreted so as to render usurious any interest called for under this Lease,
or contracted for, charged, taken, reserved, or received with respect to this
Lease, then it is Landlord's and Tenant's express intent that all excess amounts
theretofore collected by either party be credited on the applicable obligation
(or, if the obligation has been or would thereby be paid in full, refunded
within fifteen days of such judgment), and the provisions of this Lease
immediately shall be deemed reformed and the amounts thereafter collectible
hereunder reduced, without the necessity of the execution of any new document,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder.
K. Construction and interpretation of this Lease shall be governed by the
laws of the state in which the Project is located, excluding any principles of
conflicts of laws.
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L. Time is of the essence as to the performance of Tenant's obligations
under this Lease.
M. All exhibits and addenda attached hereto are hereby incorporated into
this Lease and made a part hereof. In the event of any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda signed
by both parties shall control.
49. Landlord's Lien/Security Interest. Tenant hereby grants Landlord a
security interest, and this Lease constitutes a security agreement, within the
meaning of and pursuant to the Uniform Commercial Code of the state in which the
Premises are situated as to all of property situate in, or upon, or used in
connection with the Premises to the extent the same is deemed to be real
property under Virginia law as security for all of Tenant's obligations
hereunder, including, without limitation, the obligation to pay rent.
50. Limitation of Liability of Trustees, Shareholders, and Officers of Parties.
Any obligation or liability whatsoever of either party hereunder which may arise
at any time under this Lease or any obligation or liability which may be
incurred by it pursuant to any other instrument, transaction, or undertaking
contemplated hereby shall not be personally binding upon, nor shall resort for
the enforcement thereof be had to the property of, its members, managers,
trustees, directors, shareholders, officers, employees or agents, regardless of
whether such obligation or liability is in the nature of contract, tort, or
otherwise.
51. Tenant's Extension Options.
A. Options. Provided that Tenant has not assigned this Lease except for
the exclusions in Paragraph 24 that do not require the consent of the Landlord,
and that Tenant is not in default under this Lease at the time of exercise or at
any time thereafter until the beginning of any extension of the term, Tenant
shall have the following options to extend the term of this Lease (each an
"Extension Option"): (1) an option (the "First Extension Option") to extend the
term of this Lease, for the period from the expiration of the initial term
through the last day preceding the 5th year thereafter (the "First Extension
Period"), by delivering written notice to Landlord of exercise of Tenant's First
Extension Option at least twelve (12) months, but not more than eighteen (18)
months, prior to the end of the initial Lease Term; and (2) if Tenant duly
exercises the First Extension Option, an additional option (the "Second
Extension Option") to further extend the term of this Lease, for the period from
expiration of the First Extension Period through the last day preceding the 5th
year thereafter (the "Second Extension Period"), by delivering written notice to
Landlord of exercise of Tenant's Second Extension Option at least twelve (12)
months, but not more than eighteen (18) months prior the end of the First
Extension Term. Any Extension Option shall terminate if not exercised in the
manner provided herein. Any such extension shall be upon all the terms and
conditions set forth in this Lease, except as may be expressly modified and
fully executed by both parties.
B. Market Base Rental. The Base Rent for the Extension Period shall be a
fair market rent ("Fair Market Base Rental") for the space and term involved,
which shall be determined as set forth below. "Fair Market Base Rental" shall
mean the Base Rent at the time or times in question for the applicable space,
based on the prevailing rentals then being charged to new tenants in similar
buildings in the area, of comparable size, location, quality and age as the
Building, the desirability, location in the building, size, quality, cost
savings of Landlord for not having to pay leasing commissions, and method for
payment of taxes and expenses or increases in taxes and expenses for the space
in the Building for which Fair Market Base Rental is being determined and of the
buildings which are being used for comparison, and the credit of Tenant. Fair
Market Base Rental shall also reflect the then prevailing rental structure for
comparable buildings in the general vicinity of the Premises, so that if, for
example, at the time Fair Market Base Rental is being determined the prevailing
rental structure for comparable space and for comparable lease terms includes
periodic rental adjustments or escalations, Fair Market Base Rental shall
reflect such rental structure, or, for example, if prevailing rental structure
for comparable space does not include charges for parking, then there shall be
no charge for parking. The value of cash and non-cash tenant concessions
included in the transactions being used for comparison shall also be taken into
account in determining prevailing rentals.
C. Determination of Fair Market Base Rental. Upon written notice of
Tenant's intent to exercise an Extension Period, Landlord shall within twenty
(20) days provide Tenant, with written notice, the amount which Landlord
contends to be the Fair Market Base Rental. Within twenty (20) days after
receipt of Landlord's written
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notice of the Fair Market Base Rental, Tenant shall give Landlord written notice
("Tenant's Response"), either (a) irrevocably exercising Tenant's Extension
Option and accepting the statement of Fair Market Base Rental set forth in
Landlord's notice, or (b) rejecting the Fair Market Base Rental set forth in
Landlord's notice and specifying the amount Tenant contends to be the Fair
Market Base Rental. If Tenant rejects the Fair Market Base Rental specified by
Landlord, then Landlord and Tenant shall endeavor to negotiate a mutually
acceptable resolution to their dispute concerning the Fair Market Base Rental.
If they are unable to agree within thirty (30) days after receipt by Landlord of
Tenant's Response upon a mutually acceptable resolution of the Fair Market Base
Rental, then Tenant shall either (i) revoke its intent to exercise the Extension
Period, or (ii) provide Landlord with written notice to arbitrate the Fair
Market Base Rental. If Tenant elects to arbitrate the Fair Market Base Rental,
the term of the Lease shall be extended for the Extension Period, and the final
determination of the Fair Market Base Rental shall be binding on both Landlord
and Tenant. Upon Tenant's written notice, Landlord and Tenant shall, within ten
(10) days, each separately designate a licensed real estate broker or agent who
is reasonably active in regard to the valuation of industrial properties in the
area where the Project is located to participate in determination of the Fair
Market Base Rental. If either Landlord or Tenant fails timely to designate an
appraiser as provided above, then the determination of Fair Market Base Rental
shall be made solely by the broker or agent timely designated by the other party
and such determination shall be binding on Landlord and Tenant. Within sixty-
five (65) days after receipt by Landlord of Tenant's notice (or at such other
time as Landlord and Tenant may mutually agree), each party shall state in
writing the amount the party contends to be the Fair Market Base Rental,
including whatever support for such contention the party wishes to have
considered by the brokers/agents. The brokers/agents shall arrange for
simultaneous exchange of such written contentions and for presentation of such
additional evidence, rebuttals, or other matters as the parties may wish to
present and the brokers/agents may elect to hear or otherwise receive. After
presentation of such additional evidence and argument as the brokers/agents may
elect to receive, if any, each party may submit a modified statement of
contended Fair Market Base Rental. If the brokers/agents do not agree upon the
actual Fair Market Base Rental, and the two statements of Fair Market Base
Rental are within ten percent (10%) of one another, then the two statements of
Fair Market Base Rental shall be averaged and such amount shall be binding on
Landlord and Tenant as the Fair Market Base Rental. If the determinations of the
two brokers/agents are greater than ten percent (10%) from one another, then the
two brokers/agents shall appoint, within ten (10) days thereafter, a third
licensed broker or agent who has significant experience and is then active
leasing warehouse space in the area. If the two brokers/agents designated by
Landlord and Tenant cannot agree on the appointment of a third broker or agent
within the time period provided, either Landlord or Tenant may seek the
appointment of a third broker or agent by the presiding judge for the Circuit
Court for Fairfax County, Virginia. The third broker/agent shall then determine
which of the two final contended Fair Market Base Rental amounts submitted by
the parties is closest to the actual Fair Market Base Rental, and such
determination shall be binding on Landlord and Tenant as the Fair Market Base
Rental.
D. Costs and Expenses. All reasonable fees and expenses of the
brokers/agents shall be paid as follows: Landlord shall advance the fees and
expenses of the broker/agent designated by Landlord; Tenant shall advance the
fees and expenses of the broker/agent designated by Tenant; and Landlord and
Tenant shall each advance one half of any fees and expenses of the third
broker/agent. The attorneys' fees and expenses of counsel for the respective
parties and of witnesses shall be paid and borne by the party engaging such
counsel or calling such witness, as the case may be.
E. Payments Pending Determination. If the Fair Market Base Rental for any
Extension Period has not been determined at such time as Tenant is obligated to
pay Base Rent for such Extension Period, Tenant shall pay as Base Rent pending
such determination the Base Rent in effect for such space immediately prior to
the Extension Period; provided, that upon the determination of the applicable
Fair Market Base Rental, any shortage of Base Rent paid shall be paid to
Landlord by Tenant.
52. Tenant Improvement Allowance. Landlord will provide a tenant improvement
allowance in the amount of Four Dollars and Eighty Seven and one-half cents
($4.875) per rentable square foot leased by Tenant ("Tenant Improvement
Allowance") for the cost of improvements in and about the Premises, including
designing, space planning, real estate consultants, engineering, permitting,
managing and constructing the build-out of the Premises and site work by Tenant.
The Tenant Improvement Allowance shall be disbursed to Tenant from time-to-time
in the amount equal to fifty percent (50%) of the actual amounts spent by Tenant
for such items within thirty (30) days of
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the receipt by Landlord of a written request therefor accompanied by paid
receipts, invoices and lien waivers for the work, up to an aggregate amount
equal to $4.875 per rentable square foot leased by Tenant.
53. Final Determination of Premises Square Footage. The exact square footage
of the Premises shall be determined by Tenant's architect, subject to the
reasonable approval of Landlord. Tenant's architect shall measure the space
based upon the standards most recently promulgated by the Washington D.C.
Association of Realtors upon completion of the demising wall to be constructed
by Landlord. If Landlord disagrees with the rentable square footage determined
by Tenant's architect, Landlord and Tenant shall mutually agree upon an
independent, third party architect who shall measure the Premises based on the
foregoing standards and whose decision will be final and binding upon Landlord
and Tenant.
54. Roof Installations. Tenant, at its sole cost and expense, but subject to
Landlord's prior written consent (which shall not be unreasonably withheld,
delayed or conditioned), shall have the option to install over the Premises (a)
antennas and satellite dishes, (b) refrigeration equipment, and (c) heating
ventilation and air conditioning equipment, in each case subject to applicable
codes. There shall be no additional rent charged for such use of the roof and
these items shall be treated as Trade Fixtures. As such, Tenant shall remove
all such equipment at the end of the lease and repair all penetrations and other
damage to the Building caused thereby.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
TENANT: LANDLORD:
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., A Delaware MBC SPRINGBELT, LLC,
corporation a Delaware limited liability company
By: /s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ By: MBC INDUSTRIAL I, L.C.,
------------------------------- a Virginia limited liability company
Title:
----------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Managing Director
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