EXHIBIT 10.8
STATE OF GEORGIA
GWINNETT COUNTY
LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease"), made this 8th day of December, 1997, by and
between WEEKS DEVELOPMENT PARTNERSHIP, hereinafter referred to as "Landlord",
and INNOTRAC CORPORATION, hereinafter referred to as "Tenant";
ARTICLE I
PREMISES
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1.01 Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the property hereinafter referred to as the LEASED PREMISES, described
as: (i) an office warehouse building (the "Building") containing approximately
250,000 square feet of leasable space (50,000 square feet of office space and
200,000 square feet of warehouse space) in the Sugarloaf Office Park, Duluth,
Georgia, with a street address of 6655 Sugarloaf Parkway, which Building is to
be constructed by Landlord for Tenant, at Landlord's sole cost and expense, in
accordance with the Approved Plans and Specifications (as defined in Section
3.03 hereof), and (ii) the land on which the Building is to be located with all
its rights and appurtenances (the "Land") and as more particularly described on
Exhibit "A" attached hereto and by this reference incorporated herein. (The
Building and Land are sometimes collectively referred to as the "Leased
Premises").
1.02 Landlord represents, warrants and covenants to and with Tenant,
knowing that Tenant is relying on each such representation, warranty and
covenant, that:
(a) Landlord is a general partnership, duly organized, validly
existing and in good standing under the laws of the State of Georgia. All
partnership action has been taken by Landlord authorizing and approving the
execution of and entry into this Lease and the performance by Landlord of
Landlord's duties and obligations under this Lease.
(b) To the best of Landlord's knowledge, there are no actions,
suits or proceedings pending or threatened against, by or affecting
Landlord which affect title to the Leased Premises or which question the
validity or enforceability of this Lease or of any action taken by Landlord
under this Lease, in any court or before any governmental authority,
domestic or foreign.
(c) The execution of and entry into this Lease, and the performance
by Landlord of Landlord's duties and obligations under this Lease are
consistent with and not in violation of, and will not create any adverse
condition under, any contract, agreement or other instrument to which
Landlord is a party, any judicial order or judgment of any nature by which
Landlord is bound, or the organizational documents of Landlord.
(d) By the Commencement Date, Landlord shall have good and
marketable fee simple title to the Leased Premises subject only to the
exceptions, liens and encumbrances listed on Exhibit "A-1" ("Permitted
Exceptions").
(e) There are no encroachments on the Land, with the exception of a
monument sign located on the corner of Sugarloaf Parkway and Premier
Parkway, and the Building will be situated entirely within the boundaries
of the Land and within applicable building lines.
(f) The Building or any improvements to be constructed by Landlord
on the Leased Premises will not contain hazardous substances or hazardous
materials; and, to the best of Landlord's knowledge, no Hazardous
Substances have been released, introduced, spilled, discharged or disposed
of on, in or under any adjacent land.
(g) By the Commencement Date, the Land will constitute either a
previously subdivided lot in compliance with applicable subdivision
regulations and similar governmental requirements, or will constitute a lot
that was created in a manner not subject thereto; and no subdivision filing
or approval or similar governmental filing or approval will be required for
the conveyance of the Land.
(h) To the best of Landlord's knowledge, there are no pending,
threatened or contemplated condemnation actions involving all or any
portion of the Land; and, to the best of Landlord's knowledge and belief,
there are no existing, proposed or contemplated plans to widen, modify or
realign any public rights-of-way located adjacent to any portion of the
Land.
(i) By the Commencement Date, all utilities (including, without
limitation, water, storm and sanitary sewer, electricity, gas, telephone
and cable television) will be available on the Land through private
easements or properly dedicated public easements in capacities sufficient
to serve and operate the Building.
(j) By the Commencement Date, access to the Land from streets and
roads adjoining the Land shall be provided by a curb cut to Sugarloaf
Parkway and a curb cut to Premier Parkway as shown on the Site Plan
referred to on Exhibit "B", and such access shall not otherwise be limited
or restricted.
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ARTICLE II
TERM
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2.01 TO HAVE AND TO HOLD said Leased Premises for a term commencing on the
date of Substantial Completion of the Leased Premises (hereinafter referred to
as the "Commencement Date") and continuing for a period of ten (10) years,
(provided that if the Commencement Date is not the first day of a calendar
month, the term of this lease shall continue until the last day of the calendar
month in which the tenth (10th) anniversary of the Commencement Date occurs)
upon the terms, conditions, and covenants contained herein. "Substantial
Completion" shall mean the date three (3) weeks after the: (i) completion of
construction of the Leased Premises in accordance with the Approved Plans and
Specifications, subject only to normal punchlist items which shall be set forth
in the Punch List described in section 7.03; and (ii) issuance of a Certificate
of Occupancy for the Building, and all other certificates, licenses, permits,
authorizations and approvals for the full and complete uses and occupancy of the
Leased Premises by Tenant ("Other Licenses"), by all governmental authorities
having jurisdiction with respect thereto; provided, however, that Other Licenses
shall not include any certificate, license, permit or other authorization or
approval that (i) Tenant is required to obtain under this Lease; or (ii) relate
to Tenant's own operations at the Leased Premises. It is understood and agreed
by Landlord and Tenant that in order to achieve Substantial Completion the Punch
List must be those items which shall, if taken either individually or in the
aggregate, do not materially or substantially interfere with Tenant's taking
possession of, moving its personal property and effects into, or using and
enjoying the Leased Premises for the purposes for which it was intended.
Landlord agrees to provide to Tenant at least fifteen (15) days prior written
notice of the date on which it expects to achieve Substantial Completion.
ARTICLE III
RENTAL
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3.01 As rental for the Leased Premises, Tenant agrees to pay to Landlord,
without offset or abatement, except as otherwise provided in the Lease, Base
Rental as set forth below:
Years 1 - 5 $71,458.33/month $857,500.00/year
Years 6 - 10 $80,000.00/month $960,000.00/year
due on or before the first day of each calendar month beginning on or following
the Commencement Date and thereafter for the remainder of the term, together
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with any other additional rental as hereinafter set forth. Tenant shall pay
interest at a rate of eight percent (8%) per annum on any payment of Base Rental
remaining due five (5) days after the due date thereof. Tenant has deposited
with Landlord, upon delivery of this Lease Agreement, an amount equal to
Seventy-One Thousand Four Hundred Fifty-Eight and 33/100 Dollars ($71,458.33)
which is to be applied as first month's rental, and part of the second month's
rental if the first month is a partial month. Landlord shall hold an amount
equal to Ten Thousand Seven Hundred Sixty-two and 50/100 ($10,762.50) Dollars
from Tenant's previous lease agreement, and upon execution of this Lease, shall
apply said amount to be held as a refundable security deposit for this Lease.
If Tenant shall perform each provision of this Lease, any portion of the
security deposit which has not been appropriated by Landlord in accordance with
the provisions hereof shall be returned to Tenant, without interest, within
thirty (30) days after the expiration of the term of this Lease.
Notwithstanding anything to the contrary, Landlord shall not appropriate any
portion of the security deposit without first giving Tenant notice which
expressly sets forth which provision of the Lease was breached by Tenant and the
damages suffered by Landlord as a result of such breach. If the Commencement
Date of this Lease shall be a date other than the first day of a calendar month,
applicable rent for such month shall be prorated on a daily basis, based on the
number of days in such month, and such sum shall be due on the Commencement
Date.
3.02 In addition to the rentals called for herein, Landlord agrees to
provide or contract for the common area maintenance ("CAM") and Tenant agrees to
pay Landlord additional rental for said CAM. CAM shall consist of: maintaining
parking areas, planted areas, signs, and routine lawn maintenance, including the
trimming of plantings and pruning of trees in the summer, all done in a manner
consistent with like-kind space in the northern corridor of the Atlanta, Georgia
Metropolitan area. Specifically excluded from the definition of the term "CAM"
are expenses for repairs, replacements and general maintenance to the extent
paid by proceeds of insurance or by Tenant or other third parties; expenses for
repairs, replacements or maintenance to the extent same are to be paid for by
Landlord pursuant to the provisions this Lease; interest, amortization or other
payments on loans to Landlord whether secured or unsecured; depreciation of the
Building; leasing commissions; legal expenses; salaries of officers, executives,
employees and agents not directly involved in the on-site operation of the
Building; state, federal or local income taxes, excess profits or franchise
taxes or other such taxes imposed on or measured by or determined from the gross
income of Landlord; and any capital improvements to the Leased Premises with the
exception of those mandated by governmental requirements occurring after the
Commencement Date. Each year during the term hereof, Landlord shall give Tenant
written notice of its estimate of the amount of CAM charges (collectively
"Charges") for the Leased Premises for the calendar year. Tenant shall,
thereafter, during that calendar year, pay to Landlord one-twelfth (1/12) of the
amount set forth in said statement at such time as its monthly installments of
base rental hereunder are due and payable. At such time as Landlord is able to
determine the actual Charges for such calendar year, Landlord shall deliver to
Tenant a statement thereof, and in the event the estimated Charges differ from
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the actual Charges, any adjustment necessary shall be made to additional rental
payments next coming due under this section. Charges for the Leased Premises
shall be set at $.25 per square foot of space contained within the Leased
Premises for the first full year of the Lease and can only be increased five
percent (5%) per annum thereafter. CAM for the calendar years during which the
Commencement Date and the last day of the term of Lease occur shall be prorated
so that Tenant pays only that portion of the CAM for such calendar years
allocable to periods of time during the term of this Lease.
3.03 The base rental provided in section 3.01 above, was based, in part,
on a tenant finish allowance for the office space in the amount of $25.00 per
square foot ($1,250,000.00) (the "Allowance") for the costs and expenses of
construction of the tenant finish to the Leased Premises as set forth in the
plans and specifications attached hereto in Exhibit "B" and by reference
incorporated herein (herein referred to as the "Approved Plans and
Specifications"). Any increases in costs and expenses due to Change Orders
shall be taken into account in the manner described in Section 7.01.
3.04 Tenant agrees to pay as additional rent to Landlord, upon demand, its
pro rata share of any utility surcharges, or any other costs levied, assessed or
imposed by, or at the direction of, or resulting from statutes or regulations,
or interpretations thereof, promulgated by any Federal, State, Municipal or
local governmental authorities in connection with its use or occupancy of the
Leased Premises.
3.05 Tenant recognizes that the Leased Premises are subject to the
Protective Covenants (as defined below) and that the Protective Covenants
provide, among other things, for the imposition of assessments and other charges
against the Leased Premises and the Land. Tenant agrees to pay as additional
rent to Landlord, upon demand, any costs, expenses or assessments levied,
assessed or imposed on the Leased Premises ("Covenant Assessments") by, or at
the direction of, any entity or group authorized by the Protective Covenants to
make such assessments or levy such costs in connection with the Leased Premises.
Tenant may, within the time and in the manner prescribed by the Protective
Covenants for such purpose, in its own name and behalf or, if necessary or
appropriate in order to perfect such challenge, in the name and on behalf of
Landlord, challenge the amount, validity or applicability of any such costs,
expenses or assessments (an "Assessment Protest"); provided that (a) Tenant
shall pay any such cost, expense or assessment under protest, prior to
delinquency, if any such Assessment Protest does not suspend the collection
thereof from any party, and (b) no portion of the Leased Premises or any rentals
payable hereunder or Landlord's title or interest therein would be in any danger
of being sold, forfeited, interrupted or lost as a result of such Assessment
Protest. Tenant shall prosecute any Assessment Protest with due diligence and
continuity. Tenant shall provide Landlord with copies of any application,
petition or other pleading filed in connection with any Assessment Protest
before filing. Landlord may, at its own expense, join with Tenant in making any
such application, petition or other pleading, retain co-counsel, attend
hearings, present evidence and arguments, and generally participate in the
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conduct of the Assessment Protest. If and to the extent that Landlord is
requested in writing to do so by Tenant, Landlord agrees to cooperate with
Tenant in good faith in connection with any Assessment Protest undertaken by
Tenant ("Landlord's Cooperation With Assessment Protest"), provided Tenant
promptly reimburses Landlord for reasonable expenses in connection therewith.
Subject to Landlord's right to reimbursement as set forth below, Tenant shall be
entitled to receive and retain any refund of any costs, expense or assessments
obtained by Tenant, to the extent such cost, expense or assessment was paid by
Tenant under this section 3.05. Nothing contained in this section 3.05 shall
limit or restrict Landlord's right to undertake any Assessment Protest with
respect to the Leased Premises at its own expense. Any reduction in or refund
of any such costs, expenses or assessments previously paid by Tenant obtained by
Landlord shall be applied first to Landlord's reasonable costs and expenses
incurred in connection with Landlord's Cooperation With Assessment Protest, with
the balance refunded to Tenant in the manner described above, and in the event
of a reduction in any such costs, expenses and assessments not yet paid by
Tenant, Tenant shall reimburse Landlord, within thirty (30) days of receipt of
Landlord's invoice therefor, for Landlord's reasonable costs and expenses
incurred in connection with Landlord's Cooperation With Assessment Protest, up
to the amount of the reduction obtained. In the event Tenant undertakes or files
any Assessment Protest in the name of Landlord, Tenant shall promptly provide
Landlord written notice thereof, and Tenant acknowledges that Tenant's use of
Landlord's name shall be subject to the indemnification of Landlord contained in
Article 12 hereof. Tenant shall give Landlord five (5) days advance written
notice of any such use of Landlord's name. Covenant Assessments for the calendar
years during which the Commencement Date and the last day of the term of the
Lease occur shall be prorated so that Tenant pays only that portion of the
Covenant Assessments for such calendar years allocable to periods of time during
the term of this Lease.
"Protective Covenants" means the Initial Declaration of Covenants,
Conditions and Restrictions, dated November 1,1996 by King & Spalding, recorded
in Deed Book 13418, Page 0001, Gwinnett County, Georgia Records, as further
amended.
3.06 It is the purpose and intent of Landlord and Tenant that (except as
otherwise expressly provided in this Lease) the base rental payable under this
Lease be net. Tenant covenants and agrees with Landlord to pay and discharge on
a timely basis, as additional rent hereunder, those items set forth above and in
Articles 6 and 8 hereof, excepting only any costs, expenses and/or obligations
which arise as a result of the negligence, intentional misconduct or
unauthorized acts of Landlord which are not covered by the insurance under
Article 17 hereof. Notwithstanding the foregoing, nothing contained herein
shall be construed to require Tenant to make any debt service payments under any
secured or unsecured indebtedness of Landlord or to pay any costs and expenses
which this Lease expressly provided for Landlord to pay (including the costs and
expenses Landlord agrees to pay under Article 7 hereof), or to pay any income
taxes, franchise taxes, estate or gift taxes, inheritance taxes, transfer taxes,
recording taxes or intangibles taxes of Landlord.
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ARTICLE IV
DELAY IN DELIVERY OF POSSESSION
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4.01 Attached hereto as Exhibit "C" is a schedule of construction of the
Leased Premises, including the dates by which Tenant must make certain decisions
regarding the Leased Premises (hereinafter referred to as the "Construction
Schedule"). Landlord and Tenant shall use their diligent good faith efforts to
ensure construction of the Leased Premises remains on schedule in accordance
with the Construction Schedule, provided, however, that in no event shall the
failure of Landlord to cause Substantial Completion to occur on or before the
Substantial Completion Deadline (hereinafter defined), constitute a default by
Landlord under this Lease. In the event of any delay in Substantial Completion
of the Leased Premises caused by Tenant Delays (hereafter defined), the
Commencement Date (for purposes of Tenant's obligation to commence the payment
of rent and for purposes of fixing the lease term) shall be the date on which
Substantial Completion would have occurred but for such delay.
4.02. Landlord acknowledges and agrees that it is of critical importance
to Tenant that Landlord shall have achieved Substantial Completion by 7/1/98
(the "Substantial Completion Deadline"). Accordingly, Landlord agrees that
Landlord shall be liable to and shall pay Tenant for damages suffered by Tenant
("Tenant's Damages") as a result of Landlord's failure to meet such construction
deadlines, and such Tenant's Damages shall be calculated as follows:
(i) if Substantial Completion, as extended by Tenant Delays or Excusable
Delays other than adverse weather conditions, occurs after 7/1/98 but prior to
8/1/98 and was delayed by (a) reasons other than adverse weather conditions,
then Tenant's Damages shall be the amount which is the greater of the rent paid
or to be paid by Tenant for the month of August 1998 for the lease at 6866 Jimmy
Carter Boulevard or the last month's rent paid by Tenant under such lease (such
greater amount shall be known herein as "Tenant's Rent Payment"), or (b) reasons
of adverse weather conditions, then Tenant's Damages shall be one-half (1/2) of
Tenant's Rent Payment; or
(ii) if Substantial Completion, as extended by Tenant Delays or Excusable
Delays, occurs on or after 8/1/98 then Tenant's Damages shall be: (a) the
amount by which the sum of all of the rent paid by Tenant to its landlords under
its current leases (1828 Meca Way, Shackleford Road, 6866 Jimmy Carter
Boulevard, and parking lot lease at 1 Meca Way) and any other lease which Tenant
enters into because of Landlord's failure to meet such construction deadlines,
exceeds the Base Rental that would have been due under this Lease, and (b) all
moving, storage, setup and any other expenses related to moving to any temporary
space; provided, however, that the parties agree to cooperate in good faith in
an attempt to mitigate Tenant's Damages as calculated in this subparagraph (ii)
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by utilizing other space which Landlord may have available and shall provide to
Tenant at no cost.
Furthermore, in addition to Landlord's liability for such damages, Tenant shall
be entitled to a credit against future Base Rental equal to the Base Rental for
the number of days by which the work necessary to achieve Substantial Completion
remains incomplete following the Substantial Completion Deadline for any reason
other than Tenant Delays or Excusable Delays.
4.03 In the event the Substantial Completion has not occurred by 9/15/98,
as such date has been extended for Excusable Delays and Tenant Delays, or, in
the event Substantial Completion has not occurred by 11/1/98, as such date has
been extended for only Tenant Delays, then, in either said event, Tenant shall
have the right to terminate this Lease by giving Landlord five (5) days written
notice, whereupon neither party shall have further liability to the other
hereunder except as provided for in Section 4.02 above.
ARTICLE V
USE OF LEASED PREMISES
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5.01 The Leased Premises may be used and occupied only for general
manufacturing and assembly, testing, warehousing and distribution, showroom and
offices, and such other uses as are incidental thereto and customary in
connection therewith (collectively herein the "Permitted Uses'), and for no
other purpose or purposes, without Landlord's prior written consent. Tenant
shall promptly comply at its sole expense with all laws, ordinances, orders, and
regulations (collectively herein "Laws", or singularly "Law") which are
applicable as a result of Tenant's specific use of the Leased Premises, but
specifically not including any zoning Law, building Law or other Law applicable
to the construction or installation of the Building (except as a result of or in
connection with any alterations made by Tenant). Tenant shall not, without
prior written notice to Landlord, do or permit anything to be done in or about
the Leased Premises that will in any way increase the insurance premiums due for
fire insurance upon the Building. Tenant shall be solely responsible for all
increases in fire insurance premium amounts resulting from Tenant's specific use
of the Building. Tenant will not perform any act or carry on any practices that
will likely injure the building or constitute a nuisance to owners or occupants
of adjoining premises. Tenant shall not cause, maintain or permit any outside
storage on or about the Leased Premises, including pallets or other refuse. No
area outside of the Leased Premises shall be used by Tenant for storage without
Landlord's prior written consent. The rear loading areas of the Tenant's unit
must be clean and unobstructed. Tenant shall, at Tenant's sole cost and
expense, comply fully with all environmental laws and regulations, and all other
legal requirements, applicable to Tenant's operations at, on or within, or to
Tenant's use and occupancy of, the Leased Premises. On or before the
Commencement Date, Tenant shall take possession of, and, thereafter,
continuously occupy the Leased Premises during the term of this Lease, and
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operate thereon the normal business operations of Tenant, subject to sections
18.01, 18.02, and 20.01.
5.02 Tenant shall not cause or permit the escape, disposal or release of
any biologically or chemically active or other hazardous substances or
materials. Tenant shall not allow the storage or use of such substances or
materials in any manner not permitted by law for the storage and use of such
substances or materials, nor allow to be brought into the Lease Premises any
such materials or substances except to use in the ordinary course of Tenant's
business. Without limitation, hazardous substances or materials shall include
those described in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq., any
applicable state or local laws and the regulations adopted under these acts. If
any governmental agency shall ever require testing of the Leased Premises to
ascertain whether or not there has been any release of hazardous substances or
materials, then the reasonable costs thereof shall be reimbursed by Tenant to
Landlord upon demand only if such governmental agency makes a written
determination that Tenant caused the release of such hazardous substances or
materials and Tenant is provided a copy of such determination. In addition,
Tenant agrees to provide Landlord with notice any time it brings hazardous
substances or materials on to the Leased Premises in such a manner that it would
result in a reporting obligation under any federal, state or local law. In
addition, Tenant shall execute affidavits, representations and the like from
time to time, but limited to one time per calendar year, at Landlord's request
concerning Tenant's best knowledge and belief regarding the presence of
hazardous substances or materials on the Leased Premises. Tenant shall
indemnify Landlord and hold Landlord harmless from and against any and all
claims, damages, fines, judgments, penalties, costs, liabilities and losses
(including, without limitation, any and all sums paid for settlement of claims,
attorneys' fees and consultant and expert fees) arising from or in connection
with the presence of hazardous substances in or on the Leased Premises resulting
from the actions of Tenant except as a result of the acts or omissions of
Landlord, its agents, employees and contractors for which Landlord shall
indemnify Tenant and hold Tenant harmless in the manner provided in section 5.03
below. Without limitation of the foregoing, these indemnifications shall
include any and all costs incurred due to any investigation of the site or any
cleanup, removal, or restoration mandated by a federal, state, or local agency
or political subdivision. The indemnification covenants in this section 5.02
shall survive the expiration or earlier termination of the lease term.
5.03 Landlord shall indemnify Tenant and hold Tenant harmless from and
against any and all claims, damages, fines, judgments, penalties, costs,
liabilities and losses (including, without limitation, any and all sums paid for
settlement of claims, attorneys' fees and consultant and expert fees) arising
from or in connection with the presence of hazardous substances in or on the
Leased Premises which presence resulted from the acts of Landlord except as a
result of the acts or omissions of Tenant, its agents, employees and contractors
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for which Tenant shall indemnify Landlord and hold Landlord harmless in the
manner provided in section 5.02 above. Without limitation of the foregoing,
these indemnifications shall include any and all costs incurred due to any
investigation of the site or any cleanup, removal, or restoration mandated by a
federal, state, or local agency or political subdivision. The indemnification
covenants in this section 5.03 shall survive the expiration or earlier
termination of the lease term.
5.04 In the event of the discovery of the presence of hazardous substances
or materials on the Leased Premises which presence arose prior to the
Commencement Date, Tenant shall have the right to terminate the Lease with one
hundred twenty (120) days prior notice to Landlord. Notwithstanding the
foregoing, Tenant shall not have the right to terminate the Lease if: (i) within
ninety (90) days following such notice Landlord brings the Leased Premises in
compliance with all laws related to hazardous substances and materials, or to
the extent such compliance shall be incapable of completion within such ninety
(90) days, if Landlord shall commence such compliance within such ninety (90)
day period and continuously and in good faith prosecute the performance of the
same until completion; and (ii) the presence of such hazardous substances or
materials does not materially affect Tenant's operations at the Leased Premises.
ARTICLE VI
UTILITIES
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6.01 Landlord shall not be liable in the event of any interruption in the
supply of any utilities unless and except to the extent caused by the actions or
inactions of Landlord, its employees, agents, contractors or invitees.
Notwithstanding the foregoing, Tenant will not seek recovery against Landlord
for damages for the interruption of utility service to the extent such damages
have been previously paid by any business interruption insurance that may be
carried by Tenant, but Tenant has no requirement to carry such insurance. Also,
notwithstanding the foregoing, Landlord agrees to use all reasonable efforts to
aid Tenant in having any such interrupted utility restored in an expeditious
manner. Tenant agrees that it will not knowingly install any equipment which
will exceed or overload the capacity of any utility facilities and that if any
equipment installed by Tenant shall require additional utility facilities, the
same shall be installed by Tenant at Tenant's expense in accordance with plans
and specifications approved in writing by Landlord to the extent required by
Article 9. Tenant shall be solely responsible for and shall pay all charges for
its use or consumption of sanitary sewer, water, gas, electricity and any other
utility services for the Leased Premises.
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ARTICLE VII
LANDLORD'S OBLIGATIONS
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7.01 The Leased Premises shall be constructed by Landlord: (i) in
accordance with the Approved Plan and Specifications and anything reasonably
inferable therefrom; (ii) in compliance with all federal, state, county,
municipal or local government laws, ordinances, regulations, rules and orders
(including, without limitation, the Occupational Safety and Health Act of 1970,
as amended), and after obtaining all necessary approvals and permits; (iii)
diligently, continuously and in a workman-like manner; and (iv) with new and
first-class materials. The obligations of Landlord in the preceding sentence
shall be referred to as "Landlord's Work". All costs of Landlord's Work shall
be borne by Landlord. Changes in the Approved Plans and Specifications shall be
made only pursuant to written change order (hereafter a "Change Order") signed
by both Tenant and Landlord and shall be in compliance with the Protective
Covenants. Such Change Order shall specify the increase or decrease in
construction costs as a result of the change (which shall be based on the actual
costs and expenses attributable thereto with no mark-up or profit by Landlord or
general contractor whatsoever, except for a 10% mark-up for overhead and profit
to be charged by Landlord), and any reasonably expected increase or decrease in
the time, if any, required to substantially complete construction as a result of
such change. In the event of a net increase in the cost of construction
resulting from such Change Orders requested by Tenant, Landlord shall invoice
Tenant for the net increase upon Substantial Completion of the Leased Premises,
in which event Tenant shall pay Landlord the amount thereof within ten (10)
business days after delivery of such invoice. In the event of a net increase in
the amount of time required for substantial completion resulting from such
Change Orders requested by Tenant, such Change Orders shall constitute an
amendment to this Lease extending the dates specified in Article 4 hereof by
that number of days of net additional time so specified in such Change Orders;
provided, however, that in such event the Commencement Date, for purposes of
Tenant's obligation to commence the payment of rent and for purposes of fixing
the lease term, shall be the date on which Substantial Completion would have
occurred but for the extension of time caused by such Change Order. Landlord
shall indemnify and hold Tenant harmless from or in connection with any
occurrence during construction of the Leased Premises, unless such claims or
demands are caused by any act or negligence of Tenant or its agents,
contractors, employees or invitees.
7.02 During the course of construction of the Leased Premises, Tenant may
enter upon the Leased Premises for purposes of inspecting and reviewing
Landlord's Work, taking measurements, making plans, installing trade fixtures
and telephones, erecting temporary or permanent signs and doing such other work
as may be appropriate or desirable without being deemed thereby to have taken
possession or obligated itself to pay rent but Tenant agrees that: (a) Landlord
shall have no liability for injury to any person or damage to any property of
Tenant stored on the Leased Premises except for damages caused by the negligence
of Landlord or its employees, contractors, or agents, (b) Tenant shall not
materially interfere with Landlord's construction work on the Leased Premises,
(c) Tenant shall indemnify, protect and hold harmless Landlord from and against
any and all claims, demands, damages, losses, costs, expenses, liabilities and
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actions at law or in equity directly arising out of Tenant's exercise of such
right, and (d) Tenant shall be solely responsible for the permitting of any such
work it performs to the extent required.
7.03 No later than twenty (20) days after the Commencement Date, Tenant
and Landlord shall an agreed final punch list ("Punch List") setting forth the
work, if any, remaining to be done, or requiring correction, on the Leased
Premises, and Landlord shall promptly commence, and thereafter with due
diligence prosecute to completion the work required by the Punch List (which
shall in no event include, except on the condition Tenant shall pay to Landlord
the actual cost thereof plus ten percent (10%) of such amount, work required as
a consequence of injury or damages to the Leased Premises attributable to
Tenant, its agents, employees, contractors or movers). If the parties cannot
agree upon the Punch List, then the Punch List shall be determined by an
independent professional engineer employed by the mutual agreement of Landlord
and Tenant. Landlord agrees to commence to complete all the items on the Punch
List within thirty (30) days after Substantial Completion. Landlord
acknowledges and agrees that in the event it has not completed all of the items
on the Punch List within ninety (90) days after Substantial Completion, Tenant
shall have the right to complete such items and charge Landlord the cost
thereof.
7.04 Notwithstanding anything elsewhere in this Lease to the contrary,
Landlord shall, at its sole cost and expense, upon notice by Tenant, for a
period of one (1) year immediately subsequent to the Commencement Date, repair,
replace or otherwise correct any defects or problems related to any of
Landlord's Work, as well as defects in any of the additional items to be
constructed or installed by Landlord in accordance with this Lease, provided
that Landlord shall not have any obligation to correct or repair any defect or
condition directly caused by the acts of Tenant, its agents, contractors,
employees or invitees. In addition, Landlord acknowledges and agrees that it
shall, at its sole cost and expense, repair any defects or problems in any of
the structural components of the Leased Premises (including but not limited to
the roof, exterior walls, and foundation) discovered during the Lease Term.
Landlord acknowledges and agrees that Landlord's costs incurred in connection
with its obligations under this Section 7.04 shall not be passed through as CAM.
7.05 From the Commencement Date until the expiration or earlier
termination of the term hereof, Tenant shall have exclusive control of the
Leased Premises and Landlord shall be under no obligation to inspect the same.
Tenant shall report in writing to Landlord any defective condition known to it
which Landlord is required to repair, and Landlord shall move with reasonable
diligence to repair such condition. Landlord agrees that in the event Landlord
fails to maintain the Leased Premises as required or fails to commence to make
repairs within thirty (30) days after its receipt of notice from Tenant, or
fails thereafter to diligently pursue such repair to completion, then Tenant
shall have the right to make such repairs or have a contractor make such repairs
and charge Landlord for the cost thereof. Failure to report such defects within
12
a reasonable time after discovery shall make Tenant responsible to Landlord for
any and all additional costs or liability incurred by Landlord resulting from
such delay in notification.
ARTICLE VIII
TENANT REPAIRS
--------------
8.01 Except as otherwise expressly provided in Article 7, Tenant shall, at
its sole cost, keep and maintain the Leased Premises and appurtenances and every
part thereof, including by way of illustration and not by way of limitation the
all windows, and skylights, doors, any store front and the interior of the
Leased Premises, including all plumbing, heating, air conditioning, sewer,
electrical systems and all fixtures and all other similar equipment serving the
Leased Premises (but expressly excluding the roof, exterior walls, foundation
and all structural elements of the Building) in good and sanitary order,
condition, and repair. Tenant shall be responsible for its own pest control
within the Leased Premises. In the event Tenant fails to maintain the Leased
Premises as required herein or fails to commence repairs (requested by Landlord
in writing) within thirty (30) days after such request, or fails diligently to
proceed thereafter to complete such repairs, Landlord shall have the right in
order to preserve the Leased Premises or portion thereof, and/or the appearance
thereof, to make such repairs or have a contractor make such repairs and charge
Tenant for the cost thereof as additional rent.
8.02 Tenant shall obtain upon occupancy and keep current during the lease
term a service maintenance contract on the heating, ventilation and air
conditioning (HVAC) equipment serving the Leased Premises. The contract shall
be between Tenant and a dealer-authorized company acceptable to Landlord, and
shall at a minimum provide for an equipment check and tune-up service each
spring and fall, and filter and lubrication service every six (6) months. A
copy of said contract shall be provided to Landlord, as shall any modification,
extension, renewal or replacement thereof.
ARTICLE IX
ALTERATIONS, MECHANICS' LIENS
-----------------------------
9.01 Alterations may not be made to the Leased Premises without prior
written consent of Landlord, and any alterations of the Leased Premises
excepting moveable furniture and trade fixtures shall at Landlord's option
become part of the realty and belong to Landlord. Notwithstanding the foregoing
provisions, Tenant shall have the absolute right to make alterations, additions
or improvements to the Leased Premises ("Tenant's Alterations") having a cost of
Fifteen Thousand Dollars ($15,000.00) for each alteration, addition or
improvement, or Forty-Five Thousand Dollars ($45,000.00) in the aggregate per
lease year, provided Tenant's Alterations do not materially and adversely affect
the structure, electrical, mechanical or plumbing systems of the Building.
13
9.02 Should Tenant desire to alter the Leased Premises and Landlord must
consent to such alterations, at Landlord's option, Tenant shall contract with a
contractor approved by Landlord for the construction of such alterations.
9.03 Notwithstanding anything in section 9.01 or 9.02 above, Tenant may,
install trade fixtures, machinery or other trade equipment in conformance with
all applicable laws, statutes, ordinances, rules, regulations, and the same may
be removed upon the termination of this Lease, and the Leased Premises are not
damaged by such removal. Tenant shall return the Leased Premises on the
termination of this Lease in the same condition as when rented to Tenant,
reasonable wear and tear only excepted. Upon termination of the Lease, Tenant
shall not be required to remove: (i) any alteration, addition or improvement
approved by Landlord during the term unless Landlord advises Tenant at time of
such approval that it will require such removal; and (ii) any of Tenant's
Alterations unless Landlord advises Tenant within ten (10) days of its knowledge
of such alteration that it will require such removal. Tenant shall keep the
Leased Premises, the building and property in which the Leased Premises are
situated free from any liens arising out of any work performed for, materials
furnished to, or obligations incurred by Tenant, and Tenant shall discharge of
record by bond or otherwise, within ten (10) days following the filing thereof,
any mechanic's or similar lien or encumbrance filed against the Leased Premises
for work or materials claimed to have been furnished to or for the benefit of
Tenant and/or the Leased Premises, but expressly excluding any work performed
for, materials furnished to, or obligations incurred by Landlord. All such work
provided for above requiring Landlord's approval, shall be done at such times
and in such manner as Landlord may from time to time designate.
ARTICLE X
WASTE AND QUIET CONDUCT
-----------------------
10.01 Tenant shall not commit, or suffer any waste upon the Leased
Premises, or any nuisance, or other act or thing which may unreasonably
interfere with the quiet enjoyment of any owner or occupant of any other
property in the project in which the Leased Premises are located.
ARTICLE XI
FIRE INSURANCE, HAZARDS
-----------------------
11.01 No use shall be made or permitted to be made of the Leased Premises,
nor acts done which might increase the existing rate of insurance upon the
Building or cause the cancellation of any insurance policy covering the
Building, or any part thereof, nor shall Tenant sell, or permit to be kept, used
or sold, in or about the Leased Premises, any article which may be prohibited by
14
the standard form of fire insurance policies. Tenant shall, at its sole cost
and expense, comply with any and all requirements pertaining to the Leased
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance, covering the
Leased Premises and appurtenances. In the event that Tenant takes any actions
in the future, or conducts its business in such a way that causes an increase in
the fire insurance rate on the Building, Landlord shall give Tenant notice of
such proposed increase, and Tenant shall have a period of ten (10) days within
which to discontinue such actions or use before Tenant shall be responsible for
the payment of such increase in cost.
ARTICLE XII
INDEMNIFICATION BY TENANT
-------------------------
12.01 Tenant shall indemnify Landlord and hold Landlord harmless against
and from any and all claims arising from Tenant's use of the Leased Premises
(other than those arising from any negligence of Landlord or its agents or
employees), or the conduct of its business or from any activity, work, or thing
done, permitted or suffered by the Tenant in or about the Leased Premises, and
shall further indemnify and hold harmless Landlord against and from any and all
claims arising from any breach or default in the performance of any obligation
on Tenant's part to be performed under the terms of this Lease, or arising from
any act, neglect, fault or omission of the Tenant, or of its agents or
employees, and from and against all costs, reasonable attorney's fees, expenses
and liabilities incurred in or about such claim or any action or proceeding
brought relative thereto and in case any action or proceeding be brought against
Landlord by reason of any such claim. Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel, chosen by Tenant, and who is
reasonably acceptable to Landlord. The obligations of Tenant under this Section
12.01 shall survive any termination or expiration of this Lease.
12.02 Landlord shall indemnify and hold harmless Tenant against and from
all claims arising from any breach or default in the performance of any
obligation on Landlord's part to be performed under this Lease, or arising from
any act, neglect, fault or omission of Landlord or of its agents, employees or
contractors and from and against all reasonable costs, reasonable attorneys'
fees actually incurred, expenses and liabilities actually incurred in or about
such claim or any action or proceeding brought relative thereto and in case any
action or proceeding be brought against Tenant by reason of any such claim.
Landlord upon notice from Tenant shall defend the same at Landlord's expense by
counsel, chosen by Landlord, and who is reasonably acceptable to Tenant. The
obligations of Landlord under this Section 12.02 shall survive any termination
or expiration of this Lease.
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ARTICLE XIII
WAIVER OF CLAIMS
----------------
13.01 Notwithstanding any indemnity granted herein, and notwithstanding
any other term or provision of the Lease to the contrary, Landlord and Tenant
hereby both release the other and their respective employees, agents and
invitees from and waive any claims either may have against the other and their
employees, agents, servants or invitees for any loss or damage to the Building,
Leased Premises, Land, improvements on or to the Building, Leased Premises, or
Land, or the contents of the foregoing, and any personal property stored or
placed thereon by either of them caused by any of the perils insurable against
under fire and extended coverage insurance policies with "all risks"
endorsement, whether such damage or loss was caused by the negligence of either
of them or their respective employees, agents, servants or invitees. The
foregoing mutual release and waiver of subrogation shall apply whether or not
such insurance on the Building, Leased Premises, Land, improvements, contents,
and/or personal property was in force at the time of the loss of damage.
Moreover, each party agrees to take all actions necessary to make the foregoing
release effective and binding upon their respective insurance carriers so that
such carriers specifically waive any right of subrogation that such carriers
might otherwise have against the other party and/or their respective employees,
agents, servants or invitees.
ARTICLE XIV
SIGNS, LANDSCAPING
------------------
14.01 Landlord shall have the right to control landscaping and approve the
placing of signs and the size and quality of the same. Tenant shall, however,
be entitled to make changes to the landscaping plan shown on the Approved Plans
and Specifications, with the prior written consent of the Landlord. Tenant
shall place no exterior signs on the Leased Premises without the prior written
consent of Landlord, but Landlord hereby approves the placement of an
appropriate monument sign at the Sugarloaf Parkway entrance and a smaller
monument sign and "truck entrance" and/or "delivery entrance" sign at the
Premiere Parkway entrance. Any signs not in conformity with the Lease may be
immediately removed by Landlord. Notwithstanding the above language, Landlord
acknowledges and agrees that Tenant shall be entitled to have corporate
identification signage on any and all Sugarloaf Office Park signs which list
tenants or any multi-user directional signs constructed by Landlord within the
Sugarloaf Office Park, and, furthermore, Landlord acknowledges and agrees that
it will not withhold its approval of any proposed Tenant signage based upon size
so long as such signage is in conformance with the Protective Covenants and all
applicable governmental requirements. Finally, Tenant shall have the absolute
right to place such identification signs within the interior of the Building as
Tenant so elects.
16
ARTICLE XV
ENTRY BY LANDLORD
-----------------
15.01 Tenant shall permit Landlord and Landlord's agents to enter the
Leased Premises at all reasonable times during normal business hours for the
purpose of inspecting the same or for the purpose of maintaining the building,
or for the purpose of making repairs, alterations, or additions to any portion
of the building, including the erection and maintenance of such scaffolding,
canopies, fences and props as may be required or for the purpose of posting
notices of non-responsibility for alterations, additions or repairs; and shall
permit Landlord upon the Leased Premises at any time within thirty (30) days
prior to the expiration of this Lease for the purpose of placing any usual or
ordinary "to let" or "to lease" signs, or placing upon the Building any usual or
ordinary "for sale" signs, or ninety (90) days prior to the expiration of this
Lease for showing the Leased Premises to prospective tenants, without any rebate
of rent and without any liability to Tenant for any loss of occupation or quiet
enjoyment of the Leased Premises thereby occasioned. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the exterior doors about the Leased Premises. Notwithstanding the
foregoing, Landlord agrees to use all reasonable efforts to provide Tenant at
least twenty-four (24) hours prior written notice of its intent to enter the
Leased Premises and further agrees any such entry shall be conducted in such
manner so as to minimize any interference with Tenant's business operations.
ARTICLE XVI
TAXES
-----
16.01 (a) Tenant shall, without notice or demand, as additional rent, pay
and discharge, on or before the last day on which the same may be paid without
penalty, but in no event earlier than ten (10) days after receipt of any invoice
or similar notice, all "taxes" (as hereinafter defined) which shall or may
during the term be levied, assessed or imposed on or become a lien upon or grow
due or payable out of or by reason of the Leased Premises or any part thereof,
or the Landlord's interest in the Leased Premises. For the purposes hereof
"taxes" shall mean all ad valorem taxes at any time imposed by the United States
of America or by any state, city, county or other political or taxing
subdivision thereof upon or against this Lease, the Leased Premises, the use or
occupancy thereof, the buildings, improvements or personally thereon, any rent
or use tax imposed on rent paid by Tenant under this Lease, or any assessments
after the Commencement Date for the benefit of public works or improvements
which benefit the Leased Premises. Notwithstanding anything hereinabove to the
contrary, "taxes" shall not include any penalties or interest imposed or
incurred because of Landlord's dilatory payment, unless the delay in payment is
due to Tenant's breach of its obligations under this Lease including this
Article 16, or any payment to reimburse Landlord or any affiliate, or related or
controlled entity, for any site development or work done on the Leased Premises
17
or in the Sugarloaf Office Park. Taxes for the calendar years during which the
Commencement Date and the last day of the term of the Lease occur shall be
prorated so that Tenant pays only that portion of the taxes for such calendar
years allocable to periods of time during the term of this Lease.
(b) All taxes imposed upon the Leased Premises during the term of this
Lease for public works or improvements which shall benefit the Leased
Premises after the expiration of this Lease shall be equitably prorated, so
that only the portion of such taxes allocable to the term of this Lease
shall be included in determining Tenant's share of "taxes" in accordance
with section 16.01(a) above.
(c) Notwithstanding anything to the contrary expressed or implied in
this Article 16 or elsewhere in this Lease, nothing herein is intended to
or shall be held or construed so as to require Tenant to pay for any income
taxes, franchise taxes, estate or gift taxes, inheritance taxes, or
intangible taxes of Landlord.
16.02 Tenant shall pay as additional rent the amount of all taxes, other
than income taxes, upon or measured by the rent payable hereunder, whether as a
sales tax, transaction privilege tax, excise tax, or otherwise, which additional
rent shall be due and payable at the same time as each installment of base
rental.
16.03 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Leased Premises.
16.04 Tax Protest. Tenant may, within the respective times and in the
manner prescribed by law for such purposes, in its own name and behalf or, if
necessary or appropriate in order to perfect such petition, in the name and on
behalf of Landlord (subject to the provisions of section 16.06 hereof), petition
for reduction of the assessed valuation of the Building and the Land, claim a
refund of real estate taxes or assessments or otherwise challenge the amount,
validity or applicability of any taxes or other tax that must be paid by Tenant
under this Lease (a "Tax Protest"); provided that (a) Tenant shall pay such tax
or assessment under protest, prior to delinquency, if such Tax Protest does not
suspend the collection thereof from any party, and (b) no portion of the Leased
Premises or any rentals payable hereunder or Landlord's title or interest herein
would be in any danger of being sold, forfeited, interrupted or lost as a result
of such Tax Protest. Tenant shall prosecute any Tax Protest with due diligence
and continuity. Tenant shall provide Landlord with copies of any application,
petition or other pleading filed in connection with any Tax Protest before
filing. Landlord may, at its own expense, join with Tenant in making any such
application, petition or other pleading, retain co-counsel, attend hearings,
present evidence and arguments, and generally participate in the conduct of the
tax Protest. If and to the extent that Landlord is requested to do so by
Tenant, Landlord agrees to cooperate with Tenant in good faith in connection
18
with any Tax Protest undertaken by Tenant ("Landlord's Cooperation With Tax
Protest"), provided Tenant promptly reimburses Landlord for any reasonable
expenses in connection therewith. Subject to Landlord's right to reimbursement
as set forth below, Tenant shall be entitled to receive and retain any refund of
taxes or assessments obtained by Tenant, to the extent such taxes or assessment
was paid by Tenant under this Article 16. Nothing contained in this section
16.04 shall limit or restrict Landlord's right to undertake any Tax Protest with
respect to the Leased Premises at its own expense; to the extent Landlord
obtains any reduction in or refund of taxes or assessments, Landlord's
reasonable expenses of Landlord's Cooperation With Tax Protest shall be
additional rent payable by Tenant to Landlord within ten (10) days of Tenant's
receipt of Landlord's invoice therefore, but Landlord shall not be entitled to
reimbursement by Tenant for the costs of such Landlord's Cooperation With Tax
Protest in excess of any reduction and/or refund of such taxes or assessments so
obtained.
16.05 In the event Tenant undertakes or files any Tax Protest in the name
of Landlord, Tenant shall promptly provide Landlord written notice thereof, and
Tenant acknowledges that Tenant's use of Landlord's name shall be subject to the
indemnification of Landlord contained in Article 12 hereof. Tenant shall give
Landlord five (5) days advance written notice of any such use of Landlord's
name.
16.06 Landlord agrees to provide to Tenant a copy of any tax assessment,
tax bill, tax statement or other tax invoice within ten (10) days of its receipt
of the same.
ARTICLE XVII
INSURANCE
---------
17.01 (a) Liability Insurance. Tenant, at its own expense, shall obtain
and keep in full force and effect at all times during the term of this Lease
public liability insurance for the benefit of Landlord and Tenant (and, at
Landlord's request, any Mortgagee (hereinafter defined) of Landlord) jointly
against liability for personal injury and property damage in the amount of not
less than Three Million Dollars ($3,000,000.00) in respect to injuries to or
death of more than one person in any one occurrence, in the amount of not less
than One Million Dollars ($1,000,000.00) in respect to injuries to or death of
any one person, and in the amount of not less than One Million Dollars
($1,000,000.00) per occurrence in respect to damage to property. Tenant shall
increase said insurance coverage as reasonably required by Landlord; provided,
however, that the insurance premiums paid for such increased coverage shall not
be 5% greater than the prior premiums paid by Tenant. All or part of the
liability insurance coverage, if any, that may from time to time be required or
maintained in excess of the minimum limits set forth above may be provided by an
umbrella policy complying in all respects with the requirements of this Article
17 and which provides that its coverage is not limited or affected by claims
made with respect to personal injury or property damage at other locations. As
19
used herein, "Mortgage" means any deed to secure debt, mortgage, deed of trust,
or similar security instrument. "Mortgagee" means the holder of a Mortgage.
(b) Tenant shall obtain and keep in full force and effect at all times
during the term of this Lease on all of its personal property in the Leased
Premises (including without limitation fixtures, equipment, movable and non-
movable trade fixtures, inventory, merchandise and goods) a policy or policies
of fire and extended coverage insurance with standard coverage endorsement to
the full extent of their insurable value (provided, however, that so long as at
least eighty percent (80%) of such insurable value is covered under Tenant's
primary policy, the remaining coverage up to full insurable value may be
provided by an umbrella policy complying in all respects with the requirements
of this Article 17 and which provides that such coverage is not limited or
affected by claims for loss or damage to insured property at other locations).
During the term of this Lease the proceeds from any such policy or policies of
insurance shall be used for the repair or replacement of the personal property,
and Landlord will sign all reasonable documents necessary or proper in
connection with the settlement of any claim or loss by Tenant. Landlord will
have no obligation to carry insurance on Tenant's possessions and Landlord will
not be responsible for any damage thereto except as expressly set forth in this
Lease to the contrary.
(c) Landlord shall procure and maintain in full force and effect fire
and extended coverage insurance covering the Building in an amount at least
equal to the full replacement cost thereof ("Landlord's Insurance"). Tenant
shall reimburse Landlord for the cost of the premiums for Landlord's Insurance
thirty (30) days after receipt of evidence showing payment by Landlord of such
premiums; provided, that, Tenant shall only reimburse Landlord for such premiums
to the extent the premiums, the coverage and the deductibles related to
Landlord's Insurance are reasonable and customary. Landlord shall furnish
Tenant with certificates of such policies whenever reasonably required by Tenant
to satisfy Tenant that such policies are in full force and effect.
(d) Each insurance policy required to be maintained by Tenant
hereunder shall be written by a company having an A.M. Best Company rating of
"A" or better and a financial category of "VII" or better and legally qualified
to issue such insurance, and shall name as insured parties Landlord (and, at
Landlord's request, any Mortgagee of Landlord) and Tenant as their interests may
appear. Each such policy shall provide that it shall not be canceled or reduced
except after not less than thirty (30) days written notice to Landlord (and any
Mortgagee of Landlord), and shall also provide that the interest of Landlord and
any Mortgagee of Landlord shall not be invalidated by any act or negligence of
Tenant or Landlord or of any person or entity having an interest in the Leased
Premises nor by occupancy or use of the Leased Premises for any purpose that is
more hazardous than permitted by such policy. Tenant shall deliver to Landlord
(and, at Landlord's request, any Mortgagee of Landlord) a certificate of
20
insurance evidencing the existence and renewal of each insurance policy which is
required to be maintained by Tenant hereunder (and specifically confirming that
such policy shall not be canceled or reduced except after not less than thirty
(30) days written notice to Landlord and any Mortgagee of Landlord), such
delivery to be made promptly after such insurance is obtained at least thirty
(30) days prior to the expiration date of such insurance policy. If any such
insurance policy has a deductible clause, Tenant shall be liable for the full
deductible amount Each policy of property insurance maintained by Tenant
hereunder shall provide that the insurer waives any right of subrogation against
Landlord and any Mortgagee of Landlord, and any policy or policies of property
insurance maintained by Landlord with respect to the Leased Premises shall
provide that the insurer waives any right of subrogation against Tenant. Each
such policy maintained by Tenant shall be primary and non-contributing with any
insurance carried by Landlord (and any Mortgagee of Landlord). The limits of any
insurance provided hereunder shall not limit the liability of Tenant hereunder.
If Tenant shall fail to procure and maintain any insurance required hereunder,
Landlord may, but shall not be required to, procure and maintain the same but at
the expense of Tenant.
(e) In addition to the foregoing, Tenant shall comply with any
reasonable requirements of any Mortgagee of Landlord with respect to insurance
on or with respect to the Leased Premises, provided such requirements do not
materially increase the obligations or diminish the rights of Tenant hereunder.
ARTICLE XVIII
ABANDONMENT
-----------
18.01 Subject to Tenant's right to assign or sublease set forth in section
20.1, Tenant shall not vacate nor abandon the Leased Premises at any time during
the term of this Lease; and if Tenant shall abandon, vacate or surrender the
Leased Premises, or be dispossessed by process of law, or otherwise, any
personal property belonging to Tenant and left on the Leased Premises shall, at
the option of the Landlord, be deemed abandoned and be and become the property
of Landlord.
18.02 Notwithstanding anything to the contrary, Tenant may vacate the
Leased Premises during the term of this Lease provided that: (i) Tenant has not
been notified in writing of an Event of Default hereunder prior to vacating the
Leased Premises; (ii) Tenant adequately secures the Leased Premises to prevent
damage, destruction or vandalism to the Leased Premises; (iii) Tenant continues
such utilities to the Leased Premises as will prevent any damage to the Leased
Premises; and (iv) Tenant continues to provide insurance for the Leased Premises
and Tenant pays any increased premium resulting from a lack of a tenant in the
Leased Premises.
21
ARTICLE XIX
DESTRUCTION
-----------
19.01 In the event of damage to or destruction of the Leased Premises
during the lease term which requires repairs to the Leased Premises, Landlord
shall (subject to section 19.02 below) forthwith make repairs and put the Leased
Premises in a condition at least as good as the condition which existed
immediately prior to the damage or destruction ("Landlord's Reconstruction"),
provided in Landlord's and Tenant's reasonable judgment repairs can be completed
within one hundred twenty (120) days from the date of such damage or destruction
under the laws and regulations of authorized public authorities, but such damage
or destruction (including any destruction necessary in order to make repairs)
shall in no way annul or void this Lease, except that Tenant shall be entitled
to a proportionate reduction of rent while such repairs are being made. The
proportionate reduction is to be based upon the extent to which the damage or
destruction, or the making of repairs, shall interfere with the business carried
on by Tenant in the Leased Premises. Notwithstanding anything to the contrary,
if Landlord's Reconstruction cannot in Landlord's and Tenant's reasonable
judgment be completed within one hundred twenty (120) days, then this Lease may
be terminated at the option of either party, and all sums payable by Tenant
shall be apportioned and paid through the date of such damage or destruction.
Notwithstanding the foregoing, if Landlord's Reconstruction is not completed
within one hundred twenty (120) days from the date of such damage or
destruction, then this Lease may be terminated by Tenant, and all sums payable
by Tenant shall be so apportioned. Landlord agrees to notify Tenant in writing
of the estimated time period for the completion of required repairs within
thirty (30) days after Landlord receives notice of the occurrence of the
damaging event, and to promptly commence and diligently prosecute unto
completion any repairs required to be made by Landlord hereunder.
19.02 (a) Either Landlord or Tenant may require that any dispute under
this Article 19 be submitted to arbitration pursuant to this section 19.03. To
the extent the provisions of this section 19.03 vary from or are inconsistent
with the rules of the American Arbitration Association or any other arbitration
tribunal, the provisions of this section 19.03 shall govern. All arbitration
shall occur at a location in Atlanta, Georgia chosen by the arbitrators and
shall, except as expressly provided to the contrary in this section 19.03, be
conducted pursuant to the rules of the American Arbitration Association (or the
successor organization, or if no such organization exists, then an organization
composed of persons of similar professional qualifications).
(b) The party desiring such arbitration shall give notice to that
effect to the other party. As soon as possible, but in any event within
the next ten (10) days, Landlord and Tenant shall each select one
arbitrator. As soon as possible, but in any event within the next ten (10)
days, the two arbitrators so selected shall select a third arbitrator.
Each arbitrator shall be, if reasonably possible, a recognized expert in
the subject matter of the arbitration. In the event of the failure,
refusal or inability of any arbitrator to act, a new arbitrator shall be
appointed in his stead, which appointment shall be made in the same manner
as provided above. At the request of either party, the arbitrators shall
22
authorize the service of subpoenas for the production of documents or
attendance of witnesses.
(c) Within twenty (20) days after their appointment, the arbitrators
so chosen shall hold a hearing at which each party may submit evidence, be
heard and cross-examine witnesses, with each party having at least ten (10)
days advance notice of the hearing. The hearing shall be conducted such
that each of Landlord and Tenant shall have reasonably adequate time to
present oral evidence or argument, but either party may present whatever
written evidence it deems appropriate prior to the hearing (with copies of
any such written evidence being sent to the other party).
(d) The decision of the arbitrators so chosen shall be given within a
period of twenty (20) days after the conclusion of such hearing, and shall
be accompanied by findings of fact. The decision within which any two
arbitrators so appointed and acting hereunder concur, shall in all cases be
binding and conclusive upon the parties and shall be the basis for a
judgment entered in any court of competent jurisdiction.
(e) The fees and expenses of the arbitration proceeding and the fees
of the third arbitrator appointed under this section 19.03 shall be equally
borne by both parties. Landlord and Tenant shall each pay the fees of the
arbitrator each selected, and the fees and expenses of preparing and
presenting its own case. Landlord and Tenant may at any time by mutual
written agreement discontinue arbitration proceedings and agree themselves
upon any such matter submitted to arbitration.
ARTICLE XX
ASSIGNMENT AND SUBLETTING
-------------------------
20.01 Landlord shall have the right to transfer and assign, in whole or in
part its rights and obligations in the Leased Premises; provided, however, in
the event of any such transfer and assignment, Landlord shall remain primarily
responsible for any liability to Tenant arising either: (i) prior to the date of
said assignment; or (ii) by virtue of Landlord's failure to timely deliver the
Leased Premises to Tenant in accordance with the standards and schedules set
forth in this Lease. Tenant shall not assign this Lease or sublet all or any
part of the Leased Premises without the prior written consent of the Landlord.
Landlord agrees to provide Tenant written notice of its decision to either
approve or disapprove of any proposed sublessee or assignee within ten (10) days
of Tenant's request for such approval and failure to deliver such notice by
Landlord within this ten (10) day period shall be deemed approval. Tenant shall
state in its request for such approval that Landlord has only ten (10) days to
respond or Landlord's approval will be deemed granted. In the event of any
assignment or subletting, Tenant shall nevertheless at all times, remain fully
23
responsible and liable for the payment of the rent and for compliance with all
of its other obligations under the terms, provisions and covenants of this
Lease. Notwithstanding the foregoing, Tenant shall have the right, without
Landlord's consent, to sublet the Leased premises or any part thereof, or assign
this Lease, to any of Tenant's parent, subsidiaries or affiliated companies;
provided, however, as a condition to any such subletting or assignment: (i) both
Tenant and the proposed subtenant or, if applicable, assignee, shall be solvent
at the time of each such subletting and/or assignment; (ii) Tenant shall provide
Landlord at least ten (10) business days prior written notice of each such
subletting and/or assignment; and (iii) no such subletting and/or assignment
shall release Tenant of Tenant's obligation or alter the primary liability of
Tenant to pay Base Rental or additional rent hereunder and to perform all
obligations to be performed by Tenant under this Lease. Upon the occurrence of
an "Event of Default" as defined below, if all or any part of the Leased
Premises are then assigned or sublet, Landlord, in addition to any other
remedies provided by this Lease or provided by law, may at its option, collect
directly from the assignee or subtenant all rents becoming due to Tenant by
reason of the assignment or sublease. Any collection directly by Landlord from
the assignee or subtenant shall not be construed to constitute a novation or a
release of Tenant from the further performance of its obligations under this
Lease, or an acceptance of such assignee or subtenant. In the event that Tenant
sublets the Leased Premises or any part thereof, or assigns this Lease and at
any time receives rent and/or other consideration which exceeds that which
Tenant would at that time be obligated to pay to Landlord, Tenant shall pay to
Landlord 50% of the gross excess in such rent as such rent is received by Tenant
and 50% of any other consideration received by Tenant from such subtenant in
connection with such sublease or, in the case of any assignment of this Lease by
Tenant, Landlord shall receive 50% of any consideration paid to Tenant by such
assignee in connection with such assignment Landlord acknowledges and agrees
that Tenant shall be entitled to recoup any and all normal customary costs
incurred in connection with its re-leasing or assigning the Leased Premises
prior to sharing with Landlord any gross excess and/or additional consideration
received by Tenant as a result of any sublease or assignment. In addition,
should Landlord agree to an assignment or sublease agreement, Tenant will pay to
Landlord on demand the sum of $500.00 to partially reimburse Landlord for its
costs, including reasonable attorneys' fees, incurred in connection with
processing such assignment or subletting request.
20.02 Landlord understands that Tenant, as a part of its business, stores
materials and information for its clients and charges for such storage. Such
storage shall not be considered an assignment or sublease under paragraph 20.01
and shall be a considered a Permitted Use under paragraph 5.01.
24
ARTICLE XXI
INSOLVENCY OF TENANT
--------------------
21.01 Either (a) the appointment of a receiver to take possession of all
or substantially all of the assets of Tenant, or (b) a general assignment by
Tenant for the benefit of creditors, or (c) any action taken or suffered by
Tenant under any insolvency or bankruptcy act shall, if any such appointments,
assignments or action continues for a period of sixty (60) days, constitute a
breach of this Lease by Tenant, and Landlord may at its election without notice,
terminate this Lease and in that event be entitled to immediate possession of
the Leases Premises and damages as provided below.
ARTICLE XXII
BREACH BY TENANT
----------------
22.01 The occurrence of any of the following shall constitute an Event of
Default ("Event of Default") under this Lease on the part of Tenant:
(a) Failure to pay when due any payment of base rental, additional
rent, or any other sum of money payable by Tenant under this Lease, and
such failure to pay continues for a period of ten (10) days after notice
from Landlord of such failure to pay; provided, however, Landlord shall not
be required to provide such notice more than two (2) times in any one (1)
calendar year, the third (3rd) and any subsequent such failure in such
calendar year to pay within ten (10) days after the due date therefor
constituting an Event of Default without Landlord being required to provide
such notice or allow Tenant a grace period after such notice;
(b) Tenant's interest in this Lease or the Leased Premises shall be
subjected to any attachment, execution, levy or other judicial seizure
pursuant to any order or decree entered against Tenant in any legal
proceeding that is not stayed (so as to prevent seizure) pending appeal and
such order or decree is not vacated or bonded against so as to prevent
seizure upon the earlier to occur of (aa) fifteen (15) days prior to the
sale of such interest pursuant to such order or decree, or (bb) sixty (60)
days after entry of the order; or
(c) Tenant breaches or fails to comply with any term, provision,
condition, or covenant of this Lease, other than as described in clause
21.01(i) above, and such breach or failure continues for thirty (30) days
after written notice from Landlord of such breach or failure to comply; or
in the event such breach or failure is curable but cannot be cured within
thirty (30) days and Tenant does not commence to cure such breach or
failure promptly within such thirty (30) day period and continuously
thereafter pursue such cure and remedy such breach or failure within a
reasonable period of time, not to exceed an additional 90 days.
25
22.02 Upon the occurrence of an Event of Default, Landlord shall have the
option to do and perform any one or more of the following in addition to, and
not in limitation of, any other remedy or right permitted it by law or in equity
or by this Lease:
(a) Landlord, with or without terminating this Lease, may immediately
or at any time thereafter re-enter the Leased Premises and correct or
repair any condition which shall constitute a failure on Tenant's part to
keep, observe, perform, satisfy, or abide by any term, condition, covenant,
agreement, or obligation of this Lease or of any notice given Tenant by
Landlord pursuant to the terms of this Lease, and Tenant shall fully
reimburse and compensate Landlord on demand for Landlord's actual costs so
incurred.
(b) Landlord, with or without terminating this Lease, may immediately
or at any time thereafter demand in writing that Tenant vacate the Leased
Premises and thereupon Tenant shall immediately vacate the Leased Premises
and remove therefrom all property thereon belonging to or placed in the
Leased Premises by, at the direction of, or with consent of Tenant,
whereupon Landlord shall have the right to re-enter and take possession of
the Leased Premises. Any such demand, reentry and taking possession of the
Leased Premises by Landlord, shall not of itself constitute an acceptance
by Landlord of a surrender of this Lease, or of the Leased Premises by
Tenant, and shall not of itself constitute a termination of this Lease by
Landlord.
(c) Landlord, with or without terminating this Lease, may immediately
or at any time thereafter, reenter the Leased Premises pursuant to a court
order and remove therefrom Tenant and all property belonging to or placed
on the Leased Premises by, at the direction of, or with consent of Tenant.
Any such re-entry and removal by Landlord shall not of itself constitute an
acceptance by Landlord of a surrender of this Lease or of the Leased
Premises by Tenant and shall not of itself constitute a termination of this
Lease by Landlord.
(d) Landlord, with or without terminating this Lease, may immediately
or at any time thereafter use reasonable efforts to relet the Leased
Premises or any part thereof, without cost to Landlord (it being agreed
that "reasonable efforts" does not require Landlord to make any effort to
relet the Leased Premises or any portion thereof in preference to any
unleased space or space leased or subleased by Landlord or its affiliates
in other buildings) for such time or times, at such rental or rentals and
upon such other terms and conditions as Landlord in its sole, but
reasonable judgment (taking into account the fair market rental value of
the Leased Premises) deems advisable, and Landlord may make any alterations
or repairs to the Leased Premises which it in its reasonable determination
may be necessary or proper to facilitate such reletting; and Tenant shall
pay all reasonable costs of such reletting including but not limited to the
cost of any such alterations and repairs to the Leased Premises, reasonable
26
attorneys' fees actually incurred, leasing inducements, and brokerage
commissions; and if this Lease shall not have been terminated, Tenant shall
continue to pay all rent due under this Lease up to and including the date
of beginning of payment of rent by any subsequent tenant of part or all of
the Leased Premises, and thereafter Tenant shall pay monthly during the
remainder of the term of this Lease the difference, if any, between the
rent and other charges collected from any such subsequent tenant or tenants
and the rent and other charges reserved in this Lease, but Tenant shall not
be entitled to receive any excess of any such rents collected over the rent
reserved herein.
(e) Landlord may immediately or at any time thereafter terminate this
Lease, and this Lease shall be deemed to have been terminated upon receipt
by Tenant of notice of such termination; upon such termination Landlord
shall recover from Tenant all damages that Landlord may suffer by reason of
such termination including, without limitation, all arrearages in rentals,
reasonable costs, charges, additional rentals, and reimbursements, the cost
(including court costs and reasonable attorneys' fees actually incurred) of
recovering possession of the Leased Premises, the actual or estimated (as
reasonably estimated by Landlord) cost of any alteration of or repair to
the Leased Premises which is necessary or proper to prepare the same for
reletting and, in addition thereto, Landlord shall have and recover from
Tenant an amount equal to the present value (discounted at a rate per annum
equal to the discount rate of the Federal Reserve Bank of Atlanta at the
time the Event of Default occurs) of the rental to be paid by Tenant for
the remainder of the lease term, over the present value (discounted at the
same rate) of the fair market value of the Leased Premises for the
remainder of the lease term.
22.03 If Landlord re-enters the Leased Premises or terminates this Lease
pursuant to any of the provisions of this Lease, Tenant hereby waives all claims
for damages which may be caused by such re-entry or termination by Landlord's
reasonable acts complying with the provisions of this Lease. No such reentry or
termination shall be considered or construed to be forcible entry.
22.04 "Events of Default by Landlord" under this Lease shall be deemed to
be the situations where Landlord shall fail to comply with any term, provision
or covenant of this Lease and shall not commence to cure such failure within
thirty (30) days after written notice thereof and diligently and in good faith
continue to cure the default until completion. If the default cannot reasonably
be cured within such thirty (30) day period, Landlord shall not be in default if
Landlord commences to cure the default within the thirty (30) day period and
diligently and in good faith continues to cure the default until completion. In
no event shall Landlord's right to cure extend beyond ninety (90) days following
written notice from Tenant, unless such period is extended by Tenant Delays or
Excusable Delays.
27
22.05 Upon the occurrence of any Event of Default by Landlord, Tenant
shall have the right to perform the obligations of Landlord and Tenant shall
have Landlord reimburse Tenant on demand for any reasonable and necessary costs
and expenses which Tenant may have incurred.
ARTICLE XXIII
ATTORNEY'S FEES
---------------
23.01 If Landlord and Tenant litigate any provision of this Lease or the
subject matter of this Lease, the unsuccessful litigant will pay to the
successful litigant all costs and expenses, including reasonable attorneys' fees
and court costs, incurred by the successful litigant at trial and on any appeal.
If, without fault, either Landlord or Tenant is made a party to any litigation
instituted by or against the other, the other will indemnify the faultless one
against all loss, liability, and expense, including reasonable attorneys' fees
and court costs, incurred by it in connection with such litigation.
ARTICLE XXIV
CONDEMNATION
------------
24.01 If, at any time during the term of this Lease, title to the entire
Leased Premises should become vested in a public or quasi-public authority by
virtue of the exercise of expropriation, appropriation, condemnation or other
power in the nature of eminent domain, or by voluntary transfer from the owner
of the Leased Premises under threat of such a taking then this Lease shall
terminate as of the time of such vesting of title, after which neither party
shall be further obligated to the other except for occurrence antedating such
taking. The same results shall follow if less than the entire Leased Premises
be thus taken, or transferred in lieu of such a taking, but to such extent that
it would be not feasible or commercially impractical for Tenant to reasonably
conduct his trade or business therein.
24.02 Should there be such a partial taking or transfer in lieu thereof,
but not to such an extent as to make such continued occupancy and operation by
Tenant not feasible or commercially impractical, then this Lease shall continue
on all of its same terms and conditions subject only to an equitable reduction
in rent proportionate to the effect (if any) of such taking on Tenant's
continued occupancy and operation.
24.03 Subject to section 24.04 below, in the event of any such taking or
transfer, whether or not it covers the entire Leased Premises or a portion
thereof, it is expressly agreed and understood that all sums awarded, allowed or
received in connection therewith shall belong to Landlord, and any such rights
otherwise vested in Tenant are hereby assigned to Landlord, and Tenant shall
have no interest in or claim to any such sums or any portion thereof, whether
28
the same be for the taking of the property or for damages, or otherwise;
provided, however, that Tenant may separately claim and receive from the
condemning authority (but not from Landlord), for compensation for Tenant's
removal and relocation costs and/or business interruption, the value of any of
Tenant's property taken, and any alterations, additions or improvements made by
Tenant.
24.04 If all or any part of the Leased Premises shall be the subject of a
temporary taking, this Lease shall nevertheless remain in full force and effect,
and Tenant shall continue to be responsible for all of its obligations hereunder
insofar as Tenant's ability and authority to comply with such obligations are
not affected by such taking including, without limitation, the payment of all
base rental and additional rent. The award for any such temporary taking
payable for any period prior to the expiration date of this Lease shall be paid
to Tenant and the award for any temporary taking for any period thereafter shall
be paid to Landlord. A taking or transfer in lieu of taking shall be deemed to
be a temporary taking if the term of such taking does not extend beyond the then
current lease term.
ARTICLE XXV
NOTICES
-------
25.01 Prior to the Commencement Date of this Lease, all notices,
statements, demands, requests, consents, approvals, authorization, offers,
agreements, appointments, or designations under this Lease by either party to
the other shall be in writing and shall be sufficiently given and served upon
the other party, if sent by facsimile to the number for each party set forth
below or by certified mail, return receipt requested, postage prepaid, at the
address for each party set forth below:
(a) To Tenant at 1828 Meca Way, Norcross, Georgia 30093, Attention: David
Ellin, Facsimile No. 770-717-2111, with a copy to such other place as
Tenant may from time to time designate by notice to Landlord.
(b) To Landlord at 4497 Park Drive, Norcross, Georgia 30093, Facsimile
No._____________, with a copy to such other place as Landlord may from
time to time designate by notice to Tenant.
25.02 Following the Commencement Date, the numbers and addresses shall be:
(a) To Tenant at the Leased Premises, Attention: David Ellin, Facsimile
No. _________________, with a copy to such other place as Tenant may
from time to time designate by notice to Landlord.
29
(b) To Landlord at 4497 Park Drive, Norcross, Georgia 30093, Facsimile
_______________, with a copy to such other place as Landlord may from
time-to-time designate by notice to Tenant.
25.03 All notices shall be deemed received five (5) days after being
deposited in the mail in accordance with the foregoing provisions, or if sent by
facsimile on the date of the facsimile transmittal.
ARTICLE XXVI
WAIVER
------
26.01 The waiver by either party of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term,
covenant, or condition or any subsequent breach of the same or any other term,
covenant, or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant, or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
ARTICLE XXVII
EFFECT OF HOLDING OVER
----------------------
27.01 If Tenant should remain in possession of the Leased Premises after
the expiration of the lease term and without executing a new lease, then such
holding over shall be construed as a tenancy from month to month, subject to all
the conditions, provisions, and obligations of this Lease insofar as the same
are applicable to a month to month tenancy, except that the rent payable
pursuant to subsection 3.01 hereof shall be 125% of the rent payable pursuant to
subsection 3.01 for any month or portion thereof during the first thirty (30)
days of any holdover period. In such event, Landlord shall have the right to
terminate such tenancy-at-sufferance by giving Tenant fifteen (15) business days
prior written notice of such termination.
ARTICLE XXVIII
SUBORDINATION
-------------
28.01 This Lease and all rights of Tenant hereunder are and shall be
subject and subordinate to each Mortgage which may now or hereafter affect
Landlord's fee simple title to the Leased Premises and to any modifications,
renewals, consolidations, extensions or replacements thereof; provided, however,
that such subordination is conditioned upon the holder of any such Mortgage
30
first executing and delivering to Tenant a Subordination, Non-Disturbance and
Attornment Agreement as described in section 28.02 below. Subject to the
provisions of the immediately preceding sentence, Tenant agrees to recognize and
attorn to any party succeeding to the interest of Landlord as a result of the
enforcement of any Mortgage, and to be bound to such party under all of the
terms, covenants, and conditions of this Lease, for the balance of the term of
this Lease, including renewal terms, with the same force and effect as if such
party were the original Landlord under this Lease.
28.02 Upon the request of Landlord, the lessor under any such Prime Lease
or the holder of any Mortgage, Tenant agrees to execute a Subordination, Non-
Disturbance and Attornment Agreement with respect to each Mortgage or other
instrument from time to time encumbering fee simple title to the Leased
Premises. Tenant agrees to execute and deliver any Subordination, Non-
Disturbance and Attornment Agreement substantially in the form attached hereto
as Exhibit "E" ("SNDA"), or in such other form as Landlord or the holder of such
Mortgage shall reasonably request. Notwithstanding anything to the contrary in
this Lease: (i) Tenant's obligations under this Lease shall be contingent upon
(and only Tenant shall have the right to waive such contingency) Tenant,
Landlord and all of the holders of Mortgages on the Leased Premises each
executing an SNDA prior to the Commencement Date; and (ii) Landlord covenants to
deliver to Tenant an SNDA executed by each of the holders of Mortgages on the
Leased Premises and Landlord prior to the Commencement Date.
28.03 Notwithstanding the foregoing provisions of this Article 28, Tenant
shall, upon demand, at any time or times, execute, acknowledge and deliver to
Landlord or holder of any Mortgage, any and all instruments that may be
necessary to make this Lease superior to the lien of such Mortgage, and each
renewal, modification, consolidation, replacement and extension thereof.
ARTICLE XXIX
ESTOPPEL CERTIFICATE
--------------------
29.01 Upon ten (10) days notice from Landlord to Tenant, Tenant shall
deliver a certificate dated as of the first day of the calendar month in which
such notice is received, executed by an appropriate officer, partner or
individual, in the form as Landlord may reasonably require and stating the
following: (i) the commencement date of this Lease; (ii) the space occupied by
Tenant hereunder; (iii) the expiration date hereof; (iv) a description of any
renewal or expansion options; (v) the amount of rental currently and actually
paid by Tenant under this Lease; (vi) the nature of any default or claimed
default hereunder by Landlord; (vii) that Tenant is not in default hereunder nor
has any event occurred which with the passage of time or the giving of notice
would become a default by Tenant hereunder and (viii) such other statements as
Landlord may reasonably require.
31
29.02 Upon ten (10) days notice from Tenant to Landlord, Landlord shall
deliver a certificate dated as of the first day of the calendar month in which
such notice is received, executed by an appropriate officer, partner or
individual, in the form as Tenant may reasonably require and stating the
following: (i) the commencement date of this Lease; (ii) the space occupied by
Tenant hereunder; (iii) the expiration date hereof; (iv) a description of any
renewal or expansion options; (v) the amount of rental currently and actually
paid by Tenant under this Lease; (vi) the nature of any default or claimed
default hereunder by Tenant; (vii) that Landlord is not in default hereunder nor
has any event occurred which with the passage of time or the giving of notice
would become a default by Landlord hereunder and (viii) such other statements as
Tenant may reasonably require.
ARTICLE XXX
PARKING
-------
30.01 Tenant agrees to park all Tenant's trucks in the designated parking
spaces, if any such exist, at the rear of the Building. "Parking" as used
herein means the use by Tenant's employees, its visitors, invitees, and
customers for the parking of motor vehicles for such periods of time as are
reasonably necessary in connection with use of and/or visits to the Leased
Premises. No vehicle may be repaired or serviced in the parking area and any
vehicle deemed abandoned by Landlord in its reasonable discretion will be towed
from the Leased Premises and all costs therein shall be borne by the Tenant.
ARTICLE XXXI
MORTGAGE PROTECTION
-------------------
31.01 In the event of any default on the part of Landlord, Tenant will
give notice by registered or certified mail to any holder of a Mortgage covering
the Leased Premises whose address shall have been furnished to Tenant, and shall
offer such Mortgagee a reasonable opportunity to cure the default, including
time to obtain possession of the Leased Premises by power of sale or a judicial
foreclosure, if such should prove necessary to effect a cure. Tenant shall
accept cure by Landlord's Mortgagee; provided, however, such cure must occur
within the same time period provided for a Landlord cure under the Lease.
32
ARTICLE XXXII
RULES AND REGULATIONS
---------------------
32.01 Tenant shall comply with all covenants, restrictions and other
matters of record in the deed records of the county in which the Leased Premises
are located which affect or encumber the Leased Premises, the Building or the
Land.
ARTICLE XXXIII
BROKERAGE COMMISSIONS
---------------------
33.01 Landlord and Tenant acknowledge that Carter & Associates, L.L.C.
("Broker") has represented Tenant in connection with this Lease. Broker's
commission, however, shall be payable by Landlord. Landlord shall pay to Broker
a leasing commission in an amount as set forth in a separate agreement between
Broker and Landlord. The parties hereto do acknowledge and agree that that
certain Commission Agreement dated September 15, 1997, by and between Weeks
Development Partnership, a Georgia general partnership, as lessor/owner and
Carter & Associates, L.L.C. as broker is hereby incorporated into this lease as
if same were repeated in full. Broker acknowledges that Broker is not entitled
to any other compensation in connection with this Lease other than as expressly
provided hereinabove.
33.02 Landlord and Tenant each represents and warrants to the other that
it has not dealt with any broker, agent, commission salesman or other person
(other than Broker) in the negotiations for and procurement of this Lease and of
the Leased Premises and that no commissions, fees, or compensation of any kind
are due and payable in connection herewith to any broker, agent, commission
salesman or other person (other than Broker) as a result of any such dealings.
Landlord and Tenant each hereby agrees to indemnify the other and hold the other
harmless from and against any and all claims, suits or judgments or in the
enforcement of this indemnity for any fees, commissions or compensation of any
kind which arise out of or in any way connected with any claimed dealings or
relationship with the indemnifying party.
33.03 Broker represents and warrants to Landlord and Tenant that Broker
has not dealt with any broker, agent, commission salesman or other person in the
negotiations for and procurement of this Lease and of the Leased Premises, and
that no commissions, fees, or other compensation of any kind are due and payable
in connection herewith to any broker, agent, commission salesman or other person
as a result of any such dealings. Broker agrees to indemnify Landlord and
Tenant and hold Landlord and Tenant harmless from and against any and all
claims, suits or judgments (including without limitation, reasonable attorneys'
fees and court costs incurred in connection with any such claims, suits or
judgments or in the enforcement of this indemnity) for any fees, commissions or
33
compensation of any kind which arise out of or in any way connected with any
claimed dealings or relationship with Broker.
33.04 Broker has executed this Lease solely for the purpose of agreeing to
the provisions of this Article 34 and for no other purpose.
ARTICLE XXXIV
DELAYS
------
34.01 Definition. The term "Excusable Delays" shall mean any delay due to
war, natural catastrophe, future order of any government, court or regulatory
body claiming jurisdiction, blockage, embargo, or similar regulation or order of
any government or other regulatory body, storm, flood, washout, adverse weather
conditions, inability to obtain or delay in obtaining permits for reasons beyond
the control of the party seeking such permits, (provided that applications for
permits have been made within a reasonable time), or inability to obtain any
approval or consent required under the Protective Covenants for reasons beyond
the control of the party seeking such approval or consent, or any other cause
whatsoever beyond the reasonable control of the party from whom performance is
required, whether or not similar to any of the causes stated above; provided,
however, that a party's lack of funds or a party's failure, refusal or neglect
to pay any amount due hereunder shall not be deemed to be a cause beyond the
control of such party.
34.02 Performance Excused. Landlord and Tenant shall each be excused for
the period of any Excusable Delay from, and shall not be deemed in default with
respect to, the performance of any of the terms, covenants and conditions of
this Lease to be performed by such party when prevented from doing so by
Excusable Delays; provided, however, that nothing contained in this section
shall excuse a party's performance or prohibit the other party from exercising
any remedy in any circumstance in which any other provision of this Lease
expressly provides that such party is not excused or that such remedy may be
exercised notwithstanding or without regard to the existence of all or certain
Excusable Delays.
34.03 The term "Tenant Delays" shall mean and refer to delays directly
attributable to or caused by Tenant or Tenant's employees or agents, including
any failure by Tenant to make any decision within the time frame specified in
the Construction Schedule, except those delays contributed to by Landlord or
Landlord's employees, agents, contractors or invitees.
34.04 The time period for any Excusable Delay or Tenant Delay hereunder
shall not be deemed to have commenced until a party claiming such delay sends
notice to the other party that such delay has occurred. Notwithstanding the
34
foregoing, a party claiming a delay can set a date in such notice up to five (5)
days prior to the date the notice is sent and this date shall be deemed the
commencement of such delay; provided that, the delay did in fact commence on
such day. Any Excusable Delay or Tenant Delay shall continue only as long as
necessary in the reasonable determination of the party claiming such delay, and
only so long as the party claiming such delay exercises due diligence to remove
and overcome such delay.
MISCELLANEOUS PROVISIONS
------------------------
A. Whenever the singular number is used in this Lease and when required by
the context, the same shall include the plural, and the masculine gender shall
include the feminine and neuter genders, and the word "person" shall include
corporation, firm or association. If there be more than one tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
B. The headings or titles to sections of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part of this Lease.
C. This instrument contains all of the agreements and conditions made
between the parties to this Lease and may not be modified orally or in any other
manner than by agreement in writing signed by all parties to this Lease.
D. Time is of the essence of each term and provision of this Lease.
E. Except as otherwise expressly stated, each payment required to be made
by Tenant shall be in addition to and not in substitution for other payments to
be made by Tenant.
F. Subject to Article 19, the terms and provisions of this Lease shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
successors, and assigns of Landlord and Tenant.
G. Except as otherwise expressly provided herein, all covenants and
agreements to be performed by Tenant under any of the terms of this Lease shall
be performed by Tenant at Tenant's sole cost and expense and without any
abatement of rent.
H. Where the consent, approval or acceptance of a party is required, the
party agrees that such consent, approval or acceptance shall not be unreasonably
withheld, conditioned or delayed.
I. This Lease shall create the relationship of Landlord and Tenant between
Landlord and Tenant; no estate shall pass out of Landlord; Tenant has only a
35
usufruct, not subject to levy and/or sale and not assignable by Tenant except as
provided in section 19.01 hereof.
J. Tenant acknowledges and agrees that Landlord shall not provide guards
or other security protection for the Leased Premises and that any and all
security protection shall be the sole responsibility of Tenant; provided,
--------
however, that if Landlord and Tenant reasonably determine that security
- -------
protection would assist to prevent vandalism or other mischief at the Leased
Premises, then Landlord shall hire reasonable security protection for the Leased
Premises and 50% of such costs can be charged to Tenant as CAM.
K. This Lease shall be governed by Georgia law.
L. Both parties shall execute a memorandum of this Lease for the purpose
of recordation attached as Exhibit "F" contemporaneous with the execution of the
Lease. Said memorandum or short form of this Lease shall describe the parties,
the Leased Premises and the lease term, the renewal and purchase options, and
shall incorporate this Lease by reference. Said memorandum or short form of
this Lease shall not include the economic terms of this Lease unless both
parties consent.
M. Except as otherwise expressly provided herein, Landlord's liability for
performance of its obligations under the terms of this Lease shall be limited to
its interest in the Leased Premises, and neither Landlord, nor any officer,
director, shareholder or partner of Landlord, or of any partner of Landlord,
shall have any personal liability whatsoever with respect to this Lease.
Landlord's exculpation of liability hereunder shall not apply to any liability
of Landlord resulting from its failure to timely deliver the Leased Premises to
Tenant.
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IN WITNESS WHEREOF, the parties hereto who are individuals have set their
hands and seals, and the parties who are corporations have caused this
instrument to be duly executed by its proper officers and its corporate seal to
be affixed, as of the day and year first above written.
LANDLORD:
Signed, sealed and delivered WEEKS DEVELOPMENT PARTNERSHIP, a Georgia general
as to the Landlord, in the partnership
presence of:
/s/ By: Weeks Realty Services, Inc., a Georgia
- ------------------------------- corporation, its managing general partner
Unofficial Witness
/s/ By: /s/ Forrest Robinson
- ------------------------------- --------------------------------------------
Notary Public Name: Forrest Robinson
------------------------------------------
Its: President/COO
-------------------------------------------
(CORPORATE SEAL)
TENANT:
Signed, sealed and delivered INNOTRAC CORPORATION
as to the Tenant, in the
presence of:
By: /s/ David Ellin
/s/ -------------------------------------------
- ------------------------------- Name: David Ellin
Unofficial Witness -----------------------------------------
/s/ Its: Sr. V.P. & COO
- ------------------------------- -----------------------------------------
Notary Public (CORPORATE SEAL)
BROKER:
Signed, sealed and delivered CARTER & ASSOCIATES, L.L.C.
as to the Broker, in the
presence of:
By: /s/ George P. Edwards
/s/ ------------------------------------------
- ------------------------------- Name: George P. Edwards
Unofficial Witness -----------------------------------------
Its: Authorized Agent
-----------------------------------------
/s/ (CORPORATE SEAL)
- -------------------------------
Notary Public
37