EXHIBIT 10.43
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between D/S WITHERS
COVE, LTD., a Texas Limited Partnership (hereinafter called "Landlord"), and
UNITED STATIONERS SUPPLY CO., an Illinois corporation (hereinafter called
"Tenant").
W I T N E S S E T H:
Landlord, for and in consideration of the covenants of Tenant herein
contained, and subject to the terms, provisions and conditions hereinafter
set forth, hereby leases, demises and lets unto Tenant, and Tenant hereby
leases and takes from Landlord, that certain approximate 23.2 acre tract or
parcel of land situated in Mecklenburg County, North Carolina, as described
in EXHIBIT "A" attached hereto and made a part hereof (the "Land"), together
with and including the Building (hereinafter defined) and the other
Improvements (hereinafter defined) to be constructed by Landlord on the Land
pursuant to the Construction Documents (hereinafter defined), and any other
improvements constructed by or on behalf of Landlord on the Land. The Land,
the Building and the Improvements of which the Building is a part and all
other improvements made by Landlord on or to the Land from time to time are
collectively referred to herein as the "Leased Premises".
TO HAVE AND TO HOLD the said Leased Premises unto the said Tenant,
together with the non-exclusive use of all rights, privileges, easements,
appurtenances, and amenities belonging to or in any way pertaining to the
Land, for and during the Term (hereinafter defined) and in accordance with
the terms, provisions and conditions set forth below.
Wherever and as often as the words this "Agreement" or this "Lease"
are used or appear in this instrument, the same shall mean and refer to this
instrument, and all exhibits hereto and all plans, drawings and
specifications identified herein and any amendments to the same. All
references in this Lease to "the date hereof" or "the date of this Lease" or
similar references shall be deemed to refer to the last date, in point of
time, on which all parties hereto have executed this Lease.
ARTICLE 1
CONSTRUCTION OF IMPROVEMENTS BY LANDLORD
(a) CONSTRUCTION DOCUMENTS. Landlord will construct on the Land a
warehouse distribution center containing a total of approximately 300,000
square feet of space, inclusive of approximately 8,000 square feet of office
space and an additional separate office of 1,000 square feet (the
"Building"), together with adjacent outdoor surface parking consisting of not
less than 130 spaces, and the landscaping and other improvements, if any,
located outside of the Building on the Land, pursuant to the plans and
specifications described on EXHIBIT "B" and made a part hereof for all
purposes (the "Construction Documents"). The Building and such other
improvements as are contemplated by the Construction Documents are
collectively referred to herein as the "Improvements". The Site Plan attached
hereto as EXHIBIT "C" and made a part hereof for all purposes is a general
illustration of the Land and the contemplated Building.
1
EXHIBIT 10.43
(b) CONSTRUCTION SCHEDULE. A construction schedule for the
Improvements showing the time periods estimated by Landlord for the
completion of the major phases of the Improvements is attached hereto as
EXHIBIT "F" (the "Construction Schedule"). Landlord shall make a good faith
effort to advise Tenant as soon as reasonably possible if Landlord determines
that Landlord's actual progress in completing any phase of the Improvements
is behind the time periods set forth on the Construction Schedule in any
material way. The general contractor for the Improvements selected by
Landlord and approved by Tenant is InterCon Building Corporation (the
"Contractor"). If Landlord determines that it is necessary or desirable to
find a substitute general contractor, Landlord shall have the right to
dismiss Contractor and select an appropriate substitute, which selection
shall be subject to the approval of Tenant, which approval shall not be
unreasonably withheld or delayed. All of the construction work shall be
carried out by Contractor under the sole direction of Landlord.
(c) COMPLETION DATE. Subject to the terms of this Lease, on or
before September 30, 2000 (which date is referred to herein as the
"Construction Date"), Landlord shall, at Landlord's sole cost and expense,
commence the on-site physical construction of the Improvements on the Land.
Such commencement will be deemed to have occurred upon Landlord beginning
earth-grading work on the Land. From and after the Construction Date,
Landlord shall endeavor to cause Substantial Completion (hereinafter defined)
of the Improvements in accordance with the Construction Documents to occur on
or before July 1, 2001 (the "Target Completion Date"). Additionally, Landlord
agrees to endeavor to complete the Improvements to a stage sufficient to
allow Tenant to commence Tenant's Work (hereinafter defined) no later than
May 1, 2001. If Landlord has not caused Substantial Completion of the
Improvements to occur on or before September 1, 2001 (the "Outside Completion
Date") for any reason other than a Tenant Delay (hereinafter defined), or an
event of Force Majeure (hereinafter defined), Tenant shall receive an
abatement of one (1) day of Base Rent (hereinafter defined) for each day
beyond the Outside Completion Date it takes for Landlord to achieve
Substantial Completion, as Tenant's sole and exclusive remedy.
(d) SUBSTANTIAL COMPLETION. "Substantial Completion" of the
Improvement shall not have occurred until (i) Landlord's architect, Merriman
Schmitt/Architects, Inc. (the "Architect") shall have delivered to Landlord
and Tenant a written certificate stating that all of the Improvements have
been substantially completed in substantial accordance with the Construction
Documents, except for the Punch List Items; and (ii) a certificate of
occupancy has been issued allowing Tenant to occupy and use the Leased
Premises; provided, however, that if the reason that a certificate of
occupancy has not or cannot be issued is (A) because of work yet to be
performed by Tenant (E.G., Tenant's Work (hereinafter defined)), or (B) due
to Tenant Delays, then the failure or inability to obtain a certificate of
occupancy shall not delay or prevent the occurrence of Substantial
Completion. The term "Punch List Items" shall mean details of construction,
decoration, and mechanical adjustment which are part of the Improvements and
which in the aggregate, are minor in character and do not materially
interfere with the Tenant's use or enjoyment of the Leased Premises. Landlord
shall give Tenant not less than ten (10) days notice of the date upon which
Landlord estimates Substantial Completion to be achieved. Upon receipt of
Landlord's notification, Tenant shall verbally notify Landlord of the date
Tenant intends to make a walk-through inspection of the Leased Premises, such
date to be on the date specified in Landlord's notice for the estimated
occurrence of Substantial Completion. The
2
EXHIBIT 10.43
Architect, the Contractor, Landlord's project representative and Tenant's
project representative shall meet to review and approve of the matters to be
included as Punch List Items, which approvals shall not be unreasonably
withheld. Punch List Items shall be completed by Landlord at Landlord's
expense. Landlord shall use its best efforts to complete all of the Punch
List Items within thirty (30) days after the occurrence of Substantial
Completion. At the conclusion of the walk-through inspection, Tenant will be
deemed to have acknowledged that, subject only to Landlord's completion of
the Punch List Items, (i) it has inspected and accepts the Leased Premises,
(ii) the Leased Premises is suitable for the purpose for which it is leased,
(iii) the Leased Premises is in good and satisfactory condition, and (iv) no
representations as to the repair of the Leased Premises, nor promises to
alter, remodel or improve the Leased Premises which have been made by
Landlord remain unsatisfied. At the conclusion of the walk-through inspection
Tenant further agrees to execute an Acceptance of Leased Premises Memorandum
in the form attached hereto and made a part hereof as EXHIBIT "D", whereupon
possession of the Leased Premises will be delivered to Tenant and Tenant will
be deemed to have accepted the Leased Premises, and Tenant may thereafter
occupy the Leased Premises. Tenant's failure to conduct a walk-through
inspection or execute the Acceptance of Leased Premises Memorandum will not
delay the occurrence of the Commencement Date.
(e) CHANGE ORDERS: Tenant may, from time to time prior to the
occurrence of Substantial Completion, submit to Landlord any written requests
for changes or additions to the Construction Documents and/or the
Improvements desired by the Tenant in such detail as Landlord may reasonably
require (each a "Change Order"), which changes or additions shall be subject
to Landlord's approval, which approval shall not be unreasonably withheld or
delayed. Such approval shall include Landlord's written notice to Tenant of
(i) the net increase, if any, in the actual out-of-pocket cost to be incurred
by Landlord in completing the work associated with the Change Order including
the preparation of plans therefor (the "Change Cost"), and (ii) the
anticipated delays, if any, in completing the work as a result of such Change
Order, including the processing and permitting thereof (the "Change Delay").
Within five (5) business days after Tenant's receipt of such notice, Tenant
shall give to Landlord written notice to proceed or not to proceed with the
Change Order. Tenant's notice to proceed with the Change Order shall include
a specific written agreement from Tenant to pay to Landlord the Change Cost
and written confirmation of Tenant's acceptance of the Change Delay.
Following the required approvals and subject thereto (Landlord shall not be
required to implement Change Orders if necessary approvals and permits cannot
be obtained), upon Tenant's written acceptance of any such Change Order,
Landlord shall promptly revise the Construction Documents to incorporate the
Change Order and shall proceed to complete the Improvements in accordance
with the Change Order. Any and all Change Costs up to a total amount of
$200,000 shall, at Tenant's option exercised by written notice to Landlord
included in Tenant's notice to proceed with the work contemplated by the
Change Order, (i) be paid by Tenant within fifteen (15) days after the
occurrence of Substantial Completion and written demand by Landlord
accompanied by substantiating documentation, or (ii) be initially paid by
Landlord and shall be charged back to Tenant as an adjustment to Base Rent
(hereinafter defined). In the case of (ii), the annual adjustment to Base
Rent shall be the total Change Cost (up to a maximum of $200,000) multiplied
by ten and one-half percent (10.50%). If Tenant fails to provide written
notice of its election as provided above, Landlord shall have the option,
exercisable by written notice to Tenant prior to the occurrence of
Substantial Completion, to elect repayment under (i) or (ii) above, and if
Landlord fails to give such written notice, Landlord shall be deemed to have
elected option (i) above. Tenant shall pay
3
EXHIBIT 10.43
total Change Costs in excess of $200,000 as follows: (A) fifty percent (50%)
of the Change Cost shall be paid to Landlord upon approval of the applicable
Change Order, and (B) the balance shall be paid within thirty (30) days after
the occurrence of Substantial Completion and written demand by Landlord. Any
disagreements between Landlord and Tenant regarding the calculation of any
Change Costs shall be resolved in accordance with the procedures set forth in
Article l(m) of this Lease.
(f) CONSTRUCTION COSTS. Subject to the terms of this paragraph,
Landlord will (i) pay the cost of the Building and all other improvements
other than the Finish Work (hereinafter defined) for the office portion of
the Building, and (ii) the cost of the Finish Work up to, but not in excess
of the sum of $315,000 (the "Finish Allowance"). The "Finish Work" is the
work to be performed by Landlord pursuant to the specific Construction
Documents identified on EXHIBIT "G" attached hereto and made a part hereof.
Notwithstanding the preceding, Tenant will be responsible for the following
costs of completing the Improvements:
(1) All Change Costs (as set forth above);
(2) The cost of the Finish Work in excess of the Finish
Allowance. If Landlord determines that the actual cost of the Finish
Work will exceed the Finish Allowance, or if during construction the
actual cost of the Finish Work exceeds the Finish Allowance, Landlord
will not be obligated to commence the Finish Work or continue its
construction until it receives from Tenant fifty percent (50%) of the
estimated cost of such amount as is in excess, in Landlord's
estimation, of the Finish Allowance, with the actual amount of such
excess, less the initial payment by Tenant, being due upon Substantial
Completion.
(3) The cost of Tenant specified electrical distribution not
included in the Construction Documents in excess of $125,000. Such
excess, if any, shall be determined through Change Order and paid by
Tenant in the same manner as for the cost of Finish Work in excess of
the Finish Allowance; and
(4) All costs, expenses and damages incurred or suffered by
Landlord that are caused by Tenant Delays.
(g) LANDLORD'S WARRANTY. In addition to (and not in lieu of)
Landlord's obligations under the Lease with respect to repairs, Landlord
covenants to construct the Improvements in a good and workmanlike manner and
in accordance with all Applicable Laws (hereinafter defined). Without
limitation, Landlord represents, warrants and covenants that upon the
Commencement Date, the Improvements will comply with all Applicable Laws
including, without limitation, all laws governing non-discrimination in
public accommodations and commercial facilities, including, without
limitation, the requirements of the Americans with Disabilities Act and all
regulations thereunder. Landlord further warrants that the Improvements will
be free from defects in workmanship and materials for a period of one (1)
year after the date of Substantial Completion. If, at any time during such
warranty period, any of the workmanship or material used in the construction
of the Improvements are determined to be defective, and Tenant shall, within
the warranty period, so notify Landlord in writing that such workmanship or
material is defective, Landlord shall cause such defective workmanship or
material to be
4
EXHIBIT 10.43
corrected, repaired, or replaced in a manner reasonably acceptable to both
Landlord and Tenant. Such correction, repair, or replacement shall be
performed by Landlord, at Landlord's expense, as promptly as reasonably
possible and in such manner so as to minimize any interference with Tenant in
its operations in and about the Leased Premises. If Landlord fails to correct
any such defect within fifteen (15) days after receipt of written notice from
Tenant, or such longer period as is reasonably required, then Tenant may (but
shall not be obligated to) correct such defect and Landlord shall reimburse
Tenant for the actual cost thereof. Landlord's liability for breach of any
covenant, representation or warranty set forth in this subparagraph shall
finally and automatically expire on the first (1st) anniversary of the
Commencement Date.
(h) INSPECTIONS. Landlord, through its appointed project
representative, shall maintain direct contact with Contractor and conduct
regularly scheduled job and progress meetings at the Land, or such other
place as agreed to, with Contractor and Tenant's representative, as appointed
by Tenant, as well as extraordinary meetings where deemed necessary by
Landlord, Architect or Contractor, to discuss such matters such as, but not
limited to, procedures, progress, safety and scheduling. Tenant may inspect
the installation of the Improvements and the progress of the Improvements.
Landlord shall be available, and cause the Contractor to be available, to
Tenant or its representatives from time to time upon reasonable prior notice
when necessary or desirable for the purpose of reviewing the Improvements.
Tenant shall not communicate directly with Contractor or any subcontractors
or interfere with construction of the Improvements in connection with its
inspections.
(i) COMPLIANCE WITH LAWS. Landlord, at its expense, shall obtain all
approvals, permits, and other consents required to commence, perform and
complete the Improvements; shall at all times cause all work in connection
with the Improvements to be carried out in compliance with all such consents
and in compliance with all Applicable Laws.
(j) TENANT'S WORK. All finishing work, equipment installation,
cabling, and interior wall finish for the offices, or other work (the
"Tenant's Work") desired by Tenant, if any, and not initially or thereafter
included in the Improvements, shall be performed by Tenant, at Tenant's
expense, through contractors selected by Tenant and approved by Landlord,
which approval shall not to be unreasonably withheld or delayed; provided
that Landlord's approval shall not be required for contractor's or
subcontractors who provide materials or labor the aggregate cost of which is
estimated not to exceed $25,000. Landlord and Tenant shall each cause their
respective general contractor and/or subcontractors for the Improvements and
Tenant's Work to cooperate with each other in facilitating the mutual access
to the Leased Premises and in coordinating the timing of the stages of the
Improvements and the Tenant's Work so as to facilitate the completion on a
timely basis. To the extent reasonably possible and without having to incur
additional expense, Landlord shall, prior to Substantial Completion, provide
Tenant with access to the Leased Premises and storage space at the site for
Tenant's equipment, trade fixtures, and other property in connection with
Tenant's Work and shall furnish water, electricity and HVAC to the Leased
Premises during the performance of any Tenant's Work to the extent the same
are then available at the Leased Premises; provided that, Tenant shall
reimburse Landlord or Contractor, as applicable, within fifteen (15) days
after written demand, for the cost of any such utility services used by
Tenant determined by Contractor and agreed to by Tenant, such not to be
unreasonably withheld, to be in excess of that which would otherwise have
been used by Contractor, or its subcontractors, in the course of constructing
the Improvements. The
5
EXHIBIT 10.43
performance by Tenant of Tenant's Work prior to the Commencement Date shall
be subject to all of the terms and conditions of Article 10 hereof.
(k) TENANT DELAYS. The term "Tenant Delay" shall mean any actual
delay in the completion of the Improvements which delays Substantial
Completion and which is due to any act or omission of Tenant, its agents, or
contractors. Tenant Delays shall include:
(1) Change Delays;
(2) Any delay by Tenant in giving Landlord notice of Tenant's
approval of any Change Orders or in giving Landlord notice of any other
consents or approvals required of Tenant hereunder in connection with
the Improvements; and
(3) any other delay in the occurrence of Substantial
Completion caused by a Tenant Party (hereinafter defined), including,
without limitation, any delay resulting from Tenant's Work (hereinafter
defined) or the installation by any Tenant Party of any property or
equipment of Tenant in or on the Leased Premises prior to Substantial
Completion and any delay due to interference by any Tenant Party with
Landlord's engineers, consultants, contractors or otherwise. As used in
this Lease, a "Tenant Party" shall mean one or more of Tenant, its
agents, employees, officers, partners or contractors or any of their
invitees or licensees.
(l) NOTICE OF DELAY. At the request of either the Landlord or the
Tenant, at any time and from time to time prior to the date of Substantial
Completion, Landlord or Tenant may require the other party to provide a
written notice setting out whether or not Landlord or Tenant, as the case may
be, is aware of any delays under either Article 1(k) or Article 1(l) hereof
as of the date of such notice.
(m) RESOLUTION OF DISPUTES. If Landlord and Tenant disagree as to
whether the Construction Documents have been properly prepared or as to
whether any aspect of the Improvements has been full or properly completed,
or is otherwise defective, or as to the appropriate manner to correct any
such deficiency, or as to the calculation of Change Costs hereunder, or as to
the designation of any Tenant Delay hereunder, and if Landlord and Tenant,
using their reasonable good faith efforts, are otherwise unable to resolve
such dispute, then such dispute shall be resolved by referring the same to
the Consulting Architect. In order to initiate such a resolution of any
dispute, a party shall be required to give the other party and the Consulting
Architect written notice requesting such resolution, which notice shall
identify the issue in dispute. The Consulting Architect shall promptly notify
the parties of the date, time, and place for the meeting to resolve of such
dispute, which date shall in no event be later than ten (10) business days
after the Consulting Architect's receipt of the demand for resolution. Such
notice may be given by telephone if promptly confirmed by written notice. At
the conclusion of such meeting, the Consulting Architect shall advise both
parties of the Consulting Architect's decision. The Consulting Architect
shall send the parties written notice confirming such decision immediately
thereafter. Both parties shall be bound by any and all decisions made by the
Consulting Architect and shall perform their obligations hereunder in
accordance with such decisions. The Consulting Architect's fees and expenses
for dispute resolution pursuant hereto
6
EXHIBIT 10.43
shall be split equally between Landlord and Tenant. The Consulting Architect
shall be AECC, Inc. until such time as Landlord and Tenant otherwise agree in
writing.
7
EXHIBIT 10.43
ARTICLE 2
TERM
(a) INITIAL TERM/TERM. Subject to and upon terms, provisions and
conditions hereinafter set forth, the "Initial Term" of this Lease shall
begin on the Commencement Date, and shall expire at 11:59 p.m. on the last
day of the one hundred and twentieth (120th) complete calendar month
thereafter. The "Commencement Date" shall be the earlier to occur of (i) the
date upon which Substantial Completion occurs and (ii) the date Tenant takes
possession of the Leased Premises for purposes of business operation and not
for the performance only of Tenant's Work. If the Commencement Date occurs on
the first day of a calendar month, the month in which the Commencement Date
occurs shall be the first complete calendar month after the Commencement Date
for purposes of determining the expiration of the Initial Term. The Initial
Term together with any Renewal Terms is the "Term" of this Lease or the
"Lease Term" as such terms may be used interchangeably in this Lease.
(b) RENEWAL OPTIONS.
(1) So long as there is no uncured default hereunder by Tenant
as of the date of Tenant's exercise of any Renewal Option or as of the
date of the commencement of any Renewal Term, Tenant shall be entitled
and is hereby granted two (2) successive options (the "Renewal
Options") to extend the Term for an additional period of five (5) years
each (the "Renewal Terms"). Except for Base Rent, as hereinafter
defined and separately provided for, the Renewal Terms shall be on all
the other terms and conditions of this Lease; provided, however, that
(i) upon the exercise of the first Renewal Option Tenant shall have
only one remaining Renewal Option and upon its exercise of the second
Renewal Option Tenant shall have no further right or option to renew or
extend the Term without Landlord's written consent, which may be
withheld in Landlord's sole discretion, and (ii) Landlord shall not
have any obligations to make any improvements or otherwise provide any
inducement to Tenant. Tenant shall exercise each Renewal Option, if at
all, only by giving written notice of such exercise to Landlord not
less than six (6) months, nor more than twelve (12) months, prior to
the expiration of the Initial Term or first Renewal Term, as the case
may be. Should Tenant fail to timely exercise a Renewal Option in
accordance with the preceding provisions, then the Term shall expire
and this Lease shall terminate at the end of the Initial Term or the
current Renewal Term, as applicable, and Tenant shall have no further
right or option to renew or extend the Term. Tenant's exercise of a
Renewal Option shall be irrevocable.
(2) Within thirty (30) days after Landlord receives Tenant's
written notice of its exercise of a Renewal Option, Landlord shall
deliver a notice to Tenant (the "New Rate Notice") specifying the New
Rate for the applicable Renewal Term, such to be based upon a CPI
(Consumer Price Index) Adjustment as reported by BNA, CCH, P-H or other
nationally recognized consumer or labor reporting service or 110% of
the previous rent, whichever is less. The CPI Adjustment shall be
determined using information for the previous 60 month period.
8
EXHIBIT 10.43
(3) Tenant may not assign the Renewal Options to any assignee
or subleases of the Lease that is not a Permitted Assignee (hereinafter
defined). No assignee or sublessee may exercise the Renewal Options
unless such is a Permitted Assignee of Tenant.
(4) If the Term is extended pursuant to Tenant's exercise of a
Renewal Option, Landlord shall prepare, and Landlord and Tenant will
execute and deliver an amendment to this Lease extending the Term and
specifying the new Base Rent; provided, however, that the failure of
the parties to enter into such an amendment will not affect the
validity of Tenant's exercise of the Renewal Option or the obligations
of the parties during the Renewal Term.
(c) ENTRY BY TENANT PRIOR TO THE COMMENCEMENT DATE. It is agreed that
Tenant may enter into the Leased Premises prior to the completion of the
Improvements for the purpose of completing the Tenant's Work, if any, without
being deemed thereby to have taken possession of the Leased Premises or
obligated itself to pay Rent; provided that Tenant's Work shall in no way
interfere with the construction of such Improvements or the work of Landlord or
Contractor and shall not subject Landlord to any liabilities whatsoever.
ARTICLE 3
BASE RENT
(a) BASE RENT AND ADJUSTMENTS.
(1) BASE RENT. As consideration for the use and occupancy of,
and as rental for, the Leased Premises, Tenant promises and agrees to
pay Landlord, while this Lease remains in force and effect, for the
Initial Term, paid in monthly payments in advance $77,666.67 per month
($932,000.04 annualized). Such rent is herein the "Base Rent".
(2) CHANGE COSTS. Base Rent shall be further adjusted for any
amortized Change Costs as contemplated by Article 1(e).
(b) Base Rent and any other monthly installments of Rent required to be
paid hereunder by Tenant to Landlord shall be due and payable, in advance,
beginning on the Commencement Date and continuing on the first day of each
calendar month during the Term. Any installment of Base Rent due for any
fractional calendar month shall be prorated based upon the actual number of days
in that month. All Rent (hereinafter defined) shall be paid at the times and in
the amounts provided for herein in legal tender of the United States of America
to Landlord at the address specified in Article 25 hereof or to such other
person or at such other address as Landlord may from time to time designate in
writing. Tenant's obligation to pay any installment of Rent shall not be deemed
satisfied until such installment of Rent has actually been received by Landlord.
As used in this Lease, "Rent" shall mean the Base Rent and all other amounts
provided for in this Lease to be paid by Tenant to Landlord, all of which shall
constitute rental in consideration for this Lease and the leasing of the Leased
Premises.
9
EXHIBIT 10.43
(c) If on the Commencement Date there remains an unused and
unallocated balance of the Finish Allowance or any other allowances granted
by Landlord hereunder, Landlord shall (i) apply such balance to any amounts
payable by Tenant to Landlord under Article 1(f) above or otherwise owing by
Tenant to Landlord hereunder, and (ii) any remaining balance shall be paid to
Tenant.
(d) Other remedies for nonpayment of Base Rent notwithstanding, if
the monthly Base Rent payment is not in Landlord's possession on or before
the tenth (10th) day of the month for which the Base Rent is due, or if any
other payment is due Landlord by Tenant is not received by Landlord prior to
the expiration of any applicable cure or grace period, a late payment charge
of five percent (5%) of such amount shall, unless waived in writing by
Landlord, become due and payable in addition to such amounts owed under this
Lease. In addition, Landlord shall be entitled to charge one-hundred dollars
($100.00) for each check or payment which is not honored by Tenant's bank.
Said charge to be in addition to any other amounts owed under this Lease.
ARTICLE 4
TAXES
(a) The term "Taxes" as used herein shall mean all taxes, levies and
assessments of every character imposed or assessed upon or against the Leased
Premises by any governmental agency or authority having jurisdiction, and all
assessments due to deed restrictions and/or owner or community associations,
whether foreseen or unforeseen; provided nothing herein shall require or be
construed to require Tenant to pay any gift, estate, inheritance, excess
profits, succession, capital levy, transfer tax, income tax, payroll tax or
other tax assessment, mortgage, charge or levy arising out of the Rent
payable by Tenant or other income received by Landlord, its successors or
assigns. If at any time during the Term, the State of North Carolina or any
political subdivision of the state, including any county, city, city and
county, public corporation, district, or the United States of America, levies
or assesses against Landlord a tax, fee or excise: (i) on rents, (ii) on the
square footage of the Leased Premises, (iii) on the act of entering into this
Lease, (iv) on the occupancy of Tenant, or any other tax, fee, or excise,
however described, including, without limitation, a so-called value added,
business activity or gross receipts tax, as a direct substitution in whole or
in part for, or (except in the case of (i) above) in addition to, any real
property taxes, Tenant shall pay before delinquency said tax, fee, or excise.
(b) Subject to Tenant's protest right provided below, Tenant shall
pay all Taxes during the Term directly to the taxing authority therefor not
less than twenty (20) days prior to the date on which any such Taxes would
become delinquent and shall provide evidence thereof to Landlord upon written
request. Without waiver of any other remedies of Landlord for Tenant's
failure to timely pay Taxes, Tenant shall be responsible for all damages,
penalties and fines incurred by the Leased Premises or Landlord due to
Tenant's failure to timely pay Taxes. Additionally, if Tenant fails to
provide such evidence and Landlord, without having any obligation to do so,
pays Taxes, Tenant shall reimburse Landlord for the full amount thereof upon
demand. Taxes for the partial year in which the Commencement Date occurs and
the year in which the Term expires or this Lease is terminated shall (unless
terminated for Tenant's default) be prorated between Landlord and Tenant.
10
EXHIBIT 10.43
(c) If any Taxes are paid by Landlord to any taxing authority for
any tax year in installments, the amount payable by Tenant hereunder shall be
payable in similar installments, and no amount shall be payable by Tenant on
account of installments becoming payable after the expiration of the Term
which are attributable to a period of time after the expiration of the Term
or attributable to any period of time prior to the Commencement Date. If any
assessment for new public improvements (and not for repair or replacement of
existing public improvements) is payable only in a lump sum, rather than in
installments, Tenant shall pay a pro rata share of such assessment based upon
the proportion that the number of years remaining in the Term bears to the
expected useful life of such new public improvements as determined by a third
party consultant. For purposes of the preceding sentence, the "Term" of this
Lease shall mean the Initial Term; provided that, if Tenant exercises a
Renewal Option, Tenant shall be assessed its pro rata share based upon the
proportion that the number of years of such Renewal Term bears to the
expected remaining useful life of such public improvement.
(d) Landlord shall within ten (10) days of receipt, deliver to
Tenant statements, assessments and other notices relative to any tax or
assessment; provided that Landlord's failure to timely deliver such notices
shall in no way relieve Tenant of the obligation to pay Taxes. If Landlord's
delay in delivering any such notices to Tenant is the direct and actual cause
of late payment of Taxes, Landlord shall be responsible for any penalties due
thereto.
(e) Tenant shall have the right, before delinquency occurs, of
contesting, objecting to or opposing the legality, validity or amount of any
such Taxes; provided that prompt notice of such contest, objection or
opposition shall be given to Landlord by Tenant at least twenty (20) days
before any delinquency; and provided, further, that such contest, objection
or opposition shall not be carried on or maintained after the aforementioned
time limit for the payment of said obligations unless Tenant shall have duly
paid the amount involved under protest or shall have procured and maintained
a stay of all proceedings to enforce any collection thereof and shall also
have provided for payment thereof, together with all penalties, interest,
costs, and expenses, by a deposit of sufficient sum of money or by a good and
sufficient undertaking as may be required or permitted by law to accomplish
such a stay. In the event of any such contest, objection or opposition,
Tenant agrees to pay and discharge any unpaid amounts finally determined to
be due within thirty (30) days after receipt of the final determination
thereof or within such later grace period as may be allowed by law.
(f) If any mortgagee of Landlord requires that Taxes be escrowed
with such mortgagee, Tenant shall pay to Landlord on a monthly basis, on the
same date that Base Rent is due, an amount equal to 1/12 of the estimated
total annual Taxes, as determined by Landlord. Tenant authorizes Landlord to
use such funds to pay Taxes and to fund any escrows required by Landlord's
mortgagee. If Tenant's total Tax payments for any year are less than the
actual Taxes, Tenant shall pay the difference to Landlord within thirty (30)
days after written demand, such to be accompanied by copies of applicable tax
bills. If the total payments of Tenant are more than the actual Taxes,
Landlord shall retain such excess and credit it against Tenant's next monthly
estimated payments of Taxes or, at Landlord's option, return such excess to
Tenant.
11
EXHIBIT 10.43
ARTICLE 5
INSURANCE
(a) Tenant shall at its sole expense, maintain at all times during
the Term, comprehensive general liability insurance with respect to the
Leased Premises and the conduct or operation of Tenant's business therein
with contractual liability endorsement, naming Landlord and such other
parties designated by Landlord, as an additional insured, in an amount not
less than $5,000,000.00 combined single limit.
(b) During the entire Term, Tenant shall keep the Building and other
Improvements constituting a portion of the Leased Premises insured in the
name of and for the benefit of Landlord and the holder of any mortgage or
deed of trust on the Leased Premises as their respective interests may
appear, on an "all risk" form, against loss or damage by fire and all hazards
covered by the standard form of extended coverage endorsement (subject to
exclusions approved by and otherwise in form satisfactory to Landlord), and
containing twelve (12) months' rents insurance, flood loss (if the Leased
Premises is located in a flood zone) and sprinkler breakage coverage. Such
insurance shall be for not less than one hundred percent (100%) of the full
replacement value thereof, as the same shall change from time to time. The
term "full insurable value" as used herein means agreed value for actual
replacement costs, including the cost of debris removal. Tenant shall carry,
at Tenant's sole cost and expense, fire and extended coverage casualty
insurance on all of the alterations and improvements completed by Tenant in
the Leased Premises and all trade fixtures, equipment, inventory, and
personal property located on the Leased Premises. Deductibles under policies
to be carried by Tenant hereunder shall not exceed $100,000 per occurrence.
Tenant shall not take out separate property insurance concurrent in form or
contributing in the event of loss with that required hereunder, unless
Landlord and Landlord's mortgagee is included therein as a named insured.
(c) All insurance policies required by this Article 5 shall be
written by companies licensed to sell insurance in North Carolina and having
a rating of A VIII or better, as set forth in the most recent issue of Best's
Insurance Reports.
(d) At the commencement of the Initial Term of this Lease, Tenant
shall deliver to Landlord Certificates of Insurance manifesting the insurance
coverage required by this Article 5 and, at least thirty (30) days prior to
the expiration of each such policy, shall pay the premiums for the renewal of
such insurance and provide information satisfactory to Landlord evidencing
payment thereof. All policies shall provide at least thirty (30) days'
written notice to Landlord, Landlord's mortgagee and Tenant of any
cancellation, termination, or material alteration.
(e) Tenant and Landlord shall cooperate in connection with the
collection of any insurance monies that may be due in the event of loss and
shall execute and deliver such proofs of loss and other instruments which may
be required for the purposes of obtaining recovery of any such insurance
monies.
(f) NOTWITHSTANDING ANY OTHER PROVISION OF THIS LEASE, LANDLORD AND
TENANT HEREBY WAIVE ANY RIGHTS EACH MAY HAVE AGAINST THE OTHER ON ACCOUNT OF
ANY LOSS OR DAMAGE OCCASIONED TO
12
EXHIBIT 10.43
LANDLORD OR TENANT, AS THE CASE MAY BE (WHETHER OR NOT SUCH LOSS OR DAMAGE IS
CAUSED BY THE FAULT OR SOLE OR CONCURRENT NEGLIGENCE OF THE OTHER PARTY), TO
THEIR RESPECTIVE PROPERTY OR TO THE LEASED PREMISES OR ITS CONTENTS ARISING
FROM ANY RISK THAT IS COVERED BY ANY INSURANCE REQUIRED TO BE CARRIED UNDER
THIS LEASE OR OTHERWISE CARRIED BY LANDLORD OR TENANT, BUT ONLY TO THE EXTENT
OF INSURANCE PROCEEDS ACTUALLY RECEIVED (SUCH EXTENT TO INCLUDE APPLICABLE
DEDUCTIBLES BUT NOT THE LIMITS OF ANY APPLICABLE SELF INSURANCE). THE
FOREGOING SHALL NOT BE OPERATIVE IN ANY CASE IN WHICH THE EFFECT WOULD BE TO
INVALIDATE ANY INSURANCE COVERAGE REQUIRED TO BE CARRIED HEREUNDER. TENANT,
ON BEHALF OF ITS INSURANCE COMPANIES (WHICH INSURANCE COMPANIES SHALL INCLUDE
SUCH TENANT IF TENANT IS ALLOWED TO SELF INSURE UNDER THIS LEASE) INSURING
THE PROPERTY OF TENANT AGAINST ANY SUCH LOSS, WAIVES ANY RIGHT OF SUBROGATION
THAT IT MAY HAVE AGAINST LANDLORD. TENANT AGREES IMMEDIATELY TO GIVE TO EACH
SUCH INSURANCE COMPANY WRITTEN NOTIFICATION OF THE TERMS OF THE WAIVERS
CONTAINED IN THIS PARAGRAPH, AND TO HAVE ITS INSURANCE POLICIES PROPERLY
ENDORSED, IF NECESSARY, TO PREVENT THE INVALIDATION OF SAID INSURANCE
COVERAGES BY REASON OF SAID WAIVERS, AT TENANT'S SOLE COST.
(g) For the purposes of this Article 5 only, the "Term" shall
commence upon the earlier to occur of (i) the Commencement Date, and (ii) the
date that Tenant or any Tenant Party first enters the Leased Premises to
perform any of Tenant's Work.
ARTICLE 6
USE OF LEASED PREMISES AND COMPLIANCE WITH LAWS
(a) The Leased Premises shall be used only for the purpose of
receiving, storing and distributing products, materials and merchandise made
and/or distributed by Tenant, incidental office use in connection therewith
and for such other lawful purposes as may be incidental thereto. Outside
storage, other than storage of trucks and other vehicles, is prohibited
without Landlord's prior written consent which shall not be unreasonably
withheld. Tenant shall not permit any objectionable or unpleasant odors,
smoke, dust, gas, noise or vibrations to emanate from the Leased Premises,
nor take any other action that would constitute a health or environmental
hazard or nuisance or that would disturb, interfere with, or endanger
Landlord or the occupant of any other land or buildings in the vicinity of
the Leased Premises. Landlord agrees that odors, smoke or noise emanating
from trucks servicing the Leased Premises in the ordinary course of Tenant's
business will not violate these prohibitions provided that such are not
unreasonable.
(b) Tenant shall comply with and fulfill all state, federal and
municipal laws, regulations and ordinances, court decisions and all matters
of record (E.G., deed restrictions) applicable to the use of the Leased
Premises by Tenant and the business of Tenant conducted thereon (collectively
"Applicable Laws") including without limitation, the Americans with
Disabilities Act ("ADA").
13
EXHIBIT 10.43
(c) Tenant shall not change locks or install additional locks on
doors without prior written consent of Landlord. Tenant shall not make or
cause to be made duplicates of keys procured from Landlord without prior
approval of Landlord. All keys to Leased Premises shall be surrendered to
Landlord upon termination of this Lease.
(d) The water closets and other water fixtures shall not be used for
any purpose other than those for which they were constructed, and any damage
resulting to them from misuse, including improper disposal of any materials,
or by the defacing or injury of any part of the Building shall be borne by
the person who shall occasion it. No person shall waste water by interfering
with the faucets or otherwise.
ARTICLE 7
CONDITION OF LEASED PREMISES AND REPAIRS/IMPROVEMENTS
(a) Landlord shall not be required to make any improvements,
replacements or repairs of any kind or character to the Leased Premises or
the Building during the Term except as set forth in this section. Landlord
shall repair, maintain in good condition only the roof, foundation, floor
slab (but not the sealant or any floor coverings) and structural soundness of
the exterior walls of the Building except for damage caused by any act or
omission of a Tenant or any Tenant Party or by casualty. Landlord may elect
to repair any damage caused by a Tenant or any Tenant Party, and if Landlord
so elects, Tenant shall pay Landlord the cost or anticipated cost of such
repair on demand. The term "walls" as used herein shall not include windows,
glass or plate glass, doors, special store fronts or office entries. Tenant
shall promptly give Landlord written notice of any defect or need for
repairs, after which Landlord shall have reasonable opportunity to repair
same or cure such defect. In the event Landlord refuses or neglects to
commence or to complete properly and adequately any repairs which are the
responsibility of Landlord hereunder and such failure continues for fifteen
(15) days after written notice to Landlord or such longer period as is
reasonably required, then Tenant may (but shall not be obligated to) make
such repairs. In such event, Landlord shall be obligated to repay the actual
cost thereof to Tenant.
(b) From and after the Commencement Date, if any improvement,
modification or alteration of any portion of the Leased Premises is required
to bring same into compliance with the ADA or any other Applicable Laws, or
if Landlord otherwise makes capital repairs, replacements or improvements to
the Leased Premises (as determined using generally accepted accounting
principles) that are not the express obligation of Landlord to undertake at
its sole cost under subparagraph (a) above and (i) Tenant is not otherwise
expressly responsible for such repair, replacement or improvement under this
Lease, (ii) the necessity for such repair, replacement or improvements was
not caused, in whole or in part, by Tenant or any Tenant Party, and (iii) the
necessity for such repair, replacement or improvement was not due to the
specific use of the Leased Premises by Tenant, then Landlord will undertake
to complete such repair, replacement or improvements and the cost thereof
will be charged back to Tenant over the useful life of the subject repair,
replacement or improvements with the assumption that the only portion of such
expense chargeable for any one year will be a fraction of such expense, the
numerator of which is one and the denominator of which is the estimated
useful life of the
14
EXHIBIT 10.43
subject repair, replacement or improvements. In the event that (i) Tenant is
expressly responsible for such repair, replacement or improvement under this
Lease, (ii) the necessity for such repair, replacement or improvements was
caused, in whole or in part, by Tenant or any Tenant Party, or (iii) the
necessity for such repair, replacement or improvement was due to the specific
use of the Leased Premises by Tenant, Tenant shall be solely responsible for
the entire cost of such repair, replacement or improvements. In such event,
and if Landlord elects to construct such repair, replacement or improvement,
Tenant shall pay the cost thereof to Landlord in the same manner as Tenant
pays for the cost of the Finish Work in excess of the Finish Allowance under
Article 1(g)(2). If Landlord elects for Tenant to complete such repair,
replacement or improvement, such shall be performed by Tenant, at Tenant's
cost, subject to all of the terms of Article 10 below.
(c) From and after the Commencement Date, and except as otherwise
herein provided and except for repairs required to be performed by Landlord
under subparagraph (a) above, or covered by Landlord's one-year express
warranty made herein, Tenant agrees, at its sole cost and expense, to
maintain all of the Leased Premises in good condition and repair during the
Term (except for such repairs made necessary by fire or other casualty and
which are repaired in accordance with the provisions of Article 9 below)
including, without limitation landscaping, plumbing, wiring, fixtures,
equipment, heating and air conditioning equipment, interior and exterior
decorations, glass and painting in and on the Building and the parking area
and ingress and egress lanes, it being understood and agreed that Landlord
shall have no obligation to maintain the Leased Premises after Tenant takes
possession other than as expressly provided herein. Upon termination of this
Lease, Tenant shall deliver the Leased Premises to Landlord in as good a
condition as existed on the date Tenant took possession, the effects of
ordinary wear and tear, and obsolescence in spite of repairs excepted.
(d) Upon written request by Tenant, and to the extent assignable
without cost to Landlord, Landlord will assign to Tenant all construction or
equipment warranties, guarantees, and/or service policies received by it
which are applicable to the Improvements that are required to be repaired and
maintained by Tenant; provided that such assignment shall not prevent
Landlord from enforcing same for its own benefit in order to perform its
obligations herein. Landlord hereby represents and warrants to Tenant that,
in addition to any other warranties, Landlord shall obtain a warranty
covering the roof of the Leased Premises for a period of not less than 10
years.
(e) In the event Tenant refuses or neglects to commence or to
complete properly and adequately any repairs which are the responsibility of
Tenant hereunder, then Landlord may (but shall not be obligated to) make such
repairs after thirty (30) working days' written notice to Tenant, or such
shorter period required to protect life or property. In such event, Tenant
shall be obligated to repay the cost thereof to Landlord, upon demand, as
additional Rent.
(f) Tenant shall, at its sole cost and expense, during the Term
maintain a regularly scheduled preventative maintenance/service contract on
an annual basis with a maintenance contractor for the servicing of all
sprinkler systems, hot water, heating and air conditioning systems and
equipment within or servicing the Leased Premises. The maintenance contractor
and contract must be approved by Landlord and must include all services
suggested by the equipment manufacturer. A copy of the service contract shall
be provided to Landlord within
15
EXHIBIT 10.43
sixty (60) days following the Commencement Date. In the event the service
contract is not provided, then Landlord shall have the right, but not the
obligation to have the work done and the cost therefor shall be charged to
Tenant as additional rent and shall become payable by Tenant with the payment
of the Base Rent next due hereunder.
ARTICLE 8
RELEASE AND INDEMNIFICATION
(a) Except as otherwise expressly provided in this Lease, no
Landlord Party (hereinafter defined) will be liable to Tenant or any Tenant
Party, and Tenant hereby releases Landlord and agrees to hold Landlord
harmless from and against, any injury to person or damage to property on or
about the Leased Premises caused by (A)(i) the Leased Premises becoming out
of repair, (ii) the leakage of gas, oil, water or steam or by electricity
emanating from any part of the Leased Premises, or (iii) any other cause,
EXCEPT AND THEN ONLY TO THE EXTENT THAT SUCH INJURY OR DAMAGE ARISES OUT OF
OR RESULTS FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A LANDLORD
PARTY (WHETHER OR NOT MERELY ALLEGED, THREATENED OR PROVEN), or (B) the act
or omission of a Tenant Party. As used in this Article 8, a "Landlord Party"
shall mean one or more of Landlord and any officer, shareholder, partner,
employee or agent of Landlord and its and their respective heirs, legal
representatives, successors and assigns. TENANT ACKNOWLEDGES THAT THIS
PROVISION SHALL BE CONSTRUED TO MEAN THAT NO LANDLORD PARTY SHALL BE LIABLE
TO TENANT, ANY TENANT PARTY OR ANY INVITEE OF TENANT OR A TENANT PARTY FOR
ANY ALLEGED, THREATENED OR PROVEN NEGLIGENCE OF LANDLORD OR ANY LANDLORD
PARTY EXCEPT AS EXPRESSLY SET FORTH HEREIN.
(b) Tenant shall indemnify and hold Landlord harmless from and
against any and all fines, suits, losses, costs, together with reasonable
court costs and reasonable attorneys fees incurred by Landlord in defending
same, liabilities, claims, demands, actions and judgments of every kind and
character suffered by, recovered from, or asserted against a Landlord Party,
(i) arising by reason of any breach, violation or non-performance by Tenant
of any term, provision, covenant, condition or agreement to be performed or
abided by Tenant hereunder, or (ii) arising on account of death, injury or
damage to person or property in, on, or about the Leased Premises, or any
part thereof, where such death, injury or damage is caused, in whole or in
party, by a Tenant Party (as defined in Article 1(k) above) EXCEPT AND TO THE
EXTENT SUCH IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LANDLORD OR ANY LANDLORD PARTY (WHETHER ALLEGED, THREATENED OR
PROVEN), or the willful misconduct of a Tenant Party, or (iii) arising out of
any action brought by any Tenant Party for which Landlord has been released
by Tenant under (a) above. Upon the occurrence of an event which Tenant is
required to indemnify Landlord against, and upon demand by Landlord, Tenant
shall employ counsel reasonably acceptable to Landlord and defend Landlord
against any liability for such event, all at Tenant's cost. The indemnities
and covenants of Tenant in this paragraph (b) are in addition to, and not in
limitation of, any other indemnities made by Tenant elsewhere in this Lease.
16
EXHIBIT 10.43
(c) This Article 8 shall survive the expiration or termination of
this Lease with respect to any claims or liability occurring or first arising
prior to such expiration or termination.
ARTICLE 9
DAMAGE OR DESTRUCTION
(a) If the Building should be damaged or destroyed by fire or other
peril, Tenant immediately shall give written notice to Landlord. If: (i) the
Building should be totally destroyed by any peril not covered by insurance
required to be carried hereunder; or if (ii) the Leased Premises should be so
damaged thereby that, in Landlord's estimation, rebuilding or repairs cannot
be completed within one hundred eighty (180) days after Landlord's receipt of
insurance proceeds and required permits; or if (iii) the Leased Premises
should be so damaged thereby that, in Landlord's estimation, rebuilding or
repairs of the portion thereof required to be insured by Tenant can be
substantially completed within one hundred eighty (180) days after the date
of such damage, but the insurance proceeds available to Landlord will not, in
Landlord's estimation, be sufficient to complete such rebuilding or repairs
(due to such insurance proceeds being applied to mortgage debt or otherwise)
and Landlord is either unable or unwilling to advance sufficient funds to
complete such rebuilding or repairs (such decision to be made within sixty
(60) days of the casualty); then in any of such events this Lease shall cease
and terminate as if and to the extent the effective date of such termination
had been the date originally scheduled for the expiration of the term of this
Lease, and the Rent shall be abated during the previously unexpired term of
this Lease, effective upon the date of the occurrence of such damage.
(b) Subject to the provisions of Article 9(a) above, if the Building
should be damaged by any peril covered by the insurance required to be
carried hereunder, and Landlord does not have the right to or does not elect
to terminate this Lease, then Landlord shall restore the Building to
substantially its previous condition, except that Landlord shall not be
required to rebuild, repair or replace any of Tenant's Property or any of
Tenant's Work or any other property of, or improvements or alterations made
by, Tenant. Subject to events of Force Majeure or Tenant Delays, if such
repairs and rebuilding of the Leased Premises have not been substantially
completed within one hundred eighty (180) days after the date of Landlord's
receipt of insurance proceeds and necessary permits, Tenant, as Tenant's
exclusive remedy, may give Landlord notice of Tenant's intention to terminate
the Lease effective as of the date specified in such notice which date shall
be not less than ninety (90) days after the notice. If the repairs and
rebuilding have not been substantially completed by the date specified in
such notice for reasons other than Tenant Delays or Force Majeure, Tenant, as
Tenant's exclusive remedy, may immediately terminate this Lease by delivering
written notice of termination to Landlord, in which event the rights and
obligations hereunder shall cease and terminate as if and to the extent the
effective date of such termination had been the date originally scheduled for
the expiration of the term of this Lease, and Rent shall be abated during the
unexpired term of this Lease, effective upon the date of the termination.
Rent shall not be abated during any repairs or construction performed
pursuant to this Article 9(b).
(c) Notwithstanding any provision herein to the contrary, if
Landlord elects to proceed with the restoration of the Improvements not
withstanding the fact that Landlord
17
EXHIBIT 10.43
estimates available insurance proceeds will be inadequate for such
restoration costs, or in the event available insurance costs are in fact
inadequate for such restoration costs, Tenant will pay the deficiency to
Landlord upon demand. Regardless of whether or not Landlord terminates this
Agreement or restores the Leased Premises, Tenant shall pay Landlord the
amount of any applicable deductibles within thirty (30) days after written
demand by Landlord. Such obligations shall survive any termination of this
Agreement.
ARTICLE 10
ALTERATIONS
(a) Tenant may not make or permit any alterations, improvements, or
additions in or to the Leased Premises that may affect the structure or
structural integrity of the Building, the foundation or the roof. Tenant may
otherwise make non-structural alterations costing, in the aggregate, less
than $25,000 in any consecutive 12-month period (exclusive of trade fixtures
and equipment), without Landlord's consent. Landlord's consent will not
otherwise be unreasonably withheld. All alterations and improvements desired
by Tenant are subject to the following conditions: (i) all alterations,
improvements and additions will be at the sole cost and expense of Tenant;
(ii) all alterations, improvements and additions in and to the Leased
Premises requested by Tenant must be made in accordance with plans and
specifications first approved in writing by Landlord; (iii) Tenant's
contractors and subcontractors are subject to Landlord's prior approval. In
addition, each of Tenant's contractor(s) and subcontractor(s) must deliver
evidence satisfactory to Landlord that such contractor or subcontractor, as
applicable, carries insurance in amounts and covering events customarily
carried by similar contractors or subcontractors. Upon Landlord's reasonable
request, Tenant shall provide, or cause to be provided, certificates of such
insurance to Landlord evidencing such coverage and naming Landlord and any
mortgagee of Landlord as an additional insured thereunder; (iv) all
alterations, improvements and additions made by Tenant must comply with all
Applicable Laws and applicable building permits and certificates of
occupancy. Landlord's approval of Tenant's plans and specifications for the
alterations or improvements will not act as a confirmation or agreement by
Landlord that the improvements and alterations comply with Applicable Laws;
(v) Tenant must deliver to Landlord evidence that Tenant has obtained all
necessary governmental permits and approvals for the improvements,
alterations and additions prior to starting any work; (vi) all alterations,
improvements and additions must be done in a good and workmanlike manner so
as not to damage or alter the primary structure or structural qualities or
the utility or other systems of the Leased Premises or the Building and is
subject to approval by Landlord during and after construction, in its sole
discretion; (vii) lien releases from each of Tenant's contractor(s) and
subcontractor(s) must be submitted to Landlord within ten (10) days after
completion of the work performed by the contractor(s) or subcontractor(s);
(viii) Tenant shall be solely responsible for the safety and security of all
equipment and property installed or placed in, on or about the Leased
Premises by a Tenant Party; and (ix) if the cost of such alterations or
improvements are estimated to cost in excess of $200,000 in any 12-month
period, Tenant shall provide, upon Landlord's request, a performance bond or
construction escrow or other security reasonably satisfactory to Landlord to
assure completion thereof and full payment therefor.
(b) Notwithstanding any other provision of this Lease, Tenant, at
its own cost and expense, may erect such shelves, racks, bins and trade
fixtures (collectively, "Tenant's Property")
18
EXHIBIT 10.43
within the Leased Premises as it desires and without Landlord's prior consent
provided that (i) such items do not alter the basic character of the Leased
Premises or the Building; (ii) such items do not overload or damage the
Leased Premises or the Building or the utility or other systems serving same;
(iii) such items may be removed without material injury to the Leased
Premises and the Building; and (iv) the construction, erection or
installation thereof complies with all Applicable Laws, applicable building
permits and certificates of occupancy; and (v) provided that Tenant's
installation of Tenant's Property prior to the Commencement Date will be
subject to Article 1(j) above. All of Tenant's Property shall remain the
property of Tenant and shall be removed on or before the earlier to occur of
the date of termination of this Lease or Tenant's vacating of the Leased
Premises. Tenant shall promptly repair any damage to the Leased Premises
caused by the removal of any of Tenant's Property. Any of Tenant's Property
not so removed and any other property of Tenant not removed prior to the
termination of this Lease or Tenant's vacating of the Leased Premises shall
thereupon be conclusively presumed to have been abandoned by Tenant, and
Landlord may, at its option, take over possession of any and all of the
foregoing and either (i) declare the same to be the property of Landlord by
written notice to Tenant at the address provided herein or (ii) at the sole
cost and expense of Tenant, remove, store, and/or dispose of the same or any
part thereof, all at Tenant's cost, in any manner that Landlord shall choose
without incurring liability to Tenant or any other person.
(c) Except as provided in Article 10(a)above, all alterations,
additions, and improvements made to, or fixtures or other improvements placed
in or on, the Leased Premises, whether temporary or permanent in character
are a part of the Leased Premises and are the property of Landlord when they
are made to or placed in or on the Leased Premises, without compensation to
Tenant; provided that, at Landlord's option, upon the termination of this
Lease, Landlord may require Tenant, at Tenant's cost, to remove any
improvements made to the Leased Premises by Tenant and restore the Leased
Premises to substantially the condition it was in on the Commencement Date,
reasonable wear and tear excepted.
(d) Tenant hereby indemnifies and holds Landlord harmless from any
claims, demands, actions, losses, and damages arising from activities of a
Tenant Party, or any of their invites, in connection with any alterations,
improvements or additions made or contracted for by Tenant.
ARTICLE 11
UTILITIES
Tenant shall pay, before delinquency, all charges for water, gas,
electricity, telephone service and all other services and public utilities
furnished to or used in, upon or about the Leased Premises by Tenant during
the Term.
19
EXHIBIT 10.43
ARTICLE 12
HOLDING OVER
(a) Tenant agrees that upon the expiration or termination of this
Lease (however the same may be brought about), peaceable possession of the
Leased Premises will be promptly surrendered and delivered to Landlord.
(b) In case of holding over by Tenant after the termination of this
Lease without the written consent of Landlord (however such termination shall
be brought about), Tenant shall be obligated to pay Rent to Landlord on a per
diem basis for the entire hold over period at one hundred fifty percent
(150%) of the Base Rent in effect at the time of the termination of this
Lease. In the event of a holding over by Tenant after the Term (whether with
or without the written consent of Landlord), Tenant shall be and continue as
the Tenant at will of Landlord and in the event of Tenant's failure to
surrender, Landlord shall be entitled to institute and maintain an action of
forcible detainer of the Leased Premises in any court of competent
jurisdiction. No holding over by Tenant, whether with or without consent of
Landlord, will shall operate to extend this Lease except as otherwise
expressly provided. The preceding provisions of this Article 12 shall not be
construed as consent for Tenant to retain possession of the Leased Premises
in the absence of written consent thereto by Landlord. In addition to the
above, and whether or not any holdover is permitted, if Tenant does not
vacate the Leased Premises within sixty (60) days after written demand by
Landlord, Tenant shall be liable to Landlord for Landlord's consequential
damages incurred by Landlord as a result of any holdover by Tenant.
ARTICLE 13
ASSIGNMENT AND SALE
20
EXHIBIT 10.43
(a) In the event Tenant should desire to assign this Lease or sublet
the Leased Premises or any part thereof, Tenant shall give Landlord written
notice of such desire, together with financial information as to the proposed
assignee or subtenant as required by Landlord to allow Landlord to determine
the financial condition of such assignee or subtenant, at least fifteen (15)
days in advance of the date on which Tenant desires to make such assignment
or sublease. Landlord shall then have a period of fifteen (15) days following
receipt of such notice and financial information within which to notify
Tenant in writing that (i) Landlord consents to such assignment or sublease,
which consent shall not be unreasonably withheld, or delayed, or (ii)
Landlord does not consent thereto provided, however, that Tenant may without
prior written notice and consent from Landlord, assign this Lease or sublet
all or part of the Leased Premises to any entity which controls, is
controlled by, or is under common control with Tenant or any entity which is
a successor to Tenant by acquisition, merger, or consolidation of or with
Tenant (herein a "Permitted Assignee"). Upon request by Landlord, Tenant
shall furnish to Landlord copies of its latest consolidated annual report
together with quarterly income statements and balance sheet to date when such
reports and financial statements have been publicly released. No assignment,
subletting or other transfer, whether to a Permitted Assignee consented to by
Landlord or not or otherwise permitted hereunder shall relieve the Tenant
named herein of any liability hereunder for the obligations of the "Tenant".
If an event of default occurs while the Leased Premises or any part thereof
are assigned or sublet, then Landlord, in addition to any other remedies
herein provided, or provided by law, may collect directly from such
Transferee all rents payable to the Tenant and apply such rent against any
sum due Landlord hereunder. No such collection shall be construed to
constitute a novation or a release of Tenant from the further performance of
Tenant's obligations hereunder.
(b) Landlord shall have the continuing right at any time to sell or
convey the Leased Premises and Landlord's rights under this Lease, and
nothing herein contained shall be construed as restricting such rights of
Landlord. In the event Landlord should hereafter sell or convey the Leased
Premises to a third party or parties, such party or parties shall acquire the
Leased Premises subject to the terms and provisions of this Lease and shall
be subrogated to all of the rights and privileges of Landlord hereunder, and
Landlord shall thereupon be completely relieved and discharged from all
duties and obligations herein imposed upon Landlord which accrue after the
effective date of such conveyance; provided that such transferee of Landlord
shall have assumed all of Landlord's duties and obligations which accrue
under this Lease after such date.
(c) If this Lease is assigned to any person or entity pursuant to
the provisions of the Bankruptcy Code, 11 U.S.C. ss. 101 et. seq. (the
"Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any and all monies or other
considerations constituting Landlord's property under the preceding sentence
not paid or delivered to Landlord shall be held in trust for the benefit of
Landlord and be promptly paid or delivered to Landlord.
(d) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code, shall be deemed, without further act
or deed, to have assumed all of the
21
EXHIBIT 10.43
obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to
Landlord an instrument confirming such assumption.
ARTICLE 14
ENVIRONMENTAL
(a) HAZARDOUS MATERIALS DEFINED. As used in this Lease, the term
"Hazardous Materials" means and includes (i) any hazardous, toxic or
dangerous waste, substance or material, as defined for purposes of the
Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended, the Resource Conservation and Recovery Act of 1976, as amended,
or any other Applicable Laws applicable to the Leased Premises and
establishing liability, standards, or regulating or requiring action as to
the industrial hygiene, use, generation, treatment, discharge, spillage,
storage, uncontrolled loss, seepage, filtration, disposal, removal, or
existence of a hazardous, toxic or dangerous waste, substance or material
(collectively, "Environmental Laws") and (ii) any waste, substance or
material which, even if not so regulated, is known to pose a hazard to the
health and safety of persons or property, specifically including, without
limitation, oil and petroleum products and by-products and asbestos.
(b) PROHIBITION OF HAZARDOUS MATERIALS/TENANT'S LIABILITY. Except
for Hazardous Materials that are used only as an incidental part of Tenant's
day-to-day business operations and not as an integral part thereof (E.G.,
fuel for forklifts and similar equipment, office supplies, cleaning
solvents), or handled or stored in connection with the ordinary courses of
Tenant's business (provided that any such Hazardous Materials are wholly
contained in prepackaged containers and not repackaged, opened or otherwise
disturbed while at the Leased Premises), Tenant may not, without Landlord's
prior written consent, use, treat, handle, store, generate, dispose of or
release or cause or permit any Tenant Party, to use, handle, store, generate,
treat, dispose of or release, in, on, under or from the Leased Premises any
Hazardous Materials. Landlord agrees not to otherwise unreasonably withhold
its consent to Tenant's handling or temporarily storing Hazardous Materials
at the Leased Premises in the normal and ordinary course of the business of
the "Tenant" named herein. To the extent that Landlord consents to any of the
above, but without otherwise limiting any of the above:
(1) Tenant covenants and agrees that it shall at its own
expense procure, maintain in effect and comply with all conditions of
any and all permits, licenses and other governmental and regulatory
approvals required for Tenant's use of the Leased Premises and any
operations or conduct of Tenant involving the use, handling,
generation, treatment, storage, disposal, management or release of any
Hazardous Materials including the posting of required Material Safety
Data Sheets (copies of which are to be provided to Landlord). Tenant
shall cause any and all Hazardous Materials that are to be removed from
the Leased Premises to be transported solely by duly licensed haulers
and to duly licensed facilities for final disposal of such Hazardous
Materials. Tenant shall in all respects, handle, treat, deal with and
manage any and all Hazardous Materials in, on, under or about the
Leased Premises as a result of the actions, conduct or any part of the
business operations of Tenant or any Tenant Party, in complete
conformity with all Environmental Laws and prudent industry practices
regarding the management of such Hazardous Materials. All reporting
obligations relating to
22
EXHIBIT 10.43
Hazardous Materials in, on, under or about the Leased Premises as a
result of the actions, conduct or any part of the business operations
of Tenant or any Tenant Party, are solely the responsibility of
Tenant. Upon expiration or earlier termination of this Lease, Tenant
covenants and agrees to cause all Hazardous Materials existing in, on,
or under the Leased Premises to be removed from the Leased Premises
and transported for use, storage or disposal in accordance and in
compliance with all Environmental Laws. In addition, and unless
Landlord instructs Tenant otherwise, at the expiration of the Term,
Tenant shall remove all fixtures which were placed on the Leased
Premises by or on behalf of Tenant or a Tenant Party during the Term
and which contain, have contained or are contaminated with, Hazardous
Materials. Tenant may not install any above or underground storage
tanks;
(2) Tenant shall immediately notify Landlord in writing of (a)
any Tenant Release (hereinafter defined), (b) any enforcement,
clean-up, removal or other governmental or regulatory action
instituted, completed or threatened against Tenant, the Leased
Premises, pursuant to any Environmental Laws; (c) any claim made or
threatened by any person against Tenant, Landlord, the Leased Premises,
relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from or claimed to result from any Hazardous
Materials; and (d) any reports made to any environmental agency arising
out of or in connection with any Hazardous Materials in, on or about or
under the Leased Premises or with respect to any Hazardous Materials
removed from the Leased Premises, including, any complaints, notices,
warnings, reports or asserted violations in connection therewith.
Tenant shall also provide to Landlord, as promptly as possible, and in
any event within five (5) business days after Tenant first received or
sent the same, with copies of all claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the Leased
Premises or Tenant's use thereof. Tenant shall not take any remedial
action in response to the presence of any Hazardous Materials in, on,
about or under the Leased Premises, nor enter into any settlement
agreement, consent, decree or other compromise in respect to any claims
relating to or in any way connected with the Leased Premises without
first notifying Landlord of Tenant's intention to do so and affording
Landlord ample opportunity to appear, intervene or otherwise
appropriately assert and protect Landlord's interest with respect
thereto;
(3) Tenant shall indemnify and, at Landlord's option, defend
(with counsel reasonably acceptable to Landlord), protect and hold
Landlord and each of Landlord's officers, directors, partners,
employees, agents, attorneys, successors and assigns free and harmless
from and against any and all claims, liabilities, damages, costs,
penalties, forfeitures, losses or expenses (including reasonable
attorneys' fees) for death or injury to any person or damage to any
property whatsoever (including water tables and atmosphere) arising or
resulting in whole or in part, directly or indirectly, from the
presence, release or discharge of Hazardous Materials in, on, under,
upon or from the Leased Premises to the extent that such presence,
release or discharge was caused or permitted by Tenant or a Tenant
Party, or from the transportation or disposal of Hazardous Materials to
or from the Leased Premises by a Tenant Party (herein, a "Tenant
Release"). Tenant's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repairs, clean-up or detoxification or
decontamination of the Leased Premises and any other land
23
EXHIBIT 10.43
contaminated or adversely effected by a Tenant Release and the presence
and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration of or
early termination of this Lease;
(4) Landlord shall have the right from time to time, at its
expense, to commission an environmental audit of the Leased Premises.
If such study or report correctly determines or concludes that a Tenant
Release has occurred or that Tenant has breached any of its obligations
under this Article 14, then, and without limitation of any other remedy
Landlord may have hereunder, Tenant shall reimburse the reasonable
actual costs of the audit to Landlord on demand as additional Rent.
(5) Tenant shall execute affidavits, representations, and the
like from time to time at Landlord's reasonable request concerning
Tenant's actual knowledge and belief regarding the presence of
Hazardous Materials in, on or under the Leased Premises.
(c) Landlord represents and warrants to Tenant that Landlord has not
stored, generated, used, disposed of, released or caused or permitted any
other party to store, generate, use, dispose of or release in or upon the
Land any Hazardous Materials in violation of Environmental Laws and to
Landlord's current actual knowledge, without duty of inquiry or
investigation, no Hazardous Materials are present on, under or about the Land
in violation of Environmental Laws except as may be disclosed in the
environmental report dated August 2, 2000 and prepared by Engineering
Consulting Services, LTD., which report Tenant acknowledges having received.
Landlord makes no warranty or representations regarding the truth or accuracy
of such report. Landlord shall indemnify, at Tenant's option, defend (with
counsel reasonably acceptable to Tenant), protect and hold Tenant harmless
from and against any and all claims, liabilities, damages, costs, penalties,
forfeitures, losses or expenses (including reasonable attorneys' fees) for
death or injury to any person or damage to any property whatsoever (including
water tables and atmosphere) arising or resulting in whole or in part,
directly or indirectly, from the presence, release or discharge of Hazardous
Materials in, on , under, upon or from the Land to the extent that such
presence, release or discharge was actually caused by Landlord or from the
transportation or disposal of Hazardous Materials to or from the Land by
Landlord (herein, a "Landlord Release"). Landlord's obligations hereunder
shall include, without limitation, and whether foreseeable or unforeseeable,
all costs of any required or necessary repairs, clean-up or detoxification or
decontamination of the Land and any other land contaminated or adversely
effected by the Landlord Release and the presence and implementation of any
closure, remedial action or other required plans in connection therewith, and
shall survive the expiration of or early termination of this Lease.
(d) The respective covenants, rights and obligations of Landlord and
Tenant under this Article 14 shall survive the expiration or earlier
termination of this Lease.
ARTICLE 15
DEFAULT AND REMEDIES
(a) The following shall be deemed to be events of default by Tenant
under this Lease:
24
EXHIBIT 10.43
(1) Tenant shall fail to pay any installment of the Rent
herein reserved when due, or any other payment or reimbursement to
Landlord required herein when due, and such failure shall continue for
a period of ten (10) days after receipt of written notice from
Landlord; provided, however, that an event of default will occur
without any obligation of Landlord to deliver any notice if Landlord
has given Tenant written notice under this subparagraph on two (2) or
more occasions during the twelve (12) month period preceding the
current failure by Tenant to timely pay Rent (though Tenant in such
instances is granted a ten (10) day grace period from the date upon
which the subject payment was due).
(2) Tenant abandons the Leased Premises.
(3) Tenant or any guarantor of Tenant's obligations hereunder
shall file a petition or be adjudged bankrupt or insolvent under any
applicable federal or state bankruptcy or insolvency law, or admit that
it cannot meet its financial obligations as they become due; or a
receiver or trustee shall be appointed for all or substantially all of
the assets of Tenant or such guarantor; or Tenant or any guarantor of
Tenant's obligations hereunder shall make a transfer in fraud of
creditors or shall make an assignment for the benefit of creditors; or
(4) Tenant shall fail to discharge or bond around to
Landlord's satisfaction any lien filed against the Leased Premises, or
any portion thereof, in violation of Article 40 hereof, within ten (10)
days after receiving notice thereof.
(5) Tenant shall fail to comply with any other term, provision
or covenant of this Lease, other than the payment of Rent; and such
other failure is not cured within thirty (30) days of receipt of
written notice from Landlord specifying the default;
(6) Any of the representations and warranties of Tenant set
forth herein shall be untrue in any material respect on the date of
this Lease or at any time during the Term.
(b) Upon the occurrence of any event of default set forth in this
Lease, Landlord shall have the option to pursue any one or more of the remedies
set forth herein without any additional notice or demand.
(1) Without excluding other rights or remedies that it may
have, and without declaring the Lease terminated, Landlord shall have
the immediate right of reentry and may remove all persons and property
from the Leased Premises and dispose of such property as it sees fit,
all without resort to legal process and without being deemed guilty of
trespass, or becoming liable for any loss or damage which may be
occasioned thereby. If the Landlord should elect to reenter as herein
provided, or should it take possession pursuant to legal proceedings,
it may either terminate this Lease or it may from time to time without
terminating this Lease, make such alterations and repairs as may be
necessary in order to relet the Leased Premises, and relet the Leased
Premises for such term and at such rentals and upon such other terms
and conditions as the Landlord may deem advisable. No such reentry or
taking possession of the Leased Premises by the Landlord shall be
construed as an election to terminate this Lease unless a written
notice
25
EXHIBIT 10.43
of such intention be given by the Landlord to the Tenant at the time
of such reentry; but, notwithstanding any such reentry and reletting
without termination, the Landlord may at any time thereafter elect to
terminate this Lease for such previous breach. In the event of any
termination by Landlord, whether before or after reentry, Landlord
may recover from the Tenant damages incurred by reason of such breach,
including the cost of recovering the Leased Premises and the difference
in value between the rental which would be payable by the Tenant
hereunder for the remainder of the term and the reasonable rental value
of the Leased Premises for the remainder of the term and the reasonable
rental value of the Leased Premises for the remainder of the term.
(2) Landlord may terminate this Lease, in which event Tenant
shall immediately surrender the Leased Premises to Landlord, and if
Tenant fails to surrender the Leased Premises, Landlord may, without
prejudice to any other remedy which it may have for possession or
arrearages in Rent, enter upon and take possession of the Leased
Premises, by picking or changing locks if necessary, and lock out,
expel or remove Tenant and any other person who may be occupying all or
any part of the Leased Premises without being liable for any claim for
damages. Tenant agrees to pay on demand the amount of all loss and
damage which Landlord may suffer by reason of the termination of this
Lease under this section, including without limitation, loss and damage
due to the failure of Tenant to maintain and or repair the Leased
Premises as required hereunder and/or due to the inability to relet the
Leased Premises on terms satisfactory to Landlord or otherwise, and any
reasonable expenditures made by Landlord in order to relet the Leased
Premises, including, but not limited to, leasing commissions, moving
allowances, lease incentives, and remodeling and repair costs. In
addition, upon termination Landlord may collect from Tenant, as damages
and not as a penalty, the present value (using a discount rate of seven
percent (7%) of all future Rents required to be paid under this Lease
(had it not been terminated) from the date Landlord terminates the
Lease until the expiration of the Term less the fair market rental
value of the Leased Premises over such term. Notwithstanding anything
contained in this Lease to the contrary, this Lease may be terminated
by Landlord only by mailing or delivering written notice of such
termination to Tenant, and no other act or omission of Landlord shall
be construed as a termination of this Lease.
(3) INTENTIONALLY DELETED
(4) INTENTIONALLY DELETED
(5) Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future Applicable Laws in
the event of Tenant being evicted or dispossessed for any cause, or in
the event of Landlord obtaining possession of the Leased Premises by
reason of the violation by Tenant of any of the covenants and
conditions of this Lease or otherwise.
26
EXHIBIT 10.43
(6) No right or remedy herein conferred upon or reserved to
Landlord is intended to be exclusive of any other right or remedy, and
each and every right and remedy shall be cumulative and in addition to
any other right or remedy given hereunder or now or hereafter existing
at law or in equity or by statute. In addition to the other remedies
provided in this Lease, Landlord shall be entitled, to the extent
permitted by Applicable Laws, to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the
covenants, agreements, conditions or provisions of this Lease, or to a
decree compelling performance of any of the covenants, agreements,
conditions or provisions of this Lease, or to any other remedy now or
hereafter allowed to Landlord at law or in equity. Tenant shall
indemnify and hold Landlord harmless from any and all actual costs,
expenses (including reasonable attorneys' fees), claims and causes of
action arising from or in connection with any default by Tenant under
this Lease.
(7) In the event that Tenant or any guarantor of Tenant's
obligations hereunder is the subject of any insolvency, bankruptcy,
receivership, dissolution, reorganization or similar proceeding,
federal or state, voluntary or involuntary, under any present or future
law or act, Landlord is entitled to the automatic and absolute lifting
of any automatic stay as to the enforcement of its remedies under this
Lease, including specifically the stay imposed by Section 362 of the
United States Federal Bankruptcy Code, as amended. Tenant hereby
consents to the immediate lifting of any such automatic stay, and will
not contest any motion by Landlord to lift such stay. Tenant expressly
acknowledges that the Leased Premises is not now and will never be
necessary to any plan or reorganization of any type.
(8) To the extent required under Applicable Laws, Landlord
agrees to use reasonable efforts to mitigate any of its damages arising
from the occurrence of an event of default by Tenant involving Tenant's
abandonment of the Leased Premises. Tenant agrees that this requirement
to use reasonable efforts will have been satisfied by Landlord: (i)
notifying its leasing agent of the availability of the Leased Premises
for rent, and (ii) showing the Leased Premises to prospective tenants
who request to see the Leased Premises and to prospective tenants
referred to Landlord by Tenant. In no event shall Landlord be deemed to
have failed to mitigate its damages if Landlord chooses to lease to a
prospective tenant some or all of other space in other property owned
or controlled by Landlord, rather than some or all of the Leased
Premises or if Landlord rejects a proposed new tenant because of the
credit, reputation or proposed use of said proposed Tenant is not
satisfactory to Landlord in its sole discretion.
ARTICLE 16
EMINENT DOMAIN
(a) If any portion of the Leased Premises is 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 and the taking
prevents or materially interferes with the use of the Leased Premises for the
purpose for which it was leased to Tenant or causes the Leased Premises to
not comply with Applicable Laws, then within ten (10) days after such taking
Landlord shall
27
EXHIBIT 10.43
notify Tenant as to whether or not Landlord will reconstitute the Leased
Premises such that it once again complies with Applicable Laws or replicate
the Leased Premises to substantially the condition it was in prior to such
taking, as applicable, within one hundred fifty (150) days after such taking.
If Landlord notifies Tenant that it will not replicate or reconstitute the
Leased Premises, as applicable, or otherwise fails to complete the
reconstitution or replication within one hundred fifty (150) days after such
taking, then this Lease shall terminate and the Rent shall be abated during
the unexpired portion of this Lease, effective as of the date of such taking.
In the event any taking does not materially interfere with the use of the
Leased Premises for the purposes for which it was used by Tenant, this Lease
shall not terminate, but the Base Rent payable hereunder during the unexpired
portion of this Lease shall be reduced based upon the percentage reduction of
the square feet in the Building caused by the taking or as is otherwise fair
and reasonable under all of the circumstances. Rent will not otherwise be
reduced or abated.
(b) The provisions of this Article 16 shall only apply to the
Improvements, and in no event shall Landlord be obligated to reconstruct any
improvements constructed by Tenant.
(c) Landlord shall be entitled to receive the entire price or award
from any such sale, taking or condemnation, whether applicable to the Land,
Building, or other real estate interests. Tenant hereby assigns all its
interest in such award to Landlord and Tenant waives any right Tenant has or
may have under present or future law to receive any award of damages for its
interest in the Leased Premises or this Lease; provided, however, that Tenant
shall have the right to separately claim and receive any award which may be
allowed to Tenant for Tenant's trade fixtures, loss of business and moving
expenses, provided the same do not reduce Landlord's award.
ARTICLE 17
ACCESS TO PREMISES
Tenant shall permit Landlord and its agents to enter into and upon
the Leased Premises at all reasonable times during normal business hours and
with at least 48-hours written notice, except in an emergency situation, in
accordance with the provisions hereof, for the purpose of making repairs,
alterations, or additions to any other portion of the Leased Premises,
including the erection and maintenance of such scaffolding, canopy, fences
and props as may be required or for the purpose of posting notices of
nonliability for alterations, additions or repairs. Landlord shall conduct
its activities in the Leased Premises in a manner that will cause the least
possible interference with Tenant's business operations. Tenant shall permit
Landlord, at any time within one hundred eighty (180) days prior to the
expiration of this Lease, to place upon the Leased Premises usual or ordinary
"For Lease" signs, and during such one hundred eighty (180) day period
Landlord or its agents may, during normal business hours, with 24-hours
advance written notice, enter upon the Leased Premises and exhibit same to
prospective Tenants.
ARTICLE 18
SUBORDINATION OF LEASE
28
EXHIBIT 10.43
Conditioned upon the beneficiary of any mortgages and/or deeds of
trust now existing or hereafter placed upon the Leased Premises entering into
a Subordination, Non-disturbance and Attornment Agreement (herein an "SNDA")
with Tenant in which such beneficiary agrees not to disturb the possession
and other rights of Tenant under this Lease so long as Tenant is not in
default in the performance of its obligations hereunder, and, in the event of
the acquisition of title by such beneficiary through foreclosure proceedings
or a deed in lieu of foreclosure, to accept Tenant as tenant of the Leased
Premises under the terms and conditions of this Lease, Tenant accepts this
Lease subject and subordinate to any mortgages and/or deeds of trust now or
hereafter constituting a lien or charge upon the Leased Premises, provided,
however, that if the mortgagee, trustee, or holder of any such mortgage or
deed of trust elects to have Tenant's interest in this Lease superior to any
such instrument, then by notice to Tenant from such mortgagee, trustee or
holder, this Lease shall be deemed superior to such lien, whether this Lease
was executed before or after said mortgage or deed of trust. Subject to the
foregoing, Tenant, at any time hereafter on demand, shall execute any
instruments, releases or other documents that may be required by any
mortgagee for the purpose of subjecting and subordinating this Lease to the
lien of any such mortgage or deed of trust. Upon Landlord's request, Tenant
shall execute any SNDA submitted to Tenant if the form thereof is a type of
form that is customarily given by institutional lenders and otherwise
complies with this Article 18.
ARTICLE 19
ESTOPPEL CERTIFICATE
Tenant agrees, at any time and from time to time within ten (10)
business days after requested by Landlord, to execute and deliver to Landlord
a written estoppel certificate in the form of that attached hereto as EXHIBIT
"E" or in such other reasonable form as may be required by Landlord.
ARTICLE 20
WAIVER
No covenant or condition of this Lease to be performed by Tenant
and/or Landlord can be waived except by the written consent of Landlord
and/or Tenant, and forbearance or indulgence by Landlord or Tenant in any
regard whatsoever shall not constitute a waiver of the covenant or condition
to be performed by Tenant and/or Landlord to which the same may apply; and
until complete performance by Tenant or Landlord of said covenant or
condition, Landlord and/or Tenant shall be entitled to invoke any remedy
available to it under this Lease, despite said forbearance or indulgence. The
subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be
a waiver of any preceding breach by Tenant of any term, covenant or condition
of this Lease, other than the failure of Tenant to pay the particular Rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such Rent.
ARTICLE 21
MEMORANDUM OF LEASE
29
EXHIBIT 10.43
Landlord and Tenant agree that upon commencement of the Initial Term
they shall execute, acknowledge, and cause to be placed of record a
Memorandum of Lease substantially in form and substance of the Memorandum of
Lease attached as "Exhibit H" and made a part hereof for all purposes.
ARTICLE 22
QUIET ENJOYMENT
Landlord agrees that so long as Tenant is not in default hereunder
Tenant shall have the quiet enjoyment of the Leased Premises without hindrance
on the part of Landlord, and Landlord will defend Tenant in the peaceful and
quiet enjoyment of the Leased Premises (other than those claiming by, through,
or under Tenant).
ARTICLE 23
ATTORNEY FEES AND INTEREST
In the event either party hereto shall institute suit against the other
with reference to the terms and conditions of this Lease, the prevailing party
shall be entitled to reasonable attorney's fees and court costs.
ARTICLE 24
SIGNS
Any signage or monuments Tenant desires for the Leased Premises
shall be subject to Landlord's written approval and shall be submitted to
Landlord prior to the Commencement Date of this Lease. Tenant shall repair,
paint and/or replace the building facia surface to which its signs are
attached upon vacation of the Leased Premises, or the removal or alteration
of its signage. Tenant shall not (i) make any changes to the exterior of the
Building, (ii) install any exterior lights, decorations, balloons, flags,
pennants, banners or painting, or (iii) 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 Building, without Landlord's
prior written consent. All monuments, signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Building shall conform in all respects
to the criteria established by Landlord and Applicable Laws. Provided that
Landlord shall have first approved of same as provided above, Landlord shall
reimburse to Tenant the cost of approved Building and monument signage up to
a maximum one-time cost of $10,000.
30
EXHIBIT 10.43
ARTICLE 25
SERVICE OF NOTICE
Any notice or demand which either party hereby may desire to serve
upon the other in furtherance of any provisions of this Lease shall be in
writing and shall be sufficiently served if the same shall be sent by Federal
Express or other overnight courier service, or shall be sent United States
Mail, postage prepaid, certified or registered, or shall be sent by facsimile
transmission (provided that the sending telecopier generates an electronic
confirmation of receipt), addressed, in the instance of Landlord, as follows:
D/S Withers Cove, Ltd
c/o Simpkins Group, Inc.
Attn: Doug Simpkins, President
2900 Weslayan, Suite 350
Houston, Texas 77027
Telephone: (713) 963-0885
Telecopy: (713) 963-8079
or to such other address as Landlord shall designate by written notice to
Tenant, and in the instance of Tenant, addressed as follows:
United Stationers Supply Co.
2200 East Golf Road
Des Plaines, Illinois 60016-1267
Attention: Law Department
Telephone:(847) 699-5000, x 2113
Telecopy: (847) 699-0891
or such other address as Tenant shall designate by written notice to Landlord.
Such notices shall be deemed to have been served at the time of the actual
receipt or refusal of delivery thereof.
ARTICLE 26
CAPTIONS
The various headings and numbers herein and the grouping of the
provisions of this Lease into separate articles and paragraphs are for the
purpose of convenience only and shall not be considered a part hereof.
ARTICLE 27
TIME
Time is of the essence of this Lease and each and all of its
provisions.
31
EXHIBIT 10.43
ARTICLE 28
SUCCESSORS AND ASSIGNS
This Lease shall inure to the benefit of and be binding upon the
heirs, executors, administrators, successors and assigns of Landlord and
Tenant; provided, however, that nothing herein shall impair any of the
provisions herein above set forth inhibiting assignment or subletting without
the written consent of Landlord.
ARTICLE 29
PARTIAL INVALIDITY
If any term, covenant, condition or provision 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 shall not be affected
thereby and each term, covenant, condition and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.
ARTICLE 30
FORCE MAJEURE
As used in this Lease, "Force Majeure" shall mean a delay caused by
reason of fire, acts of God, unreasonable delays in transportation, embargo,
weather (I.E., rain and rain related conditions, humidity, temperature, wind,
etc.), strike, other labor disputes, governmental preemption of priorities or
other controls in connection with a national or other public emergency,
governmental delays in permitting, delays caused by any governmental
disapproval of, or required revisions to, the Construction Documents,
Improvements or shortages of fuel, supplies or labor or any similar cause not
within Landlord's or Tenant's reasonable control. Neither Landlord nor Tenant
shall be held responsible for delays in the performance of its obligations
hereunder caused by Force Majeure, and such delays shall be excluded from the
computation of the time allowed for the performance of such obligations. It
is expressly agreed that the number of delay days may include not only the
day or days upon which the event of Force Majeure occurred but the number of
days thereafter that work could not resume due to the occurrence of such
event of Force Majeure. By way of example only, rain on a Sunday, which is
not scheduled as a normal work day, may prevent work for several days
thereafter due to mud conditions. No event of Force Majeure shall excuse
either party from its monetary obligations hereunder nor serve to delay any
such payment. Without limitation, Tenant's obligation to timely pay Rent is
not affected by events of Force Majeure.
ARTICLE 31
AMENDMENTS
This Lease shall not be altered, amended, or modified in any way or
terminated except by an instrument in writing, executed by both parties.
32
EXHIBIT 10.43
ARTICLE 32
PERSONAL PROPERTY TAXES
During the Term, Tenant shall pay prior to delinquency all taxes
assessed against and levied upon fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Leased Premises; and, when
possible, Tenant shall cause said fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the Leased
Premises. If any such taxes are levied or assessed against Landlord or
Landlord's property and Landlord pays the same, Tenant shall pay to Landlord
such taxes upon demand.
ARTICLE 33
LEGAL CONSTRUCTION
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA AND THE LAWS OF THE UNITED STATES OF AMERICA AS
APPLICABLE TO TRANSACTIONS WITHIN THE STATE OF NORTH CAROLINA. TENANT HEREBY
SUBMITS TO THE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION SITTING IN
MECKLENBURG COUNTY, NORTH CAROLINA. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
TENANT AND LANDLORD HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS LEASE, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENT TO
THE DEALINGS OF LANDLORD AND TENANT WITH RESPECT TO THIS LEASE, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, TENANT AND LANDLORD
HEREBY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING
SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT TENANT OR LANDLORD MAY
FILE A COPY OF THIS LEASE WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE
OF THE CONSENT OF TENANT AND LANDLORD TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
33
EXHIBIT 10.43
ARTICLE 34
NET LEASE
This Lease is a net lease, and except as otherwise expressly
provided herein, Tenant shall pay all costs and other expenses of every
character, foreseen or unforeseen, for the payment of which Tenant is or
shall become liable by reason of its estate or interest in the Leased
Premises, or which are connected with or arise out of the possession, use,
occupancy, maintenance or repair of the Leased Premises or any portion
thereof by Tenant. Tenant's obligation to pay Rent is an obligation and
covenant independent of any obligation or covenant of Landlord hereunder.
Rent and any and all other amounts payable by Tenant hereunder shall be paid
by Tenant without notice or demand, and without any set off, deduction,
abatement, suspension, deferment, diminution or reduction of any kind for any
reason.
ARTICLE 35
LIMITATION OF LANDLORD'S PERSONAL LIABILITY
Notwithstanding any other provision in this Lease to the contrary,
Tenant specifically agrees to look solely to Landlord's interest in the
Leased Premises and in this Lease for the recovery of any judgment from
Landlord, it being agreed that Landlord shall never be personally liable for
any such judgment.
ARTICLE 36
LANDLORD'S REPRESENTATIONS AND WARRANTIES
Landlord represents and warrants to Tenant, as of the date hereof
and as of the Commencement Date, that, to its knowledge:
(a) Landlord does not have any knowledge of, or reason to believe
that there are grounds for, the filing of a lien against the Leased Premises,
other than the lien for the construction loan.
(b) Landlord does not have knowledge of any pending condemnation or
similar proceeding affecting the Leased Premises or any portion thereof.
(c) Landlord does not have any knowledge of any legal actions,
suits, or other legal or administrative proceedings, pending or threatened
against the Leased Premises or Landlord nor that any such action, suit,
proceeding or claim has been threatened or asserted against Landlord or the
Leased Premises.
(d) Landlord has granted no leases or license, nor created any
tenancies, affecting the Leased Premises.
34
EXHIBIT 10.43
(e) Landlord does not have any knowledge of any uncured violations
of federal, state or municipal laws, ordinances, orders, regulations, or
requirements affecting any portion of the Leased Premises.
(f) The Leased Premises have adequate legal access to abutting
public highways, streets and roads.
(g) Landlord does not have any knowledge of any pending or
threatened governmental or private proceedings which would impair or result
in the termination of access from the Leased Premises to abutting public
highways, streets and roads.
Landlord's above representations shall survive for a period of one
(1) year from the Commencement Date.
ARTICLE 37
YEAR 2000 COMPLIANCE
(a) Intentionally Deleted
(b) Intentionally Deleted
(c) Intentionally Deleted
ARTICLE 38
REPRESENTATIONS OF TENANT
Tenant represents, warrants and covenants that it is now in a
solvent condition; that no bankruptcy or insolvency proceedings are pending
or contemplated by or against Tenant or any guarantor of Tenant's obligations
under this Lease; that all reports, statements and other data furnished by
Tenant to Landlord in connection with this Lease are true and correct in all
material respects; that the execution and delivery of this Lease by Tenant
does not contravene, result in a breach of, or constitute a default under any
contract or agreement to which Tenant is a party or by which Tenant may be
bound and does not violate or contravene any law, order, decree, rule or
regulation to which Tenant is subject; and that there are no judicial or
administrative actions, suits, or proceedings pending or threatened against
or affecting Tenant or any guarantor of Tenant's obligations under this
lease. If Tenant is a corporation, limited liability company or partnership,
each of the persons executing this lease on behalf of Tenant represents and
warrants that Tenant is duly organized and existing, is qualified to do
business in the state in which the Leased Premises are located, has full
right and authority to enter into this Lease, that the persons signing on
behalf of Tenant are authorized to do so by appropriate corporate, company or
partnership action and that the terms, conditions and covenants in this Lease
are enforceable against Tenant. If Tenant is a corporation, limited liability
company or partnership, Tenant, upon
35
EXHIBIT 10.43
Landlord's request, will deliver evidence satisfactory to Landlord that the
execution and delivery of this Lease has been duly authorized and properly
executed.
ARTICLE 39
LANDLORD'S CONDITIONS
(a) Landlord has informed Tenant that Landlord currently is under
contract or is negotiating to purchase the Land. If the date of this Lease
occurs prior to the date Landlord obtains title to the Land, then Landlord's
obligations under this Lease are conditioned upon it acquiring title to the
Land on or prior to September 1, 2000. If Landlord has not acquired the Land
by such date and the parties do not agree otherwise in writing, then this
Lease shall automatically terminate.
(b) Landlord's obligations hereunder are further conditioned upon
Landlord obtaining final permits and approvals from applicable authorities
for the Construction Documents and for the construction of all of the
Improvements pursuant thereto.
ARTICLE 40
MECHANICS' LIENS
Tenant will not permit any mechanic's or materialman's lien(s) or
other lien to be placed upon the Leased Premises or the Building and nothing
in the Lease shall be deemed or construed in any way as constituting the
consent or request of Landlord, express or implied, by inference or
otherwise, to any person for the performance of any labor or the furnishing
of any materials to the Leased Premises, or any part that would give the rise
to any mechanic's or materialman's or other lien against the Leased Premises.
In any event any such lien is attached to the Leased Premises, then, in
addition to any other right or remedy of Landlord, Landlord may, but shall
not be obligated to, obtain the release or otherwise discharge the same. Any
amount paid by Landlord for any of the aforesaid purposes shall be paid by
Tenant to Landlord on demand as additional Rent.
ARTICLE 41
BROKERS
(a) Tenant represents and warrants that, except for Grubb & Ellis
Company ("Broker"), Tenant has not dealt with any broker, agent or other
person in connection with this transaction and that, except for Broker, no
broker, agent or other person brought about this transaction through the acts
of or employment by Tenant, and, except with respect to any commission or fee
owed to Broker, Tenant agrees to indemnify and hold Landlord harmless from
and against any claims by any broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with
Tenant with regard to this leasing transaction.
(b) Landlord represents and warrants that, except for Broker, Landlord
has not dealt with any broker, agent or other person in connection with this
transaction and that, except for
36
EXHIBIT 10.43
Broker, no broker, agent or other person brought about this transaction
through the acts of or employment by Landlord. Landlord has agreed to pay
Broker a commission pursuant to a separate written agreement between Landlord
and Broker, and Landlord agrees to indemnify and hold Tenant harmless from
and against any claims by Broker or any broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with Landlord with regard to this leasing transaction.
ARTICLE 42
RECORDING
Tenant may not record this Lease.
ARTICLE 43
DISCLAIMER
EXCEPT FOR LANDLORD'S OBLIGATION TO COMPLETE THE IMPROVEMENTS AND
THE PUNCH LIST ITEMS, TENANT ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT
MADE ANY REPRESENTATIONS, AGREEMENTS OR PROMISES WITH RESPECT TO THE
CONDITION OF THE LEASED PREMISES, INCLUDING THE ENVIRONMENTAL CONDITION OF
THE LAND, OR THEIR SUITABILITY OF THE LEASED PREMISES FOR ANY PURPOSE OF
TENANT AND THAT, EXCEPT FOR LANDLORD'S OBLIGATION TO COMPLETE THE
IMPROVEMENTS AND THE PUNCH LIST ITEMS, LANDLORD HAS MADE NO PROMISES TO
ALTER, REMODEL OR IMPROVE OR REPAIR THE LAND, THE IMPROVEMENTS OR ANY PORTION
THEREOF, EXCEPT FOR LANDLORD'S EXPRESS WARRANTIES CONTAINED IN THIS LEASE,
AND TENANT ACCEPTS THE LEASED PREMISES IN ITS "AS IS", "WHERE IS" CONDITION
AND "WITH ALL FAULTS". EXCEPT FOR LANDLORD'S EXPRESS WARRANTIES CONTAINED IN
THIS LEASE, LANDLORD HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS, INCLUDING
IMPLIED REPRESENTATIONS, AND SPECIFICALLY INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION REGARDING THE LEASED PREMISES' HABITABILITY, REPAIR,
WORKMANSHIP OR SUITABILITY FOR ANY INTENDED PURPOSE. TENANT SHALL MAKE, AND
HEREBY REPRESENTS AND WARRANTS TO LANDLORD THAT IT HAS MADE, ITS OWN
DETERMINATIONS AS TO THE SUITABILITY OF THE LEASED PREMISES FOR ITS INTENDED
USE. BY ENTERING INTO THIS LEASE, TENANT REPRESENTS AND WARRANTS THAT IT HAS
INVESTIGATED AND SATISFIED ITSELF AS TO WHETHER OR NOT APPLICABLE LAWS PERMIT
ITS INTENDED USE OF THE LEASED PREMISES AND THAT TENANT IS RELYING SOLELY
UPON SUCH INVESTIGATIONS, AND NOT UPON ANY REPRESENTATIONS OF LANDLORD, IN
ENTERING INTO THIS LEASE.
ARTICLE 44
37
EXHIBIT 10.43
EXPANSION OPTION
Intentionally Deleted
ARTICLE 45
TERMINATION
In the event either party terminates this Lease pursuant to an
express right to do so set forth herein, and in the event this Lease
naturally expires at the end of the Term, both Landlord and Tenant shall be
relieved of all further obligations under this Lease except for those which
by their express terms survive termination, which obligations shall continue
in full force and effect. Notwithstanding the preceding, this Article 45
shall not operate or be construed to release Tenant from any liability to
Landlord in the event this Lease is terminated by Landlord due to a default
by Tenant. Additionally, termination of this Lease shall not relieve a party
from any obligations or liabilities that may have arisen or accrued prior to
termination.
EXECUTED By Landlord, this ______ day of ________________________, 2000.
LANDLORD:
D/S Withers Cove, Ltd.
A TEXAS LIMITED PARTNERSHIP
BY DOUGLAS SIMPKINS, JR., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Its:
--------------------------------------------
EXECUTED By Tenant, this ______ day of ________________________, 2000.
TENANT:
UNITED STATIONERS SUPPLY CO.,
AN ILLINOIS CORPORATION
By:
--------------------------------------------------
Name:
------------------------------------------------
Its:
-------------------------------------------------
38