[Florida Net Lease]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 4th day of February, 2000, between
ProLogis Trust ("Landlord"), and the Tenant named below.
Tenant: America's Shopping Mall, Inc.
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Tenant's representative, Irwin Schneidmill
address, and phone no.: --------------------------------------------
Chief Executive Officer
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10 Henry Street
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Teterboro, NJ 07608
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(201) 462-0970
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Premises: That portion of the Building, containing
approximately 69,539 rentable square feet,
as determined by Landlord, as shown on
Exhibit A.
Project: Centerport Distribution Center
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Building: Centerport Distribution Center #100,
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750 NW 33rd Street, Pompano Beach, FL
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Tenant's Proportionate Share
of Project: 22% (based on the Premises containing
approximately 69,539 rentable s.f. and the
Project containing approximately 305,000
rentable s.f.)
Tenant's Proportionate Share
of Building: 73% (based on the Premises containing
approximately 69,539 rentable s.f. and the
Building containing approximately 94,820
rentable s.f.)
Lease Term: Beginning on the Commencement Date and
ending on the last day of the 120th full
calendar month thereafter, subject to
Tenant's right to Renew in Addendum 3.
Commencement date: The date which is the later of (i) the date
which is 30 days after the date upon which
the Initial Improvements are Substantially
Completed as defined in Addendum 2, or (ii)
May 1, 2000.
Initial Monthly Base Rent: See Addendum 1
Initial Estimated Monthly 1. Utilities: N/A
Operating Expense Payments:
(estimates only and subject 2. Common Area Charges: $5,099.53
to adjustment to actual costs
and expenses according to the 3. Taxes: $4,056.44
provisions of this Lease)
4. Insurance: $231.80
5. Others: $0.00
Initial Estimated Monthly Operating
Expense Payments: $9,387.77
Initial Monthly Sales Tax: $ 0.00
Initial Monthly Base Rent,
Operating Expense and
Sales Tax Payments: $41,375.71
Security Deposit: $175,575.00, which a portion of the Security
Deposit in the amount of $135,000 shall be
in the form of an irrevocable letter of
credit as more fully described in Addendum 5
attached hereto.
Broker: Cushman & Wakefield of Florida,
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Inc./Colliers Lehrer
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Addenda: Addendum 1 (Base Rent Adjustments); Addendum
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2 (Construction); Addendum 3 (One Renewal
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Option at Market); Addendum 4 (Assignment &
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Subletting); Addendum 5 (Letter of Credit)
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1. Granting Clause. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other mutual terms,
covenants, and conditions hereof, Landlord leases to Tenant, and Tenant takes
from Landlord, the Premises, to have and to hold for the Lease Term, subject to
the terms, covenants and conditions of this Lease.
2. Acceptance of Premises. Landlord shall use its commercially reasonable
efforts to complete the Initial Improvements (as defined in Addendum 2) by April
1, 2000, (the "Delivery Date") subject to delays due to Force Majeure, Tenant
Caused Delays (as defined in Addendum 2) and change orders. Upon the Initial
Improvements being Substantially Completed pursuant to Addendum 2, Tenant shall
accept the Premises in its condition on the date on which the Initial
Improvements are Substantially Completed subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord represents that
the Initial Improvements shall be constructed in compliance with Legal
Requirements in all material respects and in a good and workmanlike manner.
Landlord has made no representation or warranty as to the suitability of the
Premises for the conduct of Tenant's business, and Tenant waives
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any implied warranty that the Premises are suitable for Tenant's intended
purposes. Except as provided in Paragraph 10, for punch list items under
Addendum 2, and latent defects, in no event shall Landlord have any obligation
for any defects in the Premises or any limitation on its use. The taking of
possession of the Premises shall be conclusive evidence that Tenant accepts the
Premises and that the Premises were in good condition at the time possession was
taken except for items that are Landlord's responsibility under Paragraph 10,
latent defects, and any punchlist items agreed to in writing by Landlord and
Tenant.
3. Use. The Premises shall be used only for the purpose of receiving,
storing, shipping and selling (but limited to wholesale sales) products,
materials and merchandise made and/or distributed by Tenant, administrative
offices, a call center, and for such other lawful purposes as may be incidental
thereto; provided, however, with Landlord's prior written consent, Tenant may
also use the Premises for light manufacturing. Tenant shall not conduct or give
notice of any auction, liquidation, or going out of business sale on the
Premises. Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises or
subject the Premises to use that would damage the Premises. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, noise, or
vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with, or endanger
Landlord or any tenants of the Project. Outside storage, including without
limitation, storage of trucks and other vehicles, is prohibited without
Landlord's prior written consent; provided however, that Tenant shall have the
right to park operable trucks and trailers overnight at the truck loading docks
and truck parking areas adjacent to the Premises. Tenant, at its sole expense,
shall use and occupy the Premises in compliance with all laws, including,
without limitation, the Americans With Disabilities Act, orders, judgments,
ordinances, regulations, codes, directives, permits, licenses, covenants and
restrictions now or hereafter applicable to the Premises (collectively, "Legal
Requirements"). The Premises shall not be used as a place of public
accommodation under the Americans With Disabilities Act or similar state
statutes or local ordinances or any regulations promulgated thereunder, all as
may be amended from time to time. Tenant shall, at its expense, make any
alterations or modifications, within or without the Premises, that are required
by Legal Requirements related to Tenant's use or occupation of the Premises.
Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant's or Landlord's insurance, increase the insurance
risk. If any increase in the cost of any insurance on the Premises or the
Project is caused by Tenant's use or occupation of the Premises, or because
Tenant vacates the Premises, then Tenant shall pay the amount of such increase
to Landlord. Additionally, in the event the use of any other tenant at the
Project increases the cost of any insurance at the Project, Tenant shall not be
responsible for its Proportionate Share of such increase. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease, except for the payment of rent which
shall commence on the Commencement Date.
4. Base Rent. Tenant shall pay Base Rent in the amount set forth above.
The first month's Base Rent, the cash portion of Security Deposit, and the first
monthly installment of estimated Operating Expenses (as hereafter defined) shall
be due and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Base Rent
on or before the first day of each calendar month succeeding the Commencement
Date. Payments of Base Rent and Operating Expenses for any fractional calendar
month shall be prorated. All payments required to be made by Tenant to Landlord
hereunder shall be payable at such address as Landlord may specify from time to
time by written notice delivered in accordance herewith. The obligation of
Tenant to pay Base Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall have no
right at any time to abate, reduce, or set-off any rent due hereunder except as
may be expressly provided in this Lease. If Tenant is deliquent in any monthly
installment of Base Rent or of estimated Opeating Expenses for more than 5 days,
Tenant shall pay to Landlord on demand a late charge equal to 5 percent of such
deliquent sum. The provision for such late charge shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as a penalty. The late charge provided for in this Paragraph 4 shall
not accrue with respect to the first 2 occurrences of deliquent payment in any
consecutive 12-month period, so long as payment is made by Tenant within 5 days
of written notice from Landlord to Tenant of Tenant's failure to pay an
installment of Base Rent or estimated Operating Expenses as therein described.
5. Security Deposit. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of Default
(hereinafter defined), Landlord may use all or part of the Security Deposit to
pay delinquent payments due under this Lease, and the cost of any damage,
injury, expense or liability caused by such Event of Default, without prejudice
to any other remedy provided herein or provided by law. Tenant shall pay
Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant the later
of (i) 30 days following the termination of the Lease, provided no default has
occurred and is continuing, and (ii) when Tenant's obligations under this Lease
have been completely fulfilled. Landlord shall be released from any obligation
with respect to the Security Deposit upon transfer of this Lease and the
Premises to a person or entity assuming Landlord's obligations under this
Paragraph 5 provided that such Security Deposit is transferred to such party.
6. Operating Expense Payments. During each month of the Lease Term, on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal
to 1/12 of the annual cost, as estimated by Landlord from time to time, of
Tenant's Proportionate Share (hereinafter defined) of Operating Expenses for the
Project. Payments
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thereof for any fractional calendar month shall be prorated. The term "Operating
Expenses" means all costs and expenses incurred by Landlord with respect to the
ownership, maintenance, and operation of the Project including, but not limited
to costs of: Taxes (hereinafter defined) and fees payable to tax consultants and
attorneys for consultation and contesting taxes; insurance; utilities for the
common areas and those areas not occupied by tenants of the Project,
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, the roof and roof membrane,
alleys, and driveways, mowing, landscaping, exterior painting, utility lines,
heating, ventilation and air conditioning systems which are within the common
areas, and not exclusively serving the premises of another tenant at the
Project, lighting, electrical systems and other mechanical and building systems;
amounts paid to contractors and subcontractors for work or services performed in
connection with any of the foregoing; charges or assessments of any association
to which the Project is subject; property management fees in the amount of three
percent (3%) of the gross revenues from the Building payable to a property
manager, including any affiliate of Landlord; security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project or the Building as a bulk
warehouse facility in the market area, provided that the cost of additions or
alterations that are required to be capitalized for federal income tax purposes
shall be amortized on a straight line basis over a period equal to the lesser of
the useful life thereof for federal income tax purposes or 10 years. Operating
Expenses do not include costs, expenses, depreciation or amortization for
capital repairs and capital replacements required to be made by Landlord under
Paragraph 10 of this Lease, debt service under mortgages or ground rent under
ground leases, costs of restoration to the extent of net insurance proceeds
received by Landlord with respect thereto or which would have been received had
Landlord maintained the insurance required of Landlord hereunder, leasing
commissions, the costs of renovating space for tenants, legal fees incurred by
Landlord in disputes with tenants other than Tenant, utilities provided to
tenants other than Tenant, services provided exclusively to a tenant which are
not provided to all tenants generally, or costs of repair or replacement related
exclusively to another building at the Project (such as a roof replacement).
Notwithstanding the foregoing, during the Initial Lease Term, Operating Expenses
shall not include the cost of replacement of the roof and roof membrane.
If Tenant's total payments of Operating Expenses for any year are less
than Tenant's Proportionate Share of actual Operating Expenses for such year,
then Tenant shall pay the difference to Landlord within 30 days after demand,
and if more, then Landlord shall retain such excess and credit it against
Tenant's next payments. For purposes of calculating Tenant's Proportionate Share
of Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease. With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant's "Proportionate Share" shall
be the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Project as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Project; and,
with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant's "Proportionate Share" shall be the percentage set forth on
the first page of this Lease as Tenant's Proportionate Share of the Building as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Building. The estimated Operating Expenses for the
Premises set forth on the first page of this Lease are only estimates, and
Landlord makes no guaranty or warranty that such estimates will be accurate.
7. Utilities. Tenant shall pay for all water, gas, electricity, heat,
light, power, telephone, sewer, sprinkler services, refuse and trash collection,
and other utilities and services used on the Premises, all maintenance charges
for utilities, and any storm sewer charges or other similar charges for
utilities imposed by any governmental entity or utility provider on the
utilities used by Tenant at the Premises, together with any taxes, penalties,
surcharges or the like pertaining to Tenant's use of the Premises. Landlord may
cause at Tenant's expense any utilities to be separately metered or charged
directly to Tenant by the provider. Tenant shall pay its share of all charges
for jointly metered utilities based upon consumption, as reasonably determined
by Landlord. No interruption or failure of utilities shall result in the
termination of this Lease or the abatement of rent. Tenant agrees to limit use
of water and sewer for normal restroom, use and office and warehouse use.
Notwithstanding anything to the contrary contained in Paragraph 7 of this Lease,
if an interruption or cessation of utilities results from a cause within the
Landlord's reasonable control and the Premises are not usable by Tenant for the
conduct of Tenant's business as a result thereof, Base Rent and applicable
Operating Expenses not actually incurred by Tenant shall be abated for the
period which commences three (3) business days after the date Tenant gives to
Landlord notice of such interruption until such utilities are restored.
8. Taxes. Landlord shall pay all taxes, assessments and governmental
charges (collectively referred to as "Taxes") that accrue against the Project
during the Lease Term, which shall be included as part of the Operating Expenses
charged to Tenant. Landlord may contest by appropriate legal proceedings the
amount, validity, or application of any Taxes or liens thereof. All capital
levies or other taxes assessed or imposed on Landlord upon the rents payable to
Landlord under this Lease and any franchise tax, any excise, transaction, sales
or privilege tax, assessment, levy or charge measured by or based, in whole or
in part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any income taxes imposed on Landlord
unless such net income taxes are in subsitution for any Taxes payable hereunder.
If any such tax or excise is levied or assessed directly against Tenant, then
Tenant shall be responsible for and shall pay the same at such times and in such
manner as the taxing authority shall require. Tenant shall be liable for all
taxes levied or assessed against any personal property or fixtures placed in the
Premises, whether levied or assessed against
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Landlord or Tenant. Notwithstanding anything contained herein to the contrary,
Tenant shall be charged as an Operating Expense for any special assessments with
respect to the Building or Project based on Tenant's Proportionate Share of the
Building or Project, as applicable, and based on payment of the special
assessment over the longest period allowed for payment by the applicable taxing
authority and upon the amount due if such special assessment were paid over such
period of time.
9. Insurance. Landlord shall maintain all risk property insurance covering
the full replacement cost of the Building and commercial liability insurance in
commercially reasonable amounts. Landlord may, but is not obligated to, maintain
such other insurance and additional coverages as it may deem necessary,
including, but not limited to rent loss insurance. All such insurance shall be
included as part of the Operating Expenses charged to Tenant. The Project or
Building may be included in a blanket policy (in which case the cost of such
insurance allocable to the Project or Building will be determined by Landlord
based upon the insurer's cost calculations). Tenant shall also reimburse
Landlord for any increased premiums or additional insurance which Landlord
reasonably deems necessary as a result of Tenant's use of the Premises; provided
however, that Tenant shall not be responsible for any increases in insurance
premiums due exclusively to the use of any other tenant at the Project.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered to
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of
said insurance.
The all risk property insurance obtained by Landlord and Tenant shall
include a waiver of subrogation by the insurers and all rights based upon an
assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.
Tenant and its subtenants, assignees, invitees, employees, contractors and
agents shall not be liable for, and Landlord hereby waives all claims against
Tenant and its subtenants, assignees, invitees, employees, contractors and
agents for damage to property sustained by Landlord or any person claiming
through Landlord resulting from any accident or occurrence in or upon the
Premises or in or about the Project from any cause whatsoever, including,
without limitation, damage caused in whole or in part, directly or indirectly,
by the negligence of Tenant or its subtenants, assignees, invitees, employees,
contractors or agents; provided, however, such waiver shall only apply to claims
in excess of the commercially reasonable deductible under Landlord's insurance
policy.
10. Landlord's Repairs. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded. The term "walls" as used in this
Paragraph 10 shall not include windows, glass or plate glass, doors or overhead
doors, special store fronts, dock bumpers, dock plates or levelers, or office
entries. Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Paragraph 10, after which Landlord shall
have a reasonable opportunity to repair.
In the event of an emergency, Tenant shall have the right to make such
temporary, emergency repairs (and only such temporary, emergency repairs) to the
roof, foundation or exterior walls of the Building as may be reasonably
necessary to prevent material damage to Tenant's property at the Premises and/or
personal injury to Tenant's employees at the Premises (provided Tenant first
attempts to notify Landlord telephonically of such emergency and notifies
Landlord of such circumstances in writing as soon as practicable thereafter). In
such event, Landlord shall reimburse Tenant for the reasonable, out-of-pocket
costs actually incurred by Tenant in making such emergency repairs. If Landlord
fails to reimburse Tenant for the reasonable, out-of-pocket costs incurred by
Tenant in making such repairs, up to but not to exceed $2,000.00 with respect to
such emergency, within 30 days after demand therefor, accompanied by supporting
evidence of the costs incurred by Tenant, then Tenant may bring an
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action for damages against Landlord to recover such costs, together with
interest thereof at the rate provided for in Paragraph 37(j) of the
Lease, and reasonable attorney's fees incurred by Tenant in bringing
such action for damages. In no event, however, shall Tenant have a right
to terminate the Lease.
11. Tenant's Repairs. Landlord, the cost of which shall be an
Operating Expense as provided in Paragraph 6, shall maintain in good repair and
condition the roof and roof membrane, parking areas and other common areas of
the Building, including, but not limited to driveways, alleys, landscape and
grounds surrounding the Premises; provided however, that during the Initial
Lease Term, all replacements of the roof or roof membrane at the Building shall
be at Landlord's expense. Subject to Landlord's obligation in Paragraph 10 and
subject to Paragraphs 9 and 15, Tenant, at its expense, shall repair, replace
and maintain in good condition all non-structural portions of the Premises and
all areas, improvements and systems exclusively serving the Premises including,
without limitation, dock and loading areas, truck doors, plumbing, water and
sewer lines exclusively serving the Premises up to points of common connection
(provided however, that Landlord, at Tenant's expense, shall maintain and repair
such plumbing, water and sewer lines which are outside the perimeter of the
Building), interior fire sprinklers and fire protection systems or those systems
that exclusively serve the Premises, entries, doors, ceilings, windows, interior
walls, and the interior side of demising walls, and heating, ventilation and air
conditioning systems. Such repair and replacements include capital expenditures
and repairs whose benefit may extend beyond the Term. Heating, ventilation and
air conditioning systems and other mechanical and building systems servicing the
Premises shall be maintained at Tenant's expense pursuant to maintenance service
contracts entered into by Tenant or, at Landlord's election, by Landlord. The
scope of services and contractors under such maintenance contracts shall be
reasonably approved by Landlord. At Landlord's request, Tenant shall enter into
a joint maintenance agreement with any railroad that services the Premises. If
Tenant fails to perform any repair or replacement for which it is responsible
after thirty (30) days notice from Landlord of such repairs, then Landlord may
perform such work and be reimbursed by Tenant within 10 days after demand
therefor; provided however, that if such failure to repair creates an emergency
condition, a threat to health or safety, a hazardous condition, such repairs are
necessary due to weather conditions, or such failure to repair unreasonably
interferes with another tenant's use of the Building or Project, then no notice
prior to Landlord's repair is required. Subject to Paragraphs 9 and 15, Tenant
shall bear the full cost of any repair or replacement to any part of the
Building or Project that results from damage caused by Tenant, its agents,
contractors, or invitees and any repair that benefits only the Premises but,
with respect to repairs which may benefit only the Premises, repairs to the
roof, fire sprinklers and fire protection system shall be paid by Tenant as an
Operating Expense. Tenant shall not pay for repairs which exclusively benefit
another tenant's premises.
12. Tenant-Made Alterations and Trade Fixtures. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent; provided however, that Landlord will not unreasonably withhold its
consent to Tenant-Made Alterations the cost of which do not exceed $10,000.00,
which are decorative alterations to the interior of the Premises, and which do
not involve any structural elements of the Building or Project, or modify the
utility systems of the Building or Project. Tenant shall cause, at its expense,
all Tenant-Made Alterations to comply with insurance requirements and with Legal
Requirements and shall construct at its expense any alteration or modification
required by Legal Requirements as a result of any Tenant-Made Alterations. All
Tenant-Made Alterations shall be constructed in a good and workmanlike manner by
contractors reasonably acceptable to Landlord and only good grades of materials
shall be used. All plans and specifications for any Tenant-Made Alterations
shall be submitted to Landlord for its approval. Landlord may monitor
construction of the Tenant-Made Alterations. Tenant shall reimburse Landlord for
its reasonable out-of-pocket costs in reviewing plans and specifications and in
monitoring construction. Landlord's right to review plans and specifications and
to monitor construction shall be solely for its own benefit, and Landlord shall
have no duty to see that such plans and specifications or construction comply
with applicable laws, codes, rules and regulations. Tenant shall provide
Landlord with the identities and mailing addresses of all persons performing
work or supplying materials, prior to beginning such construction, and Landlord
may post on and about the Premises notices of non-responsibility pursuant to
applicable law. Tenant shall furnish security or make other arrangements
satisfactory to Landlord to assure payment for the completion of all work free
and clear of liens and shall provide certificates of insurance for worker's
compensation and other coverage in amounts and from an insurance company
satisfactory to Landlord protecting Landlord against liability for personal
injury or property damage during construction. Upon completion of any
Tenant-Made Alterations, Tenant shall deliver to Landlord sworn statements
setting forth the names of all contractors and subcontractors who did work on
the Tenant-Made Alterations and final lien waivers from all such contractors and
subcontractors. Upon surrender of the Premises, all Tenant-Made Alterations and
any leasehold improvements constructed by Landlord or Tenant shall remain on the
Premises as Landlord's property, except to the extent Landlord requires removal
at Tenant's expense of any such items or Landlord and Tenant have otherwise
agreed in writing in connection with Landlord's consent to any Tenant-Made
Alterations. Tenant shall repair any damage caused by such removal.
Tenant, at its own cost and expense and without
Landlord's prior approval, may erect such shelves, bins, machinery and
trade fixtures (collectively "Trade Fixtures") in the ordinary course of
its business provided that such items do not alter the basic character
of the Premises, do not overload or damage the Premises, and may be
removed without injury to the Premises, and the construction, erection,
and installation thereof complies with all Legal Requirements and with
Landlord's requirements set forth above. Tenant shall remove its Trade
Fixtures and shall repair any damage caused by such removal.
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13. Signs. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent. Upon
surrender or vacation of the Premises, Tenant shall have removed all signs and
repair, paint, and/or replace the building facia surface to which its signs are
attached. Tenant shall obtain all applicable governmental permits and approvals
for sign and exterior treatments. All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord's
approval and conform in all respects to Landlord's requirements.
14. Parking. Tenant shall be allocated 120 parking spaces as described
in Exhibit A and shall be entitled to park in common with other tenants of the
Project in those areas designated for nonreserved parking. Landlord may allocate
parking spaces among Tenant and other tenants in the Project if Landlord
determines that such parking facilities are becoming crowded; provided that the
spaces allocated to Tenant shall not be less than 120. Landlord shall not be
responsible for enforcing Tenant's parking rights against any third parties.
15. Restoration. If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within 60 days
after such damage as to the amount of time Landlord reasonably estimates it will
take to restore the Premises. If the restoration time is estimated to exceed 6
months, either Landlord or Tenant may elect to terminate this Lease upon notice
to the other party given no later than 30 days after Landlord's notice. If
neither party elects to terminate this Lease or if Landlord estimates that
restoration will take 6 months or less, then subject to receipt of sufficient
insurance proceeds (provided that Landlord maintained the insurance required
under this Lease), Landlord shall promptly restore the Premises excluding the
improvements installed by Tenant or by Landlord and paid by Tenant, subject to
delays arising from the collection of insurance proceeds or from Force Majeure
events. Tenant at Tenant's expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure events,
all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with
this Lease. Notwithstanding the foregoing, either party may terminate this Lease
if the Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage; provided however, if Tenant has exercised its right to renew under
Addendum 3 hereof, the provisions of the second sentence of this Paragraph 15
shall apply. Tenant shall pay to Landlord with respect to any damage to the
Premises the amount of the commercially reasonable deductible under Landlord's
insurance policy (currently $25,000) within 10 days after presentment of
Landlord's invoice. If the damage involves the premises of other tenants, Tenant
shall pay the portion of the deductible that the cost of the restoration of the
Premises bears to the total cost of restoration, as determined by Landlord. Base
Rent and Operating Expenses shall be abated for the period of repair and
restoration in the proportion which the area of the Premises, if any, which is
not usable by Tenant bears to the total area of the Premises. Such abatement
shall be the sole remedy of Tenant, and except as provided herein, Tenant waives
any right to terminate the Lease by reason of damage or casualty loss.
16. Condemnation. If any part of the Premises or the Project should
be taken for any public or quasi-public use under governmental law, ordinance,
or regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord or Tenant this Lease shall terminate and
Base Rent shall be apportioned as of said date. If part of the Premises shall be
Taken, and this Lease is not terminated as provided above, the Base Rent and
Operating Expenses payable hereunder during the unexpired Lease Term shall be
reduced in the proportion which the area of the Premises, if any, which is not
usable by Tenant bears to the total area of the Premises. In the event of any
such Taking, Landlord shall be entitled to receive the entire price or award
from any such Taking without any payment to Tenant, and Tenant hereby assigns to
Landlord Tenant's interest, if any, in such award. Tenant shall have the right,
to the extent that same shall not diminish Landlord's award, to make a separate
claim against the condemning authority (but not Landlord) for such compensation
as may be separately awarded or recoverable by Tenant for moving expenses, and
damage to Tenant's personal property including Trade Fixtures, if a separate
award for such items is made to Tenant.
17. Assignment and Subletting. Without Landlord's prior written
consent, Tenant shall not assign this Lease or sublease the Premises or any part
thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any
concession or license within the Premises and any attempt to do any of the
foregoing shall be void and of no effect. For purposes of this paragraph, a
transfer of the ownership interests controlling Tenant shall be deemed an
assignment of this Lease unless such ownership interests are publicly traded.
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to any entity controlling Tenant, controlled by Tenant or under common
control with Tenant (a "Tenant Affiliate"), without the prior written consent of
Landlord. Tenant shall reimburse Landlord for all of Landlord's reasonable
out-of-pocket expenses in connection with any assignment or sublease not to
exceed $1,000.00. Upon Landlord's receipt of Tenant's written notice of a
desire to assign or sublet the Premises, or any part thereof (other than to a
Tenant Affiliate or a Successor Entity as defined below), Landlord may, by
giving written notice to Tenant within 30 days after receipt of Tenant's notice,
terminate this Lease with respect to the space described in Tenant's notice, as
of the date specified in Tenant's notice for the commencement of the proposed
assignment or sublease; provided however, that Tenant shall have the right to
nullify any such termination by withdrawing in writing its request for
Landlord's consent to sublease or assignment within ten (10) days of the date of
Landlord's termination notice.
-6-
Provided no default has occurred and is continuing under this Lease, upon
10 days prior written notice to Landlord, Tenant may, without Landlord's prior
written consent, assign this Lease to an entity (the "Successor Entity") into
which Tenant is merged or consolidated or to an entity to which substantially
all of Tenant's assets are transferred, provided (x) such merger, consolidation,
or transfer of assets is for a good business purpose and not principally for the
purpose of transferring Tenant's leasehold estate, and (y) the assignee or
successor entity has a net worth at least equal to the net worth of Tenant
immediately prior to such merger, consolidation, or transfer.
Notwithstanding any assignment or subletting, Tenant shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee, except for a Tenant Affiliate or a successor entity, (or a combination
of the rental payable under such sublease or assignment plus any bonus or other
consideration therefor or incident thereto) exceeds the rental payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord as
additional rent hereunder all such excess rental and other excess consideration
within 10 days following receipt thereof by Tenant. With respect to the
obligation of Tenant to pay Landlord any excess rental and other excess
consideration payable with respect to any assignment or subleasing, Landlord
agrees that Tenant shall be entitled, in determining the amount of such excess
rental or other excess consideration, to first recapture the actual, reasonable
out-of-pocket costs of improvements made by Tenant in connection therewith, the
actual, reasonable out-of-pocket leasing commissions, and the actual, reasonable
out-of-pocket attorney's fees paid by Tenant in connection therewith.
If this Lease be assigned or if the Premises be subleased (whether in whole
or in part) or in the event of the mortgage, pledge, or hypothecation of
Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other than
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from
the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant and,
except to the extent set forth in the preceding paragraph, apply the amount
collected to the next rent payable hereunder; and all such rentals collected by
Tenant shall be held in trust for Landlord and immediately forwarded to
Landlord. No such transaction or collection of rent or application thereof by
Landlord, however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties, or
obligations hereunder.
18. Indemnification. Except for the negligence or willful misconduct of
Landlord, its agents, employees or contractors, and to the extent permitted by
law, Tenant agrees to indemnify, defend and hold harmless Landlord, and
Landlord's agents, employees and contractors, from and against any and all
losses, liabilities, damages, costs and expenses (including attorneys' fees)
resulting from claims by third parties for injuries to any person and damage to
or theft or misappropriation or loss of property occurring in or about the
Project and arising from the use and occupancy of the Premises or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Premises or due to any other act or omission of Tenant, its subtenants,
assignees, invitees, employees, contractors and agents. The furnishing of
insurance required hereunder shall not be deemed to limit Tenant's obligations
under this Paragraph 18.
19. Inspection and Access. Landlord and its agents, representatives, and
contractors may enter the Premises upon 24 hours prior telephonic notice, unless
an emergency exists in which case, no notice is required, at any reasonable time
to inspect the Premises and to make such repairs as may be required or
permitted pursuant to this Lease and for any other business purpose. Landlord
and Landlord's representatives may enter the Premises during business hours for
the purpose of showing the Premises to prospective purchasers and, during the
last year of the Lease Term, to prospective tenants. Landlord may erect a
suitable sign at the Building stating the Premises are available to let or that
the Project is available for sale. Landlord may grant easements, make public
dedications, designate common areas and create restrictions on or about the
Premises, provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.
20. Quiet Enjoyment. If Tenant shall perform all of the convenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or under
Landlord.
21. Surrender. Upon termination of the Lease Term or earlier termination of
Tenant's right of possession, Tenant shall surrender the Premises to Landlord in
the same condition as received, broom clean, ordinary wear and tear and casualty
loss and condemnation covered by Paragraphs 15 and 16 excepted. Any Trade
Fixtures, Tenant-Made Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored,
removed, and disposed of by Landlord at Tenant's expense, and Tenant waives all
claims against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant and Landlord hereunder
not fully performed as of the termination of the Lease Term shall survive the
termination of the Lease Term, including without limitation, indemnity
obligations, payment obligations with respect to Operating Expenses and
obligations concerning the condition and repair of the Premises.
-7-
22. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal to 150% of
the Base Rent in effect on the termination date, computed on a monthly basis for
each month or part thereof during such holding over. All other payments shall
continue under the terms of this Lease. In addition, Tenant shall be liable for
all damages incurred by Landlord as a result of such holding over. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this Lease except as otherwise expressly provided, and this Paragraph 22
shall not be construed as consent for Tenant to retain possession of the
Premises.
23. Events of Default. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or any
payment required herein when due, and such failure shall continue for a
period of 5 days from the date of Landlord's written notice to Tenant
of such failure to pay; provided, however, that Landlord shall not be
obligated to provide written notice of such failure more than 2 times
in any consecutive 12-month period, and failure of Tenant to pay any
third or subsequent installment of Base Rent or any other payment
required herein when due in any consecutive 12-month period shall
constitute an Event of Default by Tenant under this Lease without the
requirement of notice or opportunity to cure.
(ii) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (A) make a general assignment for the benefit of
creditors; (B) commence any case, proceeding or other action seeking to
have an order for relief entered on its behalf as a debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganzation,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts or seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or of any substantial part
of its property (collectively a "proceeding for relief"); (c) become
the subject of any proceeding for relief which is not dismissed within
60 days of its filing or entry; or (D) die or suffer a legal disability
(if Tenant, guarantor, or surety is an individual) or be dissolved or
otherwise fail to maintain its legal existence (if Tenant, guarantor or
surety is a corporation, partnership or other entity).
(iii) Any insurance required to be maintained by Tenant pursuant
to this Lease shall be cancelled or terminated or shall expire or shall
be reduced or materially changed, except, in each case, as permitted in
this Lease.
(iv) Tenant shall not occupy or shall vacate the Premises or
shall fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in monetary or
other default under this Lease. Tenant's vacating of the Premises shall
not consitute an Event of Default if, prior to vacating the Premises,
Tenant has made arrangements reasonably acceptable to Landlord to (a)
insure that Tenant's insurance for the Premises will not be voided or
cancelled with respect to the Premises as a result of such vacancy, (b)
insure that the Premises are secured and not subject to vandalism, and
(c) insure that the Premises will be properly maintained after such
vacation. Tenant shall inspect the Premises at lease once each month
and report monthly in writing to Landlord on the condition of the
Premises.
(v) Tenant shall attempt or there shall occur any assignment,
subleasing or other transfer of Tenant's interest in or with respect to
this Lease except as otherwise permitted in this Lease.
(vi) Tenant shall fail to discharge any lien placed upon the
Premises in violation of this Lease within 30 days after Tenant obtains
knowledge that such a lien or encumbrance is filed against the
Premises.
(vii) Tenant shall fail to comply with any provision of this
Lease other than those specifically referred to in this Paragraph 23,
and except as otherwise expressly provided herein, such default shall
continue for more than 30 days after Landlord shall have given Tenant
written notice of such default; provided however, Tenant shall not be
in default under this Paragraph 23(vii) if such cure will, due to the
nature of the obligation, require a period of time in excess of 30 days
to cure, and Tenant diligently pursues such cure and completes such
within a commercially reasonable time not to exceed 120 days after
Landlord's notice of such default.
24. Landlord's Remedies. Upon each occurrence of an Event of Default and
so long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election terminate this Lease or Tenant's right of possession,
(but Tenant shall remain liable as hereinafter provided) and/or pursue any other
remedies at law or in equity. Upon the termination of this Lease or termination
of Tenant's right of possession, it shall be lawful for Landlord without formal
demand or notice of any kind, except as otherwise provided by applicable law, to
re-enter the Premises by summary dispossession proceedings or any other action
or proceeding authorized by law and to remove Tenant and all persons and
property therefrom. If Landlord re-enters the Premises, Landlord shall have the
right to keep in place and use, or remove and store, all of the furniture,
fixtures and equipment at the Premises. Notwithstanding anything contained
herein to the contrary, provided that Landlord receives written notice that
Tenant
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has cured any non-monetary default under subparagraphs 23(ii) through 23(v) of
this lease within ten (10) days after Landlord's notice to Tenant that such
default has occurred, Landlord will not exercise any of its rights under this
paragraph 24.
If Landlord terminates this Lease, Landlord may recover from Tenant the
sum of: all Base Rent and all other amounts accrued hereunder to the date of
such termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable
expenses incurred by Landlord in pursuing its remedies, including reasonable
attorneys' fees and court costs; and the excess of the then present value of the
Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.
If Landlord terminates Tenant's right of possesion (but not
this Lease), Landlord may, but shall be under no obligation to, relet
the Premises for the account of Tenant for such rent and upon such terms
as shall be satisfactory to Landlord without thereby releasing Tenant
from any liability hereunder and without demand or notice of any kind to
Tenant. For the purpose of such reletting Landlord is authorized to make
any repairs, changes, alterations, or additions in or to the Premises as
Landlord deems reasonably necessary or desirable. If the Premises are
not relet, then Tenant shall pay to Landlord as damages a sum equal to
the amount of the rental reserved in this Lease for such period or
periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and
other amounts accrued hereunder at the time of repossession, and the
costs incurred in any attempt by Landlord to relet the Premises. If the
Premises are relet and a sufficient sum shall not be realized from such
reletting [after first deducting therefrom, for retention by Landlord,
the unpaid Base Rent and other amounts accrued hereunder at the time of
reletting, the cost of recovering possession (including attorneys' fees
and costs of suit), all of the costs and expense of repairs, changes,
alterations, and additions, the expense of such reletting (including
without limitation brokerage fees and leasing commissions) and the cost
of collection of the rent accruing therefrom] to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately
satisfy and pay any such deficiency. Any such payments due Landlord
shall be made upon demand therefor from time to time and Tenant agrees
that Landlord may file suit to recover any sums falling due from time to
time. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect in writing to terminate this Lease
for such previous breach. If Landlord terminates Tenant's right to possession
without terminating the Lease after an Event of Default, Landlord shall use
commercially reasonable efforts to relet the Premises; provided, however,
(a) Landlord shall not be obligated to accept any tenant proposed by Tenant,
(b) Landlord shall have the right to lease any other space controlled by
Landlord first, and (c) any proposed tenant shall meet all of Landlord's leasing
criteria.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination
can by effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce
its rights pursuant to this Lease or at law or in equity, shall not be a waiver
of Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives all right of redemption in
case Tenant shall be dispossessed by a judgment or by warrant of any court or
judge. The terms "enter," "re-enter," "entry" or "re-entry," as used in this
Lease, are not restricted to their technical legal meanings. Any reletting of
the Premises shall be on such terms and conditions as Landlord in its sole
discretion may determine (including without limitation a term different than the
remaining Lease Term, rental concessions, alterations and repair of the
Premises, lease of less than the entire Premises to any tenant and leasing any
or all other portions of the Project before reletting the Premises). Landlord
shall not be liable, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure to relet the Premises or collect rent due in
respect of such reletting.
25. Tenant's Remedies/Limitation of Liability. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days and Landlord diligently pursues
such cure, then after such period of time as is reasonably necessary). All
obligations of Landlord hereunder shall be construed as covenants, not
conditions. All obligations of Landlord under this Lease will be binding upon
Landlord only during the period of its ownership of the Premises and not
thereafter. The term "Landlord" in this Lease shall mean only the owner, for the
time being of the Premises, and in the event of the transfer by such owner of
its interest in the Premises, such owner shall thereupon be released and
discharged
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from all obligations of Landlord thereafter accruing, but such obligations shall
be binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Any liability of Landlord under this Lease shall be limited
solely to its interest in the Project, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord. Landlord's
interest in the Project shall be deemed to include: (i) the rents or other
income from the Project received by Landlord after Tenant obtains a final
judgment against Landlord, (ii) the net proceeds received by Landlord from the
sale or other disposition of all or any part of Landlord's right, title and
interest in the Project after Tenant obtains a final judgment against Landlord,
(iii) the net proceeds received by Landlord from any condemnation or conveyance
in lieu of condemnation of all or any portion of the Project after Tenant
obtains a final judgment against Landlord, and (iv) the net proceeds of
insurance received by Landlord from any casualty loss of all or any portion of
the Project after Tenant obtains a final judgment against Landlord. The failure
of Tenant at any time to enforce its rights under this lease strictly in
accordance with same shall not be construed as having created a custom in any
way or manner contrary to the specific terms, provisions, and covenants of this
lease or as having modified the same. Landlord and Tenant further agree that
forbearance or waiver by Tenant to enforce its rights pursuant to this Lease or
at law or in equity, shall not be a waiver of Tenant's right to enforce one or
more of its rights in connection with a subsequent default.
26. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL
BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27. Subordination. Landlord represents that, at the time of the
execution of this Lease by Landlord, Landlord is the fee simple owner of the
Project and the Building is not subject to any mortgage or deed of trust. This
Lease and Tenant's interest and rights hereunder are and shall be subject and
subordinate at all times to the lien of any first mortgage, now existing or
hereafter created on or against the Project or the Premises, and all amendments,
restatements, renewals, modifications, consolidations, refinancing, assignments
and extensions thereof, without the necessity of any further instrument or act
on the part of Tenant. Tenant agrees, at the election of the holder of any such
mortgage, to attorn to any such holder. Tenant agrees upon demand to execute,
acknowledge and deliver such instruments, confirming such subordination and such
instruments of attornment as shall be requested by any such holder.
Notwithstanding the foregoing, any such holder may at any time subordinate its
mortgage to this Lease, without Tenant's consent, by notice in writing to
Tenant, and thereupon this Lease shall be deemed prior to such mortgage without
regard to their respective dates of execution, delivery or recording and in that
event such holder shall have the same rights with respect to this Lease as
though this Lease had been executed prior to the execution, delivery and
recording of such mortgage and had been assigned to such holder. The term
"mortgage" whenever used in this Lease shall be deemed to include deeds of
trust, security assignments and any other encumbrances, and any reference to the
"holder" of a mortgage shall be deemed to include the beneficiary under a deed
of trust. Notwithstanding the preceding provisions of this Paragraph 27, this
Lease and Tenant's interest in the Premises shall not be subordinate to any
future mortgage or deed of trust on the Project, and Tenant shall not be
obligated to execute an instrument subordinating this Lease or Tenant's interest
in the Premises to any future mortgage or deed of trust on the Project, unless
concurrently with such subordination the holder of such mortgage or deed of
trust agrees in such instrument of subordination not to disturb Tenant's
possession of the Premises (so long as no default exists under the Lease) in the
event such holder acquires title to the Premises through foreclosure, deed in
lieu of foreclosure or otherwise.
28. Mechanic's Liens. Tenant has no express or implied authority to
create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within 30 days of Tenant's knowledge of the filing
or recording thereof; provided, however, Tenant may contest such liens or
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such 30 day period.
29. Estoppel Certificates. Landlord and Tenant agree, from time to
time, within 10 days after request of the other party, to execute and deliver
to the other party, or its designee, any estoppel certificate requested by such
other party, stating that this Lease is in full force and effect, the date to
which rent has been paid, that the other party is not in default hereunder (or
specifying in detail the nature of the other party's default), the termination
date of this Lease and such other matters pertaining to this Lease as may be
reasonably requested by the other party. Tenant's obligation to furnish each
estoppel certificate in a timely fashion is a material inducement for Landlord's
execution of this Lease. No cure or grace period provided in this Lease shall
apply to Tenant's obligations to timely deliver an estoppel certificate.
-10-
30. Environmental Requirements. Except for Hazardous Material contained
in products used by Tenant in de minimis quantities for ordinary cleaning and
office purposes, Tenant shall not permit or cause any party to bring any
Hazardous Material upon the Premises or transport, store, use, generate,
manufacture or release any Hazardous Material in or about the Premises without
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
operate its business in the Premises in strict compliance with all Environmental
Requirements and shall remediate in a manner satisfactory to Landlord any
Hazardous Materials released on or from the Project by Tenant, its agents,
employees, contractors, subtenants or invitees. Not more than two times per
year, Tenant shall complete and certify to disclosure statements as reasonably
requested by Landlord relating to Tenant's transportation, storage, use,
generation, manufacture or release of Hazardous Materials on the Premises. The
term "Environmental Requirements" means all applicable present and future
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any governmental authority or agency regulating or
relating to health, safety, or environmental conditions on, under, or about the
Premises or the environment, including without limitation, the following: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; and all state and local counterparts
thereto, and any regulations or policies promulgated or issued thereunder. The
term "Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas). As defined
in Environmental Requirements, Tenant is and shall be deemed to be the
"operator" of Tenant's "facility" and the "owner" of all Hazardous Materials
brought on the Premises by Tenant, its agents, employees, contractors or
invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
30, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 30 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligatons of Tenant under this Paragraph 30 shall survive
any termination of this Lease.
Landlord shall have access to, and a right to perform inspections and
tests of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations. Such
inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.
Notwithstanding anything to the contrary in this Paragraph 30, Tenant
shall only have liability to Landlord as to Hazardous Materials on the Project
caused or permitted by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees or as a result of Tenant's use of the Project or Premises;
Tenant shall have no liability of any kind to Landlord as to Hazardous Materials
on the Project caused or permitted by: (i) Landlord, its agents, employees,
contractors or invitees; or (ii) any other tenants in the Project or their
agents, employees, contractors, subtenants, assignees or invitees; or (iii) any
other person or entity located outside of the Premises or the Project.
31. Rules and Regulations. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and regulations
at any time or from time to time established by Landlord covering use of the
Premises and the Project; provided that such rules and regulations do not
conflict with Tenant's rights hereunder and are uniformly enforced. The current
rules and regulations are attached hereto. In the event of any conflict between
said rules and regulations and other provisions of this Lease, the other terms
and provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by other
tenants in the Project.
32. Security Service. Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33. Force Majeure. Except for the payment of monetary obligations under
this Lease, neither Landlord nor Tenant shall be held responsible for delays in
the performance of their respective obligations hereunder when caused by
strikes, lockouts, labor disputes, acts of God, inability to obtain labor or
materials or reasonable
-11-
substitutes therefor, governmental restrictions, governmental regulations,
governmental controls, delay in issuance of permits, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of such party ("Force Majeure").
34. Entire Agreement. This Lease constitutes the complete
agreement of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.
35. Severability. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby. It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable.
36. Brokers. Landlord and Tenant represent and warrant that they have
dealt with no broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, other
than the broker, if any, set forth on the first page of this Lease. Landlord and
Tenant agree to indemnify and hold the other harmless from and against any
claims by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with such party with regard to
this leasing transaction. Landlord shall pay all commissions payable to Broker
pursuant to a separate agreement between Landlord and Broker.
37. Miscellaneous. (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this Lease shall
be in writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 14100 East 35th Place, Aurora, Colorado
80011. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.
(d) At Landlord's request from time to time Tenant shall furnish Landlord
with true and complete copies of its most recent annual and quarterly financial
statements prepared by Tenant or Tenant's accountants and any other financial
information or summaries that Tenant typically provides to its lenders or
shareholders.
(e) Neither this Lease nor a memorandum of lease shall be filed by or on
behalf of Tenant in any public record. Landlord may prepare and file, and upon
request by Landlord Tenant will execute, a memorandum of lease.
(f) The normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
(g) The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party until
execution of this Lease by both parties.
(h) Words of any gender used in this Lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
describe the scope or intent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.
(i) Any amount not paid by Tenant within 5 days after its due date in
accordance with the terms of this Lease shall bear interest from such due date
until paid in full at the lesser of the highest rate permitted by applicable law
or 15 percent per year. It is expressly the intent of Landlord and Tenant at all
times to comply with applicable law governing the maximum rate or amount of any
interest payable on or in connection with this Lease. If applicable law is ever
judicially interpreted so as to render usurious any interest called for under
this Lease, or contracted for, charged, taken, reserved, or received with
respect to this Lease, then it is Landlord's and Tenant's express intent that
all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately shall
be deemed reformed and the amounts thereafter collectible hereunder reduced,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.
12
(j) Construction and interpretation of this Lease shall be governed by the
laws of the state in which the Project is located, excluding any principles of
conflicts of laws.
(k) Time is of the essence as to the performance of Tenant's obligations
under this Lease.
(l) All exhibits and addenda attached hereto are hereby incorporated into
this Lease and made a part hereof. In the event of any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda shall
control.
(m) Landlord hereby grants Tenant the right to install, maintain and
replace from time to time a satellite dish or similar antennae device
(hereinafter "Satellite Dish") on the roof of the Premises, subject to the
following: (a) applicable governmental laws; (b) the right of Landlord to
supervise any roof penetrations; (c) compliance with the conditions of any roof
bond maintained by Landlord on the Premises; and (d) the Satellite Dish not
being visible at street level. Tenant shall be responsible for the repair of any
damage to any portion of the Premises caused by Tenant's installation, use or
removal of the Satellite Dish. The Satellite Dish shall remain the exclusive
property of Tenant, and Tenant shall have the right to remove same at any time
during the term of the Lease so long as Tenant is not in default under the
Lease. Tenant shall protect, defend, indemnify and hold harmless Landlord from
and against any and all claims, damages, liabilities, costs or expenses of every
kind and nature (including without limitation reasonable attorney fees) imposed
upon or incurred by or asserted against Landlord arising out of Tenant's
installation, maintenance, use or removal of the Satellite Dish.
38. Landlord's Lien/Security Interest. Provided Tenant is not in default
under the Lease and provided that any bank, other financial institution or
vendor as detailed in this Paragraph executes an agreement substantially in the
form of Exhibit B attached hereto or a similar agreement otherwise reasonably
acceptable to Landlord, Landlord agrees that any Landlord's lien arising under
the Lease or by virtue of any statutory Landlord's lien against Tenant's
property located on the Premises, shall be automatically subordinate to the lien
of any bank or other financial institution providing financing for Tenant's
property, and to the lien of any vendor of Tenant's equipment or financing
entity related to such vendor. Tenant shall reimburse Landlord for all
reasonable out-of-pocket expenses incurred by Landlord in negotiating and
executing such agreement with Tenant's lender.
39. Radon Gas. Radon is a naturally occurring radioactive gas, that when it
has accumulated in a building in sufficient quantities, may present health risks
to persons who are exposed to it over time. Levels of radon that exceed federal
and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from your county
public health unit.
40. Limitation of Liability of Trustees, Shareholders, and Officers of
ProLogis Trust. Any obligation or liability whatsoever of ProLogis Trust, a
Maryland real estate investment trust, which may arise at any time under this
Lease or any obligation or liability which may be incurred by it pursuant to any
other instrument, transaction, or undertaking contemplated hereby shall not be
personally binding upon, nor shall resort for the enforcement thereof be had to
the property of, its trustees, directors, shareholders, officers, employees or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort, or otherwise.
41. Tenant may terminate this Lease by written notice to Landlord received
by Landlord on or before February 29, 2000, ("Termination Notice") if Tenant is
not accepted into the Enterprise Florida Qualified Target Industry Tax Refund
Program (the "Program"). Such termination shall be effective on the date of the
Termination Notice. Tenant shall use its best efforts and take all actions
necessary, at its sole cost and expense, to become accepted into the Program.
Tenant shall promptly notify Landlord in writing of Tenant's acceptance into the
Program. Tenant's right to terminate expires and Tenant shall have no further
rights under this paragraph 41 at the earlier of: i) February 29, 2000 and ii)
Tenant's acceptance into the Program. The Termination Notice shall specify that
the Tenant was not accepted into the Program. If Tenant elects to terminate this
Lease, the effectiveness of such termination shall be conditioned upon Tenant
paying to Landlord an amount equal to all costs incurred by Landlord in
conjunction with this Lease, including but not limited to all costs to install
the Initial Improvements, any leasing commissions paid by Landlord, and any
costs to return the Premises to the condition prior to the execution of this
Lease or to remove any of the Initial Improvements, plus $175,575.00. Tenant
shall pay such amount contemporaneously with Tenant's delivery of the
Termination Notice to Landlord. Such amount is consideration for Tenant's option
to terminate and shall not be applied to rent or any other obligation of Tenant.
Landlord and Tenant shall be relieved of all obligations accruing under this
Lease after the effective date of such termination but not any obligations
accruing under the Lease prior to the effective date of such termination.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
TENANT: LANDLORD:
AMERICA'S SHOPPING MALL, INC. PROLOGIS TRUST
- ------------------------------------- ------------------------------------
-13-
By: /s/ Irwin Schneidmill By: /s/ [illegible]
----------------------------- -------------------------
Title: President & CEO Title: Sr. Vice President
Attn: Irwin Schneidmill, Chief Executive Officer
Address: Address:
10 Henry Street 2791 Peterson Place
- ----------------------------------- -----------------------------
Teterboro, NJ 07608 Norcross, GA 30071
- ----------------------------------- -----------------------------
with a copy to:
America's Shopping Mall, Inc.
10 Henry Street
Teterboro, NJ 07608
Attn: Denny McNanny, Chief Financial Officer
WITNESSES AS TO TENANT: WITNESSES AS TO LANDLORD:
/s/ [illegible]
-------------------------
Kathleen Devine
/s/
-------------------------
-14-
Rules and Regulations
---------------------
1. The sidewalk, entries, and driveways of the Project shall not be obstructed
by Tenant, or its agents, or used by them for any purpose other than ingress
and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor furniture,
etc., in the parking areas, landscaped areas or other areas outside of its
Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in offices, halls or
corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining buildings
by the use of any radio or musical instrument or by the making of loud or
improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections in
the Premises, Landlord or its agent will direct the electrician as to where
and how the wires may be introduced; and, without such direction, no boring
or cutting of wires will be permitted. Any such installation or connection
shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except as specifically approved
in the Lease. The use of oil, gas or inflammable liquids for heating,
lighting or any other purpose is expressly prohibited. Explosives or other
articles deemed extra hazardous shall not be brought into the Project.
7. Parking any type of recreational vehicles is specifically prohibited on or
about the Project. Except for the overnight parking of operative vehicles,
no vehicle of any type shall be stored in the parking areas at any time. In
the event that a vehicle is disabled, it shall be removed within 48 hours.
There shall be no "For Sale" or other advertising signs on or about any
parked vehicle. All vehicles shall be parked in the designated parking areas
in conformity with all signs and other markings. All parking will be open
parking, and no reserved parking, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.
8. Tenant shall maintain the Premies free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs or who shall in any manner do any act in violation of the
Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by janitors or any other employee or person.
11. Tenant shall give Landlord prompt notice of any defects in water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus, or any other service equipment affecting the Premises.
12. Subject to Paragraph 3 of the Lease, Tenant shall not permit storage outside
the Premises, including without limitation, outside storage of trucks and
other vehicles, or dumping of waste or refuse or permit any harmful
materials to be placed in any drainage system or sanitary system in or about
the Premises.
13. All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for
that purpose.
14. No auction, public or private, will be permitted on the Premises or the
Project.
15. No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purpose other than that specified in
the Lease. No gaming devices shall be operated in the Premises.
17. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the
needs of other tenants, and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not
relieve Tenant from the obligation not to use more electricity than such
safe capactity.
18. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage.
19. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary use
of the Premises and shall keep all such machinery free of vibration, noise
and air waves which may be transmitted beyond the Premises.
-15-
ADDENDUM 1
BASE RENT ADJUSTMENTS
---------------------
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED ______________________, 2000, BETWEEEN
PROLOGIS TRUST
and
AMERICA'S SHOPPING MALL, INC.
Base Rent shall equal the following amounts for the respective periods set forth
below:
Period Monthly Base Rent
------ -----------------
Month 1 through Month 12 $31,987.94
Month 13 through Month 24 $32,867.61
Month 25 through Month 36 $33,771.47
Month 37 through Month 48 $34,700.18
Month 49 through Month 60 $35,654.44
Month 61 through Month 72 $36,634.94
Month 73 through Month 84 $37,642.40
Month 85 through Month 96 $38,677.56
Month 97 through Month 108 $39,741.19
Month 109 through Month 120 $40,834.08
-16-
ADDENDUM 2
CONSTRUCTION
(TURNKEY)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED ______________, 2000. BETWEEN
PROLOGIS TRUST
and
AMERICA'S SHOPPING MALL, INC.
(a) Landlord agrees to furnish or perform at Landlord's sole cost
and expense and in substantial conformance with Plans and Specifications
attached hereto as Exhibit A (the "Plans") and Landlord's Standard
Specifications attached hereto as Exhibit B those items of construction and
those improvements (the "Initial Improvements") specified below:
1. Approximately 4,000 s.f. of office space, including demising
wall and electrical service.
2. Warehouse area, including 100% humidity controlled environment
(1 ton per 500 RSF), metal halide lighting system to
approximately 20 foot candles in warehouse, ESFR sprinkler
system, canopied loading areas, one drive-in and at least ten
loading doors (one "UPS Height") with three (3) load levelers.
(b) If Tenant shall desire any changes, Tenant shall so advise
Landlord in writing and Landlord shall determine whether such changes can be
made in a reasonable and feasible manner. Any and all costs of reviewing any
requested changes, and any and all costs of making any changes to the Initial
Improvements which Tenant may request and which Landlord may agree to shall be
at Tenant's sole cost and expense and shall be paid to Landlord upon demand
and before execution of the change order.
(c) Landlord shall proceed with and complete the construction of the
Initial Improvements. Landlord shall endeavor to give Tenant approximately
thirty (30) days prior notice of the anticipated date on which the Initial
Improvements will be Substantially Completed. As soon as such improvements have
been Substantially Completed, Landlord shall notify Tenant in writing of the
date that the Initial Improvements were Substantially Completed. The later of
(i) thirty (30) days following such date or (ii) May 1, 2000, shall be the
"Commencement Date," unless the completion of such improvements was delayed due
to any act or omission of, or delay caused by, Tenant including, without
limitation, Tenant's failure to approve plans, complete submittals or obtain
permits within time periods agreed to by the parties or as reasonably required
by Landlord, in which case the Commencement Date shall be thirty (30) days after
the date such improvements would have been completed but for the delays caused
by Tenant. The Initial Improvements shall be deemed substantially completed
("Substantially Completed") when, in the opinion of the construction manager
(whether an employee or agent of Landlord or a third party construction
manager) ("Construction Manager"), the Premises are substantially completed in
substantial conformance with the Plans except for punch list which do not
prevent in any material way the use of the Premises for the purposes for which
they were intended and a temporary certificate of occupancy or its equivalent
has been issued for the Premises. In the event Tenant, its employees, agents,
or contractors cause construction of such improvements to be delayed, the date
on which the Initial Improvements are Substantially Completed shall be deemed
to be the due date that, in the opinion of the Construction Manager, the Initial
Improvements would have been Substantially Completed if such delays had not
taken place. Without limiting the foregoing, Tenant shall be solely responsible
for delays caused by Tenant's request for any changes in the plans, Tenant's
request for long lead items or Tenant's interference with the construction of
the Initial Improvements, and such delays shall not cause a deferral of the
Commencement Date beyond what it otherwise would have been. After the
Commencement Date Landlord and Tenant shall enter into a letter agreement
setting forth the Commencement Date and Tenant's acceptance of delivery of the
Premises. In the event of any dispute as to the Initial Improvement, including
the Commencement Date, the certificate of the Construction Manager shall be
conclusive absent manifest error.
(d) The failure of Tenant to take possession of or to occupy the
Premises shall not serve to relieve Tenant of obligations arising on the
Commencement Date or delay the payment of rent by Tenant. Subject to applicable
ordinances and building codes governing Tenant's right to occupy or perform in
the Premises, Tenant shall be allowed to install its tenant improvements,
machinery, equipment, fixtures, or other property on the Premises during the
final stages of completion of construction provided that Tenant does not thereby
interfere with the completion of construction or cause any labor dispute as a
result of such installations, and provided further that Tenant does hereby
agree to indemnify, defend, and hold Landlord harmless from any loss or damage
to such property, and all liability, loss, or damage arising from any injury
to the Project or the property of Landlord, its contractors, subcontractors, or
materialmen, and any death or personal injury to any person or persons arising
out of such installations, whether or not any such loss, damage, liability,
death, or personal injury was caused by Landlord's negligence. Any such
occupancy or performance in the Premises shall be in accordance with the
provisions governing Tenant-Made Alterations and Trade Fixtures in the Lease,
and shall be subject to Tenant providing to Landlord satisfactory evidence of
insurance for personal injury and property damage related to such installations
and satisfactory
-17-
payment arrangements with respect to installations permitted hereunder. Delay in
putting Tenant in possession of the Premises shall not serve to extend the term
of this Lease or to make Landlord liable for any damages arising therefrom.
(e) Except for incomplete punch list items, any conditions listed on the
temporary certificate of occupancy which are required to obtain a final
certificate of occupancy and are obligations of Landlord in completing the
Initial Improvements, and as otherwise set forth in the Lease, Tenant upon the
Commencement Date shall have and hold the Premises as the same shall then be
without any liability or obligation on the part of Landlord for making any
further alterations or improvements of any kind in or about the Premises.
(f) In the event the Initial Improvements are not Substantially Completed by
May 1, 2000, subject to Force Majeure events and Tenant-caused delays, Tenant
shall receive one day free Base Rent and Operating Expenses for each day after
May 1, 2000, until the Initial Improvements are Substantially Completed. In the
event the Initial Improvements are not Substantially Completed by June 30, 2000,
subject to Force Majeure events and Tenant-caused delays, Tenant shall receive
two (2) days free Base Rent and Operating Expenses for each day after June 30,
2000, until the earlier of (i) the date on which the Initial Improvements are
Substantially Completed and (ii) August 31, 2000. In the event that the Initial
Improvements are not Substantially Completed by September 1, 2000, subject to
Force Majeure events and Tenant-caused delays, the Commencement Date shall be
the later of (i) the date which is thirty (30) days following the date on which
the Initial Improvements are Substantially Completed and (ii) February 1, 2001.
-18-
ADDENDUM 3
ONE RENEWAL OPTION AT MARKET
----------------------------
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED FEB. 4, 2000, BETWEEN
PROLOGIS TRUST
and
AMERICA'S SHOPPING MALL, INC.
(a) Provided that as of the time of the giving of the Extension Notice
and the Commencment Date of the Extension Term (as such terms are defined
below), (x) Tenant is the Tenant originally named herein, or a Tenant Affiliate
or Successor Entity (y) Tenant, Tenant Affiliate or Successor Entity actually
occupies all of the Premises initially demised under this Lease and any space
added to the Premises, and (z) no Event of Default exists, or would exist but
for the passage of time or the giving of notice, or both; then Tenant shall have
the right to extend the Lease Term for an additional term of five (5) years
(such additional term is hereinafter called the "Extention Term") commencing on
the day following the expiration of the Lease Term (hereinafter referred to as
the "Commencement Date of the Extension Term"). Tenant must give Landlord notice
(hereinafter called the "Extension Notice") of its election to extend the term
of the Lease Term at least 12 months, but not more than 18 months, prior to the
scheduled expiration date of the Lease Term.
(b) The Base Rent payable by Tenant to Landlord during the Extension Term
shall be the greater of:
(i) the Base Rent in effect on the expiration of the Lease Term (if
the Base Rent is stated as an annual or other periodic rate, adjusted for
the length of the Lease Term), and
(ii) the Fair Market Rent, as defined and determined pursuant to
Paragraphs (c), (d), and (e) below.
(c) The term "Fair Market Rent" shall mean the Base Rent, expressed as an
annual rent per square foot of floor area, which Landlord would have received
from leasing the Premises for the Extension Term to an unaffiliated person which
is not then a tenant in the Project, assuming that such space were to be
delivered in "as-is" condition, and taking into account the rental which such
other tenant would most likely have paid for such premises, including market
escalations, provided that Fair Market Rent shall not in any event be less than
the base Rent for the Premises as of the expiration of the Lease Term. Fair
Market Rent shall not be reduced by reason of any costs or expenses saved by
Landlord by reason of Landlord's not having to find a new tenant for the
Premises (including without limitation brokerage commissions, cost of
improvements necessary to prepare the space for such tenant's occupancy, rent
concession, or lost rental income during any vacancy period). Fair Market Rent
means only the rent component defined as Base Rent in the Lease and does not
include reimbursements and payments by Tenant to Landlord with respect to
operating expenses and other items payable or reimbursable by Tenant under the
Lease. In addition to its obligation to pay Base Rent (as determined herein),
Tenant shall continue to pay and reimburse Landlord as set forth in the Lease
with respect to such operating expenses and other items with respect to the
Premises during the Extension Term. The arbitration process described below
shall be limited to the determination of the Base Rent and shall not affect or
otherwise reduce or modify the Tenant's obligation to pay or reimburse Landlord
for such operating expenses and other reimbursable items.
(d) Landlord shall notify Tenant of its determination of the Fair Market
Rent (which shall be made in Landlord's sole discretion and shall in any event
be not less than the Base Rent in effect as of the expiration of the Lease Term)
for the Extension Term, and Tenant shall advise Landlord of any objection within
10 days of receipt of Landlord's notice. Failure to respond within the 10-day
period shall constitute Tenant's acceptance of such Fair Market Rent. If Tenant
objects, Landlord and Tenant shall commence negotiations to attempt to agree
upon the Fair Market Rent within 30 days of Landlord's receipt of Tenant's
notice. If the parties cannot agree, each acting in good faith but without any
obligation to agree, then the Lease Term shall not be extended and shall
terminate on its scheduled termination date and Tenant shall have no further
right hereunder or any remedy by reason of the parties' failure to agree unless
Tenant or Landlord invokes the arbitration procedure provided below to determine
the Fair Market Rent.
(e) Arbitration to determine the Fair Market Rent shall be in accordance
with the Real Estate Valuation Arbitration Rules of the American Arbitration
Association. Unless otherwise required by state law, arbitration shall be
conducted in the metropolitan area where the Project is located by a single
arbitrator unaffiliated with either party. Either party may elect to arbitrate
by sending written notice to the other party and the Regional Office of the
American Arbitration Association within 5 days after the 30-day negotiating
period provided in Paragraph (d), invoking the binding arbitration provisions of
this paragraph. Landlord and Tenant shall each submit to the arbitrator their
respective proposal of Fair Market Rent. The arbitrator must choose between the
Landlord's proposal and the Tenant's proposal and may not compromise between
the two or select some other amount. Notwithstanding any other provision herein,
the Fair Market Rent determined by the arbitrator shall not be less than, and
the arbitrator shall have no authority to determine a Fair Market Rent less
than, the Base Rent in effect as of the scheduled expiration of the Lease Term.
The cost of the arbitration shall be paid by Landlord if the Fair Market Rent is
that proposed by Landlord and by Tenant if the Fair Market Rent is that proposed
by Tenant; and shall be borne equally otherwise. If the arbitrator has not
determined the Fair Market Rent as of the end of the Lease Term, Tenant shall
pay 105 percent of the Base Rent in effect under the Lease as of the end of the
Lease Term until the Fair Market Rent is determined as provided herein. Upon
such
determination, Landlord and Tenant shall make the appropriate adjustments to the
payments between them.
(f) The parties consent to the jurisdiction of any appropriate court to
enforce the arbitration provisions of this Addendum and to enter judgment upon
the decision of the arbitrator.
(g) Except for the Base Rent as determined above, Tenant's occupancy of
the Premises during the Extension Term shall be on the same terms and conditions
as are in effect immediately prior to the expiration of the initial Lease Term;
provided, however, Tenant shall have no further right to extend the Lease Term
pursuant to this addendum or to any allowances, credits or abatements or options
to expand, contract, renew or extend the Lease.
(h) If Tenant does not send the Extension Notice within the period set
forth in Paragraph (a), Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice and the notice of Tenant's objection under Paragraph (d).
(i) Landlord shall have no obligation to refurbish or otherwise improve
the Premises for the Extension Term. Subject to Landlord's obligations pursuant
to the Lease, the Premises shall be accepted by Tenant on the Commencement Date
of the Extension Term in "as-is" condition.
(j) If the Lease is extended for the Extension Term, then Landlord shall
prepare and Tenant shall execute an amendment to the Lease confirming the
extension of the Lease Term and the other provisions applicable thereto.
(k) If Tenant exercises its right to extend the term of the Lease for the
Extension Term pursuant to this Addendum, the term "Lease Term" as used in the
Lease, shall be construed to include, when practicable, the Extension Term
except as provided in (g) above.
ADDENDUM 4
ASSIGNMENT AND SUBLETTING (CONSENT)
-----------------------------------
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED FEB. 4, 2000, BETWEEN
PROLOGIS TRUST
and
AMERICA'S SHOPPING MALL, INC.
(a) Landlord shall not unreasonably withhold or delay its consent to
Tenant's request for permission to assign the Lease or sublease all or part of
the Premises. It shall be reasonable for the Landlord to withhold its consent to
any assignment or sublease in any of the following instances:
(i) The assignee or sublessee does not have a net worth calculated
according to generally accepted accounting principles at least equal
to the greater of the net worth of Tenant immediately prior to such
assignment or sublease or the net worth of the Tenant at the time it
executed the Lease;
(ii) The intended use of the Premises by the assignee or sublessee
is not reasonable satisfactory to Landlord;
(iii) The intended use of the Premises by the assignee or sublessee
would materially increase the pedestrian or vehicular traffic to the
Premises or the Project;
(iv) Occupancy of the Premises by the assignee or sublessee would,
in Landlord's opinion, violate any agreement binding upon Landlord
or the Project with regard to the identity of tenants, usage in the
Project, or similar matters;
(v) The identity or business reputation of the assignee or
sublessee will, in the good faith judgment of Landlord, tend to
damage the goodwill or reputation of the Project;
(vi) The assignment or sublet is to another tenant in the Project
and is at rates which are below those charged by Landlord for
comparable space in the Project;
(vii) In the case of a sublease, the subtenant has not acknowledged
that the Lease controls over any inconsistent provision in the
sublease; or
(viii) The proposed assignee or sublessee is a government entity.
The foregoing criteria shall not exclude any other reasonable basis for Landlord
to refuse its consent to such assignment or sublease.
(b) Any approved assignment or sublease shall be expressly subject to
the terms and conditions of this Lease.
(c) Tenant shall provide to Landlord all information concerning the
assignee or sublessee as Landlord may reasonably request.
(d) Landlord may revoke its consent immediately and without notice if,
as of the effective date of the assignment or sublease, there has occurred and
is continuing any Event of Default under the Lease.
ADDENDUM 5
LETTER OF CREDIT FOR SECURITY DEPOSIT
-------------------------------------
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED FEB. 4, 2000, BETWEEN
PROLOGIS TRUST
and
AMERICA'S SHOPPING MALL, INC.
One Hundred Thirty-Five Thousand Dollars ($135,000.00) of the $175,575.00
Security Deposit may be in the form of an unconditional, irrevocable letter of
credit from a bank reasonably acceptable to Landlord. Tenant shall provide such
letter of credit to Landlord on or before February , 2000, or pay such
$135,000.00 to Landlord in cash on or before February 4, 2000; provided however,
in the event Tenant pays such amount in cash, Tenant may provide Landlord a
letter of credit as provided herein in the amount of $135,000.00, and upon
receipt of such letter of credit, Landlord shall promptly return the $135,000.00
to Tenant. The letter of credit shall either provide that it does not expire
until the end of the Lease Term or, if it is for less than the full term of the
Lease, shall be renewed by Tenant at least 30 days prior to its expiration
during the term of the Lease. The letter of credit shall provide that it may be
drawn down upon by Landlord at any time Landlord delivers its site draft to the
bank. If Landlord sells or conveys the Premises, Tenant shall, at Landlord's
request, cooperate in having the letter of credit transferred to the purchaser.
If the letter of credit is ever drawn upon by Landlord pursuant to the terms of
the Lease and this Addendum, Tenant shall within ten (10) days thereafter cause
the letter of credit to be restored to its original amount.
Notwithstanding anything contained herein to the contrary, provided (a) no
Event of Default exists, (b) no condition then exists which with the passage of
time or the giving of notice, or both, would constitute an Event of Default, and
(c) Tenant has not failed to timely pay rent as provided in Paragraph 4 of the
Lease more than three (3) times in the preceding twelve (12) calendar months,
then the letter of credit shall be reduced as follows: (i) by $75,000 at the end
of the first 12 months of the Lease Term, (ii) by $20,000 at the end of the 24th
month of the Lease Term, (iii) by $20,000 at the end of the 36th month of the
Lease Term, and (iv) by $20,000 at the end of the 48th month of the Lease Term.
In the event that at the time the Letter of Credit could be reduced pursuant to
Subparagraphs (i)-(iv) herein but for Tenant's failure to comply with
Subpragraphs (a) or (b) hereof, Landlord shall cause the Letter of Credit to be
reduced by the applicable amount when Tenant has cured the Event of Default or
condition(s) referenced in Subparagraph (b) to Landlord's sole satisfaction. In
the event that at the time the Letter of Credit could be reduced pursuant to
Subparagraphs (i)-(iv) but for Tenant's failure to comply with Subparagraph (c),
Landlord shall cause the Letter of Credit to be reduced by the applicable amount
to be reduced pursuant to Subparagraphs (i)-(iv) at such time as Tenant complies
with the terms of Subparagraph (c) provided that at such time Tenant also
complies with Subparagraphs (a) and (b) hereof.