EXHIBIT 10-30 TO 10-K
AGREEMENT OF LEASE
BETWEEN
MARK P. SHAMBAUGH
LANDLORD
AND
SHAMBAUGH & SON, INC.
TENANT
DATED: OCTOBER 31, 1998
PREMISES
4711 SPEEDWAY DRIVE
FORT WAYNE, IN 46825
AGREEMENT OF LEASE ("Lease"), made as of the 31st day of October,
1998, between Mark P. Shambaugh, as Landlord, and Shambaugh & Son, Inc., an
Indiana corporation.
R E C I T A L S:
WHEREAS, the Landlord is the owner of certain premises known as and
by the street address of 4711 Speedway Drive, Fort Wayne, Indiana 46825 (as more
particularly described on Schedule ?A?, annexed hereto and made a part hereof);
and
WHEREAS, the Landlord desires to rent the aforementioned premises to
the Tenant and the Tenant desires to rent the aforementioned premises from the
Landlord.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
for themselves, as well as their respective legal representatives, heirs,
successors and assigns, hereby agree as follows:
ARTICLE 1
GLOSSARY
For the purposes of this Lease, the following terms shall have the
meanings indicated below:
"Additional Rent" shall have the meaning set forth in Section 2.2(B)
hereof.
"Applicable Rate" shall mean the lesser of (x) three percentage
points above the then current Prime Interest rate as published, from time to
time, by the WALL STREET JOURNAL as its prime interest rate in its Money Rates
section (or if such publication no longer exists or no longer publishes such
rate, then the "base rate" as announced by Citibank, N.A. [or its successors],
from time to time, for the rate presently referred to as its "base rate") or (y)
the maximum rate permitted by applicable law.
"Bankruptcy Code" shall mean 11 U.S.C. Section 101 ET SEQ., or any
statute, federal or state, of similar nature and purpose, now or hereafter.
"Building Systems" shall mean the mechanical, electrical, sanitary,
heating, air conditioning, ventilating, elevator, plumbing, life-safety and
other service or support systems of any nature whatsoever located at or on the
Premises, BUT shall not include installations made by Tenant or fixtures or
appliances (regardless of whether or not such fixtures or appliances are owned
by the Tenant or the Landlord).
"Building Insurance" shall have the meaning set forth in Section
10.2 hereof.
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"Business Days" shall mean all days, excluding Saturdays, Sundays
and all days observed as holidays by the State of Indiana or the federal
government.
"Commencement Date" is October 31, 1998.
"Event of Default" shall have the meaning set forth in Section 16.1
hereof.
"Expiration Date" shall mean the Fixed Expiration Date or such other
date on which the Term ends pursuant to any of the terms, conditions or
covenants of this Lease or pursuant to law.
"Fixed Expiration Date" is October 31, 2008.
"Fixed Rent" : $12,000.00 per annum ($1,000.00 per month) for the
first Lease Year (as such term is hereinafter defined) subject to adjustment
thereafter in accordance with the provisions of Rider 1 hereof.
"Government Authority" or "Government Authorities" shall mean the
United States of America, the State of Indiana, the County of Allen, the
Municipality of Fort Wayne, and/or any political subdivision thereof and any
agency, department, commission, board, bureau or instrumentality of any of the
foregoing, now existing or hereafter created, having jurisdiction over the
Premises or any portion thereof.
"Hazardous Materials" shall have the meaning set forth in Section
8.2 hereof.
"Increase Notice" shall have the meaning set forth in Section 3 of
Rider 1 attached hereto and made a part hereof.
"Indemnitees" shall mean Landlord, his agents and contractors (and
the partners, shareholders, officers, directors and employees of any of the
Landlord's agents or contractors).
"Initial Term" shall mean the ten (10) year period commencing on the
Commencement Date.
"Landlord", on the date as of which this Lease is made, shall mean
Mark P. Shambaugh, but thereafter, "Landlord" shall mean any fee owner of the
Premises.
"Lease Year" shall mean each twelve (12) month period commencing on
the Commencement Date and each anniversary of the Commencement Date.
"Mortgage(s)" Shall mean any deed of trust, trust indenture or
mortgage which may now or hereafter affect the Premises and all extensions,
supplements, amendments, modifications, consolidations, refinancings and
replacements thereof or thereto, substitutions therefor, and advances made
thereunder.
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"Mortgagee(s)" Shall mean any trustee or mortgagee or holder of a
Mortgage.
"Notice(s)" shall have the meaning set forth in Section 22.1(A)
hereof.
"Option" or "Options" shall have the meaning set forth in Section
26.1 hereof.
"Option Period" or "Option Periods" shall have the meaning set forth
in Section 26.1 hereof.
"Permitted Use" shall mean general, executive and administrative
offices, parking, machine shop, repair, and warehouse facilities in connection
with Tenant's business as a mechanical contracting and service company and uses
related thereto including the evolution of the Tenant's business consistent with
the evolution of the mechanical contracting industry in general, subject to all
applicable laws, regulations, codes and ordinances, and subject further to all
recorded restrictions, covenants and limitations affecting the Premises,
provided, however, that no recorded restrictions, covenants or limitations
impair the use of the Premises for the purposes intended by Tenant as of the
Commencement Date.
"Person(s) or Person(s)" shall mean any natural person or persons, a
partnership, a corporation and any other form of business or legal association
or entity.
"Persons Within Tenant's Control" shall mean and include Tenant, all
of Tenant's respective shareholders, directors, officers, agents, contractors,
sub-contractors, servants, employees, licensees and invitees as well as any of
the heirs, successors, representatives and assigns of any of the foregoing.
"Premises" shall mean all that certain plot, piece and parcel of
land, together with all buildings and improvements erected thereon, known as and
by the street address of 7614 and 7620 Opportunity Drive, Fort Wayne, Indiana
46801 (as more particularly described on Schedule "A", annexed hereto and made a
part hereof).
"Price Index" shall have the meaning set forth in Section 1(B) of
Rider 1 attached hereto.
"Rental" shall mean and be deemed to include Fixed Rent, Additional
Rent and any other sums payable, now or hereafter, by Tenant hereunder.
"Requirements" shall mean all present and future laws, rules,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary as well as ordinary, retroactive and prospective, of all
Governmental Authorities, now existing or hereafter created which affect,
directly or indirectly, the Premises and/or the maintenance, use, operation or
occupation of the Premises, and all recorded restrictions, covenants and
limitations affecting the Premises, provided, however, that no recorded
restrictions, covenants or limitations impair the use of the Premises for the
purposes intended by Tenant as of the Commencement Date.
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"Taxes" shall have the meaning set forth in Section 3.1 hereof.
"Tenant", on the date as of which this Lease is made, shall mean the
Tenant named in this Lease, but thereafter "Tenant" shall mean only the tenant
under this Lease at the time in question; provided, however, that the Tenant
named in this Lease and any and all successor tenant(s) hereunder shall not be
released and relieved from any liability hereunder in the event of any
assignment of this Lease or a sublet, in whole or in part, of the Premises.
"Tenant Indemnitees" shall mean Tenant, its agents and contractors
(and the partners, shareholders, officers, directors and employees of Tenant and
its agents and contractors).
"Tenant's Property" shall mean Tenant's movable fixtures and movable
partitions, telephone and other equipment, furniture, furnishings and other
movable items of personal property owned by the Tenant.
"Term", on the date as of which this Lease is made shall mean the
Initial Term, but thereafter shall be deemed to include any Option Period for
which the Tenant exercises its Option pursuant to the provisions of Article 26
hereof.
ARTICLE 2
DEMISE; PREMISES; TERM; RENT
SECTION 2.1. Landlord hereby leases to Tenant and Tenant hereby
hires from Landlord the Premises for the Initial Term to commence on the
Commencement Date and to end on the Fixed Expiration Date, unless earlier
terminated as provided herein and subject to the renewal options provided for in
Article 26 below.
SECTION 2.2. Commencing upon the Commencement Date, Tenant shall pay
to Landlord, in lawful money of the United States of America, without Notice or
demand, without relief from valuation and appraisement laws, by good and
sufficient check at the office of Landlord or at such other place as Landlord
may designate from time to time, the following:
(A) the Fixed Rent, as such term is defined in Article 1 hereof,
which shall be payable in equal monthly installments in advance on the
first day of each and every calendar month during the Term, and
(B) additional rent ("Additional Rent") consisting of all other sums
of money as shall become due from and be payable by Tenant hereunder.
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SECTION 2.3. If the Commencement Date is other than the first day of
a calendar month, or the Fixed Expiration Date is other than the last day of a
calendar month, Fixed Rent for such month shall be prorated on a per diem basis.
SECTION 2.4. Tenant shall pay the Fixed Rent and Additional Rent
when due without abatement, deduction, counterclaim, setoff or defense of any
nature. It is understood and agreed that the Fixed Rent to be received by
Landlord during the Term shall be net to Landlord so that this Lease shall yield
to Landlord the Fixed Rent specified herein and, accordingly, all real estate
taxes, insurance, maintenance and other expenses of any nature related to the
Premises, excluding Landlord's income taxes, shall be solely the responsibility
of Tenant unless otherwise specifically set forth herein.
ARTICLE 3
REAL ESTATE TAXES
SECTION 3.1. The Tenant covenants and agrees that it shall, within
twenty (20) days of written demand by the Landlord to the Tenant, pay to the
Landlord, as Additional Rent, any and all Taxes (as hereinafter defined) of any
nature whatsoever assessed or imposed against the Premises for each and every
Lease Year during the Term of this Lease. The Landlord hereby agrees that any
demand given by the Landlord to the Tenant pursuant to the provisions of this
Section 3.1 shall include an accurate copy of the invoice, statement, bill or
similar document issued by the relevant Governmental Authority or Governmental
Authorities, as the case may be, with respect to the Taxes for which payment is
demanded. For purposes of this Section 3.1, "Taxes" shall include, without
limitation, any and all taxes assessed against the Premises, all personal
property taxes, all ad valorem taxes and any and all other taxes assessed
against the Premises by any Governmental Authority, now or hereafter, but shall
EXCLUDE any special assessments or charges for improvements or infrastructure
effected or installed prior to the Commencement Date. With respect to Taxes for
tax periods commencing before or ending after the Term of this Lease, Tenant
shall only be obligated to pay to Landlord the pro rata portion of such Taxes
equal to the portion of such tax period falling within the Term of this Lease.
ARTICLE 4
UTILITIES
SECTION 4.1. The Tenant shall contract for in its name, and
covenants and agrees that it shall pay when due any and all charges incurred
for, any and all utilities supplied to the Premises including, without
limitation, electricity, water, heating oil and/or natural gas. Landlord
represents and warrants to Tenant that electricity, water, telephone, sewer, and
natural gas, if any, are present at and available to the Premises in quantities
sufficient for Tenant's business purposes.
SECTION 4.2. Landlord shall not be liable in any way to Tenant for
any interruption or failure of or defect in the supply or character of any
utility furnished to the Premises, now or hereafter, or for any loss, damage or
expense Tenant may sustain if either the quantity or character of any utility is
changed or is no longer suitable for Tenant's requirements, whether by reason of
any requirement, act or omission of the public utility serving the Premises or
for any other reason whatsoever. Notwithstanding the provisions of this Section
4.2, the Landlord shall be responsible for any and all actual damages suffered
by the Tenant as a result of any interruption of utility service to the extent
caused by the Landlord's gross negligence or intentional misconduct, and Rent
shall abate until such service is fully restored.
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SECTION 4.3. If any Taxes are imposed upon Landlord with respect to
any utility furnished as a service to Tenant by any Governmental Authority,
Tenant agrees that such Taxes shall be reimbursed by Tenant to Landlord upon
written demand. The Landlord hereby agrees that any demand given by the Landlord
to the Tenant pursuant to the provisions of this Section 4.3 shall include an
accurate copy of the invoice, statement, bill or similar document issued by the
relevant Governmental Authority or Governmental Authorities, as the case may be,
with respect to the Taxes for which payment is demanded.
ARTICLE 5
USE AND OCCUPANCY
SECTION 5.1. Tenant shall use and occupy the Premises for the
Permitted Use and for no other purpose of any nature whatsoever. However,
nothing contained herein shall require Tenant to operate or occupy the Premises
continuously during the Term.
ARTICLE 6
ALTERATIONS
SECTION 6.1.
(A)(1) Except as provided below, prior to making any additions,
alterations or improvements to the Premises, Tenant shall: (i) submit to
Landlord plans and specifications for approval by the Landlord (including
to the extent reasonably applicable, layout, architectural, electrical,
mechanical and structural drawings) that comply with all Requirements for
each proposed addition, alteration or improvement to the Premises, and
Tenant shall not commence any such work without first obtaining Landlord's
approval of such plans and specifications; and (ii) at Tenant's expense,
obtain all permits, approvals and certificates required by any
Governmental Authorities. Upon completion of such addition, alteration or
improvement, Tenant, at Tenant's expense, shall obtain certificates of
final approval of such addition, alteration or improvement required by any
Governmental Authority and shall furnish Landlord with copies thereof. All
additions, alterations and improvements shall be made and performed in
accordance with the plans and specifications therefor as approved by
Landlord and otherwise in accordance with all Requirements. All materials
and equipment to be incorporated in the Premises as a result thereof shall
be good quality and no such materials or equipment shall be subject to any
lien, encumbrance, chattel mortgage, title retention or security
agreement.
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(A)(2) Notwithstanding anything to the contrary contained in this
Lease, Tenant shall have the right to make any alterations, additions and
improvements to the Premises without the consent of the Landlord if and
only if: (i) the total cost of such alterations, additions or improvements
do not exceed Fifty Thousand and No/100 Dollars ($50,000.00) for any Lease
Year; and (ii) Tenant shall not remove, materially alter or otherwise
impair any structural element of the Premises or the Building System.
(A)(3) Tenant agrees that any review or approval by Landlord of any
plans and/or specifications with respect to any alteration, addition and
improvement is solely for Landlord's benefit, and without any
representation or warranty whatsoever to Tenant or any other Person with
respect to the adequacy, correctness or sufficiency thereof or with
respect to Requirements or otherwise.
(A)(4) Landlord, at Tenant's expense, and upon the request of
Tenant, shall join in any applications for any permits, approvals or
certificates required to be obtained by Tenant in connection with any
permitted alteration, addition and improvement (provided that the
provisions of the applicable Requirements shall require that Landlord join
in such application) and shall otherwise cooperate with Tenant in
connection therewith; provided, however, that Landlord shall not be
obligated to incur any cost or expense or liability in connection
therewith.
(B) All alterations, additions and improvements shall become a part
of the Premises and shall be Landlord's property from and after the
installation thereof and may not be removed or changed without Landlord's
prior written consent. All Tenant's Property shall remain the property of
Tenant and, on or before the Expiration Date or earlier end of the Term,
may be removed from the Premises by Tenant at Tenant's sole cost and
option; provided, however, that Tenant shall repair and restore in a good
and workmanlike manner any damage to the Premises caused by such removal.
The provisions of this Section 6.1(B) shall survive the expiration or
earlier termination of this Lease.
(C)(1) Any mechanic's lien filed against the Premises for work
claimed to have been done for, or materials claimed to have been furnished
to, Tenant shall be contested by appropriate judicial proceedings or shall
be canceled or discharged by Tenant, at Tenant's expense, within ninety
(90) days after such lien shall be filed and Tenant receives notice
thereof, by payment or filing of the bond required by law.
(C)(2) If Tenant shall fail to contest or discharge such mechanic's
lien within the aforesaid period, then, in addition to any other right or
remedy of Landlord, Landlord may, but shall not be obligated to, discharge
the same either by paying the amount claimed to be due or by procuring the
discharge of such lien by deposit in court or bonding.
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(C)(3) Any amount paid by Landlord for any of the aforesaid charges
and for all expenses of Landlord (including, but not limited to,
reasonable attorneys' fees and disbursements) incurred in defending any
such action, discharging said lien or in procuring the discharge of said
lien, with interest on all such amounts at the Applicable Rate, shall be
repaid by Tenant within twenty (20) days after written demand therefor,
and all amounts so repayable, together with such interest, shall be
considered Additional Rent.
(D) Tenant shall have the right, at its sole cost and expense, to
erect and maintain any exterior signs on the Premises with the prior
written consent of Landlord so long as the same comply with all applicable
Requirements. Landlord acknowledges consent to Tenant's signage in
existence as of the Commencement Date.
ARTICLE 7
REPAIRS; REPLACEMENTS; MAINTENANCE
SECTION 7.1. Except for those repairs, replacements or maintenance
required to be effected by Landlord, and further subject to the right of
reimbursement herein provided, Tenant, at Tenant's sole cost and expense, shall
take good care of the Premises and the improvements, buildings, Building
Systems, fixtures, equipment, parking lots, landscaping and appurtenances
located thereon and make all non-structural repairs, REPLACEMENTS or alterations
thereto of any nature whatsoever as and when needed to preserve them in as good
working order and condition as exists as of the Commencement Date, ordinary wear
and tear excepted, ("Maintenance Repairs") or to comply with any Requirement
("Requirement Alteration"). If Tenant shall fail, after thirty (30) days Notice
(or such shorter period as may be required because of an emergency), to commence
to make repairs, replacements or alterations required to be made by Tenant and
complete the same within a reasonable period of time thereafter exercising due
diligence, the same may be made by Landlord, at the expense of Tenant, and the
expenses thereof incurred by Landlord, with interest thereon at the Applicable
Rate, shall be paid to Landlord, as Additional Rent, within twenty (20) days
after rendition of a bill or statement therefor. Tenant shall give Landlord
prompt Notice of any defective condition known to Tenant in any Building Systems
located in, servicing or passing through the Premises. If the cost of any
Maintenance Repair or Requirement Alteration, whether structural or
non-structural, exceeds $10,000.00, and Landlord consents to such Maintenance
Repair or Requirement Alteration after prior written notice from Tenant, then
upon termination or other expiration of this Lease Landlord shall reimburse to
Tenant the pro rata portion of the cost of such Maintenance Repair or
Requirement Alterations equal to the portion of the useful life of such
Maintenance Repair or Requirement Alternations that remains after the expiration
or other termination of this Lease. The useful life of such Maintenance Repair
or Requirement Alterations shall be established by the party making such
Maintenance Repair or Requirement Alterations at the time made. Notwithstanding
anything to the contrary contained in this Section, in no event shall Tenant be
responsible for any repair, item of maintenance or replacement to the extent the
same is caused by the negligence or willful misconduct of Landlord or Landlord's
employees, contractors or agents.
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SECTION 7.2. Landlord hereby assigns all warranties and guaranty
agreements relating to the Premises and the Building Systems to Tenant during
the Term.
SECTION 7.3. Landlord hereby agrees to repair, maintain and replace
all structural portions of the Premises, including, without limitation, exterior
walls, support columns and walls, foundation and the roof in as good repair and
working order as exists as of the Commencement Date, ordinary wear and tear
excepted.
ARTICLE 8
REQUIREMENTS OF LAW
SECTION 8.1. Tenant shall not do, and shall not permit (to the
extent Tenant has control over the same) any act or thing in or upon the
Premises which will invalidate or be in conflict with the certificate of
occupancy for the Premises or violate any Requirements. Tenant shall immediately
take all action, including but not limited to, making any Requirement
Alterations necessary to comply with all Requirements which shall or may impose
any violation, order or duty upon Landlord or Tenant arising from or in
connection with the Premises, Tenant's occupancy, use or manner of use of the
Premises or any installations in the Premises, or required by reason of a breach
of any of Tenant's covenants or agreements under this Lease, whether or not such
Requirements shall now be in effect or hereafter enacted or issued, and whether
or not any work required shall be ordinary or extraordinary or foreseen or
unforeseen as of the date hereof. Landlord represents and warrants to Tenant
that as of the Commencement Date no condition exists with respect to the
Premises that will necessitate any Requirement Alteration.
SECTION 8.2. Tenant covenants and agrees that Tenant shall, at
Tenant's sole cost and expense, comply at all times with all Requirements
governing the use, generation, storage, treatment and/or disposal of any
Hazardous Materials (as defined below) in, on, under, about or from the presence
of which results from or in connection with the act or omission of Tenant or
Persons Within Tenant's Control or the breach of this Lease by Tenant or Persons
Within Tenant's Control. The term "Hazardous Materials" shall mean any
biologically or chemically active or other toxic or hazardous wastes, pollutants
or substances, including, without limitation, asbestos, PCBS, petroleum products
and by-products, substances defined or listed as "hazardous substances" or
"toxic substances" or similarly identified in or pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ' 9601 ET
SEQ., and as hazardous wastes under the Resource Conservation and Recovery Act,
42 U.S.C. ' 6010, ET SEQ., any chemical substance or mixture regulated under the
Toxic Substance Control Act of 1976, as amended, 15 U.S.C. 2601, ET SEQ., any
"toxic pollutant" under the Clean Water Act, 33 U.S.C. ' 466 ET SEQ., as
amended, any hazardous air pollutant under the Clean Air Act, 42 U.S.C. ' 7401
ET SEQ., hazardous materials identified in or pursuant to the Hazardous
Materials Transportation Act, 49 U.S.C. ' 1802, ET SEQ., and any hazardous or
toxic substances or pollutant regulated under any other Requirements. Tenant
shall indemnify and hold harmless all Indemnitees from and against any loss,
claim, cost, damage, liability or expense (including attorneys' fees and
disbursements) arising by reason of any clean up, removal, remediation,
detoxification action or any other activity required or recommended of any
Indemnitees by any Governmental Authority by reason of the presence in, on,
under or about the Premises of any Hazardous Materials, as a result of or in
connection with the act or omission of Tenant or Persons Within Tenant's Control
or the breach of this Lease by Tenant or Persons Within Tenant's Control.
Landlord shall indemnify and hold harmless all Tenant Indemnitees from and
against any loss, claim, cost, damage, liability or expense (including
attorneys' fees and disbursements) arising by reason of any clean up, removal,
remediation, detoxification action or any other activity required or recommended
of any Tenant Indemnitees by any Governmental Authority by reason of the
presence in, on, under or about the Premises of any Hazardous Materials either
in existence on the Commencement Date or that come to exist thereafter that are
not the result of or in connection with the act or omission of Tenant or Persons
Within Tenant's Control or the breach of this Lease by Tenant or Persons Within
Tenant's Control. The foregoing covenants and indemnities shall survive the
expiration or any termination of this Lease.
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SECTION 8.3. Landlord represents and warrants to Tenant that as of
the date hereof Landlord has no notice of the presence, generation, storage,
disposal or other use of Hazardous Materials on, in or under the Premises prior
to the date hereof or any violation of any violation of any applicable
Requirements relating to Hazardous Materials.
SECTION 8.4. If Tenant shall receive notice of any violation of or
defaults under, any Requirements, liens or other encumbrances applicable to the
Premises, Tenant shall give immediate written Notice thereof to Landlord.
SECTION 8.5. If any governmental license or permit shall be required
for the proper and lawful conduct of Tenant's business and if the failure to
secure such license or permit would, in any way, affect Landlord or the
Premises, then Tenant, at Tenant's expense, shall promptly procure and
thereafter maintain, submit for inspection by Landlord, and at all times comply
with the terms and conditions of, each such license or permit.
ARTICLE 9
SUBORDINATION
SECTION 9.1. This Lease shall at all times, now and hereafter, be
subject and subordinate to each and every Mortgage, whether made prior to or
after the execution of this Lease, and to all extensions, supplements,
amendments, modifications, consolidations and replacements thereof or thereto,
substitutions therefor, and advances made thereunder, provided that the
Mortgagee confirms and accepts the provisions of Section 9.5 below. This clause
shall be self-operative and no further agreement of subordination shall be
required to make the interest of any Mortgagee superior to the interest of
Tenant hereunder. In confirmation of such subordination, Tenant shall promptly
execute and deliver, at its own cost and expense, any document, in recordable
form if requested, that Landlord or any Mortgagee may request to evidence such
subordination; and if Tenant fails to execute, acknowledge or deliver any such
document within twenty (20) days after request therefor, Tenant hereby
irrevocably constitutes and appoints Landlord as Tenant's attorney-in-fact,
coupled with an interest, to execute, acknowledge and deliver any such document
for and on behalf of Tenant.
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SECTION 9.2. The subordination set forth in Section 9.1 above is
subject to the written agreement (a "Non-Disturbance Agreement") by any
Mortgagee or any other person to whom Tenant may be required to attorn, that so
long as Tenant is in compliance with the terms of this Lease, Tenant's use and
occupancy of the Premises shall not be disturbed, and that all provisions of the
Lease shall be given effect, including those related to the application of any
proceeds of insurance. Landlord shall cause each Mortgagee, whether pursuant to
a Mortgage now existing or hereafter arising, to execute and deliver to Tenant a
Non-Disturbance Agreement, subject to the terms of the preceding sentence, in a
form acceptable to such Mortgagee.
ARTICLE 10
INSURANCE; PROPERTY LOSS OR DAMAGE; REIMBURSEMENT
SECTION 10.1.
(A) Neither Landlord nor Landlord's agents shall be liable for any
injury or damage to persons or property, or interruption of Tenant's
business, resulting from fire or other casualty caused by Persons other
than the Landlord.
(B) Tenant shall give written Notice to Landlord, promptly after
Tenant learns thereof, of any accident, emergency, occurrence, fire or
other casualty and all damages to or defects in the Premises for the
repair of which Landlord might be responsible. Such Notice shall be given
by telecopy or personal delivery to the address(es) of Landlord in effect
for Notice.
SECTION 10.2. Tenant shall not do or permit to be done any act or
thing in or upon the Premises which will invalidate or be in conflict with the
terms of the State of Indiana standard form of fire insurance with extended
coverage, or with rental, liability, boiler, sprinkler, water damage, war risk
or other insurance policies covering the Premises (hereinafter referred to as
"Building Insurance"); and Tenant, at Tenant's own expense, shall comply with
all rules, orders, regulations and requirements of all insurance boards.
SECTION 10.3.
(A) Tenant shall, at Tenant's own cost and expense, obtain, maintain
and keep in full force and effect during the Term, for the benefit of
Landlord, any Mortgagees and Tenant, the Building Insurance in an amount
equal to the replacement value of the Building and its contents (not to
exceed ____________) and commercial general liability insurance (including
premises operation, bodily injury, personal injury, death, independent
contractors, broad form contractual liability and broad form property
damage coverages) with coverage limits of $1,000,000 per occurrence and
$2,000,000 in the aggregate, against all claims, demands or actions with
respect to damage, injury or death made by or on behalf of any person or
entity, arising from or relating to the conduct and operation of Tenant's
business in, on or about the Premises (which shall include Tenant's signs,
if any), or arising from or related to any act or omission of Tenant or of
Persons Within Tenant's Control.
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(B) Landlord and any Mortgagees shall be named as additional
insureds in said policies. All said policies of insurance shall be: (i)
written as "occurrence" policies; (ii) written as primary policy coverage
and not contributing with or in excess of any coverage which Landlord may
carry; and (iii) issued by reputable and independent insurance companies
rated in Best's Insurance Guide, or any successor thereto (or if there be
none, an organization having a national reputation) as having a general
policyholder rating of "A" and a financial rating of at least "XI", and
which are licensed to do business in the State of Indiana. Upon Landlord?s
request, Tenant shall deliver to Landlord the policies of insurance or
certificates thereof, together with evidence of payment of premiums
thereon, and shall thereafter furnish to Landlord, at least thirty (30)
days prior to the expiration of any such policies and any renewal thereof,
a new policy or certificate in lieu thereof, with evidence of the payment
of premiums thereon. Each of said policies shall also contain a provision
whereby the insurer agrees not to cancel, fail to renew, diminish or
materially modify said insurance policy(ies) without having given Landlord
and any Mortgagees at least thirty (30) days prior written Notice thereof.
(C) Tenant shall pay all premiums and charges for all of said
policies, and, if Tenant shall fail to make any payment when due or carry
any such policy, Landlord may, but shall not be obligated to, make such
payment or carry such policy, and the amount paid by Landlord, with
interest thereon (at the Applicable Rate), shall be repaid to Landlord by
Tenant on demand, and all such amounts so repayable, together with such
interest, shall be deemed to constitute Additional Rent hereunder. Payment
by Landlord of any such premium, or the carrying by Landlord of any such
policy, shall not be deemed to waive or release the default of Tenant with
respect thereto.
(D) Tenant, at Tenant's sole cost and expense, shall maintain
insurance protecting and indemnifying Tenant against any and all damage to
or loss of Tenant's Property, and all claims and liabilities relating
thereto.
SECTION 10.4.
(A) Landlord and Tenant hereby release each other and their
respective agents, employees, partners, shareholders, officers and
directors from any claims or actions for damage to the Premises or
Tenant's Property to the extent the same are covered by proceeds of any
insurance policies maintained by the parties hereto under the terms of
this Lease or in force at the time of any such damage. Each party shall
cause each insurance policy obtained by it to provide that the insurance
company waives all rights of recovery by way of subrogation against the
other party in connection with any damage covered by any such policy.
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(B) The waiver of subrogation referred to in Section 10.4(A) above
shall extend to the agents and employees of each party, but only if and to
the extent that such waiver can be obtained without additional charge
(unless such party shall pay such charge). Nothing contained in this
Section 10.4 shall be deemed to relieve the Landlord or Tenant from any
duty imposed elsewhere in this Lease to repair, restore and rebuild the
Premises, in whole or in part.
ARTICLE 11
DESTRUCTION BY FIRE OR OTHER CAUSE
SECTION 11.1. If the Premises or any part thereof shall be damaged
by fire or other casualty, Tenant shall give immediate written Notice thereof to
Landlord. Landlord shall, subject to the provisions of Sections 11.2 and 11.3
below, proceed with reasonable diligence, after receipt of the net proceeds of
insurance, to repair or cause to be repaired such damage at its expense, to the
condition immediately preceding such damage and, if the Premises, or any part
thereof, shall be rendered untenantable by reason of such damage, then the Fixed
Rent hereunder, or an amount thereof apportioned according to the area of the
Premises so rendered untenantable (if less than the entire Premises shall be so
rendered untenantable), shall be abated for the period from the date of such
damage to the date that is thirty (30) days after the date when the repair of
such damage shall have been substantially completed. If Landlord or any
Mortgagee shall be unable to collect the insurance proceeds applicable to such
damage because of some action or inaction on the part of Tenant or Persons
Within Tenant's Control, then Landlord shall have no duty to make such repairs
or effect any restoration hereunder. Tenant covenants and agrees to cooperate
with Landlord and any Mortgagee in their efforts to collect insurance proceeds
(including rent insurance proceeds) payable to such parties. Landlord shall not
be liable for any delay which may arise by reason of adjustment of insurance on
the part of Landlord and/or Tenant, or any cause beyond the control of Landlord
or contractors employed by Landlord.
SECTION 11.2. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or injury to the business of Tenant resulting in any way
from damage from fire or other casualty or the repair thereof unless caused by
Landlord. Tenant understands that Landlord, in reliance upon Section 10.3
hereof, will not carry insurance of any kind on Tenant's Property, and that
Landlord shall not be obligated to repair any damage thereto or replace the
same.
SECTION 11.3.
(A) Notwithstanding anything to the contrary contained in Sections
11.1 and 11.2 above, in the event that:
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(1)at least fifty (50%) percent of the rentable square feet of
the Premises shall be damaged by a fire or other casualty so that
substantial alteration or reconstruction of the Premises shall be
required (whether or not the remainder of the Premises shall have
been damaged by such fire or other casualty and without regard to
the structural integrity of the Premises); or
(2)the Premises shall be totally or substantially damaged or
shall be rendered wholly or substantially unsuitable for the
Permitted Use; or
(3)the Landlord fails to commence any repairs, reconstruction or
restoration of the Premises within sixty (60) days after a casualty;
or
(4)Landlord fails complete all repairs, reconstruction or
restoration of the Premises within one hundred twenty (120) days
after the date of casualty;
then, as a result of any circumstances described in subparagraphs (1), (2), (3)
or (4) hereof, the Tenant, at Tenant's option, may terminate this Lease and the
term and estate hereby granted, by notifying the Landlord in writing of such
termination within one hundred twenty (120) days after the date of such damage
[as to subparagraphs (1) and (2)] or within thirty (30) days after the passage
of the times periods in subparagraphs (3) and (4) above. In the event that such
a Notice of termination shall be given, then this Lease and the term and estate
hereby granted shall expire as of the date of termination stated in said Notice
with the same effect as if that date were the Fixed Expiration Date, and the
Fixed Rent and Additional Rent hereunder shall be apportioned as of such date.
Notwithstanding the termination of this Lease as provided in this Subsection
11.3(A) Landlord shall be obligated to reimburse to Tenant a portion of the cost
of any Maintenance Repair or Requirement Alterations to the extent required by
Section 7.1 above. In the event of an occurrence as described in subparagraphs
(1) or (2) above, Landlord, at Landlord's option, may terminate this Lease and
the term and estate hereby granted by notifying Tenant in writing of such
termination within one hundred twenty (120) days after the date of such damage.
ARTICLE 12
EMINENT DOMAIN
SECTION 12.1. If the whole of the Premises is acquired or condemned
for any public or quasi-public use or purpose, this Lease and the Term shall end
as of the date of the vesting of title with the same effect as if said date were
the Fixed Expiration Date. If only a part of the Premises is so acquired or
condemned then, except as hereinafter provided in this Section 12.1, this Lease
and the Term shall continue in effect but, if a part of the Premises is so
acquired or condemned, from and after the date of the vesting of title, the
Fixed Rent and Additional Rent, if
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any, shall be reduced in the proportion which the area of the part of the
Premises so acquired or condemned bears to the total area of the Premises
immediately prior to such acquisition or condemnation. If the part of the
Premises acquired or condemned contains more than fifty percent (50%) of the
rentable square feet of the Premises or if, by reason of such acquisition or
condemnation, the Premises shall be rendered wholly or substantially unsuitable
for the Permitted Use, then either Landlord or Tenant may terminate this Lease
and the Term and estate hereby granted, by notifying the other party in writing
of such termination within one hundred twenty (120) days after the date upon
which Tenant receives Notice of vesting of title. In the event that such Notice
of termination shall be given, then this Lease and the Term and estate hereby
granted shall expire as of the date of termination stated in said Notice, with
the same effect as if that date were the Fixed Expiration Date. In the event of
any termination of this Lease and the Term pursuant to the provisions of this
Section 12.1, the Fixed Rent or Additional Rent shall be apportioned as of the
date of sooner termination and any prepaid portion of the Fixed Rent for any
period after such date shall be refunded by Landlord to Tenant.
SECTION 12.2. In the event of any such acquisition or condemnation
of all or any part of the Premises, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, but shall be obligated to
proceed with reasonable diligence to repair and restore the Premises, at
Landlord's expense, to a condition most suitable for the Permitted Use. Tenant
shall have no claim against Landlord or the condemning authority for the value
of any unexpired portion of the Term and Tenant hereby expressly assigns to
Landlord all of its right in and to any such award. Nothing contained in this
Section 12.2 shall be deemed to prevent Tenant from making a separate claim in
any condemnation proceedings for the value of any Tenant's Property included in
such taking, and for any moving expenses, so long as Landlord's award is not
reduced thereby.
SECTION 12.3.
(A) Notwithstanding anything to the contrary contained in Sections
12.1 and 12.2 above, in the event that:
(1)the Landlord fails to commence any repairs, reconstruction or
restoration of the Premises within sixty (60) days after the
physical taking of a portion of the Premises; or
(2)Landlord fails complete all repairs, reconstruction or
restoration of the Premises within one hundred twenty (120) days
after the date of such physical taking,
then, as a result of any circumstances described in subparagraphs (1) or (2)
hereof, the Tenant, at Tenant's option, may terminate this Lease and the term
and estate hereby granted, by notifying the Landlord in writing of such
termination within thirty (30) days after the passage of the times periods in
subparagraphs (1) and (2) above. In the event that such a Notice of termination
shall be given, then this Lease and the term and estate hereby granted shall
expire as of the date of termination stated in said Notice with the same effect
as if that date were the Fixed Expiration Date, and the Fixed Rent and
Additional Rent hereunder shall be apportioned as of such date. Notwithstanding
the termination of this Lease as provided in this Subsection 12.3(A) Landlord
shall be obligated to reimburse to Tenant a portion of the cost of any
Maintenance Repair or Requirement Alterations to the extent required by Section
7.1 above.
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ARTICLE 13
ASSIGNMENT; SUBLETTING; MORTGAGE; ETC.
SECTION 13.1.
(A) The Tenant shall not: (i) assign this Lease; or (ii) mortgage or
encumber Tenant's interest in this Lease, in whole or in part; or (iii)
sublet, or permit the subletting of, the Premises or any part thereof
without the prior consent of Landlord. Notwithstanding the provisions of
this Section 13.1, the use of the Premises by any Person AFFILIATED (as
such term is hereinafter defined) with the Tenant or under the COMMON
CONTROL (as such term is hereinafter defined) of Comfort Systems USA,
Inc., as the case may be, shall not be deemed an assignment of this Lease
or a sublet of the Premises, provided Tenant is not in default and remains
fully obligated pursuant to the terms and conditions of this Lease. For
purposes of this Article 13, a Person shall be deemed to be an "affiliate"
of the Tenant or under the "common control" of Comfort Systems USA, Inc.,
if such Person is a member of a "parent-subsidiary controlled group" as
such term is defined by Section 1563(a)(1) of the Internal Revenue Code of
1986, as amended or a member of a "brother-sister controlled group" as
such term is defined by Section 1563(a)(2) of the Internal Revenue Code of
1986, as amended of which either Comfort Systems USA, Inc. or the Tenant,
as the case may be, is a member.
(B) Notwithstanding the provisions otherwise set forth in this
Article 13, no reorganization, consolidation and/or restructuring of the
Tenant or the sale or transfer of any of its stock shall be deemed an
assignment of this Lease or a sublet of the Premises, provided that the
surviving entity resulting from such reorganization, consolidation and/or
restructuring remains fully obligated pursuant to the terms and conditions
of this Lease as Tenant.
SECTION 13.2. If Tenant's interest in this Lease shall be assigned
in violation of the provisions of this Article 13, such assignment shall be
invalid and of no force and effect against Landlord. If the Premises or any part
thereof are sublet to, or occupied by, or used by, any person other than Tenant,
whether or not in violation of this Article 13, Landlord, may collect an amount
equal to the then Fixed Rent plus any other items of Rental or other sums paid
by the subtenant, user or occupant as a fee for its use and occupancy, and shall
apply the net amount collected to the Fixed Rent and the other items of Rental
reserved in this Lease. No such assignment, subletting, occupancy, or use, nor
any such collection or application of Rental or fee for use and occupancy, shall
be deemed a waiver by Landlord of any term, covenant or condition of this Lease
or the acceptance by Landlord of such assignee, subtenant, occupant or user as
Tenant hereunder, nor shall the same, in any circumstances, relieve Tenant of
any of its obligations under this Lease.
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ARTICLE 14
ACCESS TO PREMISES
SECTION 14.1. Landlord or Landlord's agents shall have the right to
enter the Premises at all reasonable times during Tenant's regular business
hours upon (except in case of emergency) reasonable prior notice, which notice
may be oral, to examine the same, to show the same to prospective purchasers or
Mortgagees and to make such repairs, alterations, improvements or additions: (i)
as Landlord may deem necessary or required under the terms of the Lease; or (ii)
which Landlord may elect to perform at least twenty (20) days after notice
(except in an emergency when no notice shall be required) following Tenant's
failure to make repairs or perform any work which Tenant is obligated to make or
perform under this Lease, and Landlord shall be allowed to take all material
into and upon the Premises that may be required therefor without the same
constituting an eviction or constructive eviction of Tenant in whole or in part
and except as herein provided the Fixed Rent (and any other item of Rental)
shall in no respect abate or be reduced by reason of said repairs, alterations,
improvements or additions, wherever located, or while the same are being made,
by reason of loss or interruption of business of Tenant, or otherwise. Landlord
shall promptly repair any damage caused to the Premises or Tenant's Property by
such work, alterations, improvements or additions. In all events, Landlord shall
use its best efforts not to interfere with or obstruct Tenant's business
activities on or in the Premises during any entry.
ARTICLE 15
CERTIFICATE OF OCCUPANCY
SECTION 15.1. Landlord represents and warrants to Tenant that use
and occupancy of the Premises for the Permitted Uses shall not violate the
certificate of occupancy for the Premises or any Requirement. Tenant shall not
at any time, now or hereafter, use or occupy the Premises, directly or
indirectly, in violation of the certificate of occupancy for the Premises and in
the event that any Governmental Authority hereafter contends or declares by
notice, order or in any other manner whatsoever that the Premises are used for a
purpose that is not included in the Permitted Uses and is a violation of such
certificate of occupancy, Tenant shall, upon three (3) Business Days' written
Notice from Landlord or any Government Authority, immediately discontinue such
use of the Premises.
ARTICLE 16
DEFAULT
SECTION 16.1. Each of the following events shall be an "Event of
Default" under this Lease:
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(A) if Tenant shall on any occasion default in the payment when due
of any installment of Fixed Rent or Additional Rent or in the payment when
due of any other item of Rental and such default shall continue for ten
(10) days from and after the date on which Landlord gives Tenant written
Notice specifying such default; or
(B)(1) if Tenant shall not, or shall be unable to, or shall admit in
writing Tenant's inability to, as to any obligation, pay Tenant's debts as
they become due; or
(B)(2) if Tenant shall commence or institute any case, proceeding or
other action (a) seeking relief on Tenant's behalf as debtor, or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to Tenant or Tenant's debts under any
existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, or (b)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property; or
(B)(3) if Tenant shall make a general assignment for the benefit of
creditors; or
(B)(4) if any case, proceeding or other action shall be commenced or
instituted against Tenant (a) seeking to have an order for relief entered
against Tenant as debtor or to adjudicate Tenant a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
Tenant or Tenant's debts under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (b) seeking appointment of a
receiver, trustee, custodian or other similar official for Tenant or for
all or any substantial part of Tenant's property, which either: (i)
results in any such entry of an order for relief, adjudication of
bankruptcy or insolvency or such an appointment or the issuance or entry
of any other order having a similar effect; or (ii) remains undismissed
for a period of sixty (60) days; or
(B)(5) if a trustee, receiver or other custodian shall be appointed
for any substantial part of the assets of Tenant which appointment is not
vacated or effectively stayed within ninety (90) days; or
(C) if Tenant shall default in the observance or performance of any
other term, covenant or condition of this Lease on Tenant's part to be
observed or performed, and Tenant shall fail to remedy such default within
thirty (30) days after written Notice by Landlord to Tenant of such
default, or if such default is of such a nature that it cannot with due
diligence be completely remedied within said period of thirty (30) days,
if Tenant shall not: (i) duly institute within said thirty (30) day
period; and (ii) thereafter diligently and continuously prosecute to
completion all steps necessary to remedy the same.
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SECTION 16.2. If an Event of Default shall occur, Landlord may, at
any time thereafter, at Landlord's option, give written Notice to Tenant stating
that this Lease and the Term shall expire and terminate on the date specified in
such Notice, which date shall not be less than ten (10) days after the giving of
such Notice, whereupon this Lease and the Term and all rights of Tenant under
this Lease shall automatically expire and terminate as if the date specified in
the Notice given pursuant to this Section 16.2 were the Fixed Expiration Date
and Tenant thereafter shall quit and surrender the Premises, but Tenant shall
remain liable for damages as provided herein or pursuant to law. Anything
contained herein to the contrary notwithstanding, if such termination shall be
stayed by order of any court having jurisdiction over any proceeding described
in Section 16.1(B), or by federal or state statute, then, following the
expiration of any such stay, or if the trustee appointed in any such proceeding,
Tenant or Tenant as debtor-in-possession fails to assume Tenant's obligations
under this Lease within the period prescribed therefor by law or within one
hundred twenty (120) days after entry of the order for relief or as may be
allowed by the court, or if said trustee, Tenant or Tenant as
debtor-in-possession shall fail to provide adequate protection of Landlord's
right, title and interest in and to the Premises or adequate assurance of the
complete and continuous future performance of Tenant's obligations under this
Lease, Landlord, to the extent permitted by law or by leave of the court having
jurisdiction over such proceeding, shall have the right, at its election, to
terminate this Lease on ten (10) days' Notice to Tenant, Tenant as
debtor-in-possession or said trustee and upon the expiration of said ten (10)
day period this Lease shall cease and expire as aforesaid and Tenant, Tenant as
debtor-in-possession or said trustee shall thereafter quit and surrender the
Premises as aforesaid.
SECTION 16.3. If, at any time: (i) Tenant shall consist of two (2)
or more Persons; or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any Person other than Tenant; or (iii) Tenant's interest in this
Lease has been assigned, the word "Tenant" as used and referred to in this
Lease, shall be deemed to mean any one or more of the persons primarily or
secondarily liable for Tenant's obligations under this Lease. Any monies
received by Landlord from or on behalf of Tenant during the pendency of any
proceeding of the types referred to in Section 16.1(B) hereof shall be deemed
paid as compensation for the use and occupancy of the Premises and the
acceptance of any such compensation by Landlord shall not be deemed an
acceptance of Rental or a waiver on the part of Landlord of any rights under
Section 16.2 hereof.
SECTION 16.4. In the event of any default by Landlord hereunder,
except as otherwise provided herein, Tenant will give Landlord written notice
specifying such default with particularity, and Landlord shall thereupon have
thirty (30) days in which to cure such default or to commence to cure such
default if any such default cannot be reasonably cured within such 30-day
period, in which event Landlord shall prosecute such cure with diligence to a
conclusion. Unless and until Landlord fails to so cure or proceed with diligence
to cure any default after such notice, Tenant shall not have any remedy or cause
of action by reason thereof.
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If Landlord is in default hereunder, and fails to cure the same timely, in
addition to any and all other rights, remedies and recourses available to
Tenant, Tenant may undertake to cure such default on behalf of Landlord, and
thereupon Landlord agrees to pay Tenant, upon demand, all costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Tenant in
taking such remedial actions with interest thereon at the Applicable Rate. In
addition to the foregoing, Tenant shall also have the same rights granted to
Landlord under Section 17.1(B) relating to injunctive or equitable relief. The
right to invoke the remedies hereinbefore set forth are cumulative and shall not
preclude Tenant from invoking any other remedy allowed at law or in equity.
ARTICLE 17
REMEDIES AND DAMAGES
SECTION 17.1.
(A) If any Event of Default shall occur, or this Lease and the Term
shall expire and come to an end as provided in Article 16 hereof:
(1)Tenant shall quit and peacefully surrender the Premises to
Landlord, and Landlord and its agents may, after the date upon which
this Lease and the Term shall expire and come to an end, re-enter
the Premises or any part thereof, without Notice, either by summary
proceedings, or by any other applicable action or proceeding or
otherwise, and may repossess the Premises and dispossess Tenant and
any other persons from the Premises by summary proceedings or
otherwise and remove any and all of their property and effects from
the Premises (and Tenant shall remain liable for damages as provided
herein or pursuant to law); and
(2)Landlord, at Landlord's option, may relet the whole or any
part or parts of the Premises from time to time, either in the name
of Landlord or otherwise, to such tenant or tenants, for such term
or terms ending before, on or after the Fixed Expiration Date, at
such rent or rentals and upon such other conditions, which may
include concessions and free rent periods, as Landlord may
determine; provided, however, that Landlord shall exercise
reasonable efforts to mitigate any damages related to liability of
Tenant under this Lease.
(B) In the event of a breach or threatened breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or
condition of this Lease, Landlord shall have the right to enjoin such
breach.
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SECTION 17.2.
(A) If this Lease and the Term shall expire and come to an end as
provided in Article 2 hereof, or by or under any summary proceeding or any
other action or proceeding, or if Landlord shall re-enter the Premises as
provided in Section 17.1 hereof, or by or under any summary proceeding or
any other action or proceeding, then, in any of said events:
(1)Tenant shall pay to Landlord all Fixed Rent, Additional Rent
and other items of Rental payable under this Lease by Tenant to
Landlord to the date upon which this Lease and the Term shall have
expired and come to an end or to the date of re-entry upon the
Premises by Landlord, as the case may be;
(2)if Landlord has not terminated the Lease, but only Tenant's
right of possession to the Premises, Tenant also shall be liable for
and shall pay to Landlord, as damages, any deficiency ("Deficiency")
between the Rental for the period which is the unexpired portion of
the Term and the net amount, if any, of rents collected under any
reletting effected pursuant to the provisions of Section 17.1(A)(2)
for any part of such period (after first deducting from the rents
collected under any such reletting all of Landlord's reasonable and
actual expenses in connection with the termination of Tenant's right
of possession, Landlord's re-entry upon the Premises and such
reletting including, but not limited to, all repossession costs,
brokerage commissions, attorneys' fees and disbursements, alteration
costs and other expenses of preparing the Premises for such
reletting, to the extent the same are allocable to the remaining
Term); any such Deficiency shall be paid in monthly installments by
Tenant on the days specified in this Lease for payment of
installments of Fixed Rent; Landlord shall be entitled to recover
from Tenant each monthly Deficiency as the same shall arise, and no
suit to collect the amount of the Deficiency for any month shall
prejudice Landlord's right to collect the Deficiency for any
subsequent month by a similar proceeding; and
(3)alternatively, if Landlord has terminated the Lease, Landlord
shall be entitled to recover from Tenant, and Tenant shall pay to
Landlord, on demand, and as and for liquidated and agreed final
damages, a sum equal to the amount by which the present value
(calculated using the Base Rate as the discount rate) of the unpaid
Rental for the period which otherwise would have constituted the
unexpired portion of the Term exceeds the present value (calculated
using the Base Rate as the discount rate) of the then fair and
reasonable rental value of the Premises for the same period, taking
into consideration reasonable costs incurred to relet the Premises;
if, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the Premises, or any part thereof,
are relet by Landlord on a fair and arms-length basis for the period
which otherwise would have constituted the unexpired portion of the
Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and
reasonable rental value for the part or the whole of the Premises so
relet during the term of the reletting.
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(B) Tenant shall in no event be entitled to any rents collected or
payable under any reletting, whether or not such rents exceed the Fixed
Rent reserved in this Lease. Nothing contained in this Article 17 shall be
deemed to limit or preclude the recovery by Landlord from Tenant of the
maximum amount allowed to be obtained as damages by any statute or rule of
law, or of any sums or damages to which Landlord may be entitled in
addition to the damages set forth in this Section 17.2.
ARTICLE 18
FEES AND EXPENSES
SECTION 18.1. If an Event of Default shall have occurred by Tenant
or Landlord has defaulted on its obligations on this Lease and the same is not
cured within any applicable cure period, the non-defaulting party may (1)
perform any term, covenant or condition of this Lease for the account of the
defaulting party, or (2) make any expenditure or incur any obligation for the
payment of money in connection with any obligation owed to the non-defaulting
party, including, but not limited to, reasonable attorneys' fees and
disbursements in instituting, prosecuting or defending any action or proceeding,
and in either case the cost thereof, with interest thereon at the Applicable
Rate, shall be paid by the defaulting party to the non-defaulting party within
twenty (20) days after rendition of any bill or statement therefor.
ARTICLE 19
END OF TERM
SECTION 19.1. Upon the expiration or other termination of this
Lease, Tenant shall quit and surrender to Landlord the Premises, vacant, broom
clean, in good order and condition, ordinary wear and tear and damage by fire or
other casualty or by condemnation excepted, and Tenant shall remove all of
Tenant's Property and all other personal property and personal effects of all
persons claiming through or under Tenant, and shall pay the cost of repairing
all damage to the Premises occasioned by such removal.
SECTION 19.2. If the Premises are not surrendered upon the
expiration or other termination of this Lease and all Tenant Property removed as
provided above, Tenant shall be deemed to be occupying the Premises as a tenant
at will, and after sixty (60) days written notice from Landlord, such continued
occupancy will be at a rental equal to the Fixed Rent herein provided plus fifty
percent (50%) of such amount and otherwise subject to all the conditions,
provisions and obligations of this Lease insofar as the same are applicable to a
tenancy at will.
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SECTION 19.3. Tenant's obligations under this Article 19 shall
survive the expiration or termination of this Lease.
ARTICLE 20
NOTICES
SECTION 20.1.
(A) Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications
given or required to be given under this Lease ("Notice(s)") shall be in
writing and shall be deemed sufficiently given or rendered if delivered by
hand (against a signed receipt) or if deposited with a nationally
recognized overnight courier or if deposited in the United States mail,
and sent by first class mail, certified, return receipt requested with
postage prepaid, and in any case addressed:
IF TO TENANT:
(i) at Tenant's address first set forth in this Lease and (ii) to
the Premises, and
WITH A COPY TO:
Comfort Systems USA, Inc.
777 Post Oak Boulevard, Suite 500
Houston, TX 77056
Attention: General Counsel
IF TO LANDLORD:
Mark P. Shambaugh
2233 East Cedar Canyons Road
Fort Wayne, IN 46845
WITH A COPY TO:
N. Reed Silliman, Esq.
Baker & Daniels
111 East Wayne Street, Suite 800
Fort Wayne, IN 46802
and any Mortgagee who may have requested the same, by Notice given
in accordance with the provisions of this Article 20, at the address
designated by such Mortgagee, or to such other address(es) as either
Landlord or Tenant may designate as its new address(es) for such
purpose by Notice given to the other in accordance with the
provisions of this Article 20.
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(B) Notices shall be deemed to have been rendered or given (a) on
the date delivered, if delivered by hand, (b) on the day after being
deposited with a nationally recognized overnight courier or (c) five (5)
days after deposit in the United States mail, as provided in Section
20.1(A) hereof.
ARTICLE 21
INDEMNITY
SECTION 21.1. Tenant shall not do or permit any act or thing to be
done in, at or upon the Premises that may subject any Indemnitee to any
liability or responsibility for injury, damage to persons or property or to any
liability by reason of the existence or application of, compliance with or
violation of any Requirement, but shall exercise such control over the Premises
as to protect each Indemnitee fully against any such liability and
responsibility. Tenant shall indemnify and save harmless the Indemnitees from
and against (a) all claims against the Indemnitees arising from any accident,
injury or damage whatsoever caused to any person or to the property of any
person and occurring in, on or about the Premises during the Term or during
Tenant's occupancy of the Premises, unless, and to the extent not, caused by the
negligent or intentional misconduct of Landlord, and (b) any breach, violation
or non-performance of any covenant, condition or agreement contained in this
Lease to be fulfilled, kept, observed and performed by Tenant. This indemnity
and hold harmless agreement shall include indemnity from and against any and all
liability, claims, fines, suits, demands, costs and expenses of any kind or
nature (including, without limitation, attorneys' fees and disbursements)
incurred in or in connection with any such claim or proceeding brought thereon,
and the defense thereof. If any claim, action or proceeding is made or brought
against any Indemnitee, against which claim, action or proceeding Tenant is
obligated to indemnify such Indemnitee pursuant to the terms of this Lease,
then, upon demand by the Indemnitee, Tenant, at its sole cost and expense, shall
contest or defend such claim, action or proceeding in the Indemnitee's name, if
necessary, by such attorneys as the Indemnitee may select, including, without
limitation, attorneys for the Indemnitee's insurer. The provisions of this
Article 21 shall survive the expiration or earlier termination of this Lease.
SECTION 21.2. Landlord shall indemnify and save harmless the Tenant
and the other Tenant Indemnitees from and against (a) all claims against the
Tenant Indemnitees arising from any accident, injury or damage whatsoever caused
to any person or the property of any person and occurring in, on or about the
Premises during the Term or during Tenant's occupancy of the Premises to the
extent caused by the negligent or intentional misconduct of Landlord and (b) any
breach, violation or nonperformance of any covenant, condition or agreement
contained in this Lease to be fulfilled, kept, observed and performed by
Landlord. This indemnity and hold harmless shall include indemnity from and
against any and all liability, claims, fines, suits, demands, costs and expenses
of any kind or nature (including, without limitation, attorneys' fees and
disbursements) incurred in or in connection with any such claim or proceeding
brought thereon, and the defense thereof. If any claim, action or proceeding is
made or brought against any Tenant Indemnitee, against which claim, action or
proceeding Landlord is obligated to indemnify such Tenant Indemnitee pursuant to
the terms of this Lease, then, upon demand by the Tenant Indemnitee, Landlord at
its sole cost and expense shall contest or defend such claim, action or
proceeding in the Tenant Indemnitee's name, if necessary, by such attorneys as
the Tenant Indemnitee may select, including without limitation attorneys for the
Indemnitee's insurer. The provisions of this Article 21 shall survive the
expiration or earlier termination of this Lease.
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ARTICLE 22
RENEWAL OPTIONS
SECTION 22.1. Provided that there is no Event of Default at the time
the Option (as such term is hereinafter defined) is to be exercised, the Tenant
shall have the option to renew this Lease for one (1) additional five (5) year
period as follows:
OPTION PERIOD shall commence on the tenth (10th) anniversary of the
Commencement Date and shall continue up to and including the day before
the fifteenth (15th) anniversary of the Commencement Date,
the aforementioned option period is referred to herein as the
"Option Period".
SECTION 22.2. The Option granted to the Tenant pursuant to the
provisions of Section 22.1 hereof shall be exercised by the Tenant giving
written Notice to the Landlord of the Tenant's intent to exercise the Option not
less than one-hundred twenty (120) days prior to the expiration of the Initial
Term.
SECTION 22.3. In the event that the Tenant exercises the Option, the
Landlord and the Tenant hereby agree that this Lease shall continue in full
force and effect and remain unamended during the Option Period, except that the
Fixed Rent payable by the Tenant to the Landlord during such Option Period shall
continue to be increased annually in accordance with the provisions of Rider 1
hereof.
ARTICLE 23
COVENANT OF QUIET ENJOYMENT
SECTION 23.1. Landlord covenants that, upon Tenant paying all Fixed
Rent and Additional Rent and observing and performing all of the terms,
agreements, covenants, provisions and conditions of this Lease on Tenant's part
to be observed and performed, Tenant may peaceably and quietly enjoy the
Premises.
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ARTICLE 24
MISCELLANEOUS
SECTION 24.1. The obligations of Landlord under this Lease shall be
binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Premises, as the case may be, and in the event of any such sale,
conveyance, assignment or transfer, Landlord shall be freed and relieved of any
of the covenants and obligations of Landlord under this Lease thereafter
arising, upon the date that the transferee shall have assumed, in writing, for
the benefit of Tenant, all obligations of the Landlord under this Lease arising
after the effective date of the transfer.
SECTION 24.2. Notwithstanding anything contained in this Lease to
the contrary, all amounts payable by Tenant to or on behalf of Landlord under
this Lease, whether or not expressly denominated Fixed Rent, Additional Rent or
Rental, shall constitute rent for the purposes of Section 502(b)(7) of the
Bankruptcy Code.
SECTION 24.3. Upon the request of either party, the other will
execute and deliver a mutually acceptable memorandum of this Lease in recordable
form.
SECTION 24.4. Except as otherwise provided specifically herein, any
consent or approval required to be obtained from Landlord or Tenant under this
Lease shall not be unreasonably withheld, conditioned or delayed.
SECTION 24.5. Landlord represents and warrants to Tenant that
Landlord has full power and authority to enter into this Lease without the
consent of any other parties, including any Mortgagees. Tenant and the person
executing this Lease on behalf of Tenant hereby covenant and warrant that: (i)
Tenant is now and shall remain throughout the term of this Lease a duly
organized and validly existing corporation qualified to do business in the State
of Indiana; and (ii) the persons executing this Lease on behalf of Tenant are
duly authorized to do so by all necessary corporate action.
SECTION 24.6. If any words or phrases in this Lease are stricken out
or otherwise eliminated, whether or not any other words or phrases have been
added, this Lease shall be construed as if the words or phrases so stricken out
or otherwise eliminated were never included in this Lease and no implication or
inference shall be drawn from the fact that such words or phrases were stricken
out or otherwise eliminated.
SECTION 24.7. If any of the provisions of this Lease, or the
application thereof to any person or circumstance, shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such provisions to persons or circumstances other than those as to whom or which
it is held invalid or unenforceable, shall not be affected thereby and shall
remain valid and enforceable, and every provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law.
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SECTION 24.8. This Lease contains the entire agreement between the
parties and all prior negotiations and agreements are merged into this Lease.
This Lease may not be changed, abandoned or discharged, in whole or in part, nor
may any of its provisions be waived except by a written agreement that (a)
expressly refers to this Lease, and (b) is executed by the party against whom
enforcement of the change, abandonment, discharge or waiver is sought.
SECTION 24.9. The laws of the State of Indiana applicable to
contracts made and to be performed wholly within the State of Indiana shall
govern and control the validity, interpretation, performance and enforcement of
this Lease without regard to principles of conflicts of law.
SECTION 24.10. The captions are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
of this Lease nor the intent of any provision thereof.
SECTION 24.11. The covenants, conditions and agreements contained in
this Lease shall bind and inure to the benefit of Landlord and Tenant and their
respective legal representatives, heirs, successors, and, except as otherwise
provided in this Lease, their assigns.
SECTION 24.12. Tenant acknowledges and agrees that the liability of
Landlord under this Lease shall be limited to Landlord's interest in the
Premises, and any judgments rendered against Landlord shall be satisfied solely
out of the proceeds of the sale of Landlord's interest in the Premises. The
foregoing provision is not intended to relieve Landlord from the performance of
any of Landlord's obligations under this Lease, but only to limit the personal
liability of Landlord in the case of a recovery of a judgment against Landlord;
nor shall the foregoing be deemed to limit Tenant's rights to injunctive relief
or to avail itself of any other right or remedy which may be awarded Tenant by
law or under this Lease.
SECTION 24.13. For the purposes of this Lease and all agreements
supplemental to this Lease, unless the context otherwise requires:
(A) The words "herein", "hereof", "hereunder" and "hereby" and words
of similar import shall be construed to refer to this Lease as a whole and
not to any particular Article or Section unless expressly so stated.
(B) Obligations hereunder shall be construed in every instance as
conditions as well as covenants, each separate and independent of any
other terms of this Lease.
(C) Reference to "termination of this Lease" or "expiration of this
Lease" and words of like import includes expiration or sooner termination
of this Lease and the Term and the estate hereby granted or cancellation
of this Lease pursuant to any of the provisions of this Lease or by law.
Upon the termination of this Lease, the Term and estate granted by this
Lease shall end at noon on the date of termination as if such date were
the Fixed Expiration Date, and neither party shall have any further
obligation or liability to the other after such termination except: (i) as
shall be expressly provided for in this Lease; and (ii) for such
obligations as by their nature under the circumstances can only be, or by
the provisions of this Lease, may be, performed after such termination,
and, in any event, unless expressly otherwise provided in this Lease, any
liability for a payment (which shall be apportioned as of such
termination) which shall have accrued to or with respect to any period
ending at the time of termination shall survive the termination of this
Lease.
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(D) Words and phrases used in the singular shall be deemed to
include the plural and vice versa, and nouns and pronouns used in any
particular gender shall be deemed to include any other gender.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Lease as of the day and year first above written.
/s/
-----------------------------------
MARK P. SHAMBAUGH
"Landlord"
SHAMBAUGH & SON, INC.,
an Indiana Corporation
By: /s/
--------------------------------
Printed: KEVIN L. BEACH
Its: V.P./SEC'Y.
"Tenant"
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RIDER 1
INCREASES IN FIXED RENT
SECTION 1. For purposes of the Lease:
(A) "Bureau" means the Federal Bureau of Labor Statistics or any
successor agency that shall issue the indices or data referred to in
subparagraph (ii) below.
(B) "Price Index" means the Consumer Price Index for All Urban
Consumers for the Fort Wayne, Indiana geographic area, 1982-1984=100,
issued from time to time by the Bureau or any other successor measure
hereafter employed by the Bureau in lieu of such price index that measures
the cost of living for such geographic area or failing such successor, the
most nearly comparable index (reflecting changes in costs of housing
including rental housing, energy and services), published by a
Governmental Authority, appropriately adjusted. Furthermore, if hereafter
the Price Index is converted to a different standard reference base or a
substantial change is made in the terms or number of items contained
therein, the Price Index shall be adjusted (with the use of such
conversion factor, formula or table as is published by the Bureau, or if
it shall not publish same, the conversion factor published by Prentice
Hall, Inc., or, failing such publication, by any other nationally
recognized publisher of similar statistical information) to the figure
that would have resulted if not for such conversion or change.
(C) "Base Index" means the Price Index issued for December 31, 1998.
(D) "Applicable Price Index" for a Lease Year means the Price Index
most recently issued prior to the date on which such Lease Year commences.
SECTION 2.
(A) Tenant shall pay to Landlord the Fixed Rent in the amount set
forth in Article 1 of this Lease for the first Lease Year.
(B) Beginning after the end of the first Lease Year, and for each
and every Lease Year thereafter, the Tenant shall pay to the Landlord, as
Fixed Rent, an amount equal to the GREATER of:
(1) an amount equal to the sum of (x) the percentage by which
the Applicable Price Index for such Lease Year exceeds the
Applicable Price Index for the immediately preceding Lease Year,
multiplied by the Fixed Rent payable for such immediately preceding
Lease Year and (y) such Fixed Rent payable for the immediately
preceding Lease Year (e.g., if the Base Index is 200, the Applicable
Price Index for the second Lease Year is 203, the Applicable Price
Index for the third Lease Year is 215, and the Fixed Rent payable
for the second Lease Year is $50,000.00, then the Applicable Price
Index for the third Lease Year exceeds the Applicable Price Index
for the second Year by 5.91% (i.e., the difference between 203 and
215), and the Fixed Rent derived from the aforesaid calculation
shall be $52,955.75 (5.91% of $50,000.00, which is $2,955.00, plus
$50,000.00); or
(2) an amount equal to the Fixed Rent for the immediately
preceding Lease Year.
The Landlord and the Tenant hereby acknowledge that it is the mutual intention
of the parties that for each and every Lease Year subsequent to the first Lease
Year during the Term hereof, the Fixed Rent payable by the Tenant to the
Landlord hereunder shall never be decreased from the prior Lease Year.
SECTION 3. Upon Notice by the Landlord to the Tenant of an increase
in the Fixed Rent pursuant to the provisions of this Section 3 ("Increase
Notice?), the Tenant shall pay the Fixed Rent as set forth in the Increase
Notice for the period in which the increase identified in such Notice shall
apply.
SCHEDULE A
LEGAL DESCRIPTION
SPEEDWAY DRIVE/ASCC
Block 10, Speedway Addition, Section 2, according to the recorded plat thereof
located at plat book 32, pages 13-14, in the Office of the Recorder of Allen
County, Indiana.