EXHIBIT 10.35
INDUSTRIAL LEASE AGREEMENT
BETWEEN
INDUSTRIAL DEVELOPMENTS INTERNATIONAL (TENNESSEE), L.P.
AS LANDLORD
AND
SALESLINK CORPORATION
AS TENANT
LEASE INDEX
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Section Subject
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1 Basic Lease Provisions
2 Demised Premises
3 Term
4 Base Rent
5 Security Deposit
6 Operating Expenses and Additional Rent
7 Use of Demised Premises
8 Insurance
9 Utilities
10 Maintenance and Repairs
11 Tenant's Personal Property; Indemnity
12 Tenant's Fixtures
13 Signs
14 Intentionally Omitted
15 Governmental Regulations
16 Environmental Matters
17 Construction of Demised Premises
18 Tenant Alterations and Additions
19 Services by Landlord
20 Fire and Other Casualty
21 Condemnation
22 Tenant's Default
23 Landlord's Right of Entry
24 Lender's Rights
25 Estoppel Certificate and Financial Statement
26 Landlord's Liability
27 Notices
28 Brokers
29 Assignment and Subleasing
30 Termination or Expiration
31 Intentionally Omitted
32 Late Payments
33 Rules and Regulations
34 Quiet Enjoyment
35 Miscellaneous
36 Special Stipulations
37 Lease Date
38 Authority
39 No Offer Until Executed
Exhibit "A" Demised Premises
Exhibit "B" Preliminary Plans and Specifications
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E" Certificate of Authority
Exhibit "F" Form of Irrevocable Letter of Credit
Exhibit "G" Sign Guidelines
INDUSTRIAL LEASE AGREEMENT
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THIS LEASE AGREEMENT (the "Lease") is made as of the "Lease Date" (as
defined in Section 37 herein) by and between INDUSTRIAL DEVELOPMENTS
INTERNATIONAL (TENNESSEE), L.P., a Georgia limited partnership ("Landlord"), and
SALESLINK CORPORATION, a Delaware corporation ("Tenant") (the words "Landlord"
and "Tenant" to include their respective legal representatives, successors and
permitted assigns where the context requires or permits).
W I T N E S S E T H:
1. Basic Lease Provisions. The following constitute the basic provisions
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of this Lease:
(a) Demised Premises Address: 6100 Holmes Road, Suite 101
Memphis, Tennessee 38141
(b) Demised Premises Square Footage: approximately 414,504 sq. ft.
(c) Building Square Footage: approximately 829,464 sq. ft.
(d) Annual Base Rent:
Lease Year 1 $1,185,480.00
Lease Year 2 $1,185,480.00
Lease Year 3 $1,185,480.00
Lease Year 4 $1,185,480.00
Lease Year 5 $1,185,480.00
Lease Year 6 $1,372,008.00
Lease Year 7 $1,372,008.00
Lease Year 8 $1,372,008.00
Lease Year 9 $1,372,008.00
Lease Year 10 $1,372,008.00
(e) Monthly Base Rent Installments
Lease Year 1 $ 98,790.00
Lease Year 2 $ 98,790.00
Lease Year 3 $ 98,790.00
Lease Year 4 $ 98,790.00
Lease Year 5 $ 98,790.00
Lease Year 6 $ 114,334.00
Lease Year 7 $ 114,334.00
Lease Year 8 $ 114,334.00
Lease Year 9 $ 114,334.00
Lease Year 10 $ 114,334.00
(f) Lease Commencement Date: January 1, 2001
(g) Base Rent Commencement Date: January 1, 2001
(h) Expiration Date: December 31, 2010
(i) Primary Term: 120 months
(j) Tenant's Operating Expense Percentage: 50.0%
(k) Security Deposit: $1,900,000.00
(l) Permitted Use: subject to the limitations hereinafter specified,
for (i) storage, warehousing, distribution and light assembly of
products, material and merchandise of Tenant's clientele to the
extent permissible under applicable protective covenants and laws
and regulations of governmental authorities having jurisdiction
over the Demised Premises, (ii) commercial printing, (iii) Compact
Disc and DVD manufacturing, and (iv) general office, and computer
or data room, use reasonably ancillary to the uses specified in
clauses (i), (ii) or (iii) above; provided however, that Tenant's
use of the Demised Premises (A) shall never include any use
prohibited by any provision contained in this Lease (including,
without limitation, Section 16 hereof), (B) shall never extend to
or allow the use or storage of radioactive or biohazardous
materials at the Demised Premises, or any use wherein a Hazardous
Substance (as hereinafter defined) constitutes the principal or
primary product of the business to be conducted at the Demised
Premises, (C) except with respect to clause (iii) above, shall
never include any manufacturing, (D) must not result in a material
increase in the wear and tear on the Demised Premises, as compared
to uses permitted from time to time for other tenants in the
Building (as hereinafter defined), and (E) must not, in the
reasonable judgment of Landlord, result in a material increase in
the risk of environmental contamination at the Demised Premises.
The Demised Premises shall be used for the Permitted Use set forth
in this subsection (l) and for no other purpose without Landlord's
prior written consent, which consent may be withheld in Landlord's
sole discretion; provided, however, that upon Tenant's request and
provided that Tenant is not then in default hereunder, Landlord
agrees not to unreasonably withhold its consent if Tenant desires
to use the Demised Premises for web hosting, data storage and/or
collocation.
(m) Address for notice:
Landlord: Industrial Developments International (Tennessee),
L.P.
c/o Industrial Developments International, Inc.
3424 Peachtree Road, N.E., Suite 1500
Atlanta, Georgia 30326
Attn: Manager - Lease Administration
Tenant: SalesLink Corporation
425 Medford Street
Charlestown, Massachusetts 02129
Attn: CFO
With a copy to: CMGI, Inc.
100 Brickstone Square
Andover, Massachusetts 01810
Attn: General Counsel
(n) Address for rental payments:
Industrial Developments International
(Tennessee), L.P
c/o IDI Services Group, Inc.
P. O. Box 281464
Atlanta, Georgia 30384-1464
(o) Broker(s): Wilkinson & Snowden
CRF Partners, Inc.
2. Demised Premises. For and in consideration of the rent hereinafter
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reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
Exhibit A attached hereto and incorporated herein: approximately 414,504 square
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feet of space, approximately 15,000 square feet of which is office space, having
an address as set forth in Section 1(a), located within Building "D" (the
"Building"), which contains a total of approximately 829,464 square feet and is
located within Chickasaw Distribution Center (the "Project"), located in Shelby
County, Tennessee.
3. Term. To have and to hold the Demised Premises for a preliminary term
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(the "Preliminary Term") commencing on the Lease Date and ending on the Lease
Commencement Date as set forth in Section 1(f), and a primary term (the "Primary
Term") commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17 (the Preliminary Term,
the Primary Term, and any and all extensions thereof, herein referred to as the
"Term"). The term "Lease Year", as used in this Lease, shall mean each one (1)
year period of the Term (or portion thereof if the last Lease Year of the Term
is less than one (1) full year) beginning on the Lease Commencement Date, and
each anniversary thereof, and ending on the day immediately prior to the next
succeeding anniversary of the Lease Commencement Date.
4. Base Rent. Tenant shall pay to Landlord at the address set forth in
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Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance, without demand and, except as otherwise expressly set forth herein,
without abatement, reduction, set-off or deduction, on the first day of each
calendar month during the Term. If the Base Rent Commencement Date shall fall on
a day other than the first day of a calendar month, the Base Rent shall be
apportioned pro rata on a per diem basis (i) for the period between the Base
Rent Commencement Date and the first day of the following calendar month (which
pro rata payment shall be due and payable on the Base Rent Commencement Date),
and (ii) for the last partial month of the Term, if applicable. No payment by
Tenant or receipt by Landlord of rent hereunder shall be deemed to be other than
on account of the amount due, and no endorsement or statement on any check or
any letter accompanying any check or payment of rent shall be deemed an accord
and satisfaction, and Landlord may accept such check as payment without
prejudice to Landlord's right to recover the balance of such installment or
payment of rent or pursue any other remedies available to Landlord.
5. Security Deposit.
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(a) Within ten (10) days following Tenant's execution of this Lease,
Tenant will pay to Landlord the sum set forth in Section 1(k) (the "Security
Deposit") as security for the full and faithful performance by Tenant of each
and every term, covenant and condition of this Lease. At Tenant's option, Tenant
may deliver the Security Deposit to Landlord in the form of an Irrevocable
Letter of Credit, substantially in the form attached hereto as Exhibit F (the
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"Letter of Credit"), from Fleet Bank, N.A., or such other financial institution
acceptable to Landlord, and Tenant shall cause the same to be maintained in full
force and effect throughout the Term, as may be extended, and during the thirty
(30) day period after the later of (a) the Expiration Date or (b) the date that
Tenant delivers possession of the Demised Premises to Landlord. The acceptance
by Landlord of the Security Deposit paid by Tenant shall not render this Lease
effective unless and until Landlord shall have executed and delivered to Tenant
a fully executed copy of this Lease.
(b) Upon Tenant's written request, to be delivered no earlier than
fifteen (15) days before the expiration of each Lease Year, the Security Deposit
shall be reduced by One Hundred Ninety Thousand and No/100 Dollars
($190,000.00), provided that (i) the Letter of Credit, if applicable, is in full
force and effect (e.g. it has not expired or been converted to cash), (ii)
Tenant is not then in default of this Lease and no event has occurred that with
the passage of time or giving of notice would constitute a default of Tenant
hereunder (provided, however, that if Tenant is then in default of this Lease,
but cures such default within the applicable cure period provided in this Lease,
Tenant shall have the right to renew its request to reduce the Letter of
Credit), (iii) Tenant's net worth (which, for purposes of this Lease, is defined
as the sum of legal capital [common and preferred stock], additional paid-in
capital, minority interest, and retained earnings), as of the date of such
request by Tenant is not less than $20,000,000.00, and (iv) Tenant earned a
cumulative positive net income for the four quarters immediately preceding such
request (Tenant hereby agreeing to provide Landlord with such evidence as
Landlord may reasonably require to determine Tenant's net worth and recent net
income as of the date of such request by Tenant, which evidence may consist of
(x) audited financial statements, or (y) if no audited financial statements are
then available, unaudited financial statements certified by an officer of Tenant
to be true and correct). If Tenant is entitled to a reduction in the Security
Deposit pursuant to the preceding sentence and the Security Deposit is in the
form of cash, Landlord shall deliver to Tenant a check in the amount of
$190,000.00. If Tenant is entitled to a reduction in the Security Deposit as set
forth above and the Security Deposit is in the form of the Letter of Credit,
Landlord shall notify the issuer of the Letter of Credit to reduce the balance
of the Letter of Credit by $190,000.00.
(c) The Security Deposit, if in the form of cash, may be commingled
with Landlord's other funds or held by Landlord in a separate interest bearing
account, with interest paid to Landlord, as Landlord may elect. Notwithstanding
the foregoing, Landlord agrees that, as long as Tenant is not in default under
this Lease, the Security Deposit, if in the form of cash, will accrue simple
interest, without compounding, at the annual rate of interest actually earned on
the account(s) into which the Security Deposit is, from time to time, deposited
by Landlord, from the date that Landlord receives written notice from Tenant
requesting that such interest accrue (provided that Tenant shall have no right
to request that such interest accrue unless the unapplied portion of the
Security Deposit is in cash and is in excess of $500,000.00) to the date on
which the Security Deposit is returned to Tenant in accordance with the
provisions of this Lease. The Security Deposit shall not accrue any interest
during any period (i) when the unapplied portion of the Security Deposit does
not exceed $500,000.00, or (ii) when Tenant is in default beyond applicable
notice and cure periods under this Lease. In no event shall any interest
whatsoever accrue on any part of the Security Deposit which is applied by
Landlord in accordance with the provisions
of this Section 5. The accrued interest shall be delivered by Landlord to Tenant
at such time, if at all, as Landlord is obligated to return to Tenant all of the
unapplied Security Deposit in accordance with this Section 5.
(d) In the event that Tenant commits an Event of Default (as
hereinafter defined) under this Lease, Landlord may convert the Letter of
Credit, if applicable, to cash and/or apply the Security Deposit to the payment
of any sum due Landlord or which Landlord may expend or be required to expend by
reason of such Event of Default; provided, however, that any such conversion or
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application by Landlord shall not be or be deemed to be an election of remedies
by Landlord or viewed as liquidated damages, it being expressly understood and
agreed that Landlord shall have the right to pursue any and all other remedies
available to it under the terms of this Lease or otherwise. In the event all or
any portion of the Security Deposit is so applied by Landlord, Tenant shall,
within five (5) days of demand therefor from Landlord, replenish the Security
Deposit to the full amount set forth in Section 1(k).
(e) In the event that Tenant shall comply with all of the terms,
covenants and conditions of this Lease, the Security Deposit shall be returned
to Tenant within thirty (30) days after the later of (i) the Expiration Date or
(ii) the date that Tenant delivers possession of the Demised Premises to
Landlord. In the event of a sale of the Building, Landlord shall have the right,
at Landlord's cost, to transfer the Security Deposit (and any interest earned
thereon pursuant to the foregoing provisions of this Section 5) to the
purchaser, and upon acceptance by such purchaser, Landlord shall be released
from all liability for the return of the Security Deposit (and any interest
earned thereon pursuant tot he foregoing provisions of this Section 5). Tenant
shall not assign or encumber the money deposited as security, and neither
Landlord nor its successors or assigns shall be bound by any such assignment or
encumbrance.
6. Operating Expenses and Additional Rent.
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(a) Tenant agrees to pay as Additional Rent (as defined in Section
6(b) below) its proportionate share of Operating Expenses (as hereinafter
defined). "Operating Expenses" shall be defined as all reasonable expenses for
operation, repair, replacement and maintenance as necessary to keep the Building
and the common areas, driveways, and parking areas associated therewith
(collectively, the "Building Common Area") in good order, condition and repair,
including but not limited to, utilities for the Building Common Area, expenses
associated with the driveways and parking areas (including sealing and
restriping, and snow, trash and ice removal), security systems, fire detection
and prevention systems, lighting facilities, landscaped areas, walkways,
painting and caulking, directional signage, curbs, drainage strips, sewer and
other utility lines located in the Building Common Area (except to the extent
such utility lines were installed by a tenant of the Building and exclusively
serve such tenant's space), common utility lines located within the Building and
not required to be maintained by a tenant of the Building pursuant to its lease,
all charges assessed against or attributed to the Building pursuant to any
applicable easements, covenants, restrictions, agreements, declaration of
protective covenants, property management fees, all real property taxes,
franchise taxes and special assessments attributable to or imposed upon the
Building, the Building Common Area and the land on which the Building and the
Building Common Area are constructed, all costs of insurance paid by Landlord
with respect to the Building and the Building Common Area, and costs of
improvements to the Building and the Building Common Area required by any law,
ordinance or regulation applicable to the Building and the Building Common Area
generally (and not because of the particular use of the Building or the Building
Common Area by a particular tenant), which cost shall be amortized on a straight
line basis over the useful life of such improvement, determined in accordance
with generally accepted accounting principles ("GAAP") (provided that in no
event shall the useful life be greater than fifteen (15) years). Operating
Expenses shall not include expenses for the costs of any maintenance and repair
required to be performed by Landlord at its own expense under Section (10)(b).
Further, Operating Expenses shall not include the costs for capital improvements
unless such costs are incurred for the purpose of causing a material decrease in
the Operating Expenses of the Building or the Building Common Area or are
incurred with respect to improvements made to comply with laws, ordinances or
regulations as described above. The proportionate share of Operating Expenses to
be paid by Tenant shall be a percentage of the Operating
Expenses based upon the proportion that the square footage of the Demised
Premises bears to the total square footage of the Building (such figure referred
to as "Tenant's Operating Expense Percentage" and set forth in Section 1(j).
Prior to or promptly after the beginning of each calendar year during the Term,
Landlord shall estimate the total amount of Operating Expenses to be paid by
Tenant during each such calendar year and Tenant shall pay to Landlord one-
twelfth (1/12) of such sum on the first day of each calendar month during each
such calendar year, or part thereof, during the Term. Within one hundred twenty
(120) days after the end of each calendar year, Landlord shall submit to Tenant
a statement of the actual amount of Operating Expenses for such calendar year,
and the actual amount owed by Tenant, and within thirty (30) days after receipt
of such statement, Tenant shall pay any deficiency between the actual amount
owed and the estimates paid during such calendar year, or in the event of
overpayment, Landlord shall credit the amount of such overpayment toward the
next installment of Operating Expenses owed by Tenant or remit such overpayment
to Tenant if the Term has expired or has been terminated and no Event of Default
exists hereunder. The obligations in the immediately preceding sentence shall
survive the expiration or any earlier termination of this Lease for a period of
time sufficient to allow the time periods set forth therein to run in full. If
the Lease Commencement Date shall fall on other than the first day of the
calendar year, and/or if the Expiration Date shall fall on other than the last
day of the calendar year, Tenant's proportionate share of the Operating Expenses
for such calendar year shall be apportioned prorata.
(b) Any amounts required to be paid by Tenant hereunder (in addition
to Base Rent) and any charges or expenses incurred by Landlord on behalf of
Tenant under the terms of this Lease shall be considered "Additional Rent"
payable in the same manner and upon the same terms and conditions as the Base
Rent reserved hereunder except as set forth herein to the contrary. Any failure
on the part of Tenant to pay such Additional Rent when and as the same shall
become due shall entitle Landlord to the remedies available to it for non-
payment of Base Rent. Tenant's obligations for payment of Additional Rent shall
begin to accrue on the Lease Commencement Date regardless of the Base Rent
Commencement Date.
(c) If applicable in the jurisdiction where the Demised Premises are
located, Tenant shall pay and be liable for all rental, sales, use and inventory
taxes or other similar taxes, if any, on the amounts payable by Tenant hereunder
levied or imposed by any city, state, county or other governmental body having
authority, such payments to be in addition to all other payments required to be
paid Landlord by Tenant under the terms of this Lease. Such payment shall be
made by Tenant directly to such governmental body if billed to Tenant, or if
billed to Landlord, such payment shall be paid concurrently with the payment of
the Base Rent, Additional Rent, or such other charge upon which the tax is
based, all as set forth herein.
7. Use of Demised Premises.
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(a) Intentionally Omitted
(b) Tenant shall not commit any waste.
(c) The Demised Premises shall not be used for any illegal purposes,
and Tenant shall not allow, suffer, or permit any vibration, noise, odor, light
or other effect to occur within or around the Demised Premises that could
constitute a nuisance or trespass for Landlord or any occupant of the Building
or an adjoining building, its customers, agents, or invitees. Upon notice by
Landlord to Tenant that any of the aforesaid prohibited uses are occurring,
Tenant agrees to promptly remove or control the same.
(d) Tenant shall not in any way violate any law, ordinance or
restrictive covenant (provided Tenant has been given written notice of such
restrictive covenant) affecting the Demised Premises, and shall not in any
manner use the Demised Premises so as to cause cancellation of, or prevent the
use of, the fire and extended coverage insurance policy required hereunder.
Landlord represents to
Tenant that, to "Landlord's actual knowledge" (which term, or any derivation
thereof, when used in this Lease, shall be deemed to mean the current actual
knowledge of Kurt Nelson, the employee of Landlord with the day to day
responsibility for managing and leasing the Building, without any independent
investigation and without any individual liability on the part of such
individual), the use of the Demised Premises for general storage, warehousing,
distribution and light assembly is allowed by the current zoning classification
applicable to the Demised Premises and by the Declaration of Protective
Covenants established by Landlord and currently encumbering the Building;
provided, however, that Landlord makes no (and does hereby expressly disclaim
any) representation that the storage, warehousing, distribution and light
assembly of a particular product is allowed by such current zoning
classification or such Declaration of Protective Covenants. Except as expressly
set forth hereinabove, Landlord makes no (and does hereby expressly disclaim
any) covenant, representation or warranty as to the Permitted Use being allowed
by or being in compliance with any applicable laws, rules, ordinances or
restrictive covenants now or hereafter affecting the Demised Premises, and any
zoning letters, copies of zoning ordinances or other information from any
governmental agency or other third party provided to Tenant by Landlord or any
of Landlord's agents or employees shall be for informational purposes only,
Tenant hereby expressly acknowledging and agreeing that Tenant shall conduct and
rely solely on its own due diligence and investigation with respect to the
compliance of the Permitted Use with all such applicable laws, rules, ordinances
and restrictive covenants and not on any such information provided by Landlord
or any of its agents or employees. Without limiting the foregoing, Landlord
agrees that it will not voluntarily enter into any restrictive covenant that
encumbers the Building if such restrictive covenant would materially interfere
with Tenant's Permitted Use.
(e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the use of the Demised Premises by Tenant, Tenant shall pay such additional
amount as Additional Rent.
8. Insurance.
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(a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:
(i) Liability insurance in the Commercial General Liability form
(including Broad Form Property Damage and Contractual Liabilities or reasonable
equivalent thereto) covering the Demised Premises and Tenant's use thereof
against claims for bodily injury or death, property damage and product liability
occurring upon, in or about the Demised Premises, such insurance to be written
on an occurrence basis (not a claims made basis), to be in combined single
limits amounts not less than $3,000,000.00 and to have general aggregate limits
of not less than $10,000,000.00 for each policy year. The insurance coverage
required under this Section 8(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 11 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
(ii) Insurance covering (A) all of the items included in the
leasehold improvements constructed in the Demised Premises by or at the expense
of Landlord (collectively, the "Improvements"), including but not limited to
demising walls and the heating, ventilating and air conditioning system and (B)
Tenant's trade fixtures, merchandise and personal property from time to time in,
on or upon the Demised Premises, in an amount not less than one hundred percent
(100%) of their full replacement value from time to time during the Term,
providing protection against perils included within the standard form of "all-
risks" fire and casualty insurance policy, together with insurance against
sprinkler damage, vandalism and malicious mischief. Any policy proceeds from
such insurance relating to the Improvements shall be used solely for the repair,
construction and restoration or replacement of the
Improvements damaged or destroyed unless this Lease shall cease and terminate
under the provisions of Section 20.
(b) All policies of the insurance provided for in Section 8(a) shall
be issued in form reasonably acceptable to Landlord by insurance companies with
a rating of not less than "A-," and financial size of not less than Class X, in
the most current available "Best's Insurance Reports", and licensed to do
business in the state in which the Building is located. Each and every such
policy:
(i) shall name Landlord, Lender (as defined in Section 24), and
any other party reasonably designated by Landlord, as an additional insured. In
addition, the coverage described in Section 8(a)(ii)(A) relating to the
Improvements shall also name Landlord as "loss payee";
(ii) shall be delivered to Landlord, in the form of an insurance
certificate acceptable to Landlord as evidence of such policy, on or prior to
the Lease Commencement Date and thereafter within thirty (30) days prior to the
expiration of each such policy, and, as often as any such policy shall expire or
terminate. Renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent;
(iii) shall contain a provision that the insurer will give to
Landlord and such other parties in interest at least thirty (30) days notice in
writing in advance of any material change, cancellation, termination or lapse,
or the effective date of any reduction in the amounts of insurance; and
(iv) shall be written as a primary policy which does not
contribute to and is not in excess of coverage which Landlord may carry.
(c) In the event that Tenant shall fail to carry and maintain the
insurance coverages set forth in this Section 8, Landlord may upon thirty (30)
days notice to Tenant (unless such coverages will lapse in which event no such
notice shall be necessary) procure such policies of insurance and Tenant shall
promptly reimburse Landlord therefor.
(d) Landlord and Tenant hereby waive any rights each may have against
the other on account of any loss or damage occasioned to Landlord or Tenant, as
the case may be, their respective property, the Demised Premises, its contents
or to the other portions of the Building, arising from any risk covered by all
risks fire and extended coverage insurance of the type and amount required to be
carried hereunder, provided that such waiver does not invalidate such policies
or prohibit recovery thereunder. The parties hereto shall cause their respective
insurance companies insuring the property of either Landlord or Tenant against
any such loss, to waive any right of subrogation that such insurers may have
against Landlord or Tenant, as the case may be.
9. Utilities. During the Term, Tenant shall promptly pay as billed to
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Tenant all rents and charges for water and sewer services and all costs and
charges for gas, steam, electricity, fuel, light, power, telephone, heat and any
other utility or service used or consumed in or servicing the Demised Premises.
To the extent reasonably possible, such utilities shall be separately metered
and billed to Tenant. In the event any such utilities are separately metered,
Tenant's obligation for payment of such utilities shall commence as of the date
of Tenant's actual occupancy of all or any portion of the Demised Premises,
including any period of occupancy by Tenant prior to the Lease Commencement
Date, regardless of whether or not Tenant conducts business operations during
such period of occupancy. Any utilities which are not separately metered shall
be billed to Tenant by Landlord at Landlord's actual cost. In the event Tenant's
use of any utility not metered is in excess of the average use by other tenants,
Landlord shall have the right to install a meter for such utility, at Tenant's
expense, and bill Tenant for Tenant's actual use. If Tenant fails to pay any
utility bills or charges, Landlord may, at its option and upon reasonable notice
to Tenant, pay the same and in such event, the amount of such payment, together
with interest thereon at the Interest Rate as defined in Section 32 from the
date of such payment by Landlord, will be added to Tenant's next due payment as
Additional Rent.
10. Maintenance and Repairs.
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(a) Tenant shall, at its own cost and expense, maintain in good
condition and repair the interior of the Demised Premises, including but not
limited to the heating, air conditioning and ventilation systems, glass, windows
and doors, sprinkler, all plumbing, sewage and other utility lines and systems
to the extent exclusively serving the Demised Premises, fixtures, interior
walls, floors (including floor slabs), ceilings, storefronts, plate glass,
skylights, all electrical facilities and equipment including, without
limitation, lighting fixtures, lamps, fans and any exhaust equipment and
systems, electrical motors, and all other appliances and equipment (including,
without limitation, dock levelers, dock shelters, dock seals and dock lighting)
of every kind and nature located in, upon or about the Demised Premises, except
as to such maintenance and repair as is the obligation of Landlord pursuant to
Section 10(b). During the Term, Tenant shall maintain in full force and effect a
service contract for the maintenance of the heating, ventilation and air
conditioning systems with an entity reasonably acceptable to Landlord. Tenant
shall deliver to Landlord (i) a copy of said service contract prior to the Lease
Commencement Date, and (ii) thereafter, a copy of a renewal or substitute
service contract within thirty (30) days prior to the expiration of the existing
service contract. Tenant's obligation shall exclude any maintenance and repair
required because of the act or negligence of Landlord, its employees,
contractors or agents, the cost of which shall be the responsibility of
Landlord.
(b) Landlord shall, at its own cost and expense, maintain in good
condition and repair the Building structure, including the roof, foundation
(beneath the floor slab), structural integrity of the exterior walls, and
structural frame of the Building. Landlord's obligation shall exclude the cost
of any maintenance or repair required because of the act or negligence of Tenant
or any of Tenant's or such subsidiaries' or affiliates' agents, contractors,
employees, licensees and invitees (collectively, "Tenant's Affiliates"), the
cost of which shall be the responsibility of Tenant.
(c) Unless the same is caused solely by the negligent action or
inaction of Landlord, its employees or agents, and is not covered by the
insurance required to be carried by Tenant pursuant to the terms of this Lease,
Landlord shall not be liable to Tenant or to any other person for any damage
occasioned by failure in any utility system or by the bursting or leaking of any
vessel or pipe in or about the Demised Premises, or for any damage occasioned by
water coming into the Demised Premises or arising from the acts or neglects of
occupants of adjacent property or the public.
(d) If (i) Landlord has failed to commence any repair of the Demised
Premises, as required in subsection (b) above, within thirty (30) days after
written notice from Tenant specifying which repair Landlord has failed to
perform (or, in the case of leaks in the roof of the Demised Premises that
otherwise meet the conditions required for "self-help" hereinbelow, within
seventy-two (72) hours after written notice from Tenant specifying same), or
(ii) Landlord has failed to complete any repair of the Demised Premises, as
required in subsection (b) above, within forty-five (45) days after written
notice from Tenant specifying which repair Landlord has failed to complete
(provided such repair is reasonably capable of being completed within such
forty-five (45) day period), and, in Tenant's reasonable opinion, "self-help"
measures are necessary in an emergency situation to prevent significant physical
damage to the Demised Premises (including Tenant's property located within the
Demised Premises) or injury to persons, Tenant may exercise such self-help to
perform or complete such repair, as the case may be, after giving Landlord such
notice of Tenant's intent to do so as is reasonable under the circumstances (it
being acknowledged that oral notice may be appropriate in certain emergency
situations, but that any such oral notice must be followed by written notice
given in the manner provided for notices herein within twenty-four (24) hours of
such oral notice); provided, however, that in performing any such self-help with
respect to the roof of the Demised Premises, Tenant (i) shall only use a
manufacturer approved, licensed roof contractor, and (ii) shall not void or
impair any applicable roof warranty. Tenant shall be entitled to recover from
Landlord the reasonable and actual third party out-of-pocket cost of any such
self-help measures, and Landlord shall pay such amount to Tenant within sixty
(60) days after Tenant's request for reimbursement. Any requests for
reimbursement made by Tenant pursuant to this subsection (d) shall be
accompanied by such documentation as Landlord shall reasonably require showing
the actual costs incurred by Tenant, and by full and final lien waivers from all
contractors performing the work. If Landlord has not paid to Tenant such amount
or given Tenant notice of its objection to such amount within such sixty (60)
day period, or if Landlord's objection to such amount is resolved against
Landlord by agreement of the parties or by a court of competent jurisdiction to
which the dispute has been submitted by either party, then Tenant may offset the
reasonable and actual third party out-of pocket cost of such self-help measures
from future Monthly Base Rent Installments next coming due hereunder until
Tenant has been reimbursed in full therefor, such offset for any given month to
be up to, but not to exceed, one-half (1/2) of the Monthly Base Rental
Installment due for such month.
11. Tenant's Personal Property; Indemnity. All of Tenant's personal
-------------------------------------
property in the Demised Premises shall be and remain at Tenant's sole risk.
Landlord, its agents, employees and contractors, shall not be liable for, and
Tenant hereby releases Landlord from, any and all liability for theft thereof or
any damage thereto occasioned by any act of God or by any acts, omissions or
negligence of any persons, other than Landlord. Landlord, its agents, employees
and contractors, shall not be liable for any injury to the person or property of
Tenant or other persons in or about the Demised Premises, Tenant expressly
agreeing to indemnify and save Landlord, its agents, employees and contractors,
harmless, in all such cases, except to the extent caused by the negligence or
willful misconduct of Landlord, its agents, employees and contractors. Tenant
further agrees to indemnify and reimburse Landlord for any costs or expenses,
including, without limitation, reasonable attorneys' fees, that Landlord
reasonably may incur in investigating, handling or litigating any such claim
against Landlord by a third person, unless such claim arose from the negligence
or willful misconduct of Landlord, its agents, employees or contractors. The
provisions of this Section 11 shall survive the expiration or earlier
termination of this Lease with respect to any damage, injury or death occurring
before such expiration or termination.
12. Tenant's Fixtures. Tenant shall have the right to install in the
-----------------
Demised Premises trade fixtures required by Tenant or used by it in its
business, and if installed by Tenant, to remove any or all such trade fixtures
from time to time during and upon termination or expiration of this Lease,
provided no Event of Default, as defined in Section 22, then exists; provided,
--------
however, that Tenant shall repair and restore any damage or injury to the
- - -------
Demised Premises (to the condition in which the Demised Premises existed prior
to such installation) caused by the installation and/or removal of any such
trade fixtures.
13. Signs. No sign, advertisement or notice shall be inscribed, painted,
-----
affixed, or displayed on the windows or exterior walls of the Demised Premises
or on any public area of the Building, except in such places, numbers, sizes,
colors and styles as are approved in advance in writing by Landlord, and which
conform to all applicable laws, ordinances, or covenants affecting the Demised
Premises. Notwithstanding the foregoing, Tenant shall have the right to affix
one (1) identification sign to the exterior of the Demised Premises, and one (1)
street monument sign within the Building Common Area, provided Tenant and such
sign otherwise comply with the terms and conditions of this Section 13. Any and
all signs installed or constructed by or on behalf of Tenant pursuant hereto
shall be installed, maintained and removed by Tenant at Tenant's sole cost and
expense. Without limiting the foregoing, all signage installed by Tenant shall
be consistent with the sign guidelines attached hereto as Exhibit G and
---------
incorporated herein, as such guidelines may be amended from time to time with
respect to comparably sized tenants in the Buildings owned by Landlord within
the Project.
14. Intentionally Omitted
15. Governmental Regulations.
------------------------
(a) Tenant shall promptly comply throughout the Term, at Tenant's
sole cost and expense, with all present and future laws, ordinances, orders,
rules, regulations or requirements of all federal, state and municipal
governments and appropriate departments, commissions, boards and officers
thereof (collectively, "Governmental Requirements") relating to (i) all or any
part of the Demised Premises, and (ii) to the use or manner of use of the
Demised Premises and the Building Common Area.
Tenant shall also observe and comply with the requirements of all policies of
public liability, fire and other policies of insurance at any time in force with
respect to the Demised Premises.
(b) Notwithstanding subsection (a) hereinabove, in the event that any
Governmental Requirements are in existence as of the Lease Date and require an
alteration or modification of the Demised Premises or the Building Common Area
(a "Code Modification") solely as a result of the use of the Demised Premises
for general warehouse and office purposes (irrespective of the specific use
thereof by any particular occupant), then Landlord shall be required to make
such Code Modification at Landlord's sole cost and expense.
(c) Without limiting subsections (a) or (b) above, if as a result of
one or more Governmental Requirements it is necessary, from time to time during
the Term, to perform a Code Modification that is made necessary as a result of
the specific use being made by Tenant of the Demised Premises, then such Code
Modification shall be the sole and exclusive responsibility of Tenant in all
respects; any such Code Modification shall be promptly performed by Tenant at
its expense in accordance with the applicable Governmental Requirement and with
Section 18 hereof.
(d) Without limiting subsections (a), (b) or (c) above, if as a
result of one or more Governmental Requirements it is necessary from time to
time during the Term to perform a Code Modification which (i) would be
characterized as a capital expenditure under generally accepted accounting
principles and (ii) is not made necessary as a result of the specific use being
made by Tenant of the Demised Premises (as distinguished from an alteration or
modification which would be required to be made by the owner of any warehouse-
office building comparable to the Building irrespective of the use thereof by
any particular occupant), then (a) Landlord shall have the obligation to perform
the Code Modification at its expense, (b) the cost of such Code Modification
shall be amortized on a straight-line basis over the useful life of the item in
question, determined in accordance with GAAP (provided that in no event shall
the useful life be greater than fifteen (15) years), and (c) Tenant shall be
obligated to pay (as Additional Rent, payable in the same manner and upon the
same terms and conditions as the Base Rent reserved hereunder) for the portion
of such amortized costs attributable to the remainder of the Term, including any
extensions thereof. Tenant shall promptly send to Landlord a copy of any written
notice received by Tenant requiring a Code Modification.
16. Environmental Matters.
---------------------
(a) For purposes of this Lease:
(i) "Contamination" as used herein means the presence of
or release of Hazardous Substances (as hereinafter defined) into any
environmental media from, upon, within, below, into or on any portion of the
Demised Premises, the Building, the Building Common Area or the Project so as to
require remediation, cleanup or investigation under any applicable Environmental
Law (as hereinafter defined).
(ii) "Environmental Laws" as used herein means all federal,
state, and local laws, regulations, orders, permits, ordinances or other
requirements, which exist now or as may exist hereafter, concerning protection
of human health, safety and the environment, all as may be amended from time to
time.
(iii) "Hazardous Substances" as used herein means any
hazardous or toxic substance, material, chemical, pollutant, contaminant or
waste as those terms are defined by any applicable Environmental Laws
(including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any
solid wastes, polychlorinated biphenyls, urea formaldehyde, asbestos,
radioactive materials, radon, explosives, petroleum products and oil.
(b) Landlord represents that, except as revealed to Tenant in that
certain Phase I Environmental Site Assessment prepared for Industrial
Developments International, Inc., by ERM, dated July, 1996, as amended by letter
dated April 22, 1998, copies of which have been delivered to Tenant, to
Landlord's actual knowledge, Landlord has not treated, stored or disposed of any
Hazardous Substances upon or within the Demised Premises, nor, to Landlord's
actual knowledge, has any predecessor owner of the Demised Premises.
(c) Tenant covenants that all its activities, and the activities of
Tenant's Affiliates (as defined in Section 10(b)), on the Demised Premises, the
Building, or the Project during the Term will be conducted in compliance with
Environmental Laws. Tenant warrants that to its knowledge it is currently in
compliance with all applicable Environmental Laws and that there are no pending
or threatened notices of deficiency, notices of violation, orders, or judicial
or administrative actions involving alleged violations by Tenant of any
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall be
responsible for obtaining all permits or licenses or approvals under
Environmental Laws necessary for Tenant's operation of its business on the
Demised Premises and shall make all notifications and registrations required by
any applicable Environmental Laws. Tenant, at Tenant's sole cost and expense,
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations and with any other
applicable Environmental Laws. Tenant warrants that prior to the Lease
Commencement Date, Tenant shall have obtained all such permits, licenses or
approvals and made all such notifications and registrations required by any
applicable Environmental Laws necessary for Tenant's operation of its business
on the Demised Premises.
(d) Except as otherwise set forth in Special Stipulation 17 of
Exhibit C to this Lease, Tenant shall not cause or permit any Hazardous
Substances to be brought upon, kept or used in or about the Demised Premises,
the Building, or the Project without the prior written consent of Landlord,
which consent shall not be unreasonably withheld; provided, however, that the
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consent of Landlord shall not be required for the use at the Demised Premises of
batteries or charging stations necessary to operate Tenant's forklifts (provided
reasonable safety precautions are at all times taken by Tenant in connection
therewith), or of cleaning supplies, toner for photocopying machines and other
similar materials, in containers and quantities reasonably necessary for and
consistent with normal and ordinary use by Tenant in the routine operation or
maintenance of Tenant's office equipment or in the routine janitorial service,
cleaning and maintenance for the Demised Premises. For purposes of this Section
16, Landlord shall be deemed to have reasonably withheld consent if Landlord
determines that the presence of such Hazardous Substance within the Demised
Premises could (i) result in a risk of harm to person or property or (ii)
otherwise negatively affect the value or marketability of the Building or the
Project.
(e) Tenant shall not cause or permit the release of any Hazardous
Substances by Tenant or Tenant's Affiliates into any environmental media such as
air, water or land, or into or on the Demised Premises, the Building or the
Project in any manner that violates any Environmental Laws. If such release
shall occur, Tenant shall (i) take all steps reasonably necessary to contain and
control such release and any associated Contamination, (ii) clean up or
otherwise remedy such release and any associated Contamination to the extent
required by, and take any and all other actions required under, applicable
Environmental Laws and (iii) notify and keep Landlord reasonably informed of
such release and response.
(f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold Landlord
harmless from and against any and all expense, loss, and liability suffered by
Landlord (except to the extent that such expenses, losses, and liabilities arise
out of Landlord's own negligence or willful act), by reason of the storage,
generation, release, handling, treatment, transportation, disposal, or
arrangement for transportation or disposal, of any Hazardous Substances (whether
accidental, intentional, or negligent) by Tenant or Tenant's Affiliates or by
reason of Tenant's breach of any of the provisions of this Section 16. Such
expenses, losses and liabilities shall include, without limitation, (i) any and
all expenses that Landlord may incur to comply with any Environmental Laws; (ii)
any and all costs that Landlord may incur in studying or remedying any
Contamination at or arising from the Demised Premises, the Building, or the
Project; (iii) any and all costs that Landlord may incur in studying, removing,
disposing or otherwise addressing any Hazardous Substances; (iv) any and all
fines, penalties or other sanctions assessed upon Landlord; and (v) any and all
legal and professional fees and costs incurred by Landlord in connection with
the foregoing. The indemnity contained herein shall survive the expiration or
earlier termination of this Lease.
17. Construction of Demised Premises.
--------------------------------
(a) Within thirty (30) days after the Lease Date, Landlord shall
prepare, at Landlord's sole cost and expense, and submit to Tenant a set of
plans and specifications and/or construction drawings (collectively, the "Plans
and Specifications") based on the preliminary plans and specifications and/or
preliminary floor plans set forth on Exhibit B attached hereto and incorporated
---------
herein, covering all work to be performed by Landlord in constructing the
Improvements (as defined in Section 8(a)(ii)), together with Landlord's
reasonable estimate of the cost to construct the Allowance Improvements (as
defined in Special Stipulation 3 of Exhibit C to this Lease); provided, however,
that Tenant acknowledges that such estimate of the cost to construct the
Allowance Improvements will be only an estimate, and shall have no affect on any
obligation Tenant may have under said Special Stipulation 3 to reimburse
Landlord for the cost to construct the Allowance Improvements to the extent such
cost exceeds the Tenant Allowance (as defined in said Special Stipulation 3).
Tenant shall have ten (10) days after receipt of the Plans and Specifications in
which to review and to give to Landlord written notice of its approval of the
Plans and Specifications or its requested changes to the Plans and
Specifications. Tenant shall have no right to request any changes to the Plans
and Specifications which would materially alter either the Demised Premises or
the exterior appearance or basic nature of the Building, as the same are
contemplated by the Preliminary Plans. Landlord agrees to reasonably cooperate
with Tenant during such ten (10) day period to value engineer the Plans and
Specifications. If Tenant fails to approve or request changes to the Plans and
Specifications by ten (10) days after its receipt thereof, then Tenant shall be
deemed to have approved the Plans and Specifications and the same shall
thereupon be final. If Tenant requests any changes to the Plans and
Specifications, Landlord shall make those changes which are reasonably requested
by Tenant and shall within ten (10) days of its receipt of such request submit
the revised portion of the Plans and Specifications to Tenant. Tenant may not
thereafter disapprove the revised portions of the Plans and Specifications
unless Landlord has unreasonably failed to incorporate reasonable comments of
Tenant and, subject to the foregoing, the Plans and Specifications, as modified
by said revisions, shall be deemed to be final upon the submission of said
revisions to Tenant. Tenant acknowledges that Landlord shall have the right and
option to submit various parts of the proposed Plans and Specifications from
time to time during the aforesaid thirty (30) day period and the time period for
approval of any part of the proposed Plans and Specifications shall commence
upon receipt of each submission provided that Landlord gives Tenant written
notice that Tenant's approval is required in connection with such submitted
part. Tenant shall at all times in its review of the Plans and Specifications,
and of any revisions thereto, act reasonably and in good faith. After Tenant has
approved the Plans and Specifications or the Plans and Specifications have
otherwise been finalized pursuant to the procedures set forth hereinabove, any
subsequent changes to the Plans and Specifications requested by Tenant shall be
at Tenant's sole cost and expense and subject to Landlord's written approval,
which approval shall not be unreasonably withheld, conditioned or delayed. If
after the Plans and Specifications have been finalized pursuant to the
procedures set forth hereinabove Tenant requests any further changes to the
Plans and Specifications and, as a result thereof, Substantial Completion (as
hereinafter defined) of
the Improvements is delayed, then for purposes of establishing the Lease
Commencement Date, Substantial Completion shall be deemed to mean the date when
Substantial Completion would have been achieved but for such Tenant delay.
(b) Landlord shall use reasonable speed and diligence to
Substantially Complete the Improvements, at Landlord's sole cost and expense,
and have the Demised Premises ready for occupancy on or before the Lease
Commencement Date set forth in Section 1(f).
(i) If the Demised Premises are not Substantially Complete on
that date (as such date is, and shall be, extended as a result of Ordinary
Delay, as hereinafter defined, the "Target Completion Date"), such failure to
complete shall not in any way affect the obligations of Tenant hereunder except
that (A) the Lease Commencement Date, the Base Rent Commencement Date and the
Expiration Date shall be postponed one (1) day for each day Substantial
Completion is delayed beyond the Target Completion Date, and (B) commencing on
the Target Completion Date and continuing through and including February 1, 2001
(as such date is, and shall be, extended as a result of Ordinary Delay, the
"First Delay Date"), Tenant shall receive a credit against Base Rent (but not
Additional Rent) in an amount equal to the product of (1) $3,186.77, and (2) the
number of days that Substantial Completion is delayed beyond the Target
Completion Date, and (C) commencing on the date immediately following the First
Delay Date and continuing through and including the date that the Improvements
are Substantially Complete, Tenant shall receive a credit against Base Rent in
an amount equal to the product of (1) $6,373.54, and (2) the number of days that
Substantial Completion is delayed beyond the First Delay Date.
(ii) Notwithstanding subsection (i) above, in the event that the
Improvements are not Substantially Complete on or before May 1, 2001 (as such
date is, and shall be, extended as a result of Ordinary Delay and Tenant Delay,
as hereinafter defined, being hereinafter referred to as the "Outside Delivery
Date"), Tenant may, at its option and as its sole and exclusive remedy,
terminate this Lease by written notice to Landlord given on or before the tenth
(10th) day following the Outside Delivery Date (provided that Substantial
Completion has not occurred prior to Landlord's receipt of said termination
notice), and thereafter neither Landlord nor Tenant shall have any further
obligation hereunder.
(iii) Except as set forth in this subsection (b), no liability
whatsoever shall arise or accrue against Landlord by reason of its failure to
deliver or afford possession of the Demised Premises, and Tenant hereby releases
and discharges Landlord from and of any claims for damage, loss, or injury of
every kind whatsoever as if this Lease were never executed.
(iv) For purposes of this Lease, the term (A) "Tenant Delay"
shall mean delay resulting Tenant's failure to approve the Plans and
Specifications as set forth in Section 17(a), by change orders requested by
Tenant after approval of the Plans and Specifications (but only to the extent
such requests actually result in delay), or acts or omissions of Tenant, and (B)
"Ordinary Delay" shall mean such additional time as is equal to the time lost by
Landlord or Landlord's contractors or suppliers in connection with the
performance of Landlord's work and/or the construction of the Demised Premises
and related improvements due to strikes or other labor troubles, governmental
restrictions and limitations, war or other national emergency, non-availability
of materials or supplies, delay in transportation, accidents, floods, fire,
damage or other casualties, weather or other conditions, or delays by utility
companies in bringing utility lines to the Demised Premises.
(c) Upon Substantial Completion of the Demised Premises, a
representative of Landlord and a representative of Tenant together shall inspect
the Demised Premises and generate a punchlist of defective or uncompleted items
relating to the completion of construction of the Improvements (the
"Punchlist"). Landlord shall, within sixty (60) days after the Punchlist is
prepared and agreed upon by Landlord and Tenant, complete such incomplete work
and remedy such defective work as is set forth on the Punchlist. All
construction work performed by Landlord shall be deemed approved by
Tenant in all respects except for items of said work which are not completed or
do not conform to the Plans and Specifications and which are included on the
Punchlist; provided, however, that said deemed approval shall have no effect on
Landlord's warranty obligations pursuant to subsection (e) below.
(d) Upon Substantial Completion of the Demised Premises and the
creation of the Punchlist, Tenant shall execute and deliver to Landlord a letter
of acceptance in which Tenant (i) accepts the Demised Premises subject only to
Landlord's completion of the items listed on the Punchlist and (ii) confirms
that the Lease Commencement Date, the Base Rent Commencement Date and the
Expiration Date remain as set forth in Section 1, or if revised pursuant to the
terms hereof, setting forth such dates as so revised.
(e) Landlord hereby warrants to Tenant, which warranty shall survive
for the one (1) year period following the Lease Commencement Date, that (i) the
materials and equipment furnished by Landlord's contractors in the completion of
the Improvements will be of good quality and new, and (ii) such materials and
equipment and the work of such contractors shall be free from defects not
inherent in the quality required or permitted hereunder. This warranty shall
exclude damages or defects caused by Tenant or Tenant's Affiliates, improper or
insufficient maintenance, improper operation, or normal wear and tear under
normal usage.
(f) For purposes of this Lease, the term "Substantial Completion" (or
any variation thereof) shall mean completion of construction of the Improvements
in accordance with the Plans and Specifications, subject only to Punchlist items
established pursuant to Section 17(c), so that Tenant can lawfully occupy and
conduct its business at the Demised Premises, as established by the delivery by
Landlord to Tenant of a certificate of occupancy (or temporary certificate of
occupancy or its equivalent if a certificate of occupancy cannot yet be issued
solely because of the need for completion of all or a portion of the
construction, installation and testing of Tenant's improvements, equipment and
fixtures within the Demised Premises, provided that in such event, Landlord
agrees to cooperate with Tenant as reasonably necessary in obtaining a final
certificate of occupancy following the completion of said construction,
installation and testing by Tenant) for the Demised Premises issued by the
appropriate governmental authority, if a certificate is so required by a
governmental authority. Notwithstanding anything to the contrary contained in
this Section 17, in the event Substantial Completion is delayed because of
Tenant Delay, then Substantial Completion shall, for the purpose of establishing
the Lease Commencement Date, be deemed to mean the date when Substantial
Completion would have been achieved but for such Tenant Delay.
18. Tenant Alterations and Additions.
--------------------------------
(a) Tenant shall not make or permit to be made any alterations,
improvements, or additions (including the construction of additional office
space) to the Demised Premises (a "Tenant's Change"), without first obtaining on
each occasion Landlord's prior written consent (which consent Landlord agrees
not to unreasonably withhold) and Lender's prior written consent (if such
consent is required); provided, however, that Tenant shall have the right
without Landlord's (or Lender's) prior written consent to make a Tenant's Change
that is non-structural and that requires an expenditure of less than $50,000.00
for any one Tenant's Change and less than $250,000.00 in the aggregate for the
Term, provided that Tenant shall, at Landlord's request, remove any such non-
structural Tenant's Change and restore the Demised Premises to its condition
prior to such non-structural Tenant's Change upon the termination or expiration
of this Lease. As part of its approval process, Landlord may require that Tenant
submit plans and specifications to Landlord, for Landlord's approval or
disapproval, which approval shall not be unreasonably withheld. All Tenant's
Changes shall be performed in accordance with all legal requirements applicable
thereto and in a good and workmanlike manner with first-class materials. Tenant
shall maintain insurance reasonably satisfactory to Landlord during the
construction of all Tenant's Changes. If Landlord at the time of giving its
approval to any Tenant's Change notifies Tenant in writing that approval is
conditioned upon restoration, then Tenant shall, at its sole cost and expense
and at Landlord's option upon the termination or expiration of this Lease,
remove the same and restore the
Demised Premises to its condition prior to such Tenant's Change. If Landlord
fails to notify Tenant as aforesaid that Landlord's approval is conditioned upon
restoration, Tenant shall not be required to remove the Tenant's Change upon the
termination or expiration of this Lease. No Tenant's Change shall be structural
in nature or impair the structural strength of the Building or reduce its value.
Tenant shall pay the full cost of any Tenant's Change. Landlord acknowledges
that the restrictions on Tenant making a Tenant's Change set forth in this
subsection (a) shall not affect Tenant's right to install in, and remove from,
the Demised Premises trade fixtures and equipment required by Tenant or used by
it in its business, in accordance with Section 12 hereinabove, or Tenant's right
to reconfigure such trade fixtures and equipment. Except as otherwise provided
herein and in Section 12, all Tenant's Changes and all repairs and all other
property attached to or installed on the Demised Premises by or on behalf of
Tenant shall immediately upon completion or installation thereof be and become
part of the Demised Premises and the property of Landlord without payment
therefor by Landlord and shall be surrendered to Landlord upon the expiration or
earlier termination of this Lease.
(b) To the extent permitted by law, all of Tenant's contracts and
subcontracts for such Tenant's Changes shall provide that no lien shall attach
to or be claimed against the Demised Premises or any interest therein other than
Tenant's leasehold interest in the Demised Premises, and that all subcontracts
let thereunder shall contain the same provision. Whether or not Tenant furnishes
the foregoing, Tenant agrees to hold Landlord harmless against all liens, claims
and liabilities of every kind, nature and description which may arise out of or
in any way be connected with such work. Tenant shall not permit the Demised
Premises to become subject to any mechanics', laborers' or materialmen's lien on
account of labor, material or services furnished to Tenant or claimed to have
been furnished to Tenant in connection with work of any character performed or
claimed to have been performed for the Demised Premises by, or at the direction
or sufferance of Tenant and if any such liens are filed against the Demised
Premises, Tenant shall promptly discharge the same; provided, however, that
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Tenant shall have the right to contest, in good faith and with reasonable
diligence, the validity of any such lien or claimed lien if Tenant shall give to
Landlord, within thirty days after demand, such security as may be reasonably
satisfactory to Landlord to assure payment thereof and to prevent any sale,
foreclosure, or forfeiture of Landlord's interest in the Demised Premises by
reason of non-payment thereof; provided further that on final determination of
the lien or claim for lien, Tenant shall immediately pay any judgment rendered,
with all proper costs and charges, and shall have the lien released and any
judgment satisfied. If Tenant fails to post such security or does not diligently
contest such lien, Landlord may, without investigation of the validity of the
lien claim, discharge such lien and Tenant shall reimburse Landlord upon demand
for all costs and expenses incurred in connection therewith, which expenses
shall include any attorneys' fees, paralegals' fees and any and all costs
associated therewith, including litigation through all trial and appellate
levels and any costs in posting bond to effect a discharge or release of the
lien. Nothing contained in this Lease shall be construed as a consent on the
part of Landlord to subject the Demised Premises to liability under any lien law
now or hereafter existing of the state in which the Demised Premises are
located.
(c) Provided Tenant complies with this Section 18, upon Tenant's
request, Landlord shall, at Tenant's sole cost and expense (i) join in any
applications for any permits, approvals or certificates required to be obtained
from any governmental authorities in connection with any Tenant's Change, (ii)
sign such applications reasonably promptly after request by Tenant; provided,
that (A) Landlord's signature on such application is required by the applicable
governmental authority, and (B) such application is reasonably acceptable to
Landlord, and (iii) otherwise reasonably cooperate with Tenant in connection
with such applications of Tenant; provided, however, that Landlord shall not be
obligated to incur any cost or expense, including, without limitation,
reasonable attorneys' fees and disbursements, or suffer or incur any liability
in connection therewith.
19. Services by Landlord. Landlord shall be responsible for causing the
--------------------
Building Common Area to be kept in good condition and repair, and, except as
required by Section 10(b) hereof or as otherwise specifically provided for
herein, Landlord shall be responsible for no other services whatsoever.
Tenant, by payment of Tenant's share of the Operating Expenses, shall pay
Tenant's pro rata share of the expenses incurred by Landlord hereunder.
20. Fire and Other Casualty.
-----------------------
(a) In the event the Demised Premises are damaged by fire or other
casualty insured by Landlord (or required to be insured by Landlord hereunder),
Landlord agrees to promptly restore and repair the Demised Premises at
Landlord's expense, including the Improvements to be insured by Tenant but only
to the extent that the cost of such restoration and repair does not exceed the
sum of (i) the insurance proceeds actually received by Landlord in connection
with such fire or other casualty (including the proceeds from the insurance
required to be carried by Tenant on the Improvements and received by Landlord),
(ii) any applicable deductible under the insurance policies carried (or required
to be carried) by Landlord hereunder, and (iii) any insurance proceeds retained
by Lender in connection with such fire or other casualty.
(b) Notwithstanding subsection (a) above, in the event that (i) the
Demised Premises are in the reasonable opinion of Landlord, so destroyed that
they cannot be repaired or rebuilt within two hundred seventy (270) days after
the date of such damage; (ii) the Demised Premises are destroyed by a casualty
which is not covered by Landlord's insurance; or (iii) there is less than one
(1) full calendar year remaining during the Term as of the date of such
casualty, then Landlord shall give written notice to Tenant of such
determination (the "Determination Notice") within sixty (60) days of such
casualty. Either Landlord or Tenant may terminate and cancel this Lease
effective as of the date of such casualty by giving written notice to the other
party within thirty (30) days after Tenant's receipt of the Determination
Notice. Upon the giving of such termination notice, all obligations hereunder
with respect to periods from and after the effective date of termination shall
thereupon cease and terminate. If no such termination notice is given, Landlord
shall, to the extent that the cost of such restoration and repair does not
exceed the sum of (i) the insurance proceeds actually received by Landlord in
connection with such fire or other casualty (including the proceeds from the
insurance required to be carried by Tenant on the Improvements and received by
Landlord), (ii) any applicable deductible under the insurance policies carried
(or required to be carried) by Landlord hereunder, and (iii) any insurance
proceeds retained by Lender in connection with such fire or other casualty, make
such repair or restoration of the Demised Premises to the approximate condition
existing prior to such casualty, promptly and in such manner as not to
unreasonably interfere with Tenant's use and occupancy of the Demised Premises
(if Tenant is still occupying the Demised Premises). Base Rent and Additional
Rent shall proportionately abate during the time that the Demised Premises or
any part thereof are unusable by reason of any such damage thereto. In the
event that Landlord is unable to substantially restore and repair the Demised
Premises on or before the date which is three hundred sixty-five (365) days
after the date of the casualty, as extended by Delay (as defined hereinbelow),
Tenant may, at its option and as its sole remedy, terminate this Lease by
written notice to Landlord given within thirty (30) days following the
expiration of such three hundred sixty-five (365)-day period (provided that
Landlord has not substantially restored and repaired the Demised Premises prior
to Landlord's receipt of said termination notice), and thereafter neither
Landlord nor Tenant shall have any further obligation hereunder. For purposes
of this Section 20, "Delay" shall mean such additional time as is equal to the
time lost by Landlord or Landlord's contractors or suppliers in connection with
the performance of Landlord's restoration and repair of the Demised Premises due
to strikes or other labor troubles, governmental restrictions and limitations,
war or other national emergency, non-availability of materials or supplies,
delay in transportation, accidents, floods, fire, damage or other casualties,
weather or conditions, acts or omissions of Tenant.
21. Condemnation.
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(a) If all of the Demised Premises is taken or condemned for a public
or quasi-public use, or if a material portion of the Demised Premises is taken
or condemned for a public or quasi-public use and the remaining portion thereof
is not usable by Tenant in the reasonable opinion of Landlord, this Lease shall
terminate as of the earlier of the date title to the condemned real estate vests
in the condemnor
or the date on which Tenant is deprived of possession of the Demised Premises.
In such event, the Base Rent herein reserved and all Additional Rent and other
sums payable hereunder shall be apportioned and paid in full by Tenant to
Landlord to that date, all Base Rent, Additional Rent and other sums payable
hereunder prepaid for periods beyond that date shall forthwith be repaid by
Landlord to Tenant, and neither party shall thereafter have any liability
hereunder, except that any obligation or liability of either party, actual or
contingent, under this Lease which has accrued on or prior to such termination
date shall survive.
(b) If only part of the Demised Premises is taken or condemned for a
public or quasi-public use and this Lease does not terminate pursuant to Section
21(a), Landlord shall, to the extent of the award it receives, restore the
Demised Premises to a condition and to a size as nearly comparable as reasonably
possible to the condition and size thereof immediately prior to the taking, and
there shall be an equitable adjustment to the Base Rent and Additional Rent
based on the actual loss of use of the Demised Premises suffered by Tenant from
the taking.
(c) Landlord shall be entitled to receive the entire award in any
proceeding with respect to any taking provided for in this Section 21, without
deduction therefrom for any estate vested in Tenant by this Lease, and Tenant
shall receive no part of such award. Nothing herein contained shall be deemed to
prohibit Tenant from making a separate claim, against the condemnor, to the
extent permitted by law, for the value of Tenant's moveable trade fixtures,
machinery and moving expenses, provided that the making of such claim shall not
and does not adversely affect or diminish Landlord's award. Landlord agrees not
to include the value of Tenant's moveable trade fixtures, machinery and moving
expenses in Landlord's claim against the condemnor.
22. Tenant's Default.
----------------
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or any Additional
Rent hereunder as and when such rent becomes due and such failure shall continue
for more than five (5) days after Landlord gives written notice to Tenant of
such failure;
(ii) if Tenant fails to pay Base Rent or any Additional
Rent on time more than three (3) times in any period of twelve (12) months (and
Landlord has given Tenant written notice of Tenant's failure to pay at least
twice in such 12-month period), notwithstanding that such payments have been
made within the applicable cure period;
(iii) if Tenant fails to take possession of the Demised
Premises on the Lease Commencement Date or promptly thereafter;
(iv) if Tenant permits to be done anything which creates a
lien upon the Demised Premises and fails to discharge or bond such lien, or post
security with Landlord reasonably acceptable to Landlord within thirty (30) days
after receipt by Tenant of written notice thereof;
(v) if Tenant fails to maintain in force all policies of
insurance required by this Lease and such failure shall continue for more than
ten (10) days after Landlord gives Tenant written notice of such failure;
(vi) if any petition is filed by or against Tenant or any
guarantor of this Lease under any present or future section or chapter of the
Bankruptcy Code, or under any similar law or statute of the United States or any
state thereof (which, in the case of an involuntary proceeding, is not
permanently discharged, dismissed, stayed, or vacated, as the case may be,
within sixty (60) days of
commencement), or if any order for relief shall be entered against Tenant or any
guarantor of this Lease in any such proceedings;
(vii) if Tenant or any guarantor of this Lease becomes
insolvent or makes a transfer in fraud of creditors or makes an assignment for
the benefit of creditors;
(viii) if a receiver, custodian, or trustee is appointed for
the Demised Premises or for all or substantially all of the assets of Tenant or
of any guarantor of this Lease, which appointment is not vacated within sixty
(60) days following the date of such appointment; or
(ix) if Tenant fails to perform or observe any other term
of this Lease and such failure shall continue for more than thirty (30) days
after Landlord gives Tenant written notice of such failure, or, if such failure
cannot be corrected within such thirty (30) day period, if Tenant does not
commence to correct such default within said thirty (30) day period and
thereafter diligently prosecute the correction of same to completion within a
reasonable time.
(b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22):
(i) Terminate this Lease by giving Tenant notice of
termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or
(ii) Terminate this Lease as provided in Section 22(b)(i) hereof
and recover from Tenant all damages Landlord may incur by reason of Tenant's
default, including, without limitation, an amount which, at the date of such
termination, is calculated as follows: (1) the value of the excess, if any, of
(A) the Base Rent, Additional Rent and all other sums which would have been
payable hereunder by Tenant for the period commencing with the day following the
date of such termination and ending with the Expiration Date had this Lease not
been terminated (the "Remaining Term"), over (B) the aggregate reasonable rental
value of the Demised Premises for the Remaining Term (which excess, if any shall
be discounted to present value at the "Treasury Yield" as defined below for the
Remaining Term); plus (2) the costs of recovering possession of the Demised
----
Premises and all other expenses incurred by Landlord due to Tenant's default,
including, without limitation, reasonable attorney's fees; plus (3) the unpaid
----
Base Rent and Additional Rent earned as of the date of termination plus any
interest and late fees due hereunder, plus other sums of money and damages owing
on the date of termination by Tenant to Landlord under this Lease or in
connection with the Demised Premises. The amount as calculated above shall be
deemed immediately due and payable. The payment of the amount calculated in
subparagraph (ii)(1) shall not be deemed a penalty but shall merely constitute
payment of liquidated damages, it being understood and acknowledged by Landlord
and Tenant that actual damages to Landlord are extremely difficult, if not
impossible, to ascertain. "Treasury Yield" shall mean the rate of return in
percent per annum of Treasury Constant Maturities for the length of time
specified as published in document H.15(519) (presently published by the Board
of Governors of the U.S. Federal Reserve System titled "Federal Reserve
Statistical Release") for the calendar week immediately preceding the calendar
week in which the termination occurs. If the rate of return of Treasury Constant
Maturities for the calendar week in question is not published on or before the
business day preceding the date of the Treasury Yield in question is to become
effective, then the Treasury Yield shall be based upon the rate of return of
Treasury Constant Maturities for the length of time specified for the most
recent calendar week for which such publication has occurred. If no rate of
return for Treasury Constant Maturities is published for the specific length of
time specified, the Treasury Yield for such length of time shall be the weighted
average of the rates of return of Treasury Constant Maturities most nearly
corresponding to the length of the applicable period specified. If the
publishing of the rate of return of Treasury Constant Maturities is ever
discontinued, then the Treasury Yield shall be based upon the index which is
published by the Board of Governors of the U.S. Federal Reserve System in
replacement thereof or, if no such replacement index is published, the index
which, in Landlord's reasonable determination, most nearly corresponds to the
rate of return of Treasury Constant Maturities. In determining the aggregate
reasonable rental value pursuant to subparagraph (ii)(1)(B) above, the parties
hereby agree that, at the time Landlord seeks to enforce this remedy, all
relevant factors should be considered, including, but not limited to, (a) the
length of time remaining in the Term, (b) the then current market conditions in
the general area in which the Building is located, (c) the likelihood of
reletting the Demised Premises for a period of time equal to the remainder of
the Term, (d) the net effective rental rates then being obtained by landlords
for similar type space of similar size in similar type buildings in the general
area in which the Building is located, (e) the vacancy levels in the general
area in which the Building is located, (f) current levels of new construction
that will be completed during the remainder of the Term and how this
construction will likely affect vacancy rates and rental rates and (g)
inflation; or
(iii) Intentionally Omitted
(iv) Without terminating this Lease, in its own name but as
agent for Tenant, enter into and upon and take possession of the Demised
Premises or any part thereof. Any property remaining in the Demised Premises may
be removed and stored in a warehouse or elsewhere at the cost of, and for the
account of, Tenant without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage which may be occasioned thereby unless caused by
Landlord's negligence. Thereafter, Landlord may, but shall not be obligated to,
lease to a third party the Demised Premises or any portion thereof as the agent
of Tenant upon such terms and conditions as Landlord may deem necessary or
desirable in order to relet the Demised Premises. The remainder of any rentals
received by Landlord from such reletting, after the payment of any indebtedness
due hereunder from Tenant to Landlord, and the payment of any costs and expenses
of such reletting, shall be held by Landlord to the extent of and for
application in payment of future rent owed by Tenant, if any, as the same may
become due and payable hereunder. If such rentals received from such reletting
shall at any time or from time to time be less than sufficient to pay to
Landlord the entire sums then due from Tenant hereunder, Tenant shall pay any
such deficiency to Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for any such previous default provided same has not been cured; or
(v) Without terminating this Lease, and with or without
notice to Tenant, enter into and upon the Demised Premises and, without being
liable for prosecution or any claim for damages therefor, maintain the Demised
Premises and repair or replace any damage thereto or do anything or make any
payment for which Tenant is responsible hereunder. Tenant shall reimburse
Landlord immediately upon demand for any expenses which Landlord incurs in thus
effecting Tenant's compliance under this Lease and Landlord shall not be liable
to Tenant for any damages with respect thereto; or
(vi) Without liability to Tenant or any other party and
without constituting a constructive or actual eviction, suspend or discontinue
furnishing or rendering to Tenant any property, material, labor, utilities or
other service, wherever Landlord is obligated to furnish or render the same so
long as an Event of Default exists under this Lease; or
(vii) With or without terminating this Lease, allow the Demised
Premises to remain unoccupied and collect rent from Tenant as it comes due;
provided, however, that to the extent required by applicable law, Landlord shall
use reasonable efforts to mitigate its damages; or
(viii) Pursue such other remedies as are available at law or
equity.
(c) If this Lease shall terminate as a result of or while there
exists an Event of Default hereunder, any funds of Tenant held by Landlord may
be applied by Landlord to any damages payable by Tenant (whether provided for
herein or by law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor the
settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises and no
act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice of such intention is given to Tenant. No provision
of this Lease shall be deemed to have been waived by either party unless such
waiver is in writing and signed by the party making such waiver. Landlord's
acceptance of Base Rent or Additional Rent in full or in part following an Event
of Default hereunder shall not be construed as a waiver of such Event of
Default. No custom or practice which may grow up between the parties in
connection with the terms of this Lease shall be construed to waive or lessen
either party's right to insist upon strict performance of the terms of this
Lease, without a written notice thereof to the other party.
(f) If an Event of Default shall occur, Tenant shall pay to Landlord,
on demand, all expenses incurred by Landlord as a result thereof, including
reasonable attorneys' fees, court costs and expenses actually incurred;
provided, however, that Landlord and Tenant shall each reimburse the other for
the reasonable and actual attorneys' fees incurred by such other party in
connection with any litigation initiated by Landlord or Tenant, as the case may
be, pursuant to this Lease which results in a final, unappealable judgment as to
the merits in the other party's favor.
23. Landlord's Right of Entry. Tenant agrees to permit Landlord and the
-------------------------
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises during normal business hours for the purposes of inspecting the Demised
Premises and Tenant's compliance with this Lease, and making any necessary
repairs that Landlord is required, or has the right, to make thereto; provided
that, except in the case of an emergency, Landlord shall give Tenant forty-eight
(48) hours' prior written notice of Landlord's intended entry upon the Demised
Premises. Nothing herein shall imply any duty upon the part of Landlord to do
any work required of Tenant hereunder, and the performance thereof by Landlord
shall not constitute a waiver of Tenant's default in failing to perform it.
Landlord shall not be liable for inconvenience, annoyance, disturbance or other
damage to Tenant by reason of making such repairs or the performance of such
work in the Demised Premises or on account of bringing materials, supplies and
equipment into or through the Demised Premises during the course thereof, and
the obligations of Tenant under this Lease shall not thereby be affected;
provided, however, that Landlord shall use reasonable efforts not to disturb or
- - -------- -------
otherwise interfere with Tenant's operations in the Demised Premises in making
such repairs or performing such work. Landlord also shall have the right to
enter the Demised Premises upon forty-eight (48) hours' prior notice to exhibit
the Demised Premises to any prospective purchaser, or mortgagee, and, during the
last twelve (12) months of the Term, to any prospective tenant thereof.
24. Lender's Rights.
---------------
(a) For purposes of this Lease:
(i) "Lender" as used herein means the holder of a Mortgage;
(ii) "Mortgage" as used herein means any or all mortgages,
deeds to secure debt, deeds of trust or other instruments in the nature thereof
which may now or hereafter affect or
encumber Landlord's title to the Demised Premises, and any amendments,
modifications, extensions or renewals thereof.
(b) This Lease and all rights of Tenant hereunder are and shall be
subject and subordinate to the lien and security title of any Mortgage provided
that the holder of said Mortgage agrees not to disturb Tenant's possession of
the Demised Premises so long as Tenant is not in default hereunder, as evidenced
by a subordination and non-disturbance agreement signed by said holder which
agreement may include (i) the conditions contained in subsection (e) below, (ii)
a requirement that said holder be given notice and opportunity to cure a
landlord default and (c) other provisions customarily required by lenders.
Tenant shall promptly execute such a subordination and non-disturbance agreement
upon Landlord's request. Tenant recognizes and acknowledges the right of Lender
to foreclose or exercise the power of sale against the Demised Premises under
any Mortgage.
(c) Tenant shall, in confirmation of the subordination set forth in
Section 24(b) and notwithstanding the fact that such subordination is self-
operative, and no further instrument or subordination shall be necessary, upon
demand, at any time or times, execute, acknowledge, and deliver to Landlord or
to Lender any and all instruments requested by either of them to evidence such
subordination, provided that such instrument contains the nondisturbance
provisions referred to in subsection (b) above.
(d) At any time during the Term, Lender may, by written notice to
Tenant, make this Lease superior to the lien of its Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all instruments that may be necessary to make
this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall, if requested by such successor, attorn to and recognize such
successor as Tenant's landlord under this Lease without change in the terms and
provisions of this Lease and shall promptly execute and deliver any instrument
that may be necessary to evidence such attornment, provided that such successor
shall not be bound by (i) any payment of Base Rent or Additional Rent for more
than one month in advance, except prepayments in the nature of security for the
performance by Tenant of its obligations under this Lease, and then only if such
prepayments have been deposited with and are under the control of such
successor, (ii) any provision of any amendment to the Lease to which Lender has
not consented, (iii) the defaults of any prior landlord under this Lease, or
(iv) any offset rights arising out of the defaults of any prior landlord under
this Lease. Upon such attornment, this Lease shall continue in full force and
effect as a direct lease between each successor landlord and Tenant, subject to
all of the terms, covenants and conditions of this Lease.
25. Estoppel Certificate and Financial Statement.
--------------------------------------------
(a) Landlord and Tenant agree, at any time, and from time to time,
within twenty (20) days after written request of the other, to execute,
acknowledge and deliver a statement in writing to the requesting party and/or
its designee certifying that: (i) this Lease is unmodified and in full force and
effect (or, if there have been modifications, that the same is in full force and
effect, as modified), (ii) the dates to which Base Rent, Additional Rent and
other charges have been paid, (iii) whether or not, to its actual knowledge,
there exists any failure by the requesting party to perform any term, covenant
or condition contained in this Lease, and, if so, specifying each such failure,
(iv) (if such be the case) Tenant has unconditionally accepted the Demised
Premises and is conducting its business therein, and (v) and as to such
additional matters as may be reasonably requested, it being intended that any
such statement delivered pursuant hereto may be relied upon by the requesting
party and by any purchaser of title to the Demised Premises or by any mortgagee
or any assignee thereof or any party to any sale-leaseback of the Demised
Premises, or the landlord under a ground lease affecting the Demised Premises.
(b) If Landlord desires to finance, refinance, or sell the Building,
Tenant and all Guarantors shall deliver to any potential lender or purchaser
designated by Landlord such financial statements of Tenant and such Guarantors
as may be reasonably required by such lender or purchaser, including but not
limited to Tenant's financial statements for the past 3 years. All such
financial statements shall be received by Landlord and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.
26. Landlord Liability. No owner of the Demised Premises, whether or not
------------------
named herein, shall have liability hereunder for matters first arising after it
ceases to hold title to the Demised Premises. Neither Landlord nor any officer,
director, shareholder, partner or principal of Landlord, whether disclosed or
undisclosed, shall be under any personal liability with respect to any of the
provisions of this Lease. In the event Landlord is in breach or default with
respect to Landlord's obligations or otherwise under this Lease, Tenant shall
look solely to the equity of Landlord in the Building and to any net rental
income not applied to operating expenses or debt service for the Demised
Premises, any net proceeds of sale (after paying off any Mortgage), and any
insurance proceeds not applied to restoration of the Building or the Demised
Premises for the satisfaction of Tenant's remedies. It is expressly understood
and agreed that Landlord's liability under the terms, covenants, conditions,
warranties and obligations of this Lease shall in no event exceed the loss of
Landlord's equity interest in the Building or such net rental income, net
proceeds of sale or unapplied insurance proceeds.
27. Notices. Any notice required or permitted to be given or served by
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either party to this Lease shall be in writing and shall be deemed given (i)
when personally delivered, (ii) three (3) days after being deposited with the
United States Postal Service, postage prepaid, by registered or certified mail,
return receipt requested, or (iii) one (1) day after being deposited with a
licensed overnight delivery service providing proof of delivery, properly
addressed to the address set forth in Section 1(m) (as the same may be changed
by giving written notice of the aforesaid in accordance with this Section 27).
If any notice mailed is properly addressed with appropriate postage but returned
for any reason, such notice shall be deemed to be effective notice and to be
given on the date of mailing.
28. Brokers. Landlord and Tenant each represents and warrants to the other
-------
that, except for those parties set forth in Section 1(o) (the "Brokers"),
neither Landlord nor Tenant has engaged or had any conversations or negotiations
with any broker, finder or other third party concerning the leasing of the
Demised Premises to Tenant who would be entitled to any commission or fee based
on the execution of this Lease. Landlord and Tenant hereby further represent and
warrant to each other that neither Landlord nor Tenant, as the case may be, is
receiving or is entitled to receive any rebate, payment or other remuneration,
either directly or indirectly, from the Brokers, and that neither Landlord nor
Tenant (as the case may be) is otherwise sharing in or entitled to share in any
commission or fee paid to the Brokers by Landlord or any other party in
connection with the execution of this Lease, either directly or indirectly.
Landlord and Tenant hereby indemnify each other against and from any claims for
any brokerage commissions (except those payable to the Brokers, all of which are
payable by Landlord pursuant to a separate agreement) and all costs, expenses
and liabilities in connection therewith, including, without limitation,
reasonable attorneys' fees and expenses actually incurred, for any breach of the
foregoing. The foregoing indemnification shall survive the termination of this
Lease for any reason.
29. Assignment and Subleasing.
-------------------------
(a) Tenant may not assign, mortgage, pledge, encumber or otherwise
transfer this Lease, or any interest hereunder, or sublet the Demised Premises,
in whole or in part, without on each occasion first obtaining the prior express
written consent of Landlord, which consent Landlord shall not unreasonably
withhold. Any change in control of Tenant resulting from a merger,
consolidation, stock transfer or asset sale shall be considered an assignment or
transfer which requires Landlord's prior written consent. For purposes of this
Section 29, by way of example and not limitation, Landlord shall be deemed to
have reasonably withheld consent if Landlord reasonably determines (i) that the
prospective assignee or subtenant is not of a financial strength similar to
Tenant as of the Lease Date, (ii) that the prospective
assignee or subtenant has a poor business reputation, (iii) that the proposed
use of the Demised Premises by such prospective assignee or subtenant
(including, without limitation, a use involving the use or handling of Hazardous
Substances) will negatively affect the value or marketability of the Building or
the Project or (iv) that the prospective assignee or subtenant is a bona-fide
third-party prospective tenant.
(b) If Tenant desires to assign this Lease or sublet the Demised
Premises or any part thereof, and such transfer requires Landlord's consent
hereunder, Tenant shall give Landlord written notice no later than thirty (30)
days in advance of the proposed effective date of any proposed assignment or
sublease, specifying (i) the name and business of the proposed assignee or
sublessee, (ii) the amount and location of the space within the Demised Premises
proposed to be subleased, (iii) the proposed effective date and duration of the
assignment or subletting and (iv) the proposed rent or consideration to be paid
to Tenant by such assignee or sublessee. Tenant shall promptly supply Landlord
with financial statements and other information as Landlord may reasonably
request to evaluate the proposed assignment or sublease. Landlord shall have a
period of twenty (20) days following receipt of such notice and other
information requested by Landlord within which to notify Tenant in writing that
Landlord elects: (i) to permit Tenant to assign or sublet such space; provided,
--------
however, that, if the rent rate agreed upon between Tenant and its proposed
- - -------
subtenant is greater than the rent rate that Tenant must pay Landlord hereunder
for that portion of the Demised Premises, or if any consideration shall be
promised to or received by Tenant that is attributable to such proposed
assignment or sublease (in addition to rent), then one half (1/2) of such excess
rent and other consideration (after payment of brokerage commissions,
advertising expenses, improvement allowances, attorneys' fees and other
disbursements reasonably incurred by Tenant for such assignment and subletting
if acceptable evidence of such disbursements is delivered to Landlord) shall be
considered Additional Rent owed by Tenant to Landlord, and shall be paid by
Tenant to Landlord, in the case of excess rent, in the same manner that Tenant
pays Base Rent and, in the case of any other consideration, within ten (10)
business days after receipt thereof by Tenant; or (ii) to refuse, in Landlord's
reasonable discretion (taking into account all relevant factors including,
without limitation, the factors set forth in the Section 29(a) above), to
consent to Tenant's assignment or subleasing of such space and to continue this
Lease in full force and effect as to the entire Demised Premises. If Landlord
should fail to notify Tenant in writing of such election within the aforesaid
twenty (20) day period, Landlord shall be deemed to have elected option (ii)
above. Tenant agrees to reimburse Landlord for reasonable legal fees and any
other reasonable costs incurred by Landlord in connection with any requested
assignment or subletting (not to exceed $1,500 per request), and such payments
shall not be deducted from the Additional Rent owed to Landlord pursuant to
subsection (ii) above. Tenant shall deliver to Landlord copies of all documents
effectuating any permitted assignment or subletting, which documents shall be in
form and substance reasonably satisfactory to Landlord and which shall require
such assignee to assume performance of all terms of this Lease on Tenant's part
to be performed.
(c) No acceptance by Landlord of any rent or any other sum of money
from any assignee, sublessee or other category of transferee shall be deemed to
constitute Landlord's consent to any assignment, sublease, or transfer.
Permitted subtenants or assignees shall become liable directly to Landlord for
all obligations of Tenant hereunder, without, however, relieving Tenant of any
of its liability hereunder. No such assignment, subletting, occupancy or
collection shall be deemed the acceptance of the assignee, tenant or occupant,
as Tenant, or a release of Tenant from the further performance by Tenant of
Tenant's obligations under this Lease. Any assignment or sublease consented to
by Landlord shall not relieve Tenant (or its assignee) from obtaining Landlord's
consent to any subsequent assignment or sublease.
30. Termination or Expiration.
-------------------------
(a) No termination of this Lease prior to the normal ending thereof,
by lapse of time or otherwise, shall affect Landlord's right to collect rent for
the period prior to termination thereof.
(b) At the expiration or earlier termination of the Term of this
Lease, Tenant shall surrender the Demised Premises and all improvements,
alterations and additions thereto, and keys
therefor to Landlord, clean and neat, and in the same condition as at the Lease
Commencement Date, excepting normal wear and tear, condemnation and casualty.
(c) If Tenant remains in possession of the Demised Premises after
expiration of the Term, with or without Landlord's acquiescence and without any
express agreement of the parties, Tenant shall be a tenant-at-sufferance at the
greater of (i) one hundred fifty percent (150%) of the then current fair market
base rental value of the Demised Premises or (ii) one hundred fifty percent
(150%) of the Base Rent in effect at the end of the Term. Tenant shall also
continue to pay all other Additional Rent due hereunder, and there shall be no
renewal of this Lease by operation of law. In addition to the foregoing, Tenant
shall be liable for all damages incurred by Landlord as a result of such
holdover; provided, however, that Tenant shall not be liable for consequential
damages incurred by Landlord unless Tenant remains in possession of the Demised
Premises for more than thirty (30) days after expiration of the Term. No receipt
of money by Landlord from Tenant after the termination of this Lease or Tenant's
right of possession of the Demised Premises shall reinstate, continue or extend
the Term or Tenant's right of possession.
31. Intentionally Omitted
32. Late Payments. In the event any installment of rent, inclusive of Base
-------------
Rent, or Additional Rent or other sums due hereunder, if any, is not paid (i)
within five (5) days after Tenant's receipt of written notice of such failure to
pay on the first occasion during any twelve (12) month period, or (ii) as and
when due with respect to any subsequent late payments in any twelve (12) month
period, Tenant shall pay an administrative fee (the "Administrative Fee") equal
to five percent (5%) of such past due amount, plus interest on the amount past
due at the lesser of (i) the maximum interest rate allowed by law or (ii) a rate
of fifteen percent (15%) per annum (the "Interest Rate") to defray the
additional expenses incurred by Landlord in processing such payment. The
Administrative Fee is in addition to, and not in lieu of, any of the Landlord's
remedies hereunder.
33. Rules and Regulations. Tenant agrees to abide by the rules and
---------------------
regulations set forth on Exhibit D attached hereto, as well as other rules and
---------
regulations reasonably promulgated and delivered to Tenant by Landlord from time
to time, so long as such rules and regulations are uniformly enforced against
all tenants of Landlord in the Building.
34. Quiet Enjoyment. So long as Tenant has not committed an Event of
---------------
Default hereunder, Landlord agrees that Tenant shall have the right to quietly
use and enjoy the Demised Premises for the Term.
35. Miscellaneous.
-------------
(a) The parties hereto hereby covenant and agree that except to the
extent otherwise expressly provided herein, Landlord shall receive the Base
Rent, Additional Rent and all other sums payable by Tenant hereinabove provided
as net income from the Demised Premises, without any abatement (except as set
forth in Section 20 and Section 21), reduction, set-off, counterclaim, defense
or deduction whatsoever.
(b) If any clause or provision of this Lease is determined to be
illegal, invalid or unenforceable under present or future laws effective during
the Term, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and that in lieu of
such illegal, invalid or unenforceable clause or provision there shall be
substituted a clause or provision as similar in terms to such illegal, invalid
or unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
(c) All rights, powers, and privileges conferred hereunder upon the
parties hereto shall be cumulative, but not restrictive to those given by law.
(d) TIME IS OF THE ESSENCE OF THIS LEASE.
(e) No failure of Landlord or Tenant to exercise any power given
Landlord or Tenant hereunder or to insist upon strict compliance by Landlord or
Tenant with its obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of Landlord's or
Tenant's rights to demand exact compliance with the terms hereof.
(f) This Lease contains the entire agreement of the parties hereto as
to the subject matter of this Lease and no prior representations, inducements,
letters of intent, promises or agreements, oral or otherwise, between the
parties not embodied herein shall be of any force and effect. Any future
amendment to this Lease must be in writing and signed by the parties hereto.
The masculine (or neuter) pronoun, singular number shall include the masculine,
feminine and neuter gender and the singular and plural number.
(g) This contract shall create the relationship of landlord and
tenant between Landlord and Tenant; no estate shall pass out of Landlord; Tenant
has a usufruct, not subject to levy and sale, and not assignable by Tenant
except as expressly set forth herein.
(h) Landlord and Tenant agree to execute, upon request of the other,
a short form memorandum of this Lease in recordable form and the requesting
party shall pay the costs and charges for the recording of such short form
memorandum of lease. Under no circumstances shall Tenant have the right to
record this Lease (other than a short form memorandum of Lease, as reasonably
approved by Landlord), and should Tenant do so, Tenant shall be in default
hereunder.
(i) The captions of this Lease are for convenience only and are not a
part of this Lease, and do not in any way define, limit, describe or amplify the
terms or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.
(k) This Lease shall be interpreted under the laws of the State where
the Demised Premises are located.
(l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.
36. Special Stipulations. The Special Stipulations, if any, attached
--------------------
hereto as Exhibit C, are incorporated herein and made a part hereof, and to the
---------
extent of any conflict between the foregoing provisions and the Special
Stipulations, the Special Stipulations shall govern and control.
37. Lease Date. For purposes of this Lease, the term "Lease Date" shall
----------
mean the later date upon which this Lease is signed by Landlord and Tenant.
38. Authority. If Tenant is not a natural person, Tenant shall cause its
---------
corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E. Tenant is authorized by all required
----------
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms.
39. No Offer Until Executed. The submission of this Lease to Tenant for
-----------------------
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands under
seals, the day and year first above written.
LANDLORD:
Date: August 31, 2000
INDUSTRIAL DEVELOPMENTS INTERNATIONAL
(TENNESSEE), L.P., a Georgia limited
partnership
By: IDI (Tennessee), Inc., a Georgia
corporation, its sole general partner
By: /s/ Timothy J. Gunter
Name: Timothy J. Gunter
Title: Secretary
Attest: /s/ G. Bryan Blasingame, Jr.
Name: G. Bryan Blasingame, Jr.
Title: Assistant Secretary
[CORPORATE SEAL]
TENANT:
Date: August 23, 2000 SALESLINK CORPORATION, a Delaware
corporation
By: /s/ Richard F. Torre
Name: Richard F. Torre
Title: CEO
Attest: /s/ B.C. Boothby, Jr.
Name: B.C. Boothby, Jr.
Title: COO
[CORPORATE SEAL]
ATTESTATION
Landlord - Partnership:
- - ----------------------
STATE OF GEORGIA_
COUNTY OF FULTON_
BEFORE ME, a Notary Public in and for said County, personally appeared
Timothy J. Gunter and G. Bryan Blasingame, Jr., known to me to be the person(s)
who, as Secretary and Assistant Secretary, respectively, of IDI (Tennessee),
Inc., the corporation which executed the foregoing instrument in its capacity as
general partner of Landlord, signed the same, and acknowledged to me that they
did so sign said instrument in the name and upon behalf of said corporation, in
its capacity as general partner of Landlord, that the same is their free act and
deed and they were duly authorized thereunto by the corporation and the
partnership.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this 31st day of August, 2000.
/s/ Suzanne Hoover
Notary Public
My Commission Expires: May 28, 2002
Tenant - Corporation:
- - --------------------
STATE OF MASSACHUSETTS_
COUNTY OF ESSEX_
BEFORE ME, a Notary Public in and for said County, personally appeared
Richard F. Torre and B.C. Boothby, Jr., known to me to be the person(s) who, as
CEO and COO, respectively, of SalesLink Corporation, the corporation which
executed the foregoing instrument in its capacity as Tenant, signed the same,
and acknowledged to me that they did so sign said instrument in the name and
upon behalf of said corporation as officers of said corporation, that the same
is their free act and deed as such officers, respectively, and they were duly
authorized thereunto by its board of directors; and that the seal affixed to
said instrument is the corporate seal of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this 23/rd/ day of August, 2000.
/s/ Nathaniel Gaede
Notary Public
My Commission Expires: March 24, 2006
EXHIBIT A
Demised Premises
[diagram of demised premises]
a-1
EXHIBIT B
Preliminary Plans and Specifications
FACILITY SPECIFICATIONS
GENERAL
Project: Chickasaw Distribution Center
Building Site Size: +37.42 Acres
-
Building Address: 6100 Holmes Road
Suite 101
Memphis, Tennessee 38141
BASE BUILDING SPECIFICATIONS
Building Area: 829,464 SF
Premises Components: Office: 15,000 SF
Warehouse: 399,504 SF
----------
TOTAL 414,504 SF
Premises Configuration: 855' X 520'
Building - Roofing: EPDM single ply with minimum thickness 45 mils,
black, mechanically fastened roof, insulated to R-
19 with a ten year warranty. Roof has white deck
and skylights.
Building - Exterior Walls: Painted concrete tilt wall with architectural
reveals. Paint is a 2 coat system; no additional
sealer is included.
Building - Floor Slab: 6 inch unreinforced concrete slab on soil cemented
grade, 4,000 PSI with a urethane floor sealer (2
coat system). Minimum specifications are Ff50, in
pallet rack areas, Ff 35 elsewhere. Area within
50' of docks to have a premixed mineral hardener.
WAREHOUSE SPECIFICATIONS
Column Spacing: 57' x 42' typical, 57' x 50' loading bays
Minimum Clear Height: 32' minimum
Fire Sprinkler: Fire sprinkler system in the warehouse area is an
ESFR system. The park has a dual booster pump
system (an electric pump and a back up diesel
pump) and has two separate water sources providing
redundancy in both water supply and pressure.
Office areas to contain fire sprinkler per local
code. Fire extinguishers, hose stations, and fire
sprinkler-monitoring system per local codes.
Warehouse Lighting: 400-watt metal halide fixtures with shields spaced
to provide 40 FC measured 3'0" A.F.F. All area is
open except approximately 91,000 sf of racked area
with aisles 6'0" wide. Emergency lighting
provided.
b-1
Demising Wall: One-hour fire-rated wall constructed of gypsum
board on metal studs. Wall is insulated to R-11.
Electrical Service: 277/480 volt, three phase, four wire, sufficient
amperage provided for building improvements plus
an additional 1,500 amps available for Tenant's
equipment. Two hookups provided for compactors.
Battery Charging Area: Ventilation and eyewash station provided in
battery charger area.
Warehouse Heating,
Ventilating and Air Conditioning: Warehouse to be heated to approximately 55
degrees F above outside ambient temperature
and cooled to approximately 15 degrees F
below outside ambient temperature.
An allowance of $30,000 is included for an Energy Management System and for a
Public Address System.
Smoke Evacuation System: Smoke evacuation system is included to satisfy
local code requirements.
Water Fountains: Four (4) water fountains provided at locations
agreed upon by Landlord and Tenant.
TRUCK DOCKING
Dock High Doors: Thirty-two (32) dock high (48") loading doors
(9'x10') with vision panels. Doors are manually
operated.
Grade Level Doors: One (1) grade level door (14'x16'), manually
operated.
Dock Equipment: Thirty-two (32) doors to have mechanical pit
levelers (30,000 lb.), dock lights, dock seals,
abuse panels, bumpers, track guards and wheel
chocks fastened to face of building.
Truck Courts: 130' total (50' concrete apron, 80' heavy-duty
asphalt).
Entrance Gate: One (1) swinging arm gate (12' minimum width)
provided for the truck court entrance.
OFFICE IMPROVEMENTS
Office Entrance: Insulated tinted glass in an aluminum
storefront.
Office Improvement Allowance: Landlord will provide an allowance of $600,000
for office improvements including restrooms and
breakrooms. Unused portion will be credited
against rent or returned as a check.
MISCELLANEOUS
Automobile Parking: Approximately 300 spaces provided. Handicapped
spaces per local code. Paving for automobile
parking is light duty asphalt (2" asphalt on 6"
soil cement).
Signage: Tenant may install building and/or ground
mounted signage, subject to Landlord approval of
design and location.
b-1
Exterior Lighting: Truck court lighting to be provided to 1.5 FC average
by pole and building mounted fixtures. Car parking area
lighting to be provided to 3.0 FC average by pole and
building mounted fixtures.
Landscaping: Class A landscaping including automatic irrigation
system.
Exit Doors: Steel insulated doors with hollow metal frames provided
per local code.
b-1
EXHIBIT C
Special Stipulations
The Special Stipulations set forth herein are hereby incorporated into the
body of the lease to which these Special Stipulations are attached (the
"Lease"), and to the extent of any conflict between these Special Stipulations
and the preceding language, these Special Stipulations shall govern and control.
1. Early Termination and Termination Payment. Provided that no Event of
-----------------------------------------
Default has occurred and is then continuing and no facts or circumstances exist,
either at the time of Tenant's notice to Landlord or on the date such
termination would otherwise be effective, which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default, Tenant shall
have the right to terminate this Lease effective on the date which is the last
day of the sixtieth (60th) full calendar month of the Term. In order to
exercise such termination right, Tenant shall notify Landlord of such exercise
in writing at least one hundred eighty (180) days prior to the effective date of
such termination, and together with such notice Tenant shall deliver to Landlord
an amount equal to $1,325,000 as an agreed-upon termination fee. In the event
Tenant fails to notify Landlord by such notice deadline, then provided that no
Event of Default has occurred and is then continuing and no facts or
circumstances exist, either at the time of Tenant's notice to Landlord or on the
date such termination would otherwise be effective, which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default,
Tenant shall again have the right to terminate this Lease effective on the date
which is the last day of the eighty-forth (84th) full calendar month of the
Term. In order to exercise such termination right, Tenant shall notify Landlord
of such exercise in writing at least one hundred eighty (180) days prior to the
effective date of such termination, and together with such notice Tenant shall
deliver to Landlord an amount equal to $1,000,000 as an agreed-upon termination
fee. In the event Tenant fails to notify Landlord by such notice deadline,
Tenant shall be deemed to have waived Tenant's termination right for the
remainder of the Term and any extensions thereof.
2. Option to Extend Term.
---------------------
(a) Landlord hereby grants to Tenant two (2) consecutive options to extend
the Term for a period of five (5) years each, each such option to be exercised
by Tenant giving written notice of its exercise to Landlord in the manner
provided in this Lease at least one hundred eighty (180) days prior to (but not
more than two hundred ten (210) days prior to) the expiration of the Term, as it
may have been previously extended. No extension option may be exercised by
Tenant if an Event of Default has occurred and is then continuing or any facts
or circumstances then exist which, with the giving of notice or the passage of
time, or both, would constitute an Event of Default either at the time of
exercise of the option or at the time the applicable Term would otherwise have
expired if the applicable option had not been exercised.
(b) If Tenant exercises its option[s] to extend the Term, Landlord shall,
within thirty (30) days after the receipt of Tenant's notice of exercise, notify
Tenant in writing of Landlord's reasonable determination of the Base Rent for
the Demised Premises for the extended Term, which amount shall be determined
using a per square foot rental rate not less than the rental rate used to
determine the Base Rent in effect immediately prior to the effective date of the
extension term, taking into account all relevant factors for space of this type
in the southeast Memphis, Tennessee area for such five (5) year period. Tenant
shall have thirty (30) days from its receipt of Landlord's notice to notify
Landlord in writing that Tenant does not agree with Landlord's determination of
the Base Rent, in which case Landlord and Tenant shall, for a period of ten (10)
business days following Landlord's receipt of Tenant's notice, negotiate in good
faith to establish the amount of the Base Rent for the Demised Premises for the
extended Term. If Landlord and Tenant fail to agree on such amount within said
10-day period, Tenant shall be deemed to have elected to retract its option to
extend the Term, in which case the Term, as it may have been previously
extended, shall expire on its scheduled expiration date and Tenant's option to
extend the
c-1
Term shall be void and of no further force and effect. If Tenant does not notify
Landlord of such disagreement within thirty (30) days of its receipt of
Landlord's notice, Base Rent for the Demised Premises for the applicable
extended term shall be the Base Rent set forth in Landlord's notice to Tenant.
(c) Except for the Base Rent, which shall be determined as set forth in
subparagraph (b) above, leasing of the Demised Premises by Tenant for the
applicable extended term shall be subject to all of the same terms and
conditions set forth in this Lease, including Tenant's obligation to pay
Tenant's share of Operating Expenses as provided in this Lease; provided,
however, that any improvement allowances, termination rights, rent abatements or
other concessions applicable to the Demised Premises during the initial Term
shall not be applicable during any such extended term, nor shall Tenant have any
additional extension options unless expressly provided for in this Lease.
Landlord and Tenant shall enter into an amendment to this Lease to evidence
Tenant's exercise of its renewal option. If this Lease is guaranteed, it shall
be a condition of Landlord's granting the renewal that Tenant deliver to
Landlord a reaffirmation of the guaranty in which the guarantor acknowledges
Tenant's exercise of its renewal option and reaffirms that the guaranty is in
full force and effect and applies to said renewal.
(d) Following the commencement of the first extended term, if applicable,
and upon written request from Tenant to Landlord, Landlord shall reduce the
Security Deposit (by delivering to Tenant a check in the appropriate amount if
the Security Deposit is in the form of cash, or by notifying the issuer of the
Letter of Credit to reduce the balance of the Letter of Credit if the Security
Deposit is in the form of the Letter Credit) to $114,334.00, provided that: (i)
the Letter of Credit, if applicable, is in full force and effect (e.g. it has
not expired or been converted to cash), (ii) Tenant is not then in default of
this Lease and no event has occurred that with the passage of time or giving of
notice would constitute a default of Tenant hereunder (provided, however, that
if Tenant cures such default within the applicable cure period provided under
this Lease, Tenant shall have the right to renew its request to reduce the
Security Deposit pursuant to this subsection (d)), (iii) Tenant's net worth as
of the date of such request by Tenant is not less than $20,000,000.00, and (iv)
Tenant earned a cumulative positive net income for the four quarters immediately
preceding such request (Tenant hereby agreeing to provide Landlord with such
evidence as Landlord may reasonably require to determine Tenant's net worth and
recent net income as of the date of such request by Tenant, which evidence may
consist of (x) audited financial statements, or (y) if no audited financial
statements are then available, unaudited financial statements certified by an
officer of Tenant to be true and correct)).
3. Tenant Construction Allowance.
------------------------------
(a) Notwithstanding the provisions of Section 17 of this Lease, Landlord
shall be responsible for the cost of the construction of the office space (the
"Office Space") only up to an amount equal to $600,000.00 (the "Office
Allowance"), and for the cost of the construction of the energy management
system in the warehouse portion of the Demised Premises (the "Energy System")
and the public address system (the "PA System; the Office Space, the Energy
System and the PA System being referred to herein as the "Allowance
Improvements") only up to an amount equal to $30,000.00 (the "Warehouse
Allowance"; the Office Allowance and the Warehouse Allowance being referred to
hereinafter as the "Tenant Allowance"). Upon Substantial Completion, Landlord
shall deliver to Tenant a bill (together with reasonable back-up documentation)
for all amounts in excess of the Tenant Allowance. Tenant agrees to pay such
bill in full to Landlord within thirty (30) calendar days following receipt of
such bill. In the event that the Tenant Allowance exceeds the actual cost to
construct the Allowance Improvements, Landlord shall, at Landlord's option (a)
pay Tenant, within sixty (60) days following the Lease Commencement Date, an
amount equal to the difference between the Tenant Allowance and the actual cost
of the Allowance Improvements (said difference being referred to herein as the
"Savings"), or (b) provide Tenant with a credit against Base Rent (but not
Additional Rent) in the amount of the Savings.
(b) For purposes of this Special Stipulation, the cost of the construction
of the office space, the energy management system and the public address system
shall be deemed to include, but not be limited to, the cost of the plans and
specifications therefor and all permits applicable thereto.
c-2
4. PILOT Lease.
-----------
(a) Tenant shall have the right to attempt to reduce the real estate taxes
and other impositions for the Demised Premises by participating in the Payment
In Lieu Of Taxes ("PILOT Program") available through the City of Memphis and
Shelby County, Tennessee and the Industrial Development Board of the City of
Memphis and County of Shelby, Tennessee (the "IDB"). Tenant shall be responsible
for preparing and filing the application for such PILOT Program and paying all
fees in connection therewith. Landlord will cooperate with Tenant in its attempt
to participate in the PILOT Program but Landlord shall not be obligated to incur
any out-of-pocket expenses in connection with such cooperation. Tenant shall
promptly reimburse to Landlord any and all of Landlord's expenses related to the
PILOT Program, including, but not limited to, attorneys' fees and the cost of
the Leasehold Policy (as defined below). Tenant agrees to prepare and file such
application and pursue participation of the Demised Premises in the PILOT
Program in a manner reasonably acceptable to Landlord so as to minimize to the
greatest extent reasonably possible any adverse affect on Landlord's ability to
sell, finance or market the Demised Premises. If either the City of Memphis or
Shelby County, Tennessee or the IDB elects not to include the Demised Premises
in the PILOT Program, if Tenant is unable to qualify the Demised Premises for
participation in the PILOT Program, or if the Demised Premises are included in
the PILOT Program and thereafter removed therefrom at any point during the Term
other than solely as a result of a default by Landlord under the PILOT Lease (as
hereinafter defined), Tenant shall be and remain fully obligated to pay the real
estate taxes and other impositions as described in Section 6 (whether applied or
increased retroactively as a result of a removal of the Demised Premises from
the PILOT Program other than as a result of a default by Landlord under the
PILOT Lease or otherwise, and including, without limitation, Tenant's share of
any recapture payments under the PILOT Lease, if any) without any change or
reduction in such obligations and Tenant's obligations under this Lease shall
not be affected in any way whatsoever. In the event that Tenant is successful in
making the Demised Premises part of the PILOT Program, (i) Landlord shall pass
through to Tenant all reductions or abatements applicable to the Demised
Premises and (ii) Landlord and Tenant agree and acknowledge that:
(A) Participation in the PILOT Program requires Landlord to convey
title to the Building to the IDB with a leaseback of the Building to
Landlord (the "PILOT Lease") and thus, this Lease shall automatically
become a sublease for the term of the PILOT Lease and subject to the terms
and conditions of the PILOT Lease. Notwithstanding, but without limiting,
the foregoing, Landlord and Tenant shall, upon the request of the other,
execute any and all documents reasonably necessary to confirm the status of
this Lease as a sublease of the PILOT Lease, and that this Lease shall
survive and become a prime lease if the Term shall extend beyond the term
of the PILOT Lease.
(B) Tenant shall review and approve the PILOT Lease and shall comply
with all terms and conditions thereof, to the extent applicable to the
Demised Premises. Tenant shall have no responsibility for compliance with
respect to any portion(s) of the Building covered by the PILOT Lease, other
than the Demised Premises. Tenant acknowledges that Additional Rent under
this Lease to be paid by Tenant shall include any payments Landlord is
required to make under the PILOT Lease to the extent applicable to the
Demised Premises. Tenant shall indemnify Landlord from and against all
claims, damages, costs and expenses, including, without limitation,
reasonable attorneys' fees and court costs, and any recapture payments,
which Landlord may suffer as a result of a default under the PILOT Lease
caused by the acts or omissions of Tenant. This subsection (B) shall
survive the expiration or any earlier termination of this Lease.
(C) The documents necessary to implement the PILOT Program must be in
a form and substance acceptable to Landlord and Tenant in their respective
sole and absolute discretion. The PILOT Lease must contain an option in
favor of Landlord to purchase the Building and the land on which the
Building and the Building Common Area are constructed for One Dollar (or
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such greater amount acceptable to Landlord, which shall be paid by Tenant)
(the "Option") and Landlord shall receive a leasehold title insurance
policy (the "Leasehold Policy"), the cost of which shall be paid by Tenant,
insuring Landlord's interest as tenant under the PILOT Lease and the
Option. Tenant shall have its counsel obtain the Leasehold Policy.
(D) Landlord acknowledges that as of the Lease Date, Endar
Corporation ("Endar") leases from Landlord the remainder of the space
within the Building (the "Endar Space"), and that Endar is attempting to
have the IDB include the Endar Space under the PILOT Program.
Notwithstanding anything to the contrary set forth in subsection (C) above,
in the event that Endar succeeds in making the Endar Space a part of the
PILOT Program before the Demised Premises is made a part of the PILOT
Program, Tenant acknowledges that Endar will have theretofore obtained the
Leasehold Policy, and Tenant agrees that in addition to obtaining any
endorsements to the Leasehold Policy required by Landlord in connection
with making the Demised Premises a part of the PILOT Program, Tenant shall
be required to pay directly to Endar an amount equal to the difference
between (i) one-half (1/2) of the cost of the title insurance premium paid
by Endar to obtain the Leasehold Policy, and (ii) the cost to Tenant to
obtain such endorsements to the Leasehold Policy required by Landlord.
(b) Notwithstanding anything to the contrary contained herein,
provided that this Lease is in full force and effect and Tenant is not in
default under this Lease (and has not caused a default under the PILOT Lease),
Landlord hereby agrees that Landlord shall (i) comply in all material respect
with all obligations of the "Lessee" under the PILOT Lease in order to preserve
unto Tenant all of the benefits of the PILOT Program awarded to Tenant, (ii)
reasonably cooperate with Tenant in ensuring Tenant's receipt of any notices of
default under the PILOT Lease issued by the IDB, and an opportunity to cure any
such defaults, and (iii) not exercise any option under the PILOT Lease in favor
of Landlord to purchase the Building prior to the expiration or earlier
termination of the PILOT period approved for Tenant by the IDB, without Tenant's
prior written consent, which consent may be granted or withheld in Tenant's sole
and absolute discretion.
(c) Except as set forth in subsection (a) above, Tenant shall not be
required to incur any expenses in connection with any attempt by any other
tenant in the Building to make any portion of the Building (other than the
Demised Premises) a part of the PILOT Program; provided, however, that Tenant
agrees to reasonably cooperate in any such other tenant's efforts to make such
portion of the Building a part of the PILOT Program.
5. Measurement of the Demised Premises. Within thirty (30) calendar days
-----------------------------------
after Substantial Completion of the Demised Premises, either party may have the
Demised Premises and Building measured by an architect using accepted BOMA
Standards, based on a "drip-line" measurement from the outside of the exterior
walls of the Building and the Demised Premises and to the middle of any demising
wall of the Demised Premises. The architect is subject to the other party's
prior approval. The square footage so certified by such architect shall
conclusively determine the Building Square Footage and the Demised Premises
Square Footage for all purposes under this Lease, including, without limitation,
calculation of Annual Base Rent and Monthly Base Rent Installments. If the
Building Square Footage and the Demised Premises Square Footage differ from the
amounts set forth in Sections 1(b) and 1(c) above, the Annual Base Rent and
Monthly Base Rent Installments shall be adjusted on the basis of the square
footage of the Building and the Demised Premises so certified by such architect,
using the rental rates per square foot used to determine the Annual Base Rent
set forth in Section 1(d) above. In addition, Tenant's Operating Expense
Percentage in Section 1(j) shall be adjusted as necessary. If neither party
elects to have the Demised Premises and Building measured in accordance with
this Section 2, then the square footage of the Demised Premises and Building
shall be deemed to be as set forth in Sections 1(b) and 1(c) above.
6. Inspection Rights.
-----------------
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(a) Landlord's books and records pertaining to the calculation of
Operating Expenses for any calendar year within the Term may be inspected by
Tenant (or by an independent certified accountant) at Tenant's expense, at any
reasonable time within three (3) months after Tenant's receipt of Landlord's
statement for Operating Expenses; provided that Tenant shall give Landlord not
less than fifteen (15) days' prior written notice of any such inspection. If
Landlord and Tenant agree that Landlord's calculation of Tenant's share of
Operating Expenses for the inspected calendar year was incorrect, the parties
shall enter into a written agreement confirming such error and then, and only
then, Tenant shall be entitled to a credit against future Base Rent for said
overpayment (or a refund of any overpayment if the Term has expired) or Tenant
shall pay to Landlord the amount of any underpayment, as the case may be. If
Tenant's inspection proves that Landlord's calculation of Tenant's share of
Operating Expenses for the inspected calendar year resulted in an overpayment by
more than fifteen percent (15%) of Tenant's share, Landlord shall also pay the
reasonable fees and expenses of Tenant's independent professionals, if any,
conducting said inspection.
(b) All of the information obtained through Tenant's inspection with
respect to financial matters (including, without limitation, costs, expenses,
income) and any other matters pertaining to Landlord, the Demised Premises, the
Building and/or the Project as well as any compromise, settlement, or adjustment
reached between Landlord and Tenant relative to the results of the inspection
shall be held in strict confidence by Tenant and its officers, agents, and
employees; and Tenant shall cause its independent professionals and any of its
officers, agents or employees to be similarly bound. The obligations within
this subsection (b) shall survive the expiration or earlier termination of the
Lease.
7. Contesting of Taxes. If Landlord does not elect to contest real estate
-------------------
taxes applicable to the Building and the Building Common Area for a particular
tax period during the Term, Tenant may request that Landlord contest such taxes
by written notice to Landlord given, if at all, within sixty (60) days following
Tenant's receipt of the statement required to be delivered by Landlord pursuant
to Section 6(a) of the Lease covering the tax period in question. Landlord may
then elect either to contest such taxes or to allow Tenant to so contest such
taxes subject to Landlord's reasonable approval of the firm or individual hired
to conduct such contest. In either case, Tenant shall be responsible for all
costs of contesting such taxes to the extent that said costs exceed the savings
realized by such contest. Any tax refund received by Landlord shall be applied
first to the costs incurred by Tenant in connection with such contest, and any
resulting savings over and above the costs incurred by Tenant in connection with
such contest shall be distributed on a prorata basis between the parties
(Landlord, Tenant and/or the other tenants of the Building, as the case may be)
who contributed toward payment of the applicable tax bill.
8. Building Compliance with Laws. Landlord represents and warrants to Tenant
-----------------------------
that, to Landlord's actual knowledge, the design and construction of the
Building materially complies with all applicable federal, state, county and
municipal laws, ordinances and codes in effect as of the Lease Date, excepting
therefrom any requirements related to Tenant's specific use of the Demised
Premises.
9. Landlord Insurance.
------------------
(a) Landlord shall maintain at all times during the Term of this
Lease, with such deductible as Landlord in its sole judgment determines
advisable, insurance on the "All-Risk" or equivalent form on a Replacement Cost
Basis against loss or damage to the Building. Such insurance shall be in the
amount of 80% of the replacement value of the Building (excluding all fixtures
and property required to be insured by Tenant under this Lease).
(b) Landlord shall maintain at all times during the Term commercial
liability insurance with limits at least equal to the amount as Tenant is
required to maintain pursuant to Section 8(a)(i) of this Lease.
10. Assignment and Subleasing. Notwithstanding the provisions of Section 29 of
-------------------------
this Lease, Tenant shall have the right to assign or sublet this Lease to (a) a
successor corporation that acquired substantially
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all of Tenant's assets, (b) any entity owning a majority of the outstanding
stock of Tenant, (c) any entity under common ownership or control with Tenant,
or (d) any entity owned by Tenant, without the prior consent of Landlord,
provided that Tenant shall give Landlord prior written notice of such assignment
or subletting (or promptly following such assignment or subletting if Tenant is
bound by written agreement not to disclose such proposed assignment or
subletting until such time as the assignment or subletting has occurred),
together with reasonable evidence of the net worth of such successor. If
requested by Tenant, Landlord shall use reasonable efforts not to disclose such
assignment or subletting to any third parties prior to the effective date of
such assignment or subletting. Nothing in this Lease shall be deemed to
prohibit, or require Landlord's consent to, the offering or transfer of stock
publicly over a recognized securities exchange or over-the-counter market.
11. Operating Expenses. Notwithstanding the provisions of Section 6 of this
------------------
Lease, Operating Expenses shall not include:
(a) Any payments of whatsoever kind due under the terms of any
mortgage, ground lease or other underlying lease;
(b) Capital expenses of any kind whatsoever except as expressly
permitted in the Lease;
(c) Rentals for items (except when needed in connection with normal
repairs and maintenance of permanent systems) which if purchased, rather than
rented, would constitute a capital improvement (excluding, however, equipment
not affixed to the Building which is used in providing janitorial or similar
services);
(d) The cost of any items to the extent Landlord receives
reimbursement or is otherwise compensated therefor, such as through insurance
proceeds, warranties and condemnation awards;
(e) Depreciation, amortization and interest payments, except as
provided herein and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
generally accepted accounting principles, consistently applied, and when
depreciation or amortization is permitted or required; the item shall be
amortized over its reasonably anticipated useful life;
(f) Advertising and promotional expenditures, and costs of signs in
or on the Building identifying the owner of the Building or other tenants'
signs;
(g) Marketing costs including leasing commissions, attorneys' fees in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with the lease, sublease and/or
assignment negotiations and transactions with present or prospective tenants or
other occupants of the Building;
(h) Costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements made for other tenants
or other occupants in the Building or incurred in renovating or otherwise
improving, decorating, painting or redecorating vacant space for tenants or
other occupants of the Building;
(i) Expenses in connection with maintenance or other services or
benefits that are not offered to Tenant or for which Tenant or any other tenant
is charged directly;
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(j) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building;
(k) Management fees paid or charged by Landlord in connection with
the management of the Building to the extent such management fees are in excess
of the management fees which are normally and customarily charged by landlords
of comparable buildings in the vicinity of the Building;
(l) Overhead and profit increment paid to Landlord or to subsidiaries
or affiliates of Landlord for goods and/or services in the Building to the
extent the same exceeds the costs of such goods and/or services rendered by
unaffiliated third parties on a competitive basis;
(m) Landlord's general corporate overhead and general and
administrative expenses;
(n) Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord;
(o) The cost of overtime or other expense to Landlord in curing its
defaults;
(p) Costs arising from Landlord's charitable or political
contributions;
(q) Costs of sculpture, paintings or other objects of art;
(r) Costs associated with the operation of the business of the
partnership or entity which constitutes Landlord as the same are distinguished
from the costs of the Building, including partnership accounting and legal
matters, costs of defending any lawsuits with any mortgagee (except as the
actions of Tenant may be in issue), costs of selling, syndicating, financing,
mortgaging or hypothecating any of Landlord's interest in the Building, costs of
any disputes between Landlord and its employees (if any) not engaged in Building
operation, disputes of Landlord with Building management, or outside fees paid
in connection with disputes with other tenants;
(s) Costs (including in connection therewith all attorneys' fees and
costs of settlement judgments and payments in lieu thereof) arising from claims,
disputes or potential disputes in connection with potential or actual claims
litigation or arbitrations pertaining to the Landlord and/or the Building and/or
the Project;
(t) Income or excess profits or taxes assessed against Landlord, or
any corporation, or capital stock taxes imposed upon Landlord; and
(u) Without limiting the management fee permitted in subsection (k)
above, costs for any item or service in excess of the actual costs incurred by
Landlord in connection with such item or service.
12. Tenant's Early Occupancy. Provided that Tenant obtains Landlord's prior
------------------------
written approval, such approval not to be unreasonably withheld, and if and to
the extent permitted by applicable laws, rules and ordinances, Tenant may enter
the Demised Premises (or portion thereof that is the subject of Landlord's prior
written approval) prior to the Lease Commencement Date in order to make tenant
improvements and otherwise prepare the Demised Premises for occupancy, provided
that during said period: (i) Tenant shall comply with all terms and conditions
of this Lease other than the obligation to pay Base Rent, (ii) Tenant shall not
interfere with Landlord's completion of the Building and the Demised Premises
and (iii) Tenant shall not begin operation of its business.
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13. Installation of Satellite Dish. Tenant shall have the right to install
------------------------------
one (1) satellite dish (the "Dish") on the roof of the Building at a location
mutually agreeable to Landlord and Tenant, subject to the following:
(a) The installation, maintenance and removal shall be at Tenant's
sole cost and expense, including, but not limited to, the reasonable costs for
Landlord's roofing contractor to inspect and oversee said installation,
maintenance and removal.
(b) The installation and location shall be in compliance with all
applicable governmental regulations, laws and ordinances. Prior to
installation, Tenant shall provide Landlord with satisfactory evidence of
compliance with law.
(c) In no event shall the radius of the Dish be greater than six (6)
feet.
(d) The installation shall require Landlord's prior written approval
of the specifications of the Dish and the installation plans, which approval
shall not be unreasonably withheld or delayed. In addition, the plans for
installation shall receive the prior written approval of Landlord's roofing
contractor, which approval must explicitly confirm that the roof warranty shall
not be affected in any way by said installation and maintenance.
(e) Tenant hereby indemnifies Landlord against all costs, losses,
damages, fines, attorney and contractor fees and other expenses and fees
incurred by Landlord as a result of Tenant's installation, maintenance and
removal of the Dish, including, but not limited to, the loss of Landlord's roof
warranty as a result of Tenant's, or its agents, employees or contractors, acts
or omissions. This indemnity shall survive the expiration or earlier
termination of this Lease.
(f) The installation, maintenance and removal shall be completed lien
free, or, in the alternative, Tenant shall bond over any such lien.
(g) The Dish shall be located at least eighty (80) feet from the
front facade of the Building.
(h) Tenant's access to the roof shall be provided by Landlord's
property management personnel, which personnel shall have the right to accompany
Tenant onto the roof.
Tenant shall have no right to install any additional telecommunication equipment
on the roof of the Building without Landlord's prior written consent, which
consent shall not be unreasonably withheld. Tenant acknowledges that in
reviewing any Tenant request to install such additional telecommunication
equipment Landlord may require that Tenant deliver to Landlord such indemnities,
permits, specifications and other information as Landlord may reasonably
request. In addition, Landlord's approval may be conditioned upon Tenant
agreeing to share with Landlord one-half (1/2) of any licensing or similar fees
that Tenant may obtain as a result of such additional telecommunication
equipment being installed on the roof of the Building (less Tenant's third party
out-of-pocket costs in connection therewith).
14. Tenant's Property and Financing. Tenant may, from time to time and without
-------------------------------
the consent or approval of Landlord, grant security interests in Tenant's
Property (as hereinafter defined) and execute and deliver security agreements,
Uniform Commercial Code Financing Statements, equipment financing agreements,
conditional bills of sale, leases or other title retention agreements or any
modifications, extensions, replacement or amendments thereto in connection with
the granting of security interests in Tenant's Property (collectively,
"Equipment Financing Agreements"). Landlord agrees to execute and deliver such
consents, access agreements, lien subordination agreements and other documents
reasonably required by the holder or beneficiary of any Equipment Financing
Agreement, provided that such consents, agreements and documents are reasonably
acceptable to Landlord. Tenant agrees to reimburse Landlord for reasonable
legal fees and any other reasonable costs incurred by Landlord in connection
with
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Landlord's review of any such consents, agreements and documents. For purposes
of this Special Stipulation 14, "Tenant's Property" shall be deemed to mean
Tenant's trade fixtures, equipment and personal property. In no event shall
Tenant's Property be deemed to include, and Tenant's Property shall specifically
exclude, any and all Improvements, as defined in Section 8(a)(ii) of the Lease.
15. Generator. A back-up generator (the "Generator") may, at Tenant's option
---------
and expense, be located within the Demised Premises, provided that (a) the
design and precise location of the Generator is reasonably satisfactory to
Landlord, (b) the Generator (and the use of the Generator) is in compliance with
all of the terms and conditions of this Lease, and (c) the Generator (and the
use of the Generator) is in compliance with any and all applicable laws,
statutes, ordinances, regulations and protective covenants.
16. Right of First Offer to Lease. So long as the Lease is in full force and
-----------------------------
effect and no Event of Default has occurred and is then continuing and no facts
or circumstances then exist which, with the giving of notice or the passage of
time, or both, would constitute an Event of Default, Landlord hereby grants to
Tenant a right of first offer (the "Right of First Offer") to expand the Demised
Premises to include space in the Building that directly adjoins the Demised
Premises (the "Offer Space") subject to the terms and conditions set forth
herein. The term "directly adjoins", as used in the preceding sentence, shall
mean space which actually adjoins the Demised Premises. By way of example, the
Demised Premises is to contain approximately 414,504 square feet, located at one
end of the Building, leaving approximately 414,504 square feet in the remainder
of the Building. A lease by Landlord of approximately 200,000 square feet at
the opposite end of the Building from the Demised Premises (thereby leaving
approximately 214,504 square feet of space directly adjoining the Demised
Premises) would not be subject to the Right of First Offer and would not
constitute Offer Space.
(a) Tenant's then current financial condition, as revealed by its
most current financial statements (which shall include quarterly and annual
financial statements, including income statements, balance sheets, and cash flow
statements, as required by Landlord), must demonstrate either that Tenant's net
worth is at least equal to its net worth at the time the Lease was signed; or
that Tenant otherwise meets financial criteria acceptable to Landlord.
(b) The term of the Right of First Offer shall commence on the Lease
Commencement Date and continue throughout the initial Term (the "First Offer
Period"), unless sooner terminated pursuant to the terms hereof.
(c) Subject to the other terms of this Right of First Offer, after
any part of the Offer Space has or will "become available" (as defined herein)
for leasing by Landlord, Landlord shall not, during the term of the Right of
First Offer, lease to a third party that available portion of the Offer Space
(the "Available Offer Space") without first offering Tenant the right to lease
such Available Offer Space as set forth herein.
(i) Space shall be deemed to "become available" when Landlord
desires to lease all or a portion of the Offer Space.
(ii) Notwithstanding subsection c(i) above, Offer Space shall not
be deemed to "become available" if the space is (a) assigned or subleased by the
current tenant of the space; or (b) re-let by the current tenant of the space by
renewal, extension, or renegotiation (Tenant hereby acknowledging that as of the
Lease Date, a tenant currently occupies all of the Offer Space) or (c) leased on
a temporary basis for a period of less than twelve (12) months without any right
to extend.
(d) Consistent with subsection (c), Landlord shall not lease any such
Available Offer Space to a third party unless and until Landlord has first
offered the Available Offer Space to Tenant in writing (the "Offer"). The Offer
shall contain (i) a description of the Available Offer Space (which description
shall include the square footage amount and location of such Available Offer
Space) and an attached floor plan that shows the Available Offer Space; (ii) the
date on which Landlord expects
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the Available Offer Space to become available; (iii) the base rent for the
Available Offer Space; (iv) the increase in Tenant's Operating Expense
Percentage as defined in Section 1(j) of the Lease, (v) and the term for the
Available Offer Space (which shall be no less than the remainder of the Term of
this Lease then in effect). Upon receipt of the Offer, Tenant shall have the
right, for a period of five (5) calendar days after receipt of the Offer, to
exercise the Right of First Offer by giving Landlord written notice that Tenant
desires to lease the Available Offer Space at the base rent and upon the special
terms and conditions as are contained in the Offer. If the term of the Available
Offer Space expires after the Term of the Lease, the Term of the Lease shall be
extended to be coterminous with the term of the Available Offer Space and the
Annual Base Rent per square foot for the existing Demised Premises during said
extension shall be based upon the greater of (i) the base rent per square foot
for the Available Offer Space or (ii) the Annual Base Rent per square foot of
the Demised Premises for the last year of the Term multiplied by an amount equal
to the sum of (a) 100% plus (b) three percent (3%) multiplied by the number of
years or partial years of the current Term for which there has not been an
escalation of Base Rent. If Tenant has an extension option under this Lease and
the Term of this Lease is deemed extended to be coterminous with the expiration
date set forth in the Offer, then the applicable extension option shall be
deemed exercised for the period of time required to make the Term of this Lease
coterminous with the expiration date of the Offer (and any partial extension
term then remaining shall be subject to the terms and conditions of Special
Stipulation 2 above).
(e) If, within such five (5)-day period, Tenant exercises the Right
of First Offer, then Landlord and Tenant shall amend the Lease to include the
Available Offer Space subject to the same terms and conditions as the Lease, as
modified by the terms and conditions of the Offer. If this Lease is guaranteed
now or at anytime in the future, Tenant simultaneously shall deliver to Landlord
an original, signed, and notarized reaffirmation of each Guarantor's personal
guaranty, in form and substance acceptable to Landlord.
(f) If, within such five (5)-day period, Tenant declines or fails to
exercise the Right of First Offer, Landlord shall then have the right to lease
the Available Offer Space in portions or in its entirety to a third party,
unrelated to and unaffiliated with Landlord, at any time without regard to the
restrictions in this Right of First Offer and on whatever terms and conditions
Landlord may decide in its sole discretion, provided the base rent (as adjusted
to account for any changes in the tenant improvement allowance), additional rent
and any rent concessions are not substantially more favorable to such tenant
than those set forth in the Offer, without again complying with all the
provisions of this Right of First Offer.
(g) In the event that the Available Offer Space is leased to such a
third party, this Right of First Offer shall be subordinate to any extension or
renewal options contained in said lease. Further, if at the end of the term of
said third party lease, said third party tenant desires to remain in the Offer
Space, Landlord shall be entitled to renew said lease and this Right of First
Offer shall be subject and subordinate to said renewal.
(h) If Landlord desires to lease the Available Offer Space at a base
rent rate substantially less than the base rent rate set forth in the Offer
(provided, that if the base rent rate is at least ninety percent (90%) of the
base rent rate set forth in the Offer, said base rent rate shall be conclusively
deemed to be not substantially less than the base rent set forth in the Offer),
or if Landlord desires to materially alter or modify the special terms and
conditions of the Offer, if any, Landlord shall be required to present the
altered or modified Offer to Tenant pursuant to this Right of First Offer, in
the same manner that the original Offer was submitted to Tenant.
(i) This Right of First Offer is personal to Saleslink Corporation
(and any assignee pursuant to Special Stipulation 10 hereinabove) and shall
become null and void upon the occurrence of an assignment (except for an
assignment allowed without Landlord's consent pursuant to Special Stipulation 10
hereinabove) of Tenant's interest in the Lease or a sublet of all or a part of
the Demised Premises.
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17. Environmental Matters. If and only if Tenant complies with all of the
---------------------
following conditions and with Section 16 of this Lease, Tenant may use and store
the substances in the Demised Premises of the type and in the quantities
described below: (i) Tenant uses and stores all such substances in accordance
with all applicable Environmental Laws; (ii) Tenant obtains all necessary
permits and uses and stores such substances in compliance with those permits;
(iii) Tenant uses and stores all such substances in accordance with the
Materials Safety Data Sheets ("MSDS Sheets") which Tenant has provided to
Landlord, (iv) prior to using or storing any of the substances listed below in
the Demised Premises, Tenant has a program prepared for Tenant, at Tenant's sole
cost, by a reputable environmental consultant acceptable to Landlord, to detail
the steps Tenant must take to be in compliance with all applicable Environmental
Laws and to handle all such substances in a safe and prudent manner and submits
such plan to Landlord for its approval and thereafter, strictly follows such
compliance plan, as evidenced by written compliance reports delivered to
Landlord not less than quarterly by the environmental consultant; (v) Tenant
does not use or store any of the substances listed below (or any other
substances) in a manner that would cause the Demised Premises to become subject
to regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder; and (vi) Tenant shall not use or
store the substances listed below (or any other substances) in a manner as to
cause Tenant to become regulated as a generator under RCRA other than as a
Conditionally Exempt Small Quantity Generator as defined by RCRA.
"Conditionally Exempt Small Quantity Generator" shall mean the current RCRA
definition of a generator of not more than 100 kg. of hazardous wastes per
month. For purposes of this weight limitation item only, "hazardous wastes"
means only those materials defined as "hazardous wastes" upon the effective date
of this Lease.
Chemical Quantity
-------- --------
a. Ercopell Lacquer 75 gallons
b. Acetone 6 gallons
c. Isopropanol Anhydrous 75 gallons
d. Biostrip #1 6 gallons
e. EasiSolv 120 Solvent Cleaner 6 gallons
f. Sericol Ultraviolet curable screen INK 150 gallons
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EXHIBIT D
Rules And Regulations
These Rules and Regulations have been adopted by Landlord for the mutual benefit
and protection of all the tenants of the Building in order to insure the safety,
care and cleanliness of the Building and the preservation of order therein.
1. The sidewalks shall not be obstructed or used for any purpose other
than ingress and egress. No tenant and no employees of any tenant shall go upon
the roof of the Building without the consent of Landlord.
2. No awnings or other projections shall be attached to the outside walls
of the Building.
3. The plumbing fixtures shall not be used for any purpose other than
those for which they were constructed, and no sweepings, rubbish, rags or other
substances, including Hazardous Substances, shall be thrown therein.
4. No tenant shall cause or permit any objectionable or offensive odors
to be emitted from the Demised Premises.
5. The Demised Premises shall not be used for lodging or sleeping or for
any immoral or illegal purposes.
6. No tenant shall make, or permit to be made any unseemly or disturbing
noises, sounds or vibrations or disturb or interfere with tenants of this or
neighboring buildings or premises or those having business with them.
7. Each tenant must, upon the termination of this tenancy, return to the
Landlord all keys of stores, offices, and rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay to the Landlord the cost of replacing the same
or of changing the lock or locks opened by such lost key if Landlord shall deem
it necessary to make such change.
8. Canvassing, soliciting and peddling in the Building and the Project
are prohibited and each tenant shall cooperate to prevent such activity.
9. Landlord will direct electricians as to where and how telephone or
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without written consent of Landlord. The
location of telephones, call boxes and other office equipment affixed to the
Demised Premises shall be subject to the approval of Landlord.
10. Parking spaces associated with the Building are intended for the
exclusive use of passenger automobiles. Except for intermittent deliveries, no
vehicles other than passenger automobiles (which shall include, without
limitation, sport utility vehicles and minivans) may be parked in a parking
space without the express written permission of Landlord. Trucks and tractor
trailers may only be parked at designated areas of the Building. Trucks and
tractor trailers shall not block access to the Building.
11. No tenant shall use any area within the Project for storage purposes
other than the interior of the Demised Premises.
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EXHIBIT E
CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of SalesLink Corporation, a Delaware corporation
("Tenant"), hereby certifies as follows to Industrial Developments International
(Tennessee), L.P., a Georgia limited partnership ("Landlord"), in connection
with Tenant's proposed lease of premises in Building "D", at Chickasaw
Distribution Center, Shelby County, Tennessee (the "Premises"):
1. Tenant is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and duly qualified to do business in the
State of Tennessee.
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of Tenant, a lease
of the Premises and that the signature opposite the name of each individual is
an authentic signature:
- - ------------------- -------------------- -------------------
(name) (title) (signature)
- - ------------------- -------------------- -------------------
(name) (title) (signature)
- - ------------------- -------------------- -------------------
(name) (title) (signature)
3. That the foregoing authority was conferred upon the person(s) named
above by the Board of Directors of Tenant, at a duly convened meeting held
_____________, 200__.
________________________________
Secretary
[CORPORATE SEAL]
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EXHIBIT F
IRREVOCABLE LETTER OF CREDIT
Industrial Developments International (Tennessee), L.P.
3424 Peachtree Road N.E.
Suite 1500
Atlanta, Georgia 30326
Attention: _____________
Ladies and Gentlemen:
At the request and on the instructions of our customer, SalesLink
Corporation (the "Applicant"), we hereby establish this Irrevocable Letter of
Credit No. ______________ (the "Letter of Credit") in the amount of
$__________________ in your favor. This Letter of Credit is effective
immediately and expires on __________, 20__. This Letter of Credit will be
automatically renewed (without amendment) for additional one (1) year periods
unless we provide at least thirty (30) days' notice to you by certified mail or
national courier service that we elect not to renew this Letter of Credit for
such additional period. No extension will be granted, however, which extends
the maturity date of this Letter of Credit beyond ______________________.
Funds under this Letter of Credit will be made available to you against
receipt by us of (1) a sight draft in the form of Annex A attached hereto and
(2) your drawing certificate in the form of Annex B attached hereto, in each
case appropriately completed and purportedly signed by one of your authorized
officers.
Presentation of any such sight draft and drawing certificate shall be made
at our office located at _____________________, Attention: ________________,
telecopy number (____) __________, during our banking hours of ____ a.m.,
Eastern Time to ____ p.m., Eastern Time. Presentation hereunder may also be
made in the form of facsimile transmission of the appropriate sight draft and
drawing certificate to the preceding address and telecopy number.
If a sight draft and drawing certificate are presented hereunder by sight
or by facsimile transmission as permitted hereunder, by 11:00 a.m., Eastern
Time, and provided that such sight draft and drawing certificate conform to the
terms and conditions of this Letter of Credit, payment shall be made to you, or
to your designee, of the amount specified, in immediately available funds, not
later than 2:00 p.m., Eastern Time, on the same day. If a sight draft and a
drawing certificate are presented by you hereunder after the time specified
above, and provided that such sight draft and drawing certificate conform to the
terms and conditions of this Letter of Credit, payment shall be made to you, or
to your designee, of the amount specified, in immediately available funds, not
later than 2:00 p.m., Eastern Time, on the next business day. If a demand for
payment made by you hereunder does not, in any instance, conform to the terms
and conditions of this Letter of Credit, we shall give you notice within one
business day that the demand for payment was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor and
that we will upon your instructions hold any documents at your disposal or
return the same to you. Upon being notified that the demand for payment was not
effected in conformity with this Letter of Credit, you may attempt to correct
any such non-conforming demand for payment to the extent that you are entitled
to do so and within the validity of this Letter of Credit.
Partial drawings are allowed under this Letter of Credit. Any drawing under
this Letter of Credit will be paid from our general funds and not directly or
indirectly from funds or collateral deposited with or for our account by the
Applicant, or pledged with or for our account by the Applicant.
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This Letter of Credit is transferable and notwithstanding Article 48 of the
Uniform Customs (as defined below), this Letter of Credit may be successively
transferred. Transfer of this Letter of Credit to a transferee shall be
effected only upon the presentation to us of the original of this Letter of
Credit accompanied by a certificate in the form of Annex C. Upon such
presentation we shall transfer the same to your transferee or, if so requested
by your transferee, issue a letter of credit to your transferee with provisions
consistent with, and substantially the same as, this Letter of Credit.
This Letter of Credit shall be subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (the "Uniform Customs"), which is incorporated into the text
of this Letter of Credit by this reference. This Letter of Credit shall be
deemed to be issued under the laws of the State of Georgia and shall be governed
by and construed in accordance with the law of the State of Georgia with respect
to matters not governed by the Uniform Customs and matters on which the Uniform
Customs and the laws of the State of Georgia are inconsistent.
Very truly yours,
[ISSUING BANK]
By:____________________________________
Name:_______________________________
Title:______________________________
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ANNEX A
-------
SIGHT DRAFT
Date:_____________
At Sight
Pay to the order of the sum of _________________________ and ____/100
Dollars ($_________) drawn on [ISSUING BANK], as issuer of its Irrevocable
Letter of Credit No. __________ dated _____________, 20__.
Industrial Developments International (Tennessee),
L.P.
By:______________________________________
Name:_________________________________
Title:________________________________
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ANNEX B
-------
DRAWING CERTIFICATE
Date:________________
[ISSUING BANK]
[ADDRESS]
Attention: ______________________
Re: Irrevocable Letter of Credit No. _____________ (the "Letter of
Credit") For the Account of SalesLink Corporation (the "Applicant")
Ladies and Gentlemen:
The undersigned, Industrial Developments International (Tennessee), L.P.
(the "Beneficiary") hereby certifies that:
1) The Beneficiary is the lessor under that certain [Lease Agreement]
dated ___________, 20__, as amended, between the Beneficiary, as lessor, and the
Applicant, as lessee (the "Lease").
2) The Beneficiary is entitled to payment under the Letter of Credit in
the amount of $______________ by reason of the following condition (mark only
one):
___ The Applicant has defaulted under the Lease.
___ The expiration date of the Letter of Credit is less than [30] days
from the date of this Certificate.
3) Please direct payment under the Letter of Credit by wire transfer to:
[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Certificate.
Industrial Developments International (Tennessee), L.P.
By:________________________________________
Name:___________________________________
Title:__________________________________
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ANNEX C
-------
NOTICE OF TRANSFER
Date:______________
[ISSUING BANK]
[ADDRESS]
Attention: ______________________
Re: Irrevocable Letter of Credit No. _____________ (the "Letter of
Credit") For the Account of SalesLink Corporation
Ladies and Gentlemen:
You are hereby directed to transfer and endorse the Letter of Credit to
__________________ (the "Transferee") or to issue in accordance with the terms
of the Letter of Credit, a new letter of credit to the Transferee having the
same terms as the Letter of Credit.
We submit herewith for endorsement or cancellation the original of the
Letter of Credit.
Very truly yours,
Industrial Developments International (Tennessee), L.P.
By:__________________________________________
Name:_____________________________________
Title:____________________________________
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EXHIBIT G
SIGN GUIDELINES
CHICKASAW DISTRIBUTION CENTER
SIGN GUIDELINES
General Requirements. All signs, including directional and temporary signs,
--------------------
must be approved in writing by the Architectural Committee prior to
installation. Submit the drawings to Kurt Nelson at fax # (901) 385-0505. The
location, size, color and construction of signs must be in keeping with the
character of the park. Unless otherwise approved in writing by the Architectural
Committee, only one (1) Structure-mounted sign per tenant is acceptable.
Additionally, unless otherwise approved in writing by the Architectural
Committee, the only ground-mounted signs that are permissible are those
belonging to a tenant who occupies more than forty percent (40%) of the total
square footage of the Structure located on a particular Lot. Except as set forth
herein, only signs identifying the occupant's name shall be permitted. All signs
must be either attached to the Structure or ground-mounted and adhere to the
guidelines set forth herein. In addition to the guidelines below, the signs must
be in compliance with all laws and codes.
Structure-Mounted Signs. All signs to be mounted on a Structure shall:
-----------------------
(a) be installed so as to be parallel to and contiguous with the
Structure wall;
(b) not project more than fifteen (15) inches from the Structure
wall;
(c) have a maximum mounting height (measured at the bottom of the
sign) equal to one-fourth (1/4) of the height of the Structure
surface on which it is placed and be located at the same height
as any other tenant signs already existing on the building;
(d) have letters constructed as separate pieces of individual
construction; and
(e) be of a design and material compatible with the design of the
structure on which it will be installed;
(f) be of a color matching the structures' primary accent color
(i.e., painted reveal).; and
(g) not contain any internal lighting.
Ground-Mounted Signs. All ground-mounted signs shall:
--------------------
(a) be installed at least ten (10) feet away from any boundary of the
Lot in which sign is erected;
(b) not be closer than three (3) feet from a driveway or parking area
serving the lot in which such sign is to be installed;
(c) not have a gross surface area of more than fifty (50) square
feet;
(d) not exceed six (6) feet in height from ground elevation;
(e) be connected to the ground along the entire base length of the
sign;
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(f) have a base being of a design and material similar to that of the
Structure located on the Lot on which such sign is to be
installed, with the face of such sign being of a design and
material compatible with the design of said Structure; and
(g) be surrounded by landscaping.
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