Exhibit 10.11
L E A S E
between
A&E PARTNERS, L.P.,
as Landlord
and
Creditrust Corporation
as Tenant
* * * * *
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11/94
INDEX TO STANDARD COMMERCIAL BASE YEAR LEASE
ARTICLE I DEFINITIONS AND CERTAIN BASIC PROVISIONS.................1
ARTICLE II GRANTING CLAUSE..........................................4
ARTICLE III CONSTRUCTION AND ACCEPTANCE OF PREMISES..................4
ARTICLE IV RENT.....................................................5
ARTICLE V FINANCIAL DISCLOSURES....................................6
ARTICLE VI COMMON AREA..............................................6
ARTICLE VII USE AND CARE OF PREMISES.................................9
ARTICLE VIII MAINTENANCE AND REPAIR OF PREMISES......................12
ARTICLE IX ALTERATIONS.............................................13
ARTICLE X LANDLORD'S RIGHT OF ACCESS; USE OF ROOF.................14
ARTICLE XI SIGNS; EXTERIOR OF PREMISES.............................14
ARTICLE XII UTILITIES...............................................15
ARTICLE XIII INSURANCE...............................................15
ARTICLE XIV NON-LIABILITY FOR CERTAIN DAMAGES.......................17
ARTICLE XV DAMAGE BY CASUALTY......................................18
ARTICLE XVI EMINENT DOMAIN..........................................19
ARTICLE XVII ASSIGNMENT AND SUBLETTING...............................20
ARTICLE XVIII TAXES...................................................22
ARTICLE XIX EVENTS OF DEFAULT AND REMEDIES..........................23
ARTICLE XX MECHANICS' LIENS........................................28
ARTICLE XXI SURRENDER; HOLDING OVER.................................28
ARTICLE XXII SUBORDINATION AND ATTORNMENT............................29
ARTICLE XXIII [INTENTIONALLY DELETED].................................29
ARTICLE XXIV NOTICES.................................................29
ARTICLE XXVI [INTENTIONALLY DELETED].................................30
ARTICLE XXVII [INTENTIONALLY DELETED].................................30
ARTICLE XXVIII BANKRUPTCY..............................................30
ARTICLE XXIX MISCELLANEOUS...........................................30
11/94
EXHIBIT A ........... Property Site Plan Showing Premises
EXHIBIT B ........... Legal Description of Property
EXHIBIT C ........... Description of Landlord's and Tenant's Work
EXHIBIT C-1 ........ Approved Plans
EXHIBIT C-2 ........ Jaid Group Elevation Drawings re Landscaping
EXHIBIT D .......... Intentionally Deleted
EXHIBIT E ........... Rules and Regulations
11/94
STANDARD COMMERCIAL
BASE YEAR LEASE
THE STATE OF MARYLAND
COUNTY OF BALTIMORE
This lease (this "Lease"), entered into this __________ day of
_________________________, 1997, by and between the Landlord and the Tenant
hereinafter named.
ARTICLE I. DEFINITIONS AND CERTAIN BASIC PROVISIONS
1.1 (a) "Landlord":
A & E Partners, L.P.
(b) Landlord's Address:
c/o Emmes Realty Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Manager
with a copy to:
Emmes Asset Management Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(c) "Tenant":
Creditrust Corporation, a Maryland corporation
(d) Tenant's Mailing Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(e) Tenant's Trade Name:
Creditrust Corporation
(f) Premises Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(g) "Premises": Approximately 35,471 square feet, which comprise the
entire building (the "Building") located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (computed from measurements to the
exterior of outside walls of the Building and to the center of
any interior walls), such Premises being shown and outlined on
the plan attached hereto as Exhibit A, and being part of the
property described in Exhibit B attached hereto. "Property"
shall refer to the property described in Exhibit B and any
adjacent property acquired and affirmatively integrated into the
Property by Landlord and any and all improvements constructed
thereupon. Exhibit A sets forth the general layout of the
Property, but shall not be deemed to be a warranty,
representation or agreement on the part of the Landlord that the
Property will always be exactly as indicated. Landlord reserves
the right to relocate the Premises within the Property at any
time prior to the delivery of possession thereof to Tenant. If
Landlord or Tenant so requests, at any time prior to, or during
the first year of, the Term (as such term is defined herein),
the actual "as built" total square footage of the Premises shall
be measured by Landlord's architect or engineer in the presence
of Tenant or Tenant's authorized representative. In the event
-1-
the Premises shall contain an amount of square footage different
than the amount of square feet referenced above, the Base Rent
and all other charges calculated on the basis of "Tenant's
Proportionate Share" payable by Tenant hereunder shall be
proportionately adjusted based on actual square footage
multiplied by the applicable square foot rental rate (and such
adjustment shall relate back to the Commencement Date if there
is a variance). The cost of such measurement shall be borne by
the party requesting same.
(h) "Lease Term" or "Term": Commencing on the "Commencement Date" as
defined in Section 1.1(i) and ending December 31, 2002.
(i) "Commencement Date": February 1, 1997.
(j) "Permitted Use": Operation of offices for the administration and
collection of consumer debt and any other use which is ancillary to
Tenant's primary business, and no other purpose.
(k) Base Rent: See Section 4.2, below.
(l) "Rent": Collectively, Base Rent and "Additional Rent," as defined
in Section 4.4 hereof.
(m) "Security Deposit":
(A) On or before the date of Tenant's execution
hereof, Tenant shall post Tenant's Security Deposit in the
form of an irrevocable, unconditional letter of credit issued
by Signet Bank or a different financial institution having
branches within the State of Maryland, and which institution
shall be otherwise satisfactory to Landlord. Such letter of
credit is hereinafter referred to as the "Letter of Credit".
The following provisions shall apply with respect to the
Letter of Credit.
(i) The Letter of Credit shall name Landlord as
the sole beneficiary, but shall be fully assignable by
Landlord. The initial amount of the Letter of Credit shall
be Two Hundred Fifty Thousand Dollars ($250,000.00). The
Letter of Credit shall initially have a term of not less
than one (1) year, and shall be renewed annually by Tenant
(with Tenant to deliver evidence of such renewal to
Landlord no later than twenty (20) business days prior to
the scheduled expiration date thereof). If Tenant fails to
deliver evidence of such renewal to Landlord at least
twenty (20) days prior to such expiration date, Landlord
shall give Tenant notice of such failure, and if Tenant
fails to deliver evidence of such renewal within ten (10)
days prior to such expiration date, then Landlord shall
have the right to draw upon the Letter of Credit in full,
and to hold the proceeds of such draw as a cash security
deposit pursuant to Section 19.8 of this Lease.
(ii) The Letter of Credit shall be unconditional
and irrevocable, and shall provide that the same may be
drawn upon by the presentation of a draft executed by
Landlord and presented to the issuer, accompanied by a
certificate of the Landlord which certifies (a) that the
Landlord is entitled to draw upon the Letter of Credit
pursuant to the terms of this Lease, and (b) that the
amount demanded does not exceed the amount available under
the Letter of Credit on the date upon which such draw is
made.
(iii) The Letter of Credit shall provide that it
may be drawn partially or in full, as Landlord may elect.
(B) Landlord shall have the right to draw upon the
Letter of Credit, in full, either (i) immediately upon the
occurrence of an Event of Default under
-2-
this Lease which is not cured within any applicable cure
period provided for herein, or (ii) in the event Tenant fails
to renew the Letter of Credit in accordance with subparagraph
(A) of this Section 1.1(m). In the event the Letter of Credit
is drawn upon by Landlord, the proceeds thereof may be held by
Landlord as a cash security deposit, and may be applied by
Landlord (and shall be accounted for by Landlord) in
accordance with the terms of Section 19.8 of this Lease.
(C) Notwithstanding anything to the contrary in this
Section 1.1(m), above, Tenant's obligation to maintain the
Letter of Credit shall cease upon the earlier of: (a)
Landlord's receipt of Tenant's payment in full of all Rent due
hereunder for twelve (12) full months after the "Free Rent
Period" (as defined in Section 4.2, below), or (b) the date
upon which Tenant presents Landlord with proof that Tenant's
net worth has reached at least Ten Million Dollars
($10,000,000.00), which proof shall include financial
statements prepared in accordance with generally accepted
accounting principles, and Tenant shall provide Landlord with
any additional proof as to Tenant's net worth which Landlord
reasonably requests prior to being released from Tenant's
obligation to maintain the Letter of Credit. Alternatively, if
at any time after the last day of the twelfth (12th) month
after the expiration of the Free Rent Period, Tenant is unable
to meet the net worth criteria specified in clause (b) above,
then provided Tenant is not currently and has not been in
Default hereunder, Tenant shall have the option to deposit a
cash security deposit with Landlord in the amount of
Ninety-Five Thousand Three Hundred Twenty Eight and 31/100
Dollars ($95,328.31), in which event Tenant's obligation to
maintain the Letter of Credit shall cease upon Landlord's
receipt of such cash security deposit. Any such cash security
deposit shall be held by Landlord pursuant to the terms of
Section 19.8 of the Lease. Landlord shall promptly return the
Letter of Credit to Tenant when Tenant's obligation to
maintain the Letter of Credit ceases.
(n) [Intentionally Deleted.]
-3-
(o) "Tenant's Proportionate Share" or "Proportionate Share": Subject to
Section 6.4, below, a fraction, the numerator of which shall be the
number of rentable square feet of floor space in the Premises and
the denominator of which shall be the number of rentable square
feet of floor space in all premises within the Property that are
leased or leasable as of January 1 of the applicable year and which
contribute on a Proportionate Share basis to the pass-through item
in question. Because the Premises consists of the entire leasable
area of the Building, Tenant's Proportionate Share shall be one
hundred percent (100%). For purposes of further clarifying the
foregoing definition and in calculating Tenant's Proportionate
Share of certain items (or components thereof), the following
additional provisions shall apply: (1) In the case of Common Area
Costs, the denominator of the fraction shall exclude (i) the
rentable square feet of premises occupied by lessees or owners
within the Property who do not contribute on a Proportionate Share
basis to all or part of the Common Area Costs because they are
obligated to maintain separately certain common areas appurtenant
to their leased or owned premises, and (ii) with regard to specific
Common Area Cost items, the rentable square feet of all other
tenants in the Property who do not include such items within the
calculation of such other tenant's share of Common Area Costs
because such other tenants are individually responsible for the
item in question (i.e., if a tenant provides for its own trash
removal and the cost of trash removal is not part of such tenant's
Common Area Cost obligation, that tenant's rentable square feet
shall be excluded from the denominator in determining Tenant's
Proportionate Share of trash removal costs); (2) In the case of
Insurance, Tenant's Proportionate Share of Landlord's cost of
casualty insurance shall exclude from the denominator of the
fraction the rentable square feet of any building in the Property
which is separately insured by the tenant of such building, and
which tenant as a result does not contribute to Landlord's cost of
casualty insurance; and (3) in the case of Taxes, Tenant's
Proportionate Share of Taxes shall exclude from the denominator of
the fraction the rentable square feet of any leased building in the
Property which is separately assessed and whose tenant pays such
separately assessed tax amount pursuant to its lease in lieu of
paying a Proportionate Share of Taxes assessed for the Property as
a whole.
(p) "Lease Year": Each twelve (12) month period within the Lease Term
shall be referred to herein as a "Lease Year." The first Lease Year
shall commence on the Lease Commencement Date and terminate 365
days after such Lease Commencement Date. Each subsequent Lease Year
shall commence on the date immediately following the last day of
the preceding Lease Year and shall continue for a period of twelve
(12) full months, except that the last Lease Year of the Lease Term
shall terminate on the date this Lease expires or is otherwise
terminated.
(q) "Calendar Year" shall mean the twelve-month period commencing
January 1 and ending December 31.
(r) "Base Year" shall mean Calendar Year 1997.
(s) "Base Tax Year" shall mean the fiscal tax year 1997-1998.
1.2 General. Each of the foregoing definitions and basic provisions shall
be construed in conjunction with and limited by references thereto in other
provisions of this Lease.
ARTICLE II. GRANTING CLAUSE
In consideration of the obligation of Tenant to pay Rent as herein
provided, and the other terms, covenants and conditions hereof, and in
consideration of Ten Dollars ($10.00) cash in hand paid by each party to the
other, the receipt and sufficiency of which are hereby acknowledged, Landlord
hereby demises and leases to Tenant, and Tenant hereby takes from Landlord, the
Premises TO HAVE AND TO HOLD for the Lease Term, all upon the terms and
conditions set forth in this Lease.
-4-
ARTICLE III. CONSTRUCTION AND ACCEPTANCE OF PREMISES
3.1 Premises Ready for Occupancy. Improvements to the Premises shall be
constructed in compliance with the provisions of Exhibit C attached hereto. The
Premises shall be deemed to be "Ready for Occupancy" when Landlord certifies in
writing to Tenant that Landlord has completed Landlord's Work, as described in
Exhibit C (excepting only minor incomplete or defective items of the type
typically set forth on a punch-list, which incomplete items do not affect
Tenant's ability to lawfully take occupancy of the Premises and which incomplete
items do not materially and adversely affect Tenant's ability to use and enjoy
the Premises) and is ready, willing and able to tender possession thereof to
Tenant. In no event shall the determination of the date upon which the Premises
are deemed "Ready for Occupancy" be predicated upon the construction of any of
"Tenant's Work" as described in Exhibit C. Upon Tenant's request, which request
shall be made within five (5) days following Landlord's delivery to Tenant of
the Ready for Occupancy notice set forth above, Landlord agrees to participate
in a joint walk-through and inspection of the Premises with Tenant, provided
that such inspection shall not delay the "Ready for Occupancy" date nor Tenant's
obligation to commence construction of Tenant's Work. If the Premises are not
Ready for Occupancy on or prior to the Commencement Date, Landlord shall not be
deemed to be in default hereunder or otherwise liable in damages to Tenant, nor
shall the Term of this Lease be affected. When the Premises are Ready for
Occupancy, Tenant agrees to accept possession thereof and to proceed with due
diligence to perform the work described under "Description of Tenant's Work" in
Exhibit C, all of such work to be performed in compliance with Exhibit C, and to
install its fixtures, furniture and equipment.
Any Tenant Work involving venting, opening, sealing, waterproofing or
any altering of the roof shall be performed by Landlord's roofing contractor at
Tenant's sole expense. Upon completion of such work, Tenant shall provide
Landlord with a certificate from Landlord's roofing contractor stating that all
of Tenant's Work involving venting, opening, sealing, waterproofing or in any
way altering the roof has been performed in compliance with Exhibit C. Tenant
hereby indemnifies and holds Landlord harmless from any damage to the Premises
resulting, directly or indirectly, from Tenant's venting, opening, sealing,
waterproofing or other altering of the roof unless such a certificate from
Landlord's roofing contractor has been delivered to Landlord before the date of
any such damage. In the event of any dispute as to work performed or required to
be performed by Landlord or Tenant pursuant to Exhibit C, the certificate of
Landlord's architect or engineer shall be conclusive. By initiating Tenant Work
(but excluding the "Early Work", as defined in Exhibit C), Tenant shall be
deemed to have accepted the Premises and to have acknowledged that the same
fully complies with Landlord's covenants and obligations hereunder (irrespective
of whether Landlord has certified to Tenant that the Premises are Ready for
Occupancy), subject to punch list items. Tenant agrees to furnish to Landlord a
Certificate of Occupancy from applicable local authorities on or before the
Commencement Date; provided, however, Tenant's failure to do so shall not delay
the Commencement Date.
-5-
3.2 Commencement Date.
(a) Notwithstanding the February 1, 1997 date specified in Section
1.1(i), above, the "Commencement Date" of this Lease shall be the date upon
which Landlord delivers the Completion Notice to Tenant (as set forth in
paragraph 10 of Exhibit C hereto). Notwithstanding anything to the contrary
herein, (i) in the event the Commencement Date has not occurred on or before
February 15, 1997 (other than as a result of any "Tenant Delay", as such term is
defined in Exhibit C hereto), the parties mutually agree that the Term of this
Lease shall expire on February 15, 2003, regardless of when the Commencement
Date occurs (in other words, the Term of the Lease shall be shorter than
seventy-two (72) full months if the Commencement Date occurs after February 15,
1997 other than as a result of any Tenant Delay), (ii) in the event the date
upon which Landlord delivers the Completion Notice to Tenant is delayed more
than fifteen (15) days due to any Tenant Delay, then the Commencement Date of
this Lease shall be February 15, 1997 irrespective of whether construction of
Landlord's Work has been completed by February 15, 1997. The foregoing
notwithstanding, if a combination of Tenant Delay and delay occurring other than
as a result of Tenant Delay causes the date upon which construction of
Landlord's Work is completed to extend past February 15, 1997, then the
Commencement Date shall be adjusted to be that date upon which Landlord's Work
would have been completed but for such Tenant Delay (but only to the extent such
Tenant Delay exceeded fifteen (15) days), and the Lease Term shall expire on the
earlier of (1) that date which is seventy-two (72) full months after the
Commencement Date or (2) that date which is calculated by measuring seventy-two
(72) full months after the date Landlord's Work would have been completed but
for such Tenant Delay (but not later than February 15, 1997), plus the total
number of days of Tenant Delay which occurred. For purposes of illustrating the
foregoing provision only, and not by way of limitation, (A) if there were twenty
(20) days of Tenant Delay and completion of Landlord's Work and delivery of the
Completion Notice was achieved on February 28, 1997, then the Lease Commencement
Date shall be deemed to be February 23, 1997, and the expiration of the Lease
Term shall be February 22, 2003, (B) if there were ten (10) days of Tenant Delay
and completion of Landlord's Work and delivery of the Completion Notice was
achieved on February 28, 1997, then the Lease Commencement Date shall be
February 28, 1997, and the expiration of the Lease Term shall occur on February
24, 2003, (C) if there were ten (10) days of Tenant Delay and completion of
Landlord's Work and delivery of the Completion Notice was achieved on February
20, 1997, then the Lease Commencement Date shall be February 20, 1997, and the
expiration of the Lease Term shall occur on February 19, 2003, and (D) if there
was no Tenant Delay and completion of Landlord's Work and delivery of the
Completion Notice was achieved on February 28, 1997, then the Lease Commencement
Date shall be February 28, 1997, and the expiration of the Lease Term shall
occur on February 15, 2003.
(b) Any entry and/or occupancy of the Premises by Tenant, its agents,
employees or contractors prior to the Commencement Date shall be at Tenant's
sole risk, and deemed pursuant to, and subject to, all of the terms and
provisions of this Lease; provided, however, in no event shall Tenant, its
agents, employees or contractors be entitled to enter the Premises or take
occupancy thereof prior to the date it receives Landlord's notice that the same
are Ready for Occupancy except for the "Early Work", as set forth in Exhibit C
hereto.
(c) Landlord and Tenant each agree that at the request of the other
they will, following the Commencement Date, execute and deliver a certificate or
written statement acknowledging that Tenant has accepted possession of the
Premises, reciting the Commencement Date and expiration date of this Lease,
certifying that Landlord has fully complied with all Landlord's covenants and
obligations hereunder, and confirming the square footage of the Premises.
ARTICLE IV. RENT
4.1 General. Rent shall accrue hereunder from the Commencement Date, and
shall be payable by Tenant to Landlord, in immediately available funds, at the
place designated for the delivery of notices to Landlord at the time for payment
(or at such other place as Landlord designates), without previous demand and
without any set-offs or deductions whatsoever.
4.2 Base Rent. Tenant agrees to pay to Landlord, as and for its basic rent
("Base Rent") for the initial Term of this Lease, an amount equal to the sum of
all Monthly Base Rent payments stated to be due during the initial Term as set
forth below:
-6-
Base Rental Rate Annual Base Monthly
Months Per Square Foot Per Year Rent Base Rent
------ ------------------------ ------------- -------------
1-6 ("Free Rent Period") $ 0.00 $ 0.00 $ 0.00
7-12 $ 10.75 $ 381,313.25 $ 31,776.10
13-24 $ 11.29 $ 400,467.59 $ 33,372.30
25-36 $ 11.85 $ 420,331.35 $ 35,027.61
37-48 $ 12.44 $ 441,259.24 $ 36,771.60
49-60 $ 13.06 $ 463,251.26 $ 38,604.27
61-December 31, 2002* $ 13.72 $ 486,662.12 $ 40,555.18
----------
*The parties acknowledge that the Term may be shortened under certain
circumstances, as set forth in Section 3.2(a), above.
The phrase "Monthly Base Rent" shall refer to the monthly installments of Base
Rent, as set forth above. All Monthly Base Rent payments shall be due and
payable, in advance, on or before the first day of each succeeding calendar
month during the Lease Term. Notwithstanding the foregoing, if the Commencement
Date is a date other than the first day of a calendar month, there shall be due
and payable on or before such date, as Base Rent for the balance of such
calendar month, a sum equal to that proportion of the Base Rent specified for
the first full calendar month herein provided in which a monthly payment of Base
Rent is due, which the number of days from the Commencement Date to the end of
the calendar month during which the Commencement Date shall fall bears to the
total number of days in such month.
4.3 Additional Rent. In addition to Base Rent, Tenant shall pay, as
"Additional Rent" hereunder, (i) Tenant's Proportionate Share of increases in
"Common Area Costs," as set forth in Section 6.3 hereof; (ii) Tenant's
Proportionate Share of increases in premiums for the "Insurance" to be obtained
by Landlord for the Property, as set forth in Section 13.2 hereof, (iii)
Tenant's Proportionate Share of increases in "Taxes," as set forth in Article
XVIII hereof; and (iv) all other sums or charges due or to become due from
Tenant to Landlord hereunder. Any payment of monies called for herein to be made
by Tenant to Landlord is deemed Additional Rent and shall be collectible as
Additional Rent.
ARTICLE V. FINANCIAL DISCLOSURES.
Tenant shall, from time to time and at any time, upon receipt of a written
request from Landlord, provide true, complete and accurate financial information
and documentation about itself and any guarantor of this Lease to Landlord or
Landlord's designee, within ten (10) days after such request. The corporate
officers executing this Lease on Tenant's behalf hereby represent and warrant to
Landlord that the financial statements and other information submitted to
Landlord by Tenant prior to the execution hereof are true, complete and
accurate, were prepared in accordance with generally accepted cash accounting
principles applied on a consistent basis, and accurately reflect Tenant's net
worth as of the date hereof.
ARTICLE VI. COMMON AREA.
6.1 General. The "Common Area" or "Common Areas" is/are that part of the
Property designated by Landlord from time to time for the common use of all
tenants, including among other facilities, equipment, signs, parking areas,
sidewalks, landscaping, curbs, loading areas, private streets and alleys,
lighting facilities, hallways, malls, restrooms, and all other areas and
improvements provided by Landlord for the common use of all tenants, all of
which shall be subject to Landlord's sole management and control and shall be
operated and maintained in such manner as Landlord, in its discretion, shall
determine. Landlord reserves the right to construct, maintain, and operate
lighting and other facilities, temporary and/or permanent improvements and
buildings, equipment and signs on all parts of the Common Area; increase, reduce
or change the number, size, height, layout, or locations of buildings, walks,
parking and/or common areas now or hereafter forming a part of the Property; to
police the Common Area; to restrict parking by tenants and other occupants of
the Property and their employees, agents and invitees or to provide reserved
parking for certain tenants; to close temporarily all or any portion of the
Common Area to make repairs, changes or to avoid public dedication; to
discourage or prohibit noncustomer parking; and to employ and discharge all
personnel with respect to maintenance operations and policing of equipment of
said Common Area. Landlord, in its sole discretion, may delegate its rights
herein with regard to the Common Area to an independent contractor or management
company, which may be an affiliate of Landlord. Upon request by Landlord, Tenant
-7-
shall provide the license plate numbers of all employees of Tenant to Landlord,
and shall advise its employees to park only in designated "Employee Parking"
areas; employee cars that are not parked in the designated "Employee Parking"
areas may be towed and/or fined, and all fines so addressed shall be the
responsibility of, and payable by, Tenant. Subject to Landlord's rights, as
aforesaid, Tenant and its employees, customers, subtenants licensees and
concessionaires shall have the non-exclusive right and license to use the Common
Area as constituted from time to time for ingress, egress and parking and for no
other purpose, such use to be in common with Landlord, other tenants of the
Property and other persons permitted by Landlord to use the same (in such manner
as Landlord may elect or agree with such other tenants and persons). Tenant and
Tenant's agents, employees and invitees will comply fully with all requirements
of the rules and regulations which Landlord may establish for the Property in
the exercise of its sole discretion from time to time including without
limitation the Rules and Regulations which are attached as Exhibit E to this
Lease and made a part hereof by this reference. Landlord shall at all times have
the right to change such rules and regulations or to promulgate other rules and
regulations in such manner as may be deemed advisable for safety, care or
cleanliness of the Property and for preservation of good order therein, all of
which rules and regulations, changes and amendments will be forwarded to Tenant
in writing and shall be carried out and observed by Tenant. Tenant shall further
be responsible for the compliance with such rules and regulations by its
employees, servants, agents, visitors and invitees. Landlord may temporarily
close any part of the Common Area for such periods of time as may be necessary
to prevent the public from obtaining prescriptive rights or to make repairs or
alterations.
6.2 Parking.
(A) In addition to the rights reserved to Landlord in Section 6.1 above
or elsewhere in this Lease, Landlord may from time to time substitute for any
parking area shown on Exhibit A other areas or multi-level parking facilities
reasonably accessible to the tenants of the Property.
(B) Notwithstanding anything to the contrary in this Lease, Tenant, its
agents, employees and invitees shall have the non-exclusive right to use the
free and open non-dedicated surface parking areas in and around 1705, 1713 and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (for so long as Landlord owns such properties) from the
hours of 8:00 a.m. to 12:00 a.m. Monday through Friday, to the extent any such
parking is available. In addition, Tenant, its agents, employees and invitees
shall have also have the non-exclusive right to use the free and open surface
parking in the rear of 6600 Security Boulevard (▇▇▇▇▇▇▇ Parking Shopping Center,
for so long as Landlord owns such Property) for its overflow parking.
(C) Landlord and Tenant agree that Landlord shall use commercially
reasonable efforts to secure additional overflow parking located off of the
Property for the use of Tenant, its agents, employees and invitees, provided
that in no event shall Landlord be required to expend more than Twelve Thousand
Dollars ($12,000.00) per year during the Lease Term for such off-Property
parking. In the event Landlord is unable to secure said off-Property overflow
parking on or before August 1, 1997, then Landlord shall have no further
obligation to make efforts to secure off-Property overflow parking, and instead
Landlord shall be obligated to pay Tenant the sum of Ten Thousand Dollars
($10,000.00), which shall be paid to Tenant on or before September 15, 1997. In
the event Landlord secures off-Property overflow parking in the parking lot
located adjacent to Best Products or Sam's Plaza, then Landlord, at Landlord's
expense, shall construct stairs from the Building parking lot to either such
overflow lot(s), at Landlord's expense, provided that in no event shall Landlord
be required to expend more than Ten Thousand Dollars ($10,000.00) in connection
with the construction of such stairs. In the event Landlord constructs such
stairs, Landlord shall have no obligation to pay Tenant the Ten Thousand Dollar
($10,000.00) amount referenced in this Section 6.2(C), above.
6.3 Common Area Costs. Tenant agrees to pay as Additional Rent during each
Lease Year of the Term (except during the Base Year), Tenant's Proportionate
Share of the increases of the "Common Area Costs," (as hereafter defined) above
the Common Area Costs for the Base Year. For purposes of this Lease, the term
"Common Area Costs" shall mean all costs and expenses incurred by Landlord in
operating, maintaining, repairing, lighting, signing, cleaning, painting,
stripping, insuring, equipping, staffing, heating and cooling, securing, and
policing of the Common Area, including, without limitation, all costs and
expenses associated with the following items or services, which may be incurred
by Landlord in its sole discretion: (i) maintaining and replacing any and all
alarm and life safety systems and any fire alarm monitoring or testing service
program or fire suppression system installed within the Premises or otherwise
within the improvements which form a part of the Property, including without
limitation any patrol services; (ii) maintenance of irrigation systems; (iii)
insurance, including, without limitation, liability insurance for personal
injury, death and property damage to the
-8-
extent not reimbursed by Tenant under Section 13.2 below; (iv) surcharges levied
upon or assessed against parking spaces or areas, payments toward mass transit
or car pooling facilities or otherwise as required by federal, state or local
governmental authorities; (v) all landscaping, including, but not limited to,
lawn maintenance, new plantings and replacement of existing landscaping; (vi)
repairing, cleaning, sweeping, painting, striping, replacing and repaving of
paving, curbs, walkways, guardrails, bumpers, fences, screens, flagpoles,
bicycle racks, signs and other markers, landscaping, drainage pipes, ducts,
conduits, lighting facilities and all other Common Area site amenities; (vii)
maintenance, repair and replacement of utility systems serving the Property,
including, but not limited to, water, sanitary sewer and storm water lines and
drainage systems (whether on-site or off-site), electrical, gas, telephone and
lighting systems (including bulbs, poles, and fixtures) and other utility lines,
pipes and conduits, and all payments of utility charges in connection with any
of the foregoing systems; (viii) maintenance, repair, replacement and
substitution of and for all portions of the buildings in the Property to the
extent the same is Landlord's responsibility under this Lease, including, but
not limited to, the Systems (as such term is defined in Section 8.1, below),
walls, roofs and roof flashings, canopies, skylights, signs, planters, benches,
fire exits, doors and hardware, windows, glass and glazing; (ix) inspection,
maintenance, repair and acquisition costs (including depreciation) of any and
all machinery and equipment used in the operation and maintenance of the Common
Area, including personal property taxes and other charges and taxes incurred in
connection with such equipment; (x) cleaning of any exterior glass; (xi) removal
of snow, ice, trash and debris; (xii) maintenance of and compliance with
federal, state or local governmental ambient air and environmental standards;
(xiii) all materials, supplies and services purchased or hired in connection
with the operation of the Common Area; (xiv) compensation and benefits paid to
any and all personnel, including, without limitation, security and maintenance
persons, secretaries, bookkeepers and any other personnel related to the
operation of the Common Area; (xv) management fees charged for management of the
Property; and (xvi) an overhead administrative cost allowance in the amount of
fifteen percent (15%) of the total Common Area Costs. Tenant's Proportionate
Share of the increases in the Common Area Costs shall be paid by Tenant in
monthly installments in such amounts as are estimated and billed by Landlord to
Tenant as of the first day of the Calendar Year immediately following the Base
Year and then at the beginning of each Calendar Year thereafter during the Term,
each such installment being due on the first day of each calendar month. Any
period of less than a full Calendar Year occurring due to the timing of the
Commencement Date shall be proportionately adjusted to reflect such partial
year. If at any time during such twelve (12) month period it shall appear that
Landlord has underestimated Tenant's Proportionate Share of the increases in
Common Area Costs (whether attributable to a change in Tenant's Proportionate
Share, an increase in the projected Common Area Costs for such period,
mathematical error or otherwise), Landlord may re-estimate Tenant's
Proportionate Share of Common Area Costs and may ▇▇▇▇ Tenant for any deficiency
which may have accrued during such twelve (12) month period and thereafter the
monthly installment payable by Tenant shall also be adjusted. Within one hundred
twenty (120) days after the end of each Calendar Year, Landlord shall deliver to
Tenant a statement setting forth the actual Common Area Costs for such Calendar
Year, Tenant's Proportionate Share of the increases therein, and the total
amount paid by Tenant to Landlord under this Section 6.3 during such period. In
the event the amounts paid by Tenant during such period are greater or lesser
than Tenant's Proportionate Share of the increases in Common Area Costs as set
forth on such statement, Tenant shall pay to Landlord or Landlord shall credit
Tenant's account (or, if such adjustment occurs at the end of the Term, pay to
Tenant), as the case may be, within thirty (30) days of receipt of such
statement, the amount of any excess or deficiency. Failure of Landlord to
provide the statement called for hereunder shall not relieve Tenant from its
obligations under this Section 6.3 or elsewhere in this Lease.
6.4 Special Allocations. Tenant acknowledges that the Premises are located
within a Building which forms a part of a business park consisting of multiple
buildings which is currently owned by landlord (such business park as a whole
being referred to herein as the "Project"). As a result, there are certain
Common Area Costs, Insurance premiums or Taxes which may be obtained by, paid
for by, or assessed to, Landlord with respect solely to the Building, and others
which may be obtained by, paid for by, or assessed to, Landlord with respect to
multiple buildings or properties, or with respect to the Project as a whole (and
which are thus more appropriately allocated between tenants of multiple
buildings or lots, rather than among solely the tenants of the Property).
Accordingly, the following special allocations shall apply and supersede any
contrary provisions of this Lease: Landlord shall have the right to account for
those items which are appropriately allocated solely among the tenants in the
Property using Tenant's Proportionate Share as defined in Section 1.1(o), above,
and to account for those items which are more appropriately allocated among
tenants of multiple buildings or properties, or with respect to the Project as a
whole, by modifying the denominator otherwise set forth in Section 1.1(o) within
the definition of Tenant's Proportionate Share to a denominator which is based
-9-
upon the rentable square feet contained within the building or lot in question
(or if applicable, the Project as a whole).
6.5 Further Adjustments. In the event Landlord shall furnish any utility or
service which is included in the definition of Common Area Costs to less than
ninety-five (95%) of the rentable area of the Building or the Property, as the
case may be, because (i) the average occupancy level of the Building or the
Property, as the case may be, for the Base Year and/or any subsequent Calendar
Year was not ninety-five percent (95%) or more of full occupancy, (ii) any such
utility or service is not required by or provided to one or more of the tenants
or occupants of the Building or the Property, as the case may be, or (iii) any
tenant or occupant is itself obtaining or providing any such utility or
services, then the actual costs for such year shall be increased to equal the
total expenses that Landlord reasonably estimates it would have incurred if
Landlord had provided all such utilities and services to all tenant and
occupants in the Building or the Property, as the case may be, and shall be
allocated among the tenants by the Landlord to reflect those costs which would
have occurred had the Building or the Property, as the case may be, been
ninety-five percent (95%) occupied during the year in question and such
utilities and services provided to all tenants. The intent of this Section 6.5
is to ensure that the reimbursement of all Common Area Costs is fair and
equitably allocated among the tenants receiving the utilities and services in
question.
ARTICLE VII. USE AND CARE OF PREMISES.
7.1 Limitations on Use. The Premises may be used only for the purpose or
purposes specified in Section 1.1(j) above and for no other purpose or purposes
without the prior written consent of Landlord. In transacting business in the
Premises, Tenant shall use the trade name specified in Section 1.1(e) above and
no other trade name without the prior written consent of Landlord, which shall
not be unreasonably withheld. Tenant shall not at any time leave the Premises
vacant, but shall in good faith continuously throughout the Term conduct and
carry on in the entire Premises the type of business for which the Premises are
leased.
7.2 Impact on Insurance. Tenant shall not, without Landlord's prior written
consent, keep anything within the Premises for any purpose or use the Premises
in a manner which causes an increase in the insurance premium cost or
invalidates any insurance policy carried on the Premises or other part of the
Property. Tenant shall pay as Additional Rent, upon demand of Landlord, any such
increased premium cost due to or associated with Tenant's use or occupation of
the Premises or its storage of certain goods. Anything contained herein to the
contrary notwithstanding, all property kept, stored or maintained within the
Premises by Tenant shall be at Tenant's sole risk.
7.3 Limitations on Operations. Tenant shall not (a) permit any
objectionable or unpleasant odors to emanate from the Premises; (b) place or
permit any radio, television, loudspeaker or amplifier on the roof or outside
the Premises or where the same can be seen or heard from outside the Building or
in the Common Area; (c) except as provided in Section 7.5, below, place an
antenna, awning or other projection on the exterior of the Premises; (d) solicit
business or distribute leaflets or other advertising material in the Common
Area; nor (e) take any other action which in the exclusive judgment of Landlord
would constitute a nuisance or would disturb or endanger other tenants of the
Property or unreasonably interfere with their use of their respective premises.
7.4 Care of Premises. Tenant shall take good care of the Premises and shall
keep the Premises clean, safe and free from deterioration and waste at all
times, and shall maintain the Premises, and conduct all business therein, in
accordance with this Lease and all federal, state and local laws, regulations
and ordinances and lawful directions of proper police officials. Tenant shall
keep the Premises and sidewalks, serviceways and loading areas adjacent to the
Premises neat, clean and free from dirt, rubbish, insects and pests at all
times. Tenant will store all trash and garbage within the area designated by
Landlord for trash pickup and removal, in receptacles of the size, design and
color from time to time prescribed by Landlord and shall, at its sole expense,
arrange for the regular pickup of such trash and garbage. Receiving and delivery
of goods and removal of garbage and trash shall be made only in the manner and
areas from time to time prescribed by Landlord. Landlord may, at its sole
option, arrange for collection of all trash and garbage and, should Landlord
exercise such election, the cost thereof will be deemed a "Common Area Cost" as
defined in Section 6.3 hereof. Tenant shall not operate an incinerator or burn
trash or garbage within the Property.
7.5 Roof Antenna.
-10-
(a) Tenant shall have the option to install and maintain, or cause to
be installed and maintained, at the sole cost of Tenant without further charge
from Landlord therefor, and Tenant may, at its own expense, operate on the roof
of the Building, an antenna of reasonable size (an "Antenna") provided that: (i)
Tenant shall have submitted to Landlord (1) plans and specifications for the
Antenna; (2) copies of all required governmental and quasi-governmental permits,
licenses, and special zoning variances, if required, all of which Tenant shall
obtain at its own cost and expense; and (3) a policy or certificate of insurance
evidencing such insurance as Landlord may reasonably require for the
installation, operation, and maintenance, of the Antenna; (ii) Tenant shall have
received the prior written consent of Landlord thereto, such consent not to be
unreasonably withheld, delayed, or conditioned; and (iii) if Landlord requests,
Tenant shall install any approved Antenna in a location reasonably designated by
Landlord. Tenant shall not be entitled to rely upon any such Landlord consent as
being a representation by Landlord that such installation and operation is
permitted by or in accordance with any governmental or quasi-governmental
entity, authority, or regulation. The Antenna shall be deemed to be Tenant's
personal property and its ownership, installation, use, and removal thereof
shall be governed by the terms hereof.
(b) As set forth herein, Tenant shall not be allowed on the roof
without prior written notice to Landlord. Tenant shall indemnify and hold
harmless Landlord from and against any and all damage, cost, liability or loss
which Landlord incurs in connection with (i) any entry onto or use of the roof
by Tenant, its agents, employees and contractors (including without limitation,
any entry or use associated with the Antenna, and any costs incurred by Landlord
if any entry or use invalidates or causes any violation of the requirements of
any roof warranty for the Building), and/or (ii) the installation, use,
operation or maintenance of the Antenna. Tenant shall promptly notify Landlord
in the event any such entry or use results in any damage to the roof or the
Building, and shall repair any damage to the roof or the Building caused by the
presence of the Antenna thereon, any maintenance or repairs thereto, and the
installation and/or removal thereof.
(c) Except as expressly permitted above, Tenant shall not install,
repair or replace any aerial, fan, air conditioner or other device on the roof
of the Premises or the Building without the prior written consent of Landlord.
7.6 Tenant's Environmental Warranties and Covenants. During the Term and
any Renewal Term of the Lease, Tenant warrants, represents and covenants to and
with Landlord as follows:
7.6.1 The Premises will not contain (A) asbestos in any form, (B) urea
formaldehyde foam insulation, (C) transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty (50) parts per million, or (D) any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous, controlled or toxic
substances, or any pollutant or contaminant, or related materials defined in or
controlled pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801 et
seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Sections 9601 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), and
in the regulations adopted and publications promulgated pursuant thereto, or any
other Federal, state or local environmental law, ordinance, rule or regulation
(collectively, "Environmental Laws"); or which, even if not so regulated, may or
could pose a hazard to the health or safety of the occupants of the Building
(the substances described in (A), (B), (C) or (D) above being hereinafter
collectively referred to as "Hazardous Materials"); (ii) the Premises will never
be used by Tenant for any activities involving, directly or indirectly, the use,
generation, treatment, transportation, storage or disposal of any Hazardous
Materials or to refine, produce, store, handle, transfer, process or transport
"Hazardous Substances", as such term is defined in any such Environmental Laws.
7.6.2 Tenant (A) shall comply with the Environmental Laws and all other
applicable laws, rules and regulations or orders pertaining to health, the
environment or Hazardous Materials, (B) shall not store, utilize, generate,
treat, transport or dispose of (or permit or acquiesce in the storage,
utilization, generation, transportation, treatment or disposal of) any Hazardous
Materials on or from the Premises, and (C) shall to cause its employees,
licensees and invitees to comply with the representations, warranties and
covenants herein contained.
7.6.3 In the event of any storage, presence, utilization, generation,
transportation, treatment or disposal of Hazardous Materials in, on or about the
Premises, or in the event of any Hazardous Materials Release (as hereinafter
defined), Tenant shall, at the direction of Landlord or any
-11-
federal, state, or local authority or other governmental authority, remove or
cause the removal of any such Hazardous Materials and rectify any such Hazardous
Materials Release, and otherwise comply or cause compliance with the laws,
rules, regulations or orders of such authority, all at the expense of Tenant,
including without limitation, the undertaking an completion of all
investigations, studies, sampling and testing and all remedial, removal and
other actions necessary to clean up and remove all Hazardous Materials, on, from
or affecting the Premises. If Tenant shall fail to proceed with such removal or
otherwise comply with such laws, rules, regulations or orders within the cure
period permitted under the applicable regulation or order, the same shall
constitute a default under Section 19.1 hereof, and Landlord may, but shall not
be obligated to, do whatever is necessary to eliminate such Hazardous Materials
from the Premises or otherwise comply with the applicable law, rule, regulation
or order, acting either in its own name or in the name of Tenant pursuant to
this Section, and the cost thereof shall be borne by Tenant and thereupon become
due and payable as additional rent hereunder. Tenant shall give to Landlord and
its agents and employees access to the Premises for such purposes and hereby
specifically grants to Landlord a license to remove the Hazardous Materials and
otherwise comply with such applicable laws, rules, regulations or orders, acting
either in its own name or in the name of the Tenant pursuant to this Section.
7.6.4 Tenant hereby indemnifies and holds Landlord and each of its
shareholders, subsidiaries, affiliates, officers, directors, partners,
employees, agents and trustees, and any receiver, trustee or other fiduciary
appointed for the Building, harmless from, against, for and in respect of, any
and all damages, losses, settlement payments, obligations, liabilities, claims,
actions or causes of actions, encumbrances, fines, penalties, and costs and
expenses suffered, sustained, incurred or required to be paid by any such
indemnified party (including, without limitation, reasonable fees and
disbursements or attorneys, engineers, laboratories, contractors and
consultants) because of, or arising out of or relating to (A) Tenant's violation
of any of its representations, warranties and covenants under this Section 7.6,
and (B) any Environmental Liabilities (as hereinbelow defined) in connection
with the Premises. For purposes of this indemnification clause, "Environmental
Liabilities" shall include all costs and liabilities with respect to the future
presence, removal, utilization, generation, storage, transportation, disposal or
treatment of any Hazardous Materials or any release, spill, leak, pumping,
pouring, emitting, emptying, discharge, injection, escaping, leaching, dumping
or disposing into the environment (air, land or water) of any Hazardous
Materials (each a "Hazardous Materials Release"), including without limitation,
cleanups, remedial and response actions, remedial investigations and feasibility
studies, permits and licenses required by, or undertaken in order to comply with
the requirements of, any federal, state or local law, regulation, or agency or
court, any damages for injury to person, property or natural resources, claims
of governmental agencies or third parties for cleanup costs and costs of
removal, discharge, and satisfaction of all liens, encumbrances and restrictions
on the Premises relating to the foregoing. The foregoing indemnification and the
responsibilities of Tenant under this Section 7.6 shall survive the termination
or expiration of this Lease.
7.6.5 Tenant shall promptly notify Landlord in writing of the
occurrence of any Hazardous Materials Release or any pending or threatened
regulatory actions, or any claims made by any governmental authority or third
party, relating to any Hazardous Materials or Hazardous Materials Release on or
from, the Premises and shall promptly furnish Landlord with copies of any
correspondence or legal pleadings or documents in connection therewith. Landlord
shall have the right, but shall not be obligated, to notify any governmental
authority of any state of facts which may come to its attention with respect to
any Hazardous Materials or Hazardous Materials Release on or from the Premises.
7.6.6 Upon expiration of the Term or any Renewal Term, as applicable,
Tenant shall deliver the Premises to Landlord free of any and all Hazardous
Materials and any liens, encumbrances and restrictions relating to Environmental
Liabilities, so that the condition of the Premises shall conform with all
applicable federal, state and local laws, rules, regulations and orders
pertaining to health, the environment or Hazardous Materials.
7.6.7 Tenant agrees that Landlord shall have the right to conduct, or
to have conducted by its agents or contractors, such environmental inspections
of the Premises as Landlord shall reasonably deem necessary or advisable from
time to time.
7.6.8 Without limitation of the foregoing, in the event of the failure
of Tenant to comply with any of the material requirements of any Environmental
Laws, and/or any related regulations, Landlord shall have the right, at the sole
option of Landlord, to comply with such statutory or regulatory requirements,
and/or to cure any such default at Tenant's sole expense, and all costs and
-12-
expenses of such compliance and/or cure shall be due and payable from Tenant to
Landlord upon demand as additional rent hereunder.
7.7 Permits and Licenses and Compliance with Applicable Laws. Tenant shall
procure, at its sole expense, all permits and licenses required for its
operations and the transaction of business in the Premises (including without
limitation, to the extent applicable to Tenant's permitted use, special use
permits, business licenses, health department licenses, and other similar
licenses, permits and approvals), and shall otherwise comply with all applicable
laws, ordinances and governmental regulations, as well as all other covenants
and restrictions of record, affecting the Premises, and the conduct of business
therein by Tenant, including without limitation the Americans with Disabilities
Act, as the same may be amended ("ADA").
7.8 [Intentionally Deleted].
7.9 No Solicitations. Tenant shall not engage in, nor permit its employees,
agents, affiliates or customers to engage in, solicitations, demonstrations,
itinerant vending or other activities inconsistent with good Property standards.
ARTICLE VIII. MAINTENANCE AND REPAIR OF PREMISES.
8.1 Maintenance and Repair by Landlord. Landlord shall, at its sole cost
and expense, make any necessary replacements to the foundation and structural
elements of the Premises. The foregoing notwithstanding, any replacements
required to be made by Landlord hereunder which are occasioned by the act or
negligence of Tenant, its agents, employees, subtenants, licensees,
concessionaires and/or invitees, shall be paid for by Tenant upon demand to the
extent not covered by net insurance proceeds paid to Landlord therefor. In
addition, Landlord will maintain and, within a reasonable time after written
notice from Tenant of the existence of a needed repair or replacement, perform
all necessary repairs and replacements to the interior and exterior mechanical,
electrical and plumbing systems ("Systems") provided the cost of shall be
included as a "Common Area Cost" under Section 6.3, above. In the event that the
Premises should become in need of repairs required to be made or performed by
Landlord hereunder, Tenant shall give immediate written notice thereof to
Landlord and Landlord shall not be responsible in any way for failure to make
any such repairs until a reasonable time shall have elapsed after delivery of
such written notice. Landlord's obligation hereunder is limited to performing
the repairs specified in this Section 8.1 only, and Landlord shall have no
liability for any damages, loss, injury or other expense incurred or suffered by
Tenant, its employees and agents, arising out of, or as a consequence of, any
condition or occurrence causing a need for such repairs.
8.2 Janitor Service; Electric Bulbs. Landlord shall provide customary
Building janitorial service and in-suite cleaning service in addition to the
other services provided by Landlord hereunder, and the cost of such janitorial
service shall be included in Common Area Costs. Such in-suite cleaning service
shall be provided five (5) days per week, after normal business hours. Landlord,
at Tenant's request, shall furnish, maintain and replace all electric light
bulbs, tubes and tube casings, and the cost thereof shall be included in Common
Area Costs.
8.3 General Maintenance and Repair by Tenant. Tenant shall keep and
maintain the Premises (including, without limitation, the roof, non-structural
portions of exterior and interior walls, store fronts, plate glass windows,
doors, door closure devices, window and door frames, moulding, locks and
hardware and painting or other treatment of interior and exterior walls) in
good, clean and safe condition and shall, at its sole cost and expense, make all
needed repairs and replacements thereto (including without limitation
replacement of cracked or broken glass) unless such repairs and replacements are
expressly required to be made by Landlord under the provisions of Section 8.1,
Article XV or Article XVI. Tenant shall keep all plumbing units, pipes and
connections free from obstruction and protected against ice and freezing. If any
repairs, replacements or maintenance required on the part of Tenant hereunder
are not accomplished within ten (10) days after written notice to Tenant from
Landlord (or, in the event of emergency, such shorter notice, or no notice, as
is reasonable under the circumstances), Landlord may, at its option, perform
such repairs, replacements or maintenance without liability to Tenant for any
loss or damage which may result to its stock or business by reason thereof, and
Tenant shall pay to Landlord immediately upon demand, as Additional Rent
hereunder, all costs associated with such repairs, replacements or maintenance,
plus an administrative fee equal to fifteen percent (15%) of such cost.
-13-
8.4 HVAC Maintenance and Repair by Tenant. Maintenance of the air
conditioning and heating equipment shall be solely the responsibility of Tenant
throughout the entire Term. Tenant shall, at its own cost and expense, enter
into a regularly scheduled preventive maintenance/service contract with a
maintenance contractor for servicing all hot water, heating and air conditioning
("HVAC") systems and equipment within the Premises. The maintenance contractor
and the contract must be approved by Landlord, which approval shall not be
unreasonably withheld. The service contract must include all services suggested
by the equipment manufacturer within the operation/maintenance manual and must
become effective (and a copy thereof delivered to Landlord) within thirty (30)
days of the date Tenant takes possession of the Premises. Tenant shall from time
to time upon request furnish proof reasonably satisfactory to Landlord that all
such systems and equipment are being serviced in accordance with the
maintenance/service contract. Within the thirty (30) day period preceding
Tenant's vacating the Premises for any reason, whether due to expiration or
earlier termination of the Term, or otherwise, Tenant shall have the systems and
equipment checked and serviced to insure proper functioning and shall furnish
Landlord satisfactory proof thereof upon request.
8.5 Roof and Walls; Excavations. Landlord shall have the exclusive right to
use all or any part of the roof of the Premises for any purpose; to erect
additional stories or other structures over all or any part of the Premises; to
erect in connection therewith temporary scaffolds and other aids to construction
on the exterior of the Premises, provided access to the Premises shall not be
denied; and to install, use, repair and replace within the Premises pipes,
ducts, conduits, wires and all other mechanical equipment serving other parts of
the improvements constructed upon the Property, the same to be in locations
within the Premises as will not unreasonably deny or interfere with Tenant's use
thereof. Landlord shall not place any sign on the Building (except for the "For
Lease" signs pursuant to Section 11.3, below) without Tenant's permission, which
shall not be unreasonably withheld. If an excavation shall be made upon land
adjacent to the Premises, or shall be authorized to be made, Tenant shall afford
to the person causing or authorized to cause such excavation, license to enter
the Premises for the purpose of doing such work as landlord shall deem necessary
to preserve the wall or the Building of which the Premises forms a part from
injury or damage, and to support the same by proper foundation, without any
claim for damages or indemnification against Landlord for diminution or
abatement of Rent, additional rent or otherwise.
ARTICLE IX. ALTERATIONS.
9.1 Landlord Consent. Tenant shall not make any alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
except for the installation of unattached, movable trade fixtures which may be
installed without drilling, cutting or otherwise defacing the Premises. In each
instance where Landlord's consent is required hereunder, Tenant shall (i)
provide Landlord with complete plans and specifications detailing the proposed
alteration, addition or improvement so that Landlord is able to conduct a proper
review of such proposal, and (ii) reimburse Landlord for all reasonable out of
pocket costs and expenses incurred in such review regardless of whether the
request is approved. All alterations, additions, improvements and fixtures
(other than unattached, movable trade fixtures) which may be made or installed
by either party upon the Premises shall remain upon and be surrendered with the
Premises and become the property of Landlord upon the expiration or earlier
termination of this Lease, unless Landlord requests their removal, in which
event Tenant shall remove the same and restore the Premises to its original
condition at Tenant's expense. Any linoleum, carpeting or other floor covering
which may be cemented or otherwise affixed to the floor of the Premises is
hereby deemed a permanent fixture and shall become the property of Landlord
without credit or compensation to Tenant. As further specified in Article XX
below, Tenant is hereby prohibited from creating or placing, or allowing to be
created or placed, any lien or encumbrance upon the Premises or the Property as
a result of any alterations, additions, improvements, equipment and/or fixtures
which may be made or installed upon the Premises.
9.2 Requirements for Construction of Alterations. All construction work
done by Tenant within the Premises, including without limitation Tenant's Work
referred to in Section 3.1 and Exhibit C, shall be performed in a good and
workmanlike manner, in compliance with all governmental requirements, and the
requirements of any contract, deed of trust or other instrument to which the
Landlord may be a party or is otherwise bound, and in such manner as to cause a
minimum of interference with other construction in progress, and with the
transaction of business, in the Property. Tenant agrees to indemnify Landlord
and hold it harmless from and against any and all loss, liability, damage or
expense resulting from such work, and prior to commencement of any such work,
Tenant shall, if requested by Landlord, furnish a bond or other security
satisfactory to Landlord against any such loss, liability, damage or expense.
-14-
9.3 Alterations Impacting the Roof. Tenant agrees that all venting,
opening, sealing, waterproofing or altering of the roof, if any, shall be
performed by a roofing contractor approved by Landlord (which approval shall not
be unreasonably withheld) at Tenant's expense and that when completed, Tenant
shall furnish to Landlord a certificate from such roofing contractor stating
that all such alterations approved by Landlord have been completed in accordance
with the plans and specifications approved by Landlord therefor and in
accordance with any and all applicable local, state and federal ordinances,
regulations or laws. Tenant agrees that all improvements, alterations, repairs
or other work performed upon the Premises under any provision of this Lease
shall be performed under the direction of a general contractor approved by
Landlord (which approval shall not be unreasonably withheld). Tenant further
agrees that plans and drawings for installation or revision of mechanical,
electrical or plumbing systems shall be designed by an engineer selected from an
Approved Engineers List to be furnished by Landlord upon written request of
Tenant, such design work to be done at Tenant's expense.
9.4 No Warranty. Landlord's consent to or approval of any alterations,
additions or improvements (or the plans therefor) shall not constitute a
representation or warranty by Landlord, nor Landlord's acceptance, that the same
comply with sound architectural and/or engineering practices or with all
applicable laws, regulations, ordinances and other governmental requirements,
and Tenant shall be solely responsible for ensuring all such compliance.
ARTICLE X. LANDLORD'S RIGHT OF ACCESS; USE OF ROOF.
10.1 Landlord's Right of Access. Landlord shall have the right to enter
upon the Premises at any reasonable time upon reasonable prior notice (except in
case of emergency, when no notice shall be required) for the purpose of
inspecting the same, or of making repairs to the Premises, or of making repairs,
alterations or additions to adjacent premises, or of showing the Premises to
prospective purchasers, lessees or lenders.
10.2 Use of Roof. Tenant, its agents, employees or contractors shall not be
allowed on the roof without giving Landlord prior written notice.
ARTICLE XI. SIGNS; EXTERIOR OF PREMISES.
11.1 Restrictions on Signs. Tenant shall not, without Landlord's prior
written consent: (a) make any changes to or paint the exterior of the Premises;
(b) install any exterior lighting, decorations or paintings; or (c) erect or
install any signs, banners, canopy, window or door lettering, placards,
decorations or advertising media of any type which can be viewed from the
exterior of the Premises. Tenant shall not place, erect or maintain on the
doors, any exterior surface, or in any vestibule any sign, lettering,
declaration or advertising except as permitted herein. All signs, decorations
and advertising media shall conform in all respects to the sign criteria
established by Landlord for the Property from time to time in the exercise of
its sole discretion and shall be subject (i) to the prior written approval of
Landlord as to construction, method of attachment, size, shape, height,
lighting, color, and general appearance, which approval shall not be
unreasonably withheld, and (ii) to the approval of any applicable governmental
authorities. All signs shall be kept in good condition and in proper operating
order at all times.
11.2 Removal of Signs. Upon Tenant's vacating the Premises, or the removal
or alteration of its sign for any reason, Tenant shall be responsible for the
repair, painting, and/or replacement of the Building fascia surface where signs
are attached.
11.3 Advertising Premises for Rent. During the period that is three (3)
months prior to the end of the Lease Term, and at any time Tenant is in default
hereunder, Landlord shall have the right to erect on the Premises signs
indicating that the Premises are available for lease (to be referred to herein
as the "For Lease" signs).
11.4 Signage Allowance. After the installation of any exterior signage on
the Building by Tenant (which signage must be in compliance with the terms of
this Section 11), Tenant shall provide Landlord with copies of invoices for the
cost of any such signs, and Landlord shall pay Tenant Nine Thousand Dollars
($9,000.00) (the "Signage Allowance") within thirty (30) days after receipt of
such invoices, and Landlord expressly agrees that any signs so installed by
Tenant shall not become a permanent fixture of the Building upon the expiration
or earlier termination of this Lease.
ARTICLE XII. UTILITIES.
-15-
12.1 Landlord's Responsibilities. Landlord agrees to cause to be provided
and maintained the necessary mains, conduits and other facilities necessary to
supply water, electricity, gas (if applicable), telephone service and sewage
service to the Premises, subject to any provisions contained in Exhibit C.
Landlord shall not be responsible for providing any meters or other devices for
the measurement of utilities supplied to the Premises. Tenant shall, at Tenant's
sole cost and expense, make application and arrange for the installation of all
such meters or other devices.
12.2 Tenant's Responsibilities. Tenant shall be solely responsible and
promptly pay all charges for electricity, water, gas, telephone service, sewage
service and other utilities furnished to the Premises (including without
limitation, all tap fees and similar assessments made in connecting the Premises
to such utilities, and all taxes, levies and other charges upon such utilities)
and shall promptly pay any maintenance charges therefor. Landlord may, if it so
elects, furnish one or more utility services to Tenant, by submetering or
otherwise, and in such event Tenant shall purchase such services as are tendered
by Landlord, and shall pay on demand as Additional Rent the rates established
therefor by Landlord which shall not exceed the rates which would be charged for
the same services if furnished directly by the local public utility companies.
Landlord may at any time discontinue furnishing any such service without
obligation to Tenant other than to connect the Premises to the public utility,
if any, furnishing such service.
12.3 Interruption of Service. Landlord reserves the right to cut off and
discontinue, upon notice to Tenant, any utility services furnished by Landlord
at any time when Tenant has failed to pay Rent due under this Lease. Landlord
shall not be liable for damages resulting from or arising out of any such
discontinuance and the same shall not constitute a termination of this Lease nor
an actual or constructive eviction of Tenant. Landlord shall not be liable to
Tenant, or any other person or entity whatsoever, for abatement of rent as a
result of, or for any other loss or damages whatsoever occurring in connection
with, any interruption or failure whatsoever in utility services, whether the
same has become unavailable from any public utility company or other utility
provider, or is due to the making of necessary repairs, improvements or other
causes beyond Landlord's control, and Tenant shall comply with all terms and
provisions of this Lease notwithstanding any such failure or interruption. No
such failure or interruption shall constitute a termination of this Lease or an
actual or constructive eviction of Tenant.
ARTICLE XIII. INSURANCE.
13.1 Tenant's Insurance. Tenant shall procure and maintain throughout the
Term, at its sole cost and expense: (i) a policy of comprehensive general public
liability insurance, including an all-risk legal liability endorsement, and an
assumed contractual liability endorsement, insuring both Tenant and Landlord
(and all persons, firms and corporations designated by Landlord) as an
additional insured, against all claims, demands or actions arising out of or in
connection with occurrences within the Premises, Tenant's use or occupancy of
the Premises, the condition of the Premises, the acts or omissions of Tenant and
its agents, employees and contractors in the Premises and elsewhere in the
Property, and for liabilities assumed under this Lease, the limits of such
policy or policies to be in an amount not less than One Million Dollars
($1,000,000) in respect of bodily injury to, personal injury to or death of any
one person, and in an amount not less than Two Million Dollars ($2,000,000) in
respect of bodily injuries, personal injuries and/or death(s) occurring in any
one occurrence or disaster, and in an amount not less than One Million Dollars
($1,000,000) in respect of property damaged or destroyed; (ii) fire and extended
coverage insurance covering the full replacement value of all alterations,
additions, partitions, improvements, equipment, furniture, fixtures and
inventory made or placed by Tenant in the Premises against "all-risk" of
physical loss and covering loss of income or business interruption losses; (iii)
insurance covering glass breakage in the Premises; and (iv) worker's
compensation insurance with limits no less than that required by law. All such
policies shall be written by insurance companies licensed to do business in the
state in which the Property is located and from a responsible company having a
Best's Guide rating of at least A+ or better and which is otherwise satisfactory
to Landlord. Tenant shall obtain a written obligation on the part of each
insurance company to notify Landlord at least thirty (30) days prior to
cancellation of such insurance, and the liability policy shall contain an
assumed contractual liability endorsement. Tenant's liability policy shall
include, without limitation, coverage for premises and operations, products and
completed operations, blanket contractual, personal injury, operation,
ownership, maintenance and use of owned, non-owned and hired automobiles, bodily
injury and property damage, as aforesaid. All insurance policy(ies) required
under this Section 13.1 shall (i) contain a cross-liability endorsement, (ii)
contain a provision that such policy and the coverage evidenced thereby shall be
primary and non-contributing with respect to any policies carried by Landlord
and that any coverage carried by Landlord shall be
-16-
excess insurance, (iii) be written on an "occurrence" basis and not on a
"claims-made" basis, (iv) contain a waiver by the insurer of any right of
subrogation against Landlord, its agents, employees or representatives, as
contemplated by Section 15.6, below and (v) provide that, at the election of
Landlord's mortgagee, the proceeds of any insurance will be paid to a trustee or
depository designated by Landlord's mortgagee. At Landlord's election, Tenant
shall also name Landlord's mortgagee as loss payee under all fire and extended
coverage policies, and as an additional insured under all general public
liability policies of insurance, as its interest may appear. Such policies or
duly executed certificates of insurance shall promptly be delivered to Landlord,
and in all events, prior to the Commencement Date, and renewals thereof shall be
delivered to Landlord at least thirty (30) days prior to the expiration of the
respective policy terms. Tenant's failure to carry the insurance required under
this Section 13.1 shall constitute an Event of Default under this Lease without
requirement of notice or an opportunity to cure. In addition to the remedies
provided in Article XIX of this Lease, upon such failure by Tenant, Landlord
may, but is not obligated to, obtain such insurance on behalf of the parties
hereto, whereupon Tenant shall pay to Landlord upon demand as Additional Rent
the premium cost thereof plus interest thereon at the Default Rate (as defined
in Section 25.2, below).
13.2 Cost of Landlord's Insurance. Tenant agrees to pay its Proportionate
Share of increases in Landlord's cost of the property and liability insurance
carried by Landlord from time to time with respect to the Property (including,
without limitation, all buildings, other improvements and the Common Areas)
above such insurance costs during the Base Year. Such insurance shall include,
without limitation, fire and extended coverage insurance, (including, without
limitation, extended and broad form coverage risks, mudslide, land subsidence,
volcanic eruption, flood and earthquake) and comprehensive general public
liability insurance and excess liability insurance, including liability
insurance for personal injury, death, auto, and property damage, in such amounts
as Landlord deems necessary or desirable (the foregoing is hereinafter
collectively referred to as "Insurance"). During each month of the Lease Term
(except during the Base Year), Tenant shall make a monthly payment to Landlord
equal to one-twelfth (1/12) of its Proportionate Share of the increases in
Insurance costs on the Property which will be due and payable for that
particular year. Tenant authorizes Landlord to use the funds deposited with
Landlord under this section to pay the cost of Insurance. Each Insurance payment
shall be due and payable at the same time as, and in the same manner as, the
payment of Base Rent as provided herein. The initial monthly Insurance payment
is based upon Landlord's good faith estimate of Tenant's Proportionate Share
increase in Insurance costs for the Property for the Base Year, and the monthly
Insurance payment is subject to increase or decrease as determined by Landlord
to reflect accurately Tenant's estimated Proportionate Share of the increases in
Insurance costs. If, following Landlord's receipt of the actual insurance
premiums for a Calendar Year, Landlord determines that Tenant's total Insurance
payments are less than Tenant's actual Proportionate Share of the increase in
Insurance costs, Tenant shall pay to Landlord upon demand the difference; if the
total Insurance payments of Tenant are more than Tenant's actual Proportionate
Share of the increases in Insurance costs, Landlord shall retain such excess and
credit it to Tenant's future Insurance payments, except in the case of the last
year of the Term, in which event Landlord shall refund such excess to Tenant.
The foregoing notwithstanding, Landlord shall carry fire and casualty insurance
covering the Building for full replacement value (which coverage may contain
deductibles and/or coinsured amounts) throughout the Term of this Lease.
13.3 Increases in Coverage. Landlord shall have the right, from time to
time as Landlord shall determine, but not more often than once annually, to
increase the policy limits for all insurance which Tenant is required to obtain
under this Article XIII, to such amount as Landlord determines is comparable to
the policy limit requirements of other properties of comparable size, location
and character as the Property, or as is otherwise required by the holder or
beneficiary of any first deed of trust or first mortgage interest in the
Property.
ARTICLE XIV. NON-LIABILITY FOR CERTAIN DAMAGES.
14.1 Non-Liability for Certain Conditions. Landlord and Landlord's
partners, agents, employees, officers and directors shall not be liable to
Tenant or any other person or entity whomsoever for any injury to person or
damage to property caused by the Premises or other portions of the Property
becoming out of repair or damaged, or by defect in or failure of equipment,
pipes or wiring, or broken glass, or by the backing up of drains or by gas,
water, steam, electricity or oil leaking, escaping or flowing into the Premises
irrespective of the cause. To the extent Landlord would otherwise be required by
Maryland law or common law to correct any latent or patent defects in the
Premises or in the Building of which they form a part, any obligation on the
part of Landlord to correct such latent or patent defects in the Premises or in
the Building shall not extend beyond one (1) year from the date the Premises are
deemed Ready for Occupancy, whether or not such defects are
-17-
discovered within such one (1) year period; provided that the other terms of
this Lease shall in all events govern Landlord's and Tenant's respective
responsibilities and monetary obligations in connection with the construction of
initial leasehold improvements to the Premises, correction of "punch-list"
items, and any subsequent repairs and maintenance to the Premises and the
Building.
14.2 Non-Liability for Certain Occurrences. Landlord and Landlord's
partners, agents, employees, officers and directors shall not be liable to
Tenant or to Tenant's employees, agents or visitors, or to any person or entity
whomsoever, for injury to person or damage to or loss of property (i) occurring
in, on or about the Premises, regardless of the cause, (ii) occurring within the
Common Area, if caused by the negligence or misconduct of Tenant, its officers,
partners, employees, agents, subtenants, licensees or concessionaires, (iii)
arising out of the use of the Premises by Tenant and the conduct of its business
therein, (iv) arising out of any breach or default by Tenant in the performance
of its obligations hereunder, or (v) occasioned by or through the acts or
omissions of other tenants of the Property or of any other persons or entities
whomsoever, excepting only the negligence or willful misconduct of duly
authorized employees and agents of Landlord to the extent the same is not
covered under insurance Tenant is required to carry pursuant to Section 13.1,
above; and, in any of such events, Tenant hereby agrees to indemnify Landlord
and Landlord's partners, agents, employees, officers and/or directors and hold
each of them harmless from any and all liability, loss, damage, claim, action or
expense (including, without limitation, all court costs and attorneys' fees)
arising out of such damage or injury due to any of the causes described above
(other than those described in clause (v), above). The provisions of this
section shall survive the termination of this Lease with respect to any claims
or liability attributable to acts, omissions, occurrences and/or conditions
existing or occurring prior to such termination.
14.3 Non-Liability for Business Interruption. In no event shall Landlord,
or any of Landlord's partners, agents, employees, officers and directors, be
liable to Tenant or any of its agents, employees, contractors, officers or
directors for any lost profits or other loss suffered by Tenant, due to any
interruption in Tenant's business operation from the Premises (hereinafter,
collectively and/or individually a "Business Interruption Loss"), whether caused
by the acts or omissions of Landlord, or its agents, employees, contractors,
officers and/or directors, or by any other cause (other than Landlord's
intentional misconduct), it being acknowledged that Tenant is capable of
obtaining business interruption insurance covering such Business Interruption
Loss(es) including a waiver of subrogation endorsement.
Notwithstanding the foregoing to the contrary, if, pursuant to a final,
non-appealable judgment in a court of competent jurisdiction, it is determined
that Landlord's negligence or willful misconduct (i) caused Tenant to incur any
Business Interruption Loss, and (ii) prevented Tenant from operating its
business in twenty percent (20%) or more of the leasable area of the Premises
for at least five (5) consecutive business days, then commencing after such
fifth (5th) consecutive business day after Tenant is prevented from operating
its business in such portion of the Premises through the date Tenant is able to
recommence operations from such applicable portion of the Premises, or would
have been able to recommence such operations in the exercise of diligent
efforts, whichever first occurs, and regardless of whether Tenant actually
elects to recommence operations therein, the Base Rent otherwise payable with
respect to the affected part of the Premises shall be abated during such period.
For purposes of this Section 14.3, (i) a Business Interruption Loss which
prevents Tenant from operating the main computer area within the Premises (i.e.,
the area in which Tenant's main computer systems are located and operate) shall
be deemed to be a Business Interruption Loss affecting more than twenty percent
(20%) of the Premises and shall be deemed to affect all portions of the Premises
whose operation is dependent upon such main computer systems and which in fact
cease to be used as a result thereof, and (ii) in calculating the "affected area
of the Premises" for purposes of measuring the Base Rent abatement under this
Section, in addition to those office areas which are rendered unusable and which
are in fact not used by Tenant as a result of a business interruption caused by
Landlord's negligence or willful misconduct, the Base Rent abatement shall also
apply to that percentage of the commonly enjoyed portions of the Premises (such
as, but not limited to, restroom areas, kitchens, cafeterias, etc.) which
corresponds to the percentage of office areas within the Premises which were
rendered unusable due to such interruption in Tenant's business operation from
the Premises. By way of hypothetical example only, if 80% of the Premises is
office area, the remaining 20% of the Premises is a commonly enjoyed area, and a
business interruption caused by Landlord's negligence and which affects the main
computer room renders 60% of the office area (or 48% of the Premises as a whole)
unusable for a period of ten (10) consecutive business days (and the same is in
fact not used by Tenant during such period), Base Rent shall be abated for five
(5) days with respect to 60% of the entire Premises (48% of the Premises being
the affected office area and 12% being 60% of the commonly enjoyed portions).
Tenant acknowledges that it shall have a duty to use diligent efforts to
minimize the
-18-
duration and scope of any such business interruption. Landlord shall have no
liability for any Business Interruption Loss of Tenant except as set forth in
this Section 14.3.
14.4 Saving Clause. In the event (but solely to the extent) the limitations
on Landlord's liability set forth in Article XIV of this Lease would be held to
be unenforceable or void under Maryland law in the absence of a modification
holding the Landlord liable to Tenant or to another person for injury, loss,
damage or liability arising from Landlord's omission, fault, negligence or other
misconduct on or about the Premises, or other areas of the Building appurtenant
thereto or used in connection therewith and not under Tenant's exclusive
control, then such provision shall be deemed modified as and to the extent (but
solely to the extent) necessary to render such provision enforceable under
applicable Maryland law. The foregoing shall not affect the application of 19.9
of this Lease to limit the assets available for execution of any claim against
Landlord, or otherwise.
ARTICLE XV. DAMAGE BY CASUALTY
15.1 Notice to Landlord. Tenant shall give immediate written notice to
Landlord of any damage caused to the Premises by fire or other casualty.
15.2 Landlord's Obligation to Repair and Rebuild. In the event that the
Premises are damaged or destroyed by fire or other casualty insurable under
standard fire and extended coverage insurance and Landlord does not elect to
terminate this Lease as hereinafter provided, Landlord shall proceed with
reasonable diligence to rebuild and repair the Premises, and in such event
Tenant shall pay its Proportionate Share of the deductible applicable under
Landlord's insurance with respect to any such casualty, unless Tenant or another
tenant (or the employees, agents, contractors, concessionaires, licensees or
subtenants of Tenant or any other tenant), or Landlord (or its employees, agents
and/or contractors), is or are responsible for such casualty by way of
negligence or willful misconduct, in which event the responsible party shall pay
the entire amount of the deductible upon demand. If the Building in which the
Premises is located shall (i) be destroyed or substantially damaged by a
casualty not covered by Landlord's insurance, or (ii) be destroyed or rendered
untenantable to an extent in excess of fifty percent (50%) of the floor area by
a casualty covered by Landlord's insurance, or (iii) be damaged to such extent
that the remaining term of this Lease is not sufficient to amortize the cost of
reconstruction, or (iv) be damaged due to the willful misconduct of Tenant or
any party acting by, through or under Tenant, then Landlord may elect to either
terminate this Lease as hereinafter provided or to proceed to rebuild and repair
the Premises. Should Landlord elect to terminate this Lease, it shall give
written notice of such election to Tenant within ninety (90) days after the
occurrence of such casualty. If Landlord should not elect to terminate this
Lease, Landlord shall proceed with reasonable diligence to rebuild and repair
the Premises, utilizing insurance proceeds for such purpose, and Tenant agrees
to make available to Landlord any insurance proceeds it is entitled to for such
purposes. In the event of any damage or destruction to the Premises, Tenant
shall, upon notice from Landlord, forthwith remove, at Tenant's sole cost and
expense, such portion or all of Tenant's shelves, bins, machinery and other
trade fixtures and all other property belonging to Tenant or Tenant's licensees
from such portion or all of the Premises as Landlord shall request.
15.3 Tenant's Obligation to Repair and Rebuild. Landlords' obligation to
rebuild and repair under this Article XV shall in all events be limited to
restoring Landlord's Work as described in Exhibit C to substantially the
condition in which the same existed prior to the casualty, and shall be further
limited to the extent of the insurance proceeds available to Landlord for such
restoration (provided (i) Landlord shall use commercially reasonable and
diligent efforts to maximize its recovery under any such insurance policy, and
(ii) if Landlord receives insufficient insurance proceeds to fully restore
Landlord's Work as described in Exhibit C to substantially the condition in
which the same existed prior to the casualty, and Landlord does not wish to
contribute additional equity in order to achieve such level of restoration,
Landlord shall so notify Tenant, and Tenant shall have the right, for a period
of ten (10) days after receiving such notification from Landlord, to terminate
this Lease by written notice to Landlord, whereupon all rights and obligations
thereafter arising under this Lease shall cease and terminate as of the date of
such notice). If Tenant does not elect to terminate this Lease within such ten
(10) day period, then Landlord's restoration obligation shall be limited to the
amount of such insurance proceeds. If Landlord does not notify Tenant that it
has insufficient insurance proceeds to fully restore Landlord's Work as
described in Exhibit C to substantially the condition in which the same existed
prior to the casualty, then Landlord shall be deemed to have agreed to fully
restore Landlord's Work as described in Exhibit C to substantially the condition
in which the same existed prior to the casualty, without such limitation to the
amount of insurance proceeds being applicable. Tenant agrees that promptly after
completion of such work by Landlord, it will proceed with reasonable diligence
and
-19-
at its sole cost and expense to rebuild, repair and restore its signs, fixtures
and equipment and other items of Tenant's Work as described in Exhibit C.
15.4 Continuance of Tenant's Business. Tenant agrees that during any period
of reconstruction or repair of the Premises it will continue the operation of
its business within the Premises to the extent practicable. During the period
from the occurrence of the casualty until Landlord's repairs are completed, the
Base Rent shall be reduced in proportion to the floor area of the Premises which
is rendered untenantable by virtue of such casualty; however, there shall be no
abatement of the Additional Rent or other charges provided for herein.
15.5 Requirements of Mortgagee. Notwithstanding anything herein to the
contrary, in the event the holder of any indebtedness secured by a mortgage or
deed of trust covering the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right, at its sole
option, to (i) terminate this Lease by delivering written notice of termination
to Tenant within fifteen (15) days after such requirement is made or first
attempted to be enforced by any such holder, whereupon all rights and
obligations hereunder shall cease and terminate as of the date of such notice
(other than those provisions which are expressly stated to survive termination
of this Lease), or (ii) delay reconstruction until such time as it is able to
procure construction financing therefor, in which event this Lease shall remain
in full force and effect prior to and after completion of such reconstruction.
15.6 Waiver of Subrogation. Landlord and Tenant hereby release the other
from any and all liability or responsibility to the other or anyone claiming
through or under them, by way of subrogation or otherwise, from any loss or
damage to property caused by fire or any other perils insured under policies of
insurance covering such property, even if such loss or damage is attributable to
the fault or negligence of the other party, or anyone for whom such party may be
responsible, including any other tenants or occupants of the Property. The
foregoing notwithstanding, this mutual release shall be applicable and in force
and effect only to the extent lawful at the time any claim is made, and in any
event only with respect to loss or damage occurring during such times as the
releasor's policies shall contain a clause or endorsement providing that any
such release shall not adversely affect or impair said policies or prejudice the
right of the releasor to recover thereunder. Landlord and Tenant shall request
its insurance carriers to include in its policies such a clause or endorsement.
If additional cost shall be charged therefor, the party responsible for
procuring such insurance shall pay such additional costs.
ARTICLE XVI. EMINENT DOMAIN
16.1 Substantial Taking. If more than twenty percent (20%) of the floor
area of the Premises should be taken for any public or quasi-public use under
any governmental law, ordinance or regulation or by right of eminent domain or
by private purchase in lieu thereof, this Lease shall terminate and the Rent
(excluding Rent accruing with respect to the period prior to the date of such
termination) shall be abated during the unexpired portion of this Lease,
effective on the date physical possession is taken by the condemning authority.
16.2 Partial Taking. If less than twenty percent (20%) of the floor area of
the Premises should be taken as aforesaid, this Lease shall not terminate;
however, the Base Rent payable hereunder during the unexpired portion of this
Lease shall be reduced in proportion to the area taken, effective on the date
physical possession is taken by the condemning authority. Following such partial
taking, Landlord shall make all necessary repairs or alterations within the
scope of Landlord's Work as described in Exhibit C necessary to make the
Premises an architectural whole.
16.3 Common Area Condemnation. If any part of the Common Area shall be
taken as aforesaid, this Lease shall not terminate, nor shall the Rent payable
hereunder be reduced; provided, however, either Landlord or Tenant may terminate
this Lease if the area of the Common Area remaining following such taking plus
any additional parking area provided by Landlord in reasonable proximity to the
Property shall be less than fifty percent (50%) of the area of the Common Area
immediately prior to the taking. Any election to terminate this Lease in
accordance with this provision shall be evidenced by written notice of
termination delivered to the other party within thirty (30) days after the date
physical possession is taken by the condemning authority.
16.4 Condemnation Award. All compensation awarded for any taking for public
purposes, whether permanent or temporary (or the proceeds of private sale in
lieu thereof), of the Premises or Common Area shall be the property of Landlord,
and Tenant hereby assigns its interest in any such
-20-
award to Landlord; provided, however, Landlord shall have no interest in any
award made to Tenant for loss of business, relocation expenses and/or for the
taking of Tenant's fixtures and other personal property of Tenant if a separate
award for such items is made to Tenant and does not diminish the award payable
to Landlord. Tenant shall in no event be entitled to any award made for the
value of the unexpired Term of this Lease.
16.5 Requirements of Mortgagee. Notwithstanding anything herein to the
contrary, in the event the holder of any indebtedness secured by a mortgage or
deed of trust covering the Premises requires that the condemnation proceeds be
applied to such indebtedness in lieu of application for costs of necessary
alterations and reconstruction, then Landlord shall have the right, at its sole
option, to (i) terminate this Lease by delivering written notice of termination
to Tenant within fifteen (15) days after such requirement is made or first
attempted to be enforced by any such holder, whereupon all rights and
obligations hereunder shall cease and terminate as of the date of such notice
(other than those provisions which are expressly stated to survive termination
of this Lease), or (ii) delay alterations and reconstruction until such time as
it is able to procure construction financing therefor, in which event this Lease
shall remain in full force and effect prior to and after completion of such
reconstruction.
ARTICLE XVII. ASSIGNMENT AND SUBLETTING
17.1 Generally.
(a) Tenant shall not assign or transfer all or any portion of its legal
or equitable interest in this Lease or in the Premises, nor sublet all or any
portion of the Premises, nor enter into any management or similar contract which
provides for a direct or indirect transfer of operating control over the
business operated in the Premises, without the prior written consent of
Landlord. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold its consent to any proposed assignment or sublease if the proposed
assignee or subtenant satisfies all of the following criteria: (A) the proposed
assignee or sublessee has a net worth of at least Five Million Dollars
($5,000,000) (as documented by financial statements prepared according to
generally accepted accounting principles consistently applied), and it otherwise
appears that the proposed assignee or subtenant will be able to meet its
financial and other obligations under this Lease after such assignment or
sublease; (B) the proposed assignee's or subtenant's use of the Premises shall
be the Permitted Use hereunder, or a general office use; (C) the proposed
assignee or subtenant shall not have a history of landlord/tenant problems (such
as, but not limited to, defaults, evictions, other disputes) with Landlord or
other landlords; (D) the proposed assignee or subtenant shall have reasonable
prior successful operating experience; (E) the proposed assignment or sublease
shall not involve the payment of Rent for the applicable portion of the Premises
at a rental rate which is less than eighty percent (80%) of the market rate for
comparable space; and (F) the proposed assignee or subtenant shall not be an
existing tenant, or the affiliate of an existing tenant, in the Project.
(b) Any assignment, sublease or other such transfer without Landlord's
prior written consent shall be voidable, and, at Landlord's election, shall
constitute a Default of Tenant hereunder. Consent by Landlord to one or more
assignments or sublettings shall not operate as a waiver of Landlord's rights
with respect to any subsequent assignment or subletting. The term "sublet" shall
be deemed to include the granting of licenses, concessions, and any other rights
of occupancy of any portion of the Premises.
17.2 Proposal Notice and Landlord's Rights. In the event Tenant shall
desire to assign this Lease, or to sublet all or any portion of the Premises, to
any person, firm, corporation or entity, Tenant shall deliver written notice by
registered mail, return receipt requested, to Landlord identifying the proposed
assignee or sublessee (the "Proposal Notice"), which Proposal Notice shall
include, inter alia, current financial and other information with respect to the
financial ability, operating experience and business reputation of the proposed
assignee or sublessee sufficient for Landlord to evaluate the proposal; a form
of assignment and assumption agreement, or sublease agreement, for Landlord's
review and approval; and a certificate from the Tenant's Chief Executive Officer
certifying that the proposed assignee shall continue to use the Premises
strictly in accordance with the uses permitted hereby. It is expressly agreed
that Landlord shall have no obligation to consent to or otherwise respond to any
proposed assignment or sublease in the event of Tenant's failure to deliver a
Proposal Notice to Landlord completed in accordance with this Section 17.2.
Within thirty (30) days after receipt of the Proposal Notice, Landlord shall, in
its sole discretion, elect by written notice to Tenant either to (1) consent to
such proposed assignment or sublease; (2) terminate this Lease; or (3) deny its
consent to such proposed assignment or sublease (which denial shall be at
Landlord's sole exclusive judgment), in which event Tenant shall continue to be
bound by the terms of this Lease. In the event Landlord shall
-21-
elect to terminate this Lease: (i) this Lease and the term hereof shall
terminate as of a date designated by Landlord, which is not less than sixty (60)
nor more than one hundred eighty (180) days after the date of Landlord's notice
of its election to terminate; (ii) Tenant shall be released from all liability
under the lease with respect to the period after the date of termination (other
than indemnities and obligations of Tenant which expressly survive termination
of this Lease, as set forth herein); (iii) all Base Rent, Additional Rent and
other charges shall be prorated to the date of such termination; and (iv) upon
such termination date, Tenant shall surrender the Premises to Landlord in
accordance with Article XXI hereof.
17.3 Proceeds of Assignment. All cash or other proceeds of any assignment,
subletting, or other transfer in excess of the rentals called for hereunder, and
all cash or other proceeds of any other transfer of Tenant's interest in this
Lease, shall be paid to Landlord as received by Tenant, whether such assignment,
subletting or other transfer is consented to by Landlord or not, unless Landlord
agrees to the contrary in writing, and Tenant hereby assigns all rights it might
have or ever acquire in any such proceeds to Landlord. This Section 17.3 shall
not apply to any transaction which is either permitted under, or is not deemed
to be an "assignment" as a result of the application of, Section 17.7 of this
Lease, below.
17.4 Additional Restrictions on Assignment. Consent by Landlord to one or
more assignments or sublettings shall not operate as a waiver of Landlord's
rights as to any subsequent assignments and sublettings. Notwithstanding any
assignment or subletting, Tenant and any guarantor of Tenant's obligations under
this Lease shall at all times remain fully and primarily responsible and liable
for the payment of all Rent and other monetary obligations herein specified and
for the compliance with and performance of all of its other obligations under
this Lease. Upon any subletting or assignment by Tenant in accordance with the
terms hereof, any and all renewal options, expansion options, rights of first
refusal and/or exclusive use provisions herein contained shall immediately
become null and void. Landlord shall be entitled to reimbursement by Tenant for
reasonable fees incurred by Landlord for the processing of any requests for
assignment or subletting by Tenant, including but not limited to attorney's
fees.
17.5 Prohibition on Leasehold Mortgages. Tenant shall not mortgage, pledge
or otherwise encumber its interest in this Lease or in the Premises, and any
such mortgage, pledge or encumbrance shall be void and of no force and effect.
17.6 Assignment by Landlord. In the event of the transfer or assignment by
Landlord of its interest in this Lease and in the Building containing the
Premises to a person or entity assuming Landlord's obligations under this Lease,
Landlord shall thereby be released from any further obligations hereunder, and
Tenant agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be assigned and transferred by
Landlord to such successor in interest, and Landlord shall thereby be discharged
of any further obligation relating thereto.
17.7 Permissive Transfers and Public Offerings. Notwithstanding Sections
17.1 - 17.4 to the contrary, Tenant shall have the right, without Landlord's
consent and free from any requirement that Tenant share any proceeds of such
assignment with Landlord, to assign this Lease to any "Corporate Affiliate" (as
hereinafter defined), provided that (A) the Permitted Use of the Premises
remains the same, (B) such the transfer to any such Permitted Assignee is not
orchestrated by or an behalf of Tenant in order to effectuate a transfer or
assignment of this Lease to a third party which would otherwise be subject to
Landlord's consent and/or recapture rights hereunder, (C) the Permitted Assignee
has a net worth at least equal to Five Million Dollars ($5,000,000), as
documented by financial statements prepared in accordance with generally
accepted accounting principles consistently applied, (D) such assignment shall
not relieve or discharge Tenant of or from any of the obligations or liabilities
of the "Tenant" under or with respect to this Lease, whether arising before or
after such assignment, (E) Tenant shall notify Landlord of any assignment
permitted under this Section 17.7 within a reasonable time prior thereto, and
shall provide Landlord with a copy of the executed assignment instrument in a
prompt fashion, (F) such permitted assignment shall not relieve Tenant of the
obligation to obtain Landlord's consent to any subsequent assignment or
sublease, and (G) the assignment instrument shall provide, and the assignee
shall in all events be deemed to have agreed with Landlord, that the assignee
shall be bound by (and shall be directly liable to Landlord for) all of the
obligations of "Tenant" under this Lease. For purposes of this Section, the
phrase "Corporate Affiliate" shall mean and refer to any parent corporation of,
subsidiary corporation of, or other person or entity which controls, is
controlled by, or is under common control with, Tenant, or any corporation or
entity into which Tenant may be merged or consolidated, or which acquires all or
substantially all of
-22-
the ownership interests or assets of Tenant. If Tenant is a corporation, any
dissolution, merger, consolidation, or other reorganization of Tenant, or the
sale or other transfer of the controlling percentage of the capital stock of
Tenant (collectively and/or individually, a "Corporate Event"), shall be deemed
an assignment of this Lease which shall be permissible as a matter of right only
if it meets the foregoing criteria set forth in this Section 17.7 (and which
shall otherwise be subject to the consent requirements set forth in Section 17.1
and 17.2 hereof). The phrase "controlling percentage" shall mean the ownership
of, and the right to vote, stock possessing at least fifty-one percent (51%) of
the total combined voting power of all classes of Tenant's capital stock issued,
outstanding, and entitled to vote for the election of directors. In addition,
and notwithstanding Section 17.1 of this Lease to the contrary (and without
obligation to share any proceeds thereof, as otherwise contemplated in Section
17.3, above, Landlord agrees that neither (i) the offer and sale by Tenant of
any stock pursuant to an effective registration statement under the Securities
Act of 1933 (whether the same is an initial public offering or subsequent
offering), nor (ii) the offer and sale by Tenant of stock through a private
placement in accordance with applicable securities laws, shall constitute an
assignment of this Lease, and therefore shall not require the consent or
approval of Landlord.
17.8 Sale of Accounts in Ordinary Course of Business. Landlord acknowledges
that Tenant is in the business of selling assets or accounts to securitized
pools as its primary business, and any such sale or sales in the ordinary course
of Tenant's business shall in no event constitute an assignment hereunder.
ARTICLE XVIII. TAXES
18.1 Personal Property and Fixtures. Tenant shall be liable for all taxes
levied against personal property and trade fixtures placed by Tenant in the
Premises. If any such taxes are levied against Landlord or Landlord's property
and if Landlord elects to pay the same or if the assessed value of Landlord's
property is increased by inclusion of personal and trade fixtures placed by
Tenant in the Premises and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord upon demand that part of such taxes for
which Tenant is primarily liable hereunder.
18.2 Tax Payment. Tenant agrees to pay its Proportionate Share of all
increases in taxes, assessments and governmental charges of any kind and nature
whatsoever levied or assessed against the Property, any other charges, taxes
and/or impositions now in existence or hereafter imposed by any governmental
authority based upon the privilege of renting the Premises or upon the amount of
rent collected therefor, and any tax, fee, levy, assessment or charge which is
imposed as the result of the transfer of the leasehold interest in the Premises
created by this Lease (all of the foregoing being hereinafter referred to
collectively as "Taxes") above the Taxes in the Base Tax Year. Taxes shall also
be deemed to include any special taxing district assessment which is imposed in
order to fund public facilities for the area in which the Property is located.
During each month of the Term (except during the Base Tax Year), Tenant shall
make a monthly payment to Landlord equal to one-twelfth (1/12) of its
Proportionate Share of the increase in Taxes on the Property which will be due
and payable for that particular year (the "Tax Payments"). Tenant authorizes
Landlord to use the funds deposited with Landlord under this Section 18.2 to pay
the Taxes levied or assessed against the Property. Each Tax Payment shall be due
and payable at the same time and in the same manner as the time and manner of
the payment of Base Rent as provided herein. The initial monthly Tax Payment is
based upon Tenant's Proportionate Share of the increases of Taxes on the
Property in the Base Tax Year as estimated by Landlord in good faith, and the
monthly Tax Payment is subject to increase or decrease as determined by Landlord
to reflect accurately Tenant's Proportionate Share of the increases in Taxes. If
following Landlord's receipt of all Tax bills for any fiscal tax year Landlord
determines that Tenant's total Tax Payments for such period are less than
Tenant's actual Proportionate Share of the increases in Taxes on the Property,
Tenant shall pay to Landlord the difference upon demand; if the total Tax
Payments of Tenant exceed Tenant's actual Proportionate Share of the increases
in Taxes on the Property, Landlord shall retain such excess and credit it to
Tenant's future Tax Payments.
18.3 Tax Consultant; Taxes Contested by Landlord. Landlord shall have the
right to employ a tax consulting firm to attempt to assure a fair tax burden on
the Property. Tenant shall pay to Landlord upon demand from time to time, as
Additional Rent, the amount of Tenant's Proportionate Share as of the cost of
such service. Additionally, if Landlord reasonably believes that contesting a
tax assessment will result in a reduction in taxes, Landlord shall have the
right to contest any tax assessment, valuation or levy against the Property, and
to retain legal counsel and expert witnesses to assist in such contest and
otherwise to incur reasonable expenses in such contest, and Tenant shall pay
upon demand Tenant's Proportionate Share of any reasonable fees, expenses and
costs incurred by Landlord in contesting any assessments, levies or tax rate
applicable to the Property or portions thereof
-23-
whether or not such contest is successful. In the event such contest results in
a refund of Taxes in any year, Tenant shall be entitled to receive its
Proportionate Share of such refund, pro-rated for the period with respect to
which Tenant paid its share of the increases in Taxes for such year, after
deducting from the refund all fees, expenses and costs incurred by Landlord in
such contest.
18.4 Payment for Partial Year. Any payment to be made pursuant to this
Article XVIII with respect to the real estate tax year in which this Lease
commences or terminates shall bear the same ratio to the payment which would be
required to be made for the full tax year as that part of such tax year covered
by the Term of this Lease bears to a full tax year.
ARTICLE XIX. EVENTS OF DEFAULT AND REMEDIES
19.1 Events of Default by Tenant and Remedies. Each of the following events
shall be deemed to be an "Event of Default" or a "Default" by Tenant under this
Lease, without notice from Landlord to Tenant or any right to cure the same on
the part of Tenant unless specified below:
(1) If Tenant shall fail (i) to pay any installment of Rent or any
other amount payable to Landlord hereunder as and when herein provided, (ii) to
obtain the insurance coverage required hereunder, or (iii) to comply with the
provisions of Sections 7.5 and 7.6 regarding Hazardous Waste and environmental
covenants.
(2) If Tenant or any guarantor of Tenant's obligations under this Lease
shall become insolvent, or shall make a transfer in fraud of creditors, or shall
make an assignment for the benefit of creditors.
(3) If Tenant, Tenant's guarantor or any permitted sublessee or
assignee, shall (i) make an assignment for the benefit of creditors, (ii) file
or acquiesce in a petition in any court (whether or not pursuant to any statute
of the United States or of any State) in any bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceedings, (iii) make an
application in any such proceedings for or acquiesce in the appointment of a
trustee, receiver or similar officer for it or all or any portion of its
property, or (iv) have been a "debtor" in any voluntary and involuntary
bankruptcy proceeding on the date of execution of this Lease without having
disclosed the same to Landlord in writing prior to such date.
(4) If any petition shall be filed against Tenant, Tenant's guarantor
or any permitted sublessee or assignee (whether or not pursuant to any statute
of the United States or any State) in any bankruptcy, reorganization,
composition, extension, arrangement or insolvency proceedings and such
proceedings shall not be dismissed, discontinued, or vacated within thirty (30)
days after such petition is filed.
(5) If in any proceedings, pursuant to the application of any party
other than Tenant or Tenant's guarantor in which neither of them acquiesce, a
receiver, trustee or other similar officer shall be appointed for Tenant or
Tenant's guarantor or for all or any portion of the property of either and such
receivership or trusteeship shall not be set aside within thirty (30) days after
such appointment.
(6) If a receiver or Trustee shall be appointed for all of the Premises
or for all or substantially all of the assets of Tenant or any guarantor of
Tenant's obligations under this Lease.
(7) If Tenant shall vacate or abandon the Premises, or permit the same
to remain unoccupied and unattended, or shall remove or attempt to remove or
manifest an intent to remove, not in the ordinary course of business, Tenant's
goods or property from or out of the Premises.
(8) If Tenant shall create or suffer the creation of a lien upon the
Premises in violation of Article XX hereof.
(9) If the business operated by Tenant shall be suspended for a period
in excess of fifteen (15) consecutive days, or be closed for failure to pay any
State sales tax as required or for any other reason.
(10) If Tenant shall be a corporation and shall fail to remain in good
standing in the state in which the Property is located or the state of its
incorporation, or shall, if a foreign corporation, fail to qualify to transact
business and/or maintain a duly registered agent in the state in which the
Property is located.
-24-
(11) If any execution, levy, attachment, or other process of law shall
occur upon Tenant's goods, fixtures or interest in the Premises.
(12) If Tenant shall fail to deliver an estoppel certificate to
Landlord within five (5) days after Landlord's request therefor, pursuant to the
requirements of Section 29.9 hereof.
(13) If Tenant shall fail to vacate and surrender the Premises upon
expiration of the Term, or earlier termination thereof pursuant to any of the
provisions of this Lease.
(14) If Tenant shall at any time be in breach or default in the
observance or performance of any of the other covenants and/or agreements
required to be performed and/or observed by Tenant hereunder for a period of ten
(10) days; provided that if such default is curable but shall reasonably require
more than ten (10) days to cure, Tenant shall be afforded an additional time
period to effect such cure, not to exceed thirty (30) days, provided Tenant
commences to cure the default within the initial ten (10) day period and
diligently prosecutes the same to completion.
Upon the occurrence of any such Event of Default, Landlord shall have
the option to pursue any one or more of the following remedies without any
notice or demand whatsoever:
A. Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so Landlord may,
without prejudice to any other remedy which Landlord may have for possession or
arrearages in rental, enter upon and take possession of the Premises and expel
or remove Tenant and any other person who may be occupying the Premises or any
part thereof, by force if necessary, without being liable for prosecution or any
claim of damages therefor.
B. Enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, with or without having terminated this Lease.
C. Perform any act Tenant is obligated to perform under the terms
of this Lease (and enter upon the Premises in connection therewith if necessary)
in Tenant's name and on Tenant's behalf, without being liable for prosecution or
any claim for damages therefor, and Tenant agrees to reimburse Landlord on
demand for any expenses which Landlord may incur in thus effecting compliance
with Tenant's obligations under this Lease (including, but not limited to,
collection costs and legal expenses), plus a one-time administrative fee equal
to twenty percent (20%) of the amount of such expense, plus interest thereon at
the Default Rate, calculated on a per diem basis from the date due until paid,
and Tenant further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action.
D. Alter all locks and other security devices at the Premises
without terminating this Lease.
E. Landlord specifically reserves the right to enter upon and
relet the Premises on Tenant's behalf without that action being deemed to have
been a termination of this Lease by Landlord.
F. In addition to the other remedies provided in this Lease, and
anything contained herein to the contrary notwithstanding, Landlord shall be
entitled to restrain any default or violation, or attempted or threatened
default or violation of any of the terms, covenants, conditions or other
provisions of this Lease, by injunction, order of specific performance or other
appropriate equitable relief.
19.2 Exercise of Landlord's Remedies. The remedies provided to Landlord
hereunder are intended to be cumulative, and may be exercised by Landlord in any
order, or simultaneously, without such exercise being deemed or construed as a
waiver by Landlord of its right to exercise any other remedy granted to Landlord
hereunder (or under applicable laws) with respect to the same Default. Exercise
by Landlord of any one or more remedies hereunder granted or otherwise available
shall not be deemed to be an acceptance or surrender of the Premises by Tenant,
whether by agreement or by operation of law, it being understood that such
surrender can be effected only by the written agreement of Landlord and Tenant.
No such alteration of locks or other security devices and no removal or other
exercise of dominion by Landlord over the property of Tenant or others at the
Premises shall be
-25-
deemed unauthorized or constitute a conversion or a tortious interference with
the business, contracts or operations of Tenant, Tenant hereby consenting, after
any Event of Default, to the aforesaid exercise of dominion over Tenant's
property within the Premises. All claims for damages by reason of such re-entry
and/or repossession and/or alteration of locks or other security devices are
hereby waived, as are all claims for damages by reason of any distress warrant,
forcible detainer proceedings, sequestration proceedings or other legal process.
Tenant agrees that any re-entry by Landlord may be pursuant to judgment obtained
in unlawful or forcible detainer proceedings, or other legal proceedings, or
without the necessity for any legal proceedings, as Landlord may elect, and
Landlord shall not be liable in trespass, for tortious interference with
business or contract, or otherwise in connection therewith. To the fullest
extent permitted by applicable law, Landlord shall have the right to bring an
action for unlawful detainer or possession separate from any action brought to
recover damages due from Tenant by virtue of its Default, and the bringing of
such separate action for unlawful detainer or possession shall in no way
prejudice or cut off Landlord's right to seek damages or to exercise any of its
other rights and remedies under this Lease after recovering possession of the
Premises.
19.3 Termination of Lease. In the event Landlord elects to terminate this
Lease by reason of an Event of Default, then notwithstanding such termination
(and in addition to the additional costs and expenses recoverable from Tenant
pursuant to Section 19.5 below), Tenant shall be liable for and shall pay to
Landlord at the address specified for notice to Landlord herein the sum of all
Rent and other amounts payable to Landlord pursuant to the terms of this Lease
which have accrued to the date of such termination, plus, as damages, an amount
equal to the total Rent (Base Rent and Additional Rent, including Tenant's
Proportionate Share of Common Area Costs and Landlord's Insurance payments, the
Promotion Fund Charge, and Tenant's Tax Payments hereunder) for the remaining
portion of the Term (had such Term not been terminated by Landlord prior to the
date of expiration stated in Article I), less the present value of the then fair
rental value of the Premises for such period (taking into account likely
expenses of reletting, existence of other vacancy within the Property and then
current leasing conditions), such present value to be based upon a discount rate
of ten percent (10%) per annum. In lieu of the lump sum recovery of damages for
future rent measured under the formula set forth in the preceding sentence, but
in addition to the additional costs and expenses recoverable from Tenant
pursuant to Section 19.5 below, Landlord may, in the event of termination
pursuant to this Section 19.3, elect to recover "Indemnity Payments," as defined
hereinbelow, from Tenant. For purposes of this Lease "Indemnity Payments" means
an amount equal to the Rent and other payments provided for in this Lease which
would have become due and owing thereunder from time to time during the
unexpired Term less the rent and other payments, if any, actually collected by
Landlord and allocable to the Premises. Tenant shall, on demand, make Indemnity
Payments monthly, and Landlord may ▇▇▇ for all Indemnity Payments at any time
after they accrue, either monthly, or at less frequent intervals. Tenant further
agrees that Landlord may bring suit for Indemnity Payments at or after the end
of the Term as originally contemplated under this Lease, and Tenant agrees that
in such event Landlord's cause of action to recover the Indemnity Payments shall
be deemed to have accrued on the last day of the Term as originally
contemplated. Tenant hereby irrevocably waives any defense based on application
of a statute of limitation with respect to any action on behalf of Landlord to
recover such Indemnity Payments as long as such action is brought within the
applicable limitation period as measured from the last day of the Term.
19.4 No Termination. In the event that Landlord elects to repossess the
Premises without terminating this Lease, then (in addition to the additional
costs and expenses recoverable from Tenant pursuant to Section 19.5 below)
Tenant shall be liable for and shall pay to Landlord at the address specified
for notice to Landlord herein all Rent and other amounts payable to Landlord
pursuant to the terms of this Lease which have accrued to the date of such
repossession, plus total Rent (Base Rent and Additional Rent, including Tenant's
Proportionate Share of Common Area Costs and Landlord's Insurance payments, the
Promotion Fund Charge, and Tenant's Tax Escrow Payments) required to be paid by
Tenant to Landlord during the remainder of the Term until the date of expiration
of the Term as stated in Article I, diminished by any net sums thereafter
received by Landlord through reletting the Premises during said period (after
deducting expenses incurred by Landlord as provided in Section 19.5 hereof). In
reletting the Premises on Tenant's behalf, Landlord shall be entitled to grant
any concessions it deems advisable, including free rent. In no event shall
Tenant be entitled to any excess of any rental obtained by reletting over and
above the rental herein reserved. Actions to collect amounts due by Tenant to
Landlord as provided in this Section 19.4 may be brought from time to time on
one or more occasions, without the necessity of Landlord's waiting until
expiration of the Term, or such action may be brought at or after the end of the
Term, in which event Landlord's cause of action to collect such amounts shall be
deemed (for purposes of applying any applicable statute of limitations) to have
accrued on the last day of such Term, and Tenant hereby waives any defense based
on application of a statute of limitations with respect to an action brought by
Landlord to recover such
-26-
amounts, as long as such action is brought within the applicable limitation
period as measured from the last day of the Term.
19.5 Additional Costs and Expenses of Default. Following the occurrence of
any Event of Default, Tenant shall also be liable for and shall pay to Landlord,
in addition to any sum provided to be paid under Section 19.3 or 19.4, above,
above: (i) costs and expenses incurred by Landlord to obtain and secure
possession of the Premises; (ii) broker's fees incurred by Landlord in
connection with reletting the whole or any part of the Premises; (iii) the costs
of removing, storing and/or disposing of Tenant's or other occupant's property;
(iv) the amount of all damages suffered by Landlord as a result of Tenant's
Default prior to termination or recovery of the Premises, as the case may be;
(v) the cost of making repairs and replacements required to be made by Tenant
hereunder, and of performing all covenants of Tenant relating to the condition
of the Premises; (vi) the cost of reasonable repairs, reasonable alterations,
reasonable remodeling or other reasonable expenses of putting the Premises into
a condition acceptable to a new tenant or tenants; and (vii) all reasonable
expenses incurred by Landlord in enforcing or defending Landlord's rights and/or
remedies at law, equity or hereunder, including reasonable attorneys' fees
(which shall be not less than fifteen percent (15%) of all sums then owing by
Tenant to Landlord), litigation expenses and court costs.
19.6 Reletting the Premises. In the event of termination of this Lease or
repossession of the Premises after an Event of Default, Landlord shall not have
any obligation to relet or attempt to relet the Premises or any portion thereof,
or to collect rental after reletting; Landlord may relet the whole or any
portion of the Premises for any period, to any tenant, and for any use and
purpose, upon such terms as it deems appropriate, and may grant any rental or
other lease concessions as it deems advisable, including free rent.
Notwithstanding the foregoing to the contrary, in the event of a Default by
Tenant hereunder, and provided that (a) Tenant does not contest the Landlord's
claim of Default, or any judgment obtained by Landlord against Tenant in
connection therewith, and (b) upon such Default, Tenant cooperates fully in
vacating and surrendering the Premises to Landlord as required in Article XXI,
including but not limited to delivery of all keys to the Premises, then Landlord
agrees to use the following efforts to mitigate its damages as a result of such
Default (which shall represent the full extent of Landlord's obligation to
mitigate damages hereunder): retaining a leasing agent or broker to market the
Premises at market terms and conditions, provided that (i) Landlord shall not be
obligated to show preference for reletting the Premises over any other vacant
space in the Project, (ii) Landlord shall have the right to divide the Premises,
or to consolidate portions of the Premises with other spaces, in order to
facilitate such reletting, as Landlord deems appropriate, (iii) Landlord shall
not have any obligation to use efforts other than commercially reasonable
efforts under the circumstances to collect rental after any such reletting, and
(iv) Landlord may relet the whole or any portion of the Premises for any period,
to any tenant, and for any use and purpose, upon such terms as Landlord deems
appropriate, and may grant any rental or other lease concessions as it deems
advisable, including free rent. To the extent a lease acceptable to Landlord for
all or any part of the Premises is fully executed and delivered, Tenant's
damages hereunder shall be reduced by any net amounts (i.e., net of operating
expenses and other out-of-pocket expenses associated therewith) received by
Landlord under such lease which are properly allocable to the Premises.
19.7 Joint and Several Liability. In the event Tenant is comprised of more
than one person and/or entity, all such persons and/or entities shall be jointly
and severally liable for all of the obligations and liabilities of Tenant under
this Lease.
19.8 Security Deposit. Upon receipt from Tenant of any cash security
deposit (or cash proceeds of the Letter of Credit) pursuant to the terms of
Section 1.1(m) above, such Security Deposit shall be held by Landlord without
interest as security for the performance by Tenant of Tenant's covenants and
obligations under this Lease, it being expressly understood that such deposit is
not an advance payment of rental or a measure of Landlord's damages in the event
of any default by Tenant. If at any time during the Term any of the Rent herein
reserved shall be overdue and unpaid, or any other sum payable by Tenant to
Landlord hereunder shall be overdue and unpaid, then Landlord may, at its
option, apply any portion of said deposit to the payment of any such overdue
rental or other sum. In the event of the failure of Tenant to keep and perform
any of the other terms, covenants and conditions of this Lease to be kept and
performed by Tenant, then the Landlord at its option may apply the Security
Deposit, or so much thereof as may be necessary, to compensate the Landlord for
loss, cost or damage sustained, incurred or suffered by Landlord due to such
breach on the part of Tenant. Should the Security Deposit or any portion thereof
be applied by Landlord as herein provided, Tenant shall, upon written demand of
Landlord, remit to Landlord a sufficient amount in cash to restore the Security
Deposit to the original sum deposited, and Tenant's failure to do so within five
(5) days after receipt of such demand shall constitute a Default under this
Lease. Any remaining balance of the
-27-
Security Deposit shall be returned by Landlord to Tenant at such time after
termination of this Lease that all of Tenant's obligations under this Lease have
been fulfilled. Landlord hereby reserves the right to commingle Tenant's
Security Deposit with any other accounts that it holds, and Tenant hereby
consents thereto. Should Landlord choose to apply the Security Deposit against
damages suffered by it, such application shall not establish or signify a waiver
of any other rights or remedies of Landlord hereunder, nor shall such
application constitute an accord and satisfaction.
19.9 Landlord's Default. In the event of any default by Landlord, Tenant
will give Landlord written notice specifying such default with particularity,
and Landlord shall thereupon have thirty (30) days (or such longer period as may
be required in the exercise of due diligence) in which to cure any such default.
Unless and until Landlord fails to so cure any default after such notice, Tenant
shall not have any remedy or cause of action by reason thereof. All obligations
of Landlord hereunder will be construed as covenants, not conditions. The term
"Landlord" shall mean only the owner, for the time being, of the Property, and
in the event of the transfer by such owner of its interest in the Property, such
owner shall thereupon be released and discharged from all covenants and
obligations of the Landlord thereafter accruing, but such covenants and
obligations shall be binding during the Lease Term upon each new owner for the
duration of such owner's ownership. Notwithstanding any other provisions of this
Lease to the contrary, Tenant shall look solely to Landlord's interest in the
Property, and not to any other or separate business or non-business assets of
Landlord, or any partner, shareholder, officers or representative of Landlord,
for the satisfaction of any claim brought by Tenant against Landlord, and if
Landlord shall fail to perform any covenant, term or condition of this Lease
upon Landlord's part to be performed, and as a consequence of such default
Tenant shall recover a money judgment against Landlord (which may include
reasonable attorneys fees and court costs), such judgment shall be satisfied
only (i) out of the proceeds of sale received upon levy against the right, title
and interest of Landlord in the Property; and/or (ii) to the extent not
encumbered by a secured creditor, out of the rents or other incomes receivable
by Landlord from the property of which the Premises are a part. Further, in the
event the owner of Landlord's interest in this Lease is at any time a
partnership, joint venture or unincorporated association, Tenant agrees that the
members or partners of such partnership, joint venture or unincorporated
association shall not be personally or individually liable or responsible for
the performance of any of Landlord's obligations hereunder.
19.10 Repossession of the Premises. In the event that Landlord shall have
taken possession of the Premises pursuant to the authority herein granted, then
Landlord shall have the right to keep in place and use all of the furniture,
fixtures and equipment at the Premises, including that which is owned by or
leased to Tenant at all times prior to any foreclosure thereon by Landlord or
repossession thereof by any lessor thereof or third party having a lien thereon.
Landlord shall also have the right to remove from the Premises (without the
necessity of obtaining a distress warrant, writ of sequestration or other legal
process and without being liable for prosecution or any claim for damages
therefor) all or any portion of such furniture, fixtures, equipment and other
property located thereon and place the same in storage at any place within the
county in which the Premises is located or dispose of the same; and in such
event, Tenant shall be liable to Landlord for costs incurred by Landlord in
connection with such removal, storage and/or disposal and shall indemnify and
hold Landlord harmless from all loss, damage, cost, expense and liability in
connection with such removal, storage and/or disposal. Landlord shall also have
the right to relinquish possession of all or any portion of such furniture,
fixtures, equipment and other property to any person ("Claimant") claiming to be
entitled to possession thereof who presents to Landlord a copy of any instrument
purporting to have been executed by Tenant (or any predecessor of Tenant)
granting Claimant the right under various circumstances to take possession of
such furniture, fixtures, equipment or other property, without the necessity on
the part of Landlord to inquire into the authenticity of said instrument and
without the necessity of Landlord's making any investigation or inquiry as to
the validity of the factual or legal basis upon which Claimant purports to act;
and Tenant agrees to indemnify and hold Landlord harmless from all cost,
expense, loss, damage and liability incident to Landlord's relinquishment of
possession of all or any portion of such furniture, fixtures, equipment or other
property to Claimant. Should Tenant abandon the Premises and leave property
therein, Landlord may elect whether or not to accept the property, liquidate
said property and apply the proceeds against any sums due and owing by Tenant,
or to dispose of said property, and Tenant waives any claim to such property
after any such abandonment. For purposes of the foregoing, Tenant shall be
deemed to have abandoned its interest in such property if the same is not
removed from the Premises by Tenant within ten (10) days after Landlord's proper
demand that Tenant remove same, or within ten (10) days after expiration or
earlier termination of this Lease, whichever first occurs.
19.11 [Intentionally Deleted].
-28-
19.12 Additional Remedies. The rights and remedies of Landlord herein
stated shall be in addition to, and not in lieu of, any and all other rights and
remedies which Landlord has or may hereafter have against Tenant or any other
person or entity, at law or in equity; and Tenant stipulates and agrees that the
rights herein granted Landlord are understood and have been expressly agreed to
by Tenant.
ARTICLE XX. MECHANICS' LIENS
Tenant shall have no authority, express or implied, to create, place or
suffer the creation or placement of any lien or encumbrance of any kind or
nature whatsoever upon the Property and/or Premises, or in any manner to bind
the interest of Landlord or Tenant in the Property and/or Premises, or to charge
the Rent payable hereunder, for any claim in favor of persons and/or entities
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 with respect to which any lien is or can otherwise be validly and
legally asserted against its leasehold interest in the Premises or the
improvements thereon, and Tenant further covenants that it will indemnify and
hold Landlord harmless from and against any and all loss, liability, cost,
damage and expense based on or arising out of asserted claims or liens against
the leasehold estate or against the right, title and interest of the Landlord in
the Property and/or Premises or under the terms of this Lease. Tenant shall
discharge any such lien by payment or bonding within ten (10) days after the
same has been filed, failing which Landlord shall have the right, but not the
obligation, in addition to all other remedies herein provided, to discharge such
lien at Tenant's expense and in such event Landlord's cost thereof, plus
interest thereon at the lesser of eighteen percent (18%) per annum or the
maximum rate permitted by law, shall be reimbursed by Tenant to Landlord upon
demand as Additional Rent hereunder. Landlord and Tenant further agree that any
repairs or improvements made by Tenant to the Premises shall be deemed
authorized and ordered by the Tenant only, not the Landlord (although Landlord
preserves any right contained herein to approve, consent to, or inspect such
repairs or improvements).
ARTICLE XXI. SURRENDER; HOLDING OVER
Tenant shall deliver up and surrender to the Landlord possession of the
Premises upon the expiration of the lease term, or its earlier termination for
any reason, in as good condition and repair as the same shall be at the
commencement of the Term (ordinary wear and tear excepted), shall deliver the
keys to the Property manager, and shall inform Landlord of all combinations on
locks, safes and vaults, if any, in the Premises. Upon such surrender by Tenant,
should the Premises require any repairs which are the responsibility of the
Tenant hereunder, Landlord shall have the right to make such repairs at Tenant's
sole cost. In the event Tenant or any party claiming under Tenant remain in
possession of the Premises or any part thereof after the expiration of this
Lease without Landlord's consent, no tenancy or interest in the Premises will
result, and such action shall result in unlawful detainer and that party shall
be subject to immediate eviction and removal (provided that, during any such
period of occupancy by Tenant after the date the Lease Term expires or
terminates, Tenant shall be obligated to pay an occupancy charge to Landlord at
a per diem rate equal to two hundred percent (200%) of the per diem Base Rent
and Additional Rent which was in effect during the last month of the Lease
Term). In the event Tenant remains in possession of the Premises after the
expiration of this Lease with Landlord's written consent but without the
execution of a new lease, it shall be deemed to be occupying the Premises as a
tenant from month to month at a rental equal to one hundred percent (100%) of
the Base Rent herein provided and otherwise subject to all the conditions,
provisions and obligations of this Lease, including, but not limited to,
Tenant's obligation to pay its Proportionate Share of increases in Taxes,
Insurance Costs and Common Area Costs, and other obligations constituting
"Additional Rent" as set forth herein, adjusted as necessary or appropriate to
make the same applicable to a month to month tenancy. Tenant hereby agrees that
Tenant shall give to Landlord at least thirty (30) days written notice to quit
the Premises. The foregoing shall not constitute Landlord's consent for Tenant
to holdover. In the event Tenant remains in possession of the Premises after the
expiration of this Lease without Landlord's consent, Tenant shall also pay to
Landlord all damages sustained by Landlord resulting from retention of
possession by Tenant, including without limitation the loss of any proposed
subsequent tenant for any portion of the Premises.
-29-
ARTICLE XXII. SUBORDINATION AND ATTORNMENT
22.1 Subordination. This Lease is and shall be, without further action by
any other party, subject and subordinate to any mortgage, deed of trust or other
lien presently existing or hereafter created upon the Premises or the Property,
and to any renewals and extensions thereof, but Tenant agrees that any such
mortgagee shall have the right at any time to subordinate such mortgage, deed of
trust or other lien to this Lease. Landlord is hereby irrevocably vested with
full power and authority to subordinate this Lease to any mortgage, deed of
trust or other lien hereafter placed upon the Premises or the Property, and
Tenant agrees upon demand to execute such further instruments subordinating this
Lease as Landlord may request, and upon any failure of Tenant to do so, without
limitation of Landlord's remedies, Landlord shall have the right to execute the
same as attorney-in-fact for Tenant.
22.2 Attornment. In the event of any foreclosure sale or sales pursuant to
the terms of any mortgages or deeds of trust or other security instruments now
or hereafter constituting a lien upon or affecting the Property or any part
thereof, by virtue of judicial proceedings or otherwise, this Lease shall, at
the option of the mortgagee or beneficiary under the deed of trust or other
security instrument, continue in full force and effect, and Tenant will, upon
request, attorn to and acknowledge the foreclosure purchaser or purchasers at
such sale, as Landlord hereunder.
ARTICLE XXIII. [INTENTIONALLY DELETED]
ARTICLE XXIV. NOTICES
24.1 Requirements. Unless otherwise specified herein, wherever any notice
is required or permitted hereunder such notice shall be in writing. Any notice
or document required or permitted to be delivered hereunder shall be deemed to
be delivered, whether actually received or not, when deposited in the United
States mail, postage prepaid, Certified or Registered Mail, Return Receipt
Requested, addressed to the parties hereto at the respective addresses set out
in Sections 1.1(b) and 1.1(d) above, or at such other addresses as they may have
hereafter specified by hand or by written notice. Delivery by hand or by
recognized overnight carrier (such as Federal Express) to the addresses set out
in Sections 1.1(b) and 1.1(d), respectively, shall be deemed to satisfy the
notice requirements of this Lease (effective upon the date of receipt or refusal
of delivery). Any notice executed and delivered by Landlord's legal counsel (or
any other authorized agent of Landlord) shall be fully effective as if the same
had been executed and delivered by Landlord.
24.2 Multiple Entities as Landlord and Tenant. If and when included within
the term "Landlord" as used in this instrument there is more than one person,
firm or corporation, all shall jointly arrange among themselves for their joint
execution of such notice specifying some individual at some specific address for
the receipt of notices and payments to Landlord; if and when included within the
term "Tenant" as used in this instrument there is more than one person, firm or
corporation, all shall jointly arrange among themselves for their joint
execution of such a notice specifying some individual at some specific address
for the receipt of notices and payments to Tenant. All parties included within
the terms "Landlord" and "Tenant," respectively, shall be bound by notices and
payments given in accordance with the provisions of this Article to the same
effect as if each had received such notice or payment.
ARTICLE XXV. ADMINISTRATIVE CHARGE; INTEREST ON PAST DUE AMOUNTS.
25.1 Administrative Charge. In the event Tenant fails to pay to Landlord
when due any installment of Rent or any other sum to be paid to Landlord which
may become due hereunder, the parties acknowledge that Landlord will incur
administrative expenses in an amount not readily ascertainable and which has not
been elsewhere provided for herein between Landlord and Tenant. Accordingly, if
Tenant should fail to pay to Landlord when due any installment of Rent or other
sum to be paid hereunder, Tenant will pay Landlord on demand an administrative
charge equal to the greater of (i) $100.00, or (ii) five percent (5%) of the
past due amount. Failure to pay such administrative charge upon demand therefor
shall constitute an Event of Default hereunder. Provision for such
administrative charge shall be in addition to all other rights and remedies
available to Landlord hereunder or at law or in equity and shall not be
construed as liquidated damages or as a limitation on Landlord's remedies in any
manner.
25.2 Interest on Past Due Amounts. In addition to any administrative
charges resulting from Tenant's failure to pay Rent or any other sums due
hereunder in a timely fashion, Tenant agrees to pay interest upon any Rent or
other sums due hereunder which are not paid on or before the due date, at an
-30-
annual interest rate equal to the Prime Rate published from time to time by the
Wall Street Journal, plus five percent (5%), or the maximum rate permitted by
law, whichever is lesser (the "Default Rate"). Such interest shall be paid on a
per diem basis from the date due until the date paid. If publication of the Wall
Street Journal is discontinued, the parties agree that the Prime Rate in effect
at the then largest commercial bank in the United States will be applicable.
ARTICLE XXVI. [INTENTIONALLY DELETED]
ARTICLE XXVII. [INTENTIONALLY DELETED]
ARTICLE XXVIII. BANKRUPTCY
In the event the estate created hereby shall be taken in execution or by
other process of law, or if Tenant shall be adjudicated insolvent or bankrupt
pursuant to the provisions of any state or federal insolvency or bankruptcy act,
or if a receiver or trustee of the property of Tenant shall be appointed by
reason of Tenant's insolvency or inability to pay its debts, or if any
assignment shall be made of Tenant's property for the benefit of creditors, then
and in any of such events, Landlord may, at its option and in addition to any
other remedy available to Landlord, terminate this Lease and all rights of
Tenant hereunder by giving to Tenant written notice of the Landlord's election
to terminate.
In the event the trustee of the Tenant shall make timely affirmance of this
Lease under the Bankruptcy Reform Act of 1978 or similar provisions of future
laws, and continue in possession of the Demised Premises, it shall be the
responsibility of the trustee to cure or make adequate assurance that all
defaults under the provisions of this Lease shall be promptly cured, to fully
compensate or provide adequate assurance of compensation for any and all losses
suffered by Landlord, and to provide adequate assurance that all conditions of
this Lease shall be performed in the future, including but not limited to:
(a) Adequate assurance of the payment of rent and other consideration
due under this Lease.
(b) Assurance that the assumption or assignment will not breach
substantially any provisions in this Lease, such as, but not limited to, the use
provisions hereof, nor any provisions (such as exclusivity provisions) in other
lease, financing, or master agreements affecting the Property.
(c) That the Premises shall be used only in a manner consistent with
the provisions of this Lease.
In no event will Landlord be required to provide additional services or
supplies under this Lease unless fully compensated by the trustee.
In the event that any new insolvency or receivership should occur after the
closing of the bankruptcy case, the Landlord may at its option, and in addition
to any other remedy available to Landlord, terminate this Lease and all rights
of the Tenant hereunder by giving to Tenant written notice of the Landlord's
election to terminate.
ARTICLE XXIX. MISCELLANEOUS
29.1 No Partnership. Nothing herein contained shall be deemed or construed
by the parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture between Landlord and
Tenant, it being understood and agreed that neither the method of computation of
Rent, nor any other provisions contained herein, nor any acts of the parties
hereto, shall be deemed to create any relationship between the parties hereto
other than the relationship of landlord and tenant.
29.2 Caption; Construction of Terms. The captions used herein are for
convenience only and do not limit or amplify the provisions hereof. The language
in all parts of this Lease shall in all cases be construed as a whole and
according to its fair meaning, and not strictly for or against either Landlord
or Tenant, and the construction of this Lease and any of its various provisions
shall be unaffected by any argument or claim, whether or not justified, that it
has been prepared, wholly or in substantial part, by or on behalf of Landlord or
Tenant. Whenever herein the singular number is used, the same shall include the
plural, and words of any gender shall include each other gender. If any
provision of this Lease subjects any action, inaction, activity or other right
or obligation of Tenant to
-31-
the prior consent or approval of Landlord, Landlord shall be deemed to have the
right to exercise its sole and unfettered discretion in determining whether to
grant or deny such consent or approval, unless the provision in question states
that Landlord's consent or approval "shall not be unreasonably withheld", in
which event Landlord's consent shall be subject to Landlord's sole, but
reasonable, discretion.
29.3 No Waiver. One or more waivers of any covenant, term or condition of
this Lease by either party shall not be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent or approval by
either party shall not be construed as a waiver of a subsequent breach of the
same covenant, term or condition. The consent or approval by either party to or
of any act by the other party requiring such consent or approval shall not be
deemed to waive or render unnecessary consent to or approval of any subsequent
similar act. No act or thing done by Landlord or Landlord's agent during the
term of this Lease will be deemed an acceptance of a surrender of the Demised
Premises, and no agreement to accept such surrender will be valid unless in
writing signed by Landlord. The delivery of Tenant's keys to any employee or
agent of Landlord will not constitute a termination of this Lease unless
Landlord has entered into a written agreement to that effect. No payment by
Tenant, nor receipt from Landlord, of a lesser amount than the rent and all
other charges stipulated in this Lease will be deemed to be anything other than
a payment on account of the earliest stipulated rent. No endorsement or
statement on any check, or any letter accompanying any check or payment as rent,
will be deemed an accord and satisfaction. Landlord will accept such check for
payment without prejudice to Landlord's right to recover the balance of such
rent or to pursue any other remedy available to Landlord.
29.4 Time of the Essence; Force Majeure; Notice to Lender. Time is of the
essence with respect to all provisions of this Lease. The foregoing
notwithstanding, whenever a period of time is herein prescribed for action to be
taken by Landlord, Landlord shall not be liable or responsible for, and there
shall be excluded from the computation of any such period of time, any delays
due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions, inclement weather, permitting
delays or any other causes of any kind whatsoever which are beyond the
reasonable control of Landlord. At any time when there is outstanding a
mortgage, deed of trust or similar security instrument covering Landlord's
interest in the Premises, Tenant may not exercise any remedies for default by
Landlord hereunder unless and until the holder of the indebtedness secured by
such mortgage, deed of trust or similar security instrument (such party, a
"Lender") shall have received written notice of such default and a reasonable
time for curing such default shall thereafter have elapsed. Landlord and Tenant
acknowledge that the Lender may change from time to time, and upon Landlord's
execution of this Lease, Landlord will provide Tenant with the name and address
of the current Lender, and notices to any and all Lender(s) shall be governed by
the terms of Section 24.1, above.
29.5 Quiet Enjoyment. Landlord agrees that 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 continuance
of this Lease have the peaceable and quiet enjoyment and possession of the
Premises, without molestation, hindrance, or ejectment by Landlord or anybody
claiming by, through or under Landlord.
29.6 Amendment. No agreement shall be effective to change or modify this
Lease in whole or in part unless such agreement is in writing and duly signed by
the party against whom enforcement of such change or modification is sought.
29.7 Waiver of Right of Redemption. To the fullest extent permitted by law,
Tenant hereby expressly waives any and all rights of redemption granted by or
under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event Landlord obtains possession of the
Premises by reason of the violation by Tenant of any of the covenants and
conditions of this Lease, or otherwise. Additionally, to the fullest extent
permitted by law, Tenant waives all homestead rights and exemptions which Tenant
may have under any law as against any obligations occurring under this Lease.
29.8 Brokers. Tenant warrants that it has had no dealing with any broker or
agent in connection with the negotiation or execution of this Lease except for
Growth Properties, and Tenant agrees to indemnify and hold Landlord harmless
from and against any claims by any other broker, other agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with Tenant with regard to this leasing transaction.
-32-
29.9 Estoppel Certificate. Tenant agrees to furnish from time to time when
requested by Landlord, the holder of any deed of trust or mortgage or the lessor
under any ground Lease covering all or any part of the Property or the
improvements therein or the Premises or any interest of Landlord therein, a
certificate signed by Tenant confirming and containing such factual
certifications and representations deemed appropriate by Landlord, the holder of
any deed of trust or mortgage or the lessor under any ground Lease covering all
or any part of the Property or the improvements therein or the Premises or any
interest of Landlord therein, and Tenant shall, within five (5) days following
receipt of said certificate from Landlord, return a fully executed copy thereof
to Landlord. In the event Tenant shall fail to return a fully executed copy of
such certificate to Landlord within the foregoing five (5) day period, then
Tenant shall be deemed to have approved and confirmed all of the terms,
certifications and representations contained in such certificate. Tenant hereby
irrevocably appoints Landlord as attorney-in-fact for the Tenant with full power
and authority to execute and deliver in the name of Tenant such certificate if
Tenant fails to deliver the same within such five (5) day period and such
certificate as signed by Landlord shall be fully binding on Tenant. In addition
to the foregoing, Tenant's failure to deliver an executed estoppel certificate
within the five (5) day period set forth above shall constitute an Event of
Default hereunder.
29.10 Governing Law. The internal laws of the state in which the Premises
is located shall govern the interpretation, validity, performance and
enforcement of this Lease (without reference to choice of law principles).
29.11 Benefit and Burden. The terms, provisions and covenants contained in
this Lease shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors in interest and legal representatives
except as otherwise herein expressly provided.
29.12 Validity and Severability. Each provision of this Lease shall be
construed in such manner as to give such provision the fullest legal force and
effect possible. To the extent any provision herein (or part of such provision)
is held to be unenforceable or invalid when applied to a particular set of
facts, or otherwise, the unenforceability or invalidity of such provision (or
part thereof) shall not affect the enforceability or validity of the remaining
provisions hereof (or of the remaining parts of such provision), which shall
remain in full force and effect, nor shall such unenforceability or invalidity
render such provision (or part thereof) inapplicable to other facts in the
context of which such provision (or part thereof) would be held legally
enforceable and/or valid.
29.13 Name of Project. Landlord reserves the right at any time to change
any name by which the Property is designated.
29.14 Tenant's Authority. If Tenant is a corporation or partnership, the
officers or partners of Tenant (as the case may be) executing this Lease on
Tenant's behalf hereby make the following warranties and representations upon
which Landlord is relying in agreeing to lease the Premises to Tenant in
accordance with the terms of this Lease:
(i) that Tenant has been duly organized is validly existing and is in
good standing in the State of Maryland;
(ii) that Tenant has been duly qualified and is, as of the date hereof,
in good standing to transact business in the state in which the Premises are
located;
(iii) that the officers or partners executing this Lease on Tenant's
behalf have been duly authorized by all necessary corporate or partnership
action to execute the same, and that upon the execution hereof this Lease shall
be the valid and binding obligation of Tenant; and
(iv) that the financial statements supplied by Tenant to Landlord on or
before the date hereof are true and accurate in all respects, and that Tenant
shall, at all times during the term hereof, maintain a net worth equal or
greater than Tenant's net worth as disclosed in such financial statements.
29.15 Lender Approval. This Lease and the obligations of the parties hereto
are subject to the approval of the institutional lender financing Landlord's
acquisition, construction and/or ownership of the Property, if any. Landlord
shall forward an executed counterpart of this Lease to such institutional lender
for its review and approval at the time of delivery of such lease to Landlord
executed by Tenant, or at the time the initial acquisition and construction loan
with respect to the Property is made, whichever last occurs. Landlord shall
notify Tenant within two (2) business days
-33-
after its receipt thereof, of whether such approval has been given or denied,
and, if denied, the parties agree to attempt in good faith to negotiate any
modifications hereto in order to make this Lease acceptable to such
institutional lender. In the event the parties are unable to reach such an
agreement, and such institutional lender continues to deny its approval, this
Lease shall be deemed void ab initio.
29.16 Attorneys' Fees. In any litigation between the parties arising out
his Lease, and in connection with any consultants with counsel and other actions
taken or notices delivered, in relation to a default by any party to this Lease,
the prevailing party shall pay to the non-prevailing party all reasonable
expenses and court costs including attorneys' fees incurred by the
non-prevailing party, in preparation for and (if applicable) at trial, and on
appeal. Such attorneys' fees and costs shall be payable upon demand.
29.17 Independent Covenants. If Landlord shall commence any proceeding for
nonpayment of Rent, or any other payment of any other kind to which Landlord may
be entitled, or which it may claim hereunder, Tenant will not interpose any
counterclaim or setoff of whatever nature or description (other than a
compulsory counterclaim) in such proceedings. The parties hereto specifically
agree that Tenant's covenants to pay Rent or any other payments required of it
hereunder are independent of all other covenants and agreements herein
contained. The foregoing shall not be construed as a waiver of Tenant's right to
assert any such claim in a separate action brought by Tenant against Landlord.
29.18 No Election of Remedies. Mention in this Lease of any particular
remedy shall not preclude Landlord from any other remedy at law or in equity to
which it may be entitled, and all remedies herein provided are cumulative.
29.19 Incorporation of Exhibits. All exhibits attached hereto, and any
rider, addendum or special stipulations attached hereto, are incorporated herein
by this reference and made a part of this Lease.
29.20 Full Execution/No Offer. This Lease shall not be effective, and no
leasehold or other agreement shall be deemed or construed to have been created
between Landlord and Tenant, until such time as this Lease has been fully
executed by both Landlord and Tenant, and a fully executed original has been
delivered from Landlord to Tenant. Delivery to Tenant of drafts of this Lease by
Landlord or agents of Landlord shall in no way constitute the making of an offer
to lease, or any other offer, by Landlord to Tenant, and Landlord shall not be
bound by any terms or provisions sets forth in such drafts, even if the draft in
question was prepared by Landlord or its agents and signed by Tenant or bound in
any other way relating to the Premises or otherwise, unless and until the same
has been duly executed and delivered by both Landlord and Tenant.
29.21 Waiver of Jury Trial. Landlord and Tenant hereby expressly waive
trial by jury in any action, proceeding or counterclaim, brought by either of
them against the other, on any claim or matter whatsoever arising out of or in
any way connected with this Lease, their relationship as landlord and tenant,
Tenant's use and occupancy of the Premises and/or any claim of injury or damage.
29.22 Rules Against Perpetuities. If and to the extent that any of the
options, rights and privileges granted to Tenant under the provisions of this
Lease would, in the absence of the limitation imposed by this Section, be
invalid or unenforceable as being in violation of the rule against perpetuity or
any other rule of law relating to the vesting of interests in property or the
suspension of the power of alienation of property, then it is agreed that
notwithstanding any other provision of this Lease, said options, rights and
privileges, subject to the respective conditions governing the exercise of such
options, rights and privileges, shall be exercisable by Tenant only during a
period which shall end no later than twenty (20) years after the date of
execution of this Lease.
29.23 Other Tenants. Landlord reserves the absolute right to enter into
such other leases and tenancies in the Property as Landlord shall determine in
the exercise of its sole discretion. Tenant does not rely on the fact, nor does
Landlord represent, that any specific tenant or occupant or number of tenants or
occupants, or types or mix of tenants or occupants shall during the lease term
occupy any space in the Property or that the Property is maintained, managed or
otherwise operated in any particular style such as by way of example and not in
any way in limitation, as a first-class Property.
29.24 Landlord Action. If at any time during the term hereof, Tenant
requests, or causes any other individual or entity to request, the review,
consent, approval or the performance by Landlord of any other action not
specifically set forth as an obligation of Landlord under this Lease including,
without limitation, the preparation or execution of any legal documentation
(collectively, "Landlord
-34-
Action"), Tenant shall promptly reimburse Landlord for any and all cost and
expenses (including, without limitation, reasonable attorneys' fees) incurred by
Landlord in relation to Landlord Actions. Tenant agrees that Landlord may make
the performance of any Landlord Action conditioned upon the prior reimbursement
by Tenant of such costs and expenses.
29.25 Acceptability of the Premises for Permitted Use. By its entry into
this Lease, Tenant represents and acknowledges to Landlord that Tenant has
satisfied itself as to the use which it is permitted to make of the Premises and
has inspected the Premises, and the streets, sidewalks, curbs, utilities and
access ways contiguous to or adjoining the same, that the same are acceptable to
Tenant for use by Tenant for the Permitted Use pursuant to this Lease, in the
condition or state in which they are now found and that Landlord has made no
express or impled warranty, representation or covenant to or with Tenant with
respect to the same, other than as may be expressly set forth in this Lease. All
of the terms, covenants and conditions of this Lease are in all respects subject
and subordinate to all zoning restrictions affecting the Premises, and the
Building and Property in which they are located, and Tenant agrees to be bound
by all such restrictions. Landlord further does not warrant that any license(s),
permit(s) or other approval(s) which may be required for the business to be
conducted by Tenant upon the Premises will be granted, or, if granted, will be
continued in effect or renewed, and any failure to obtain such license(s),
permit(s) or approval(s), or any revocation thereof or failure to renew the
same, shall not release or discharge Tenant from any or all of its obligations
under this Lease.
-35-
THIS LEASE IS THE COMPLETE AGREEMENT BETWEEN THE PARTIES HERETO. TENANT SHOULD
NOT RELY UPON, AND LANDLORD IS NOT BOUND BY, ANY PROMISES, STATEMENTS OR
REPRESENTATIONS, WHETHER WRITTEN OR ORAL, NOT CONTAINED IN THIS LEASE.
THE PARTY OR PARTIES SIGNING THIS LEASE ON BEHALF OF TENANT ACKNOWLEDGE THAT HE,
SHE OR THEY HAVE READ THIS LEASE, COMPLETELY UNDERSTAND THE RIGHTS AND
LIABILITIES OF TENANT HEREUNDER, HAVE BEEN GIVEN THE OPPORTUNITY TO SEEK THE
ADVICE OF COUNSEL, AND HEREBY KNOWINGLY AND VOLUNTARILY EXECUTE THIS INSTRUMENT.
EXECUTED BY TENANT, this 22 day of January, 1997.
Attest/Witness: TENANT:
CREDITRUST CORPORATION
Name: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------ -------------------------
Title: Title: President
------------------------ -----------------------
Name:
-------------------------
Title:
------------------------
EXECUTED BY LANDLORD, this 22 day of January, 1997.
Attest/Witness: LANDLORD:
Name: A & E PARTNERS, L.P.
------------------------- By: Emmes ▇▇▇▇▇▇▇ Corp., General Partner
Title:
------------------------
Name: By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------ -------------------------
Title: Title: Vice President
------------------------ -----------------------
6854-6
-36-
11/94
EXHIBIT A
PROPERTY SITE PLAN SHOWING PREMISES
[To Be Attached]
-37-
11/94
EXHIBIT B
LEGAL DESCRIPTION OF THE PROPERTY
[To Be Attached]
-38-
11/94
EXHIBIT C-1
APPROVED PLANS
[To Be Attached]
-39-
11/94
EXHIBIT C-2
JAID GROUP ELEVATION DRAWINGS RE LANDSCAPING
[To Be Attached]
6854-6
-40-