EXHIBIT 10.7
COVER PAGE
The capitalized terms of this Lease shall have the meanings ascribed
to them below, and each reference to such term in the Lease shall incorporate
such meaning therein as if fully set forth therein.
LANDLORD: WEEKS REALTY, L.P., a Georgia limited partnership,
with its principal office located at 4497 Park
Drive, Norcross, Georgia 30093
TENANT: INNOTRAC CORPORATION, a corporation duly organized
and existing under the laws of the State of
Georgia.
LEASED PREMISES: (a) Address: 2505 Meadowbrook Parkway
(b) Rentable Area: 53,481 square feet
(c) Project: Meadowbrook
TERM: Three (3) years
COMMENCEMENT DATE: May 1, 1996
TERMINATION DATE: April 30, 1999
BASE RENT (PER YEAR) $267,405.00
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INNOTRAC CORPORATION
LEASE AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1. LEASED PREMISES............................... 1
2. TERM.......................................... 1
3. RENTAL........................................ 1
4. DELAY IN DELIVERY............................. 2
5. USE OF LEASED PREMISES........................ 3
6. UTILITIES..................................... 4
7. ACCEPTANCE OF PREMISES........................ 4
8. ALTERATION, MECHANICS' LIENS.................. 4
9. QUIET CONDUCT/QUIET ENJOYMENT................. 5
10. FIRE INSURANCE, HAZARDS....................... 5
11. INSURANCE..................................... 5
12. INDEMNIFICATION BY TENANT..................... 6
13. WAIVER OF CLAIMS.............................. 7
14. REPAIRS....................................... 7
15. SIGNS, LANDSCAPING............................ 8
16. ENTRY BY LANDLORD............................. 8
17. TAXES......................................... 8
18. ABANDONMENT................................... 9
19. DESTRUCTION................................... 10
20. ASSIGNMENT AND SUBLETTING..................... 10
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21. INSOLVENCY OF TENANT.......................... 11
22. BREACH BY TENANTS............................. 12
23. ATTORNEY'S FEES/COLLECTION CHARGES............ 12
24. CONDEMNATION.................................. 13
25. NOTICES....................................... 13
26. WAIVER........................................ 14
27. EFFECT OF HOLDING OVER........................ 14
28. SUBORDINATION................................. 14
29. ESTOPPEL CERTIFICATE.......................... 15
30. PARKING....................................... 15
31. MORTGAGE PROTECTION........................... 15
32. PROTECTIVE COVENANTS.......................... 15
33. GOVERNMENT REGULATIONS
34. RELOCATION.................................... 16
35. BROKERAGE COMMISSIONS......................... 16
36. MISCELLANEOUS PROVISIONS...................... 16
EXHIBITS:
EXHIBIT "A": Site Plan
EXHIBIT "B" Floor Plan of the Leased Premises
EXHIBIT "B-1": Parking
EXHIBIT "C": Tenant's Acceptance of Premises
EXHIBIT "D": Subordination, Non-disturbance and
Attornment Agreement
EXHIBIT"D": Special Stipulations
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STATE OF GEORGIA
GWINNETT COUNTY
This Lease Agreement is made this __ day of April, 1996, by and
between WEEKS REALTY, L.P., a Georgia limited partnership, hereinafter referred
to as "Landlord", and INNOTRAC CORPORATION, hereinafter referred to as "Tenant".
LEASED PREMISES
1.01 Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the property hereinafter referred to as the LEASED PREMISES, described
as approximately 53,481 rentable square feet of office/warehouse at 2505
Meadowbrook Parkway, Duluth, Georgia, Gwinnett County, as shown on the plan
attached hereto as Exhibit "A" and by reference incorporated herein. The
building in which the Leased Premises are located is herein referred to as the
"Building"; and the real property on which the building is situated is herein
referred to as the "Land".
TERM
2.01 TO HAVE AND TO HOLD said Leased Premises for a term of three (3)
years, commencing on May 1, 1996, and continuing until midnight on April 30,
1999.
RENTAL
3.01 As rental for the Leased Premises, Tenant agrees to pay to
Landlord, without offset or abatement, the sum of Two Hundred Sixty Seven
Thousand Four Hundred Five and 00/100 Dollars ($267,405.00) per year, payable in
monthly installments each in the amount of Twenty Two Thousand Two Hundred
Eighty Three and 75/100 Dollars ($22,283.75) on or before the first day of each
calendar month beginning on May 1, 1996 and thereafter for the remainder of the
term, together with any other additional rental as hereinafter set forth.
Tenant shall pay interest at a rate of ten percent (10%) per annum on all rental
payments not received by Landlord within ten (10) days of the due date thereof.
If the Lease shall commence on any date other than the first day of a calendar
month, or end on any date, other than the last day of a calendar month, rent for
such month shall be prorated. Tenant has deposited with Landlord, upon delivery
of this Lease Agreement, an amount equal to Twenty Two Thousand Two Hundred
Eighty Three and 75/100 ($22,23.750) Dollars to be applied as first month's
rental.
3.02 The rental provided in paragraph 3.01 "Rental" above, includes
an allowance in the amount of Seventy Thousand Five Hundred and 00/100 Dollars
($70,500.00) (the "Allowance") towards the cost of tenant improvements to the
Leased Premises on the basis set forth in the plans and specifications attached,
or to be attached, hereto in Exhibit "B". The Allowance shall be used for
alterations, improvements, fixtures and equipment which become part of or are
attached or affixed to the Leased Premises, including walls, wall coverings and
floor coverings, but excluding trade fixtures, furniture or furnishings or other
personal property.
In the event the cost of tenant improvements exceeds the Allowance, the excess
shall be paid by Tenant to Landlord within thirty (30) days upon Tenant's
receipt of Landlord's invoice.
3.03 In addition to the base rental, Tenant agrees to pay Landlord as
additional rental the amounts described in subparagraph (a) below. Each year
during the term hereof, Landlord shall give Tenant written notice of its
estimate of the amount of common area utility charges (collectively "Charges")
for the Lease 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 the actual
Charges, any adjustment necessary shall be made to additional rental payments
next coming due under this paragraph.
(a) In the event any utilities furnished to the Building or the Leased
Premises are not separately metered, Tenant shall pay to Landlord, as additional
rental, the gas, water, electricity, fuel, light and heat, garbage collection
services and for all other sanitary services rendered to the Leased Premises
used by Tenant. Tenant's amount shall be determined on the basis of the size of
the Leased Premises, unless Landlord determines that Tenant's use of the Leased
Premises justifies a disproportionate allocation of utility costs to Tenant.
(b) Landlord agrees to maintain those areas around the Building and in
the Project, including parking areas, planted areas, signs and landscaped areas
which are from time to time designated by Landlord. Tenant agrees to pay to
Landlord as additional rental the amount of $805.00 per month for the first year
of the lease term for common area charges and expenses for the Building and the
Land ("CAM Charges") which shall increase at a rate of six percent (6%) each
year during the term of the lease. The term "grounds maintenance" shall
include, without limitation, all landscaping, planting, lawn and grounds care,
irrigation costs, all repairs and maintenance to the grounds, signs and other
common areas around the Building and in the Project and to all sidewalks,
driveways, loading areas and parking areas. CAM Charges shall not include items
of a capital nature.
3.04 Tenant agrees to pay as additional rent to Landlord, upon
demand, any utility surcharges, or any other costs levied, assessed or imposed
by, or at the discretion of, or resulting from statutes or regulations, or
interpretations thereof, promulgated by any Federal, State, Municipal or local
governmental authorities in connection with the use or occupancy of the Leased
Premises.
DELAY IN DELIVERY OF POSSESSION
4.01 If Landlord, for any reason whatsoever, cannot deliver
possession of the Leased Premises to Tenant at the commencement of the term of
this Lease, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that event
there shall be a proportionate reduction of rent covering the period between the
commencement of the term and the time when Landlord can deliver possession. If
delay is
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longer than three (3) months, Landlord will provide Tenant such space (not
exceeding in area the Leased Premises) as Landlord may have available, until the
Leased Premises can be completed, at no charge to Tenant. The term of this
Lease shall be extended by such delay.
USE OF LEASED PREMISES
5.01 The Leased Premises may be used and occupied only for general
manufacturing and assembly, testing, warehousing and distribution, showroom and
offices 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 affecting the Leased Premises and their
cleanliness, safety, occupation and use. Tenant shall not do or permit anything
to be done in or about the Leased Premises that will in any way increase the
fire insurance upon the building. Tenant will not perform any act or carry on
any practices that may injure the building or be a nuisance or menace to tenants
of adjoining premises. Tenant shall not cause, maintain or permit any outside
storage on or about the Leased Premises, including pallets or other refuse. The
rear loading areas of the Tenant's unit must be clean and unobstructed. 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
operate between the normal business operations of Tenant.
5.02 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. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or released 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
sanctioned by law or by the highest standards prevailing in the industry for the
storage and use of such substances or materials, nor allow to be brought into
the Project any such materials or substances except to use in the ordinary
course of Tenant's business, and then only after written notice is given to
Landlord of the identity of such substances or materials. Without limitation,
hazardous substances and 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 lender or
governmental agency shall ever require testing to ascertain whether or not there
has been any release or hazardous materials, then the reasonable costs thereof
shall be reimbursed by Tenant to Landlord upon demand as additional charges if
such requirement applies to the Leased Premises. In addition, Tenant shall
execute affidavits, representations and the like from time to time at Landlord's
request concerning Tenant's best knowledge and belief regarding the presence of
hazardous materials on the Leased Premises. In all events, Tenant shall
indemnify Landlord in the manner elsewhere provided in this lease from any
release of hazardous materials on the Leased Premises occurring while Tenant is
in possession, or elsewhere if caused by Tenant or persons acting under Tenant.
The within covenants shall survive the expiration or earlier termination of the
lease term.
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UTILITIES
6.01 Landlord shall not be liable in the event of any interruption in
the supply of any utilities. Tenant agrees that it will not 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.
Tenant shall be solely responsible for and shall pay all charges for use or
consumption of sanitary sewer, water, gas, electricity and any other utility
services. In the event Landlord determines that it is advisable to separately
meter any utility services provided to the Leased Premises, Landlord shall have
the right to install a sub-meter and bill Tenant for the actual cost thereof,
which shall be paid to Landlord within fifteen (15) days following billing.
ACCEPTANCE OF PREMISES
7.01 By entry hereunder, Tenant acknowledges that it has examined the
Leased Premises and accepts the same as being in the condition called for by
this Lease, and as suited for the uses intended by Tenant. Upon delivery of
possession of the Leased Premises to Tenant, Tenant agrees to execute and
deliver to Landlord a Tenant's Acceptance of Premises, in the form attached
hereto as Exhibit "C".
ALTERATION, MECHANICS' LIENS'
8.01 Alterations may not be made to the Leased Premises without prior
written consent of Landlord, and any alterations of the Leased Premises
excepting movable furniture and trade fixtures shall at Landlord's option become
part of the realty and belong to the Landlord.
8.02 Should Tenant desire to alter the Leased Premises and Landlord
gives written consent to such alterations, at Landlord's option, Tenant shall
contract with a contractor approved by Landlord for the construction of such
alterations.
8.03 Notwithstanding anything in paragraph 8.02 above, Tenant may,
upon written consent of Landlord, 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 provided Tenant shall not be in default under any of the terms and
conditions 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. 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.
All such work provided for above, shall be done at such times and in such manner
as Landlord may from time to time designate. Tenant shall give Landlord written
notice five (5) days prior to employing any laborer or contractor to perform
work resulting in an alteration of the Leased Premises so that Landlord may post
a notice of non-responsibility.
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QUIET CONDUCT/QUIET ENJOYMENT
9.01 Tenant shall not commit, or suffer any waste upon the Leased
Premises, or any nuisance, or other act or thing which may disturb the quiet
enjoyment of any other tenant in the Building or any building in the project in
which the Leased Premises are located.
9.02 So long as Tenant is not in default in the payment of rent, or
other charges or in the performance of any of the other terms, covenants, or
conditions of the Lease, Tenant shall not be disturbed by Landlord or anyone
claiming by, through or under Landlord in Tenant's possession, enjoyment, use
and occupancy of the Leased Premises during the original or any renewal term of
the Lease or any extension or modification thereof.
FIRE INSURANCE, HAZARDS
10.1 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
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, building and appurtenances.
INSURANCE
11.01 (a) Tenant, at its own expense, shall provide and keep in
force with companies acceptable to Landlord public liability insurance for the
benefit of Landlord and Tenant jointly against liability for bodily 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 Fifty Thousand Dollars ($50,000.00) per occurrence in
respect to damage to property, such limits to be for any greater amounts as may
be reasonably indicated by circumstances from time to time existing. Tenant
shall furnish Landlord with a certificate of such policy (which certificate
shall contain the insurer's waiver of subrogation rights exercisable against the
Landlord) within thirty (30) days of the commencement date of this Lease and
whenever required shall satisfy Landlord that such policy is in full force and
effect. Such policy shall name Landlord as an additional insured and shall be
primarily and non-contributing with any insurance carried by Landlord. The
policy shall contain a contractual liability endorsement. The policy shall
further provide that it shall not be canceled or altered without twenty (20)
days prior written notice to Landlord.
(b) Tenant shall maintain in full force and effect on all of its
inventory, fixtures and equipment in the Leased Premises a policy or policies of
fire and extended coverage insurance with standard coverage endorsement to the
extent of at least eighty percent (80%) of their insurable value. During the
term of this Lease the proceeds from any such policy or policies of
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insurance shall be used for the repair or replacement of the fixtures, and
Landlord will sign all documents necessary or proper in connection with the
settlement of any claim or loss by Tenant. Landlord will not carry insurance on
Tenant's possessions. Tenant shall furnish Landlord with a certificate of such
policy within thirty (30) days of the commencement of this Lease, and whenever
required, shall satisfy Landlord that such policy is in full force and effect.
(c) Landlord shall obtain and keep in force at Tenant's sole cost and
expense during the term of this Lease a policy or policies of insurance covering
loss or damage to the Leased Premises, in the amount of the full replacement
value thereof, as the same may exist from time to time, but in no event less
than the total amount of promissory notes secured by liens on the Leased
Premises against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended perils (all risk) and
sprinkler leakage. Said insurance shall provide for payment of loss thereunder
to Landlord or to the holders of mortgages or deeds of trust on the Leased
Premises. The insuring party shall in addition, obtain and keep in force
during the term of this Lease a policy of rental income insurance covering a
period of one (1) year, which insurance shall also cover all real estate taxes
and insurance costs for said period. If such insurance coverage has a
deductible clause, Tenant shall be liable for the deductible amount. Upon
demand by Landlord, Tenant shall promptly pay the cost of such insurance
coverage as additional rent.
(d) If the Leased Premises are part of a larger building, or if the
Leased Premises are part of a group of buildings owned by Landlord, which are
adjacent to the Leased Premises, then Tenant shall pay for any increase in the
property insurance of such other building or buildings if said increase is
caused by Tenant's acts, omissions, use or occupancy of the Leased Premises.
(e) All policies of insurance shall provide that the insurers waive
any right of subrogation against Landlord or Tenant.
INDEMNIFICATION BY TENANT
12.01 Tenant shall indemnify and hold harmless Landlord against and
from any and all claims arising from Tenant's use of the Leased Premises (other
than those arising solely from 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, 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. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in or about the Leased premises from any cause whatsoever
except that which is caused by the failure of Landlord to observe any of the
terms and conditions of this Lease where such
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failure has persisted for an unreasonable period of time after written notice of
such failure, and Tenant hereby waives all claims in respect thereof against
Landlord.
12.02 Landlord shall indemnify and hold harmless Tenant against and
from any and all claims for bodily injury, death or property damage, to the
extent caused solely by Landlord's negligence or misconduct, or arising from the
conduct of its business or from any activity, work, or thing done by the
Landlord within the Building or on the Land.
12.03 The obligations of Landlord and Tenant under this paragraph
arising by reason of any occurrence taking place during the term of this Lease
shall survive the termination or expiration of this Lease.
WAIVER OF CLAIMS
13.01 Tenant, as a material part of the consideration to be rendered
to Landlord, hereby waives all claims against Landlord for damages to goods,
wares and merchandise in, upon or about the Leased Premises and for injury to
Tenant, its agents, employees, invitees, or third person in or about the Leased
Premises from any cause arising at any time.
REPAIRS
14.01 Tenant shall, at its sole cost, keep and maintain the Leased
Premises and appurtenances and every part thereof (excepting exterior walls and
roofs which Landlord agrees to repair) including by way of illustration and not
by way of limitation all windows, and skylights, doors, any store front and the
interior of the Leased Premises, including all pluming, heating, air
conditioning, sewer, electrical systems and all fixtures and all other similar
equipment serving the Leased Premises in good and sanitary order, condition, and
repair. Tenant shall be responsible for all pest control within the Leased
Premises; including, but not limited to the eradication of any ants or
terminates should infestation be observed during the term of the Lease. To the
best of Landlord's knowledge, the Leased Premises is free of any insects or
rodents. Tenant shall, at its sole cost, keep and maintain all utilities,
fixtures and mechanical equipment used by Tenant in good order, condition and
repair. All windows shall be washed and cleaned as often as necessary to keep
them clean and fee from smudges and stains. 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, together with interest at the rate of twelve percent (12%) per
annum from the date of making such payments. Landlord agrees to inspect the
mechanical equipment in the Leased Premises to insure it is in good working
order at lease commencement.
14.02 Landlord agrees to keep in good repair the roof, foundations,
and exterior walls of the Leased Premises except repairs rendered necessary by
the negligence of Tenant, its agents, employees or invitees. Landlord gives to
Tenant exclusive control of Leased Premises and shall
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be under no obligations to inspect said Leased Premises. Tenant shall promptly
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 item. Failure to report such obvious, known defects shall make
Tenant responsible to Landlord for any liability incurred by Landlord by reason
of such defects.
14.03 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 three months. A copy
of said contract shall be provided to Landlord, as well as any modification,
extension, renewal or replacement thereof.
SIGNS, LANDSCAPING
15.01 Landlord shall have the right to control landscaping and Tenant
shall make no alterations or additions to the landscaping. Landlord shall have
the right to approve the placing of signs and the size and quality of the same.
Tenant shall place no exterior signs on the Leased Premises without the prior
written consent of Landlord. Any signs not in conformity with the Lease may be
immediately removed by Landlord. Landlord shall provide, at its cost and
expense, building standard signage.
ENTRY BY LANDLORD
16.01 Upon reasonable notice, Tenant shall permit Landlord and
Landlord's agents to enter the Leased Premises at all reasonable times 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, or for the
purpose of showing the Leased Premises to prospective tenants, or placing upon
the building any usual or ordinary "for sale" signs, 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; and shall permit Landlord
at any time within six (6) months prior to the expiration of this Lease, to
place upon the Leased Premises any usual or ordinary "to let" or "to lease"
signs. 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.
TAXES
17.01 (a) Tenant shall, as additional rent, pay and discharge, on or
before the last day on which the same may be paid without penalty, "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 for or by
reason of the Leased Premises or any part thereof, only if
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caused by Tenant or the Landlord's interest in the real property described on
Exhibit "A" hereto. For the purposes hereof "taxes" means all 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
personalty thereon, and all assessments imposed subsequent to the execution and
delivery of this lease by both Landlord and Tenant (including assessments for
benefits from public works or improvements, whether commenced or completed prior
to the commencement of the term hereof and whether or not to be completed within
said term), levies, license fees, permit fees, water rents and charges, sewer
rents, excises, franchises, imposts, interest, costs, penalties and charges,
general and special, ordinary and extraordinary, of whatever name, nature and
kind, and whether or not within the contemplation of the parties hereto, which
are now or may hereafter be levied, assessed, charged or imposed upon or against
this Lease, the Leased Premises, the use or occupancy thereof, or the building,
improvements or personal property thereon or which are or may become a lien on
any thereof. 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 Section 17.
(b) All assessments imposed upon the Leased Premises during the final
year of the term of this Lease for public improvements which shall benefit the
Leased Premises after the expiration of this Lease shall be equitably pro rated,
so that only the portion of such assessments properly 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.
17.02 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
basic rent.
17.03 Joint Assessment. If the Leased Premises are not separately
assessed, Tenant's liability shall be an equitable proportion of the real
property taxes for all of the land and improvements included with the tax parcel
assessed, such proportion to be determined by Landlord from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Landlord's reasonable determination thereof, in
good faith, shall be conclusive.
17.04 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 or elsewhere.
ABANDONMENT
18.01 Tenant shall not vacate nor abandon the Leased Premises at any
time during the term of this Lease, unless agreed to in writing by both Landlord
and Tenant; and if Tenant shall abandon, vacate or surrender the Leased
Premises, or be dispossessed by process of law, or
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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.
DESTRUCTION
19.01 If the Leased Premises or any portion thereof are destroyed by
storm, fire, lightning, earthquake or other casualty, Tenant shall immediately
notify Landlord. In the event the Leased Premises cannot, in Landlord's
judgment, be restored within one hundred twenty (120) days of the date of such
damage or destruction, this Lease shall terminate as of the date of such
destruction, and all rent and other sums payable by Tenant hereunder shall be
accounted for as between Landlord and Tenant as of that date. Landlord shall
notify Tenant within thirty (30) days of the date of the damage or destruction
whether the Leased Premises can be restored within one hundred twenty (120)
days. If this Lease is not terminated as provided in this paragraph, Landlord
shall, to the extent insurance proceeds payable on account of such damage or
destruction are available to Landlord (with the excess proceeds belonging to
Landlord), within a reasonable time, repair, restore, rebuild, reconstruct or
replace the damaged or destroyed portion of the Leased Premises to a condition
substantially similar to the condition which existed prior to the damage or
destruction. Provided, however, Landlord shall only be required to repair,
restore, rebuild, reconstruct and replace the Landlord's Work shown on Exhibit
"B", and Tenant shall, at its sole cost and expense, upon completion of the
Landlord's Work, repair, restore, rebuild, reconstruct and replace, as required,
any and all improvements installed in the Leased Premises by Tenant and all
trade fixtures, personal property, inventory, signs and other contents in the
Leased Premises, and all other repairs not specifically required of Landlord
hereunder, in a manner and to at least the condition existing prior to the
damage. Tenant's obligation to pay Base Rent shall abate until Landlord has
repaired, restored, rebuilt, reconstructed or replaced the Leased Premises, as
required herein, in proportion to the part of the Leased Premises which are
unusable by Tenant. If the damage or destruction is due to the act, neglect,
fault or omission of Tenant, there shall be no rent abatement except to the
extent of rent loss insurance. In the event of any dispute between Landlord and
Tenant relative to the provisions of this paragraph, they may each select an
arbitrator, the two arbitrators so selected shall select a third arbitrator and
the three arbitrators so selected shall hear and determine the controversy and
their decision thereon shall be final and binding on both Landlord and Tenant
who shall bear the cost of such arbitration equally between them. Landlord
shall not be required to repair any property installed in the Leased Premises by
Tenant. Tenant waives any right under applicable laws inconsistent with the
terms of this paragraph and in the event of a destruction agrees to accept any
offer by Landlord to provide Tenant with comparable space within the project in
which the Leased Premises are located on the same terms as this Lease.
Notwithstanding the provisions of this paragraph, if any such damage or
destruction occurs within the final two (2) years of the term hereof, then
Landlord, in its sole discretion, may, without regard to the aforesaid 120 day
period, terminate this Lease by written notice to Tenant.
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 building and property that are the
subject of this Lease. Tenant shall not
-10-
assign this Lease or sublet all or any part of the Leased Premises without the
prior written consent of the Landlord. In the event of any assignment or
subletting, Tenant shall nevertheless at all times, remain fully 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. 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, and Landlord shall have a
security interest in all properties on the Leased Premises to secure payment of
such sums. 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. 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. 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.
INSOLVENCY OF TENANT
21.01 Either (a) the appointment of a trustee 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 thirty (30) 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 Leased Premises and damages as provided below.
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BREACH BY TENANTS
22.01 In the event of a default, Landlord in addition to any and all
other rights or remedies that it may have hereunder, at law or in equity shall
have the right to either terminate this Lease or from time to time, without
terminating this Lease relet the Leased Premises or any part thereof for the
account and in the name of Tenant or otherwise, for any such term or terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make reasonable alterations and repairs to the Leased Premises. Tenant shall
pay to Landlord, as soon as ascertained, the costs and expenses incurred by
Landlord in such reletting or in making such reasonable alterations and repairs.
Should such rentals received from time to time from such reletting during any
month be less than that agreed to be paid during that month by Tenant hereunder,
the Tenant shall pay such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly.
22.02 No such reletting of the Leased Premises by Landlord shall be
construed as an election on its part to terminate this Lease unless a notice of
such intention be given to Tenant or unless the termination thereof be decreed
by a court of competent jurisdiction. Notwithstanding any such reletting
without termination, 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, costs, charges, additional rentals, and reimbursements, the cost
(including court costs and 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 the difference
between 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,
and the present value (discounted at the same rate) of the rental for the Leased
Premises for the remainder of the lease term, taking into account the cost, time
and other factors necessary to relet the Leased Premises; provided, however,
that such payment shall not constitute a penalty or forfeiture, but shall
constitute full liquidated damages due to Landlord as a result of Tenant's
default. Landlord and Tenant acknowledge that Landlord's actual damages in the
event of a default by Tenant under this Lease will be difficult to ascertain,
and that the liquidated damages provided above represent the parties' best
estimate of such damages. The parties expressly acknowledge that the foregoing
liquidated damages are intended not as a penalty, but as full liquidated
damages, as permitted by Section 13-6-7 of the Official Code of Ga. Annotated.
ATTORNEY'S FEES/COLLECTION CHARGES'
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
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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.
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 legally and commercially impossible
for Tenant to occupy the portion of the Leased Premises remaining, and
impossible 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 an impossibility, then this Lease shall continue on all of
its same terms and conditions subject only to an equitable reduction in rent
proportionate to such taking.
24.03 In the event of any such taking or transfer, whether of 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 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 the same be for the taking of the property
or for damages, or otherwise. Nothing herein shall be construed, however, to
preclude Tenant from prosecuting any claim directly against the condemning
authority for loss of business, moving expenses, damage to, and cost of, trade
fixtures, furniture and other personal property belonging to Tenant and Landlord
will have no interest in or claim to any such sums or any portion thereof;
provided, however, that Tenant shall make no claim which shall diminish or
adversely affect any award claimed or received by Landlord.
NOTICES
25.02 All notices, statements, demands, requests, consents,
approvals, authorization, offers, agreements, appointment, 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, (i) by depositing same in
the United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested; (ii) by recognized
overnight, third party prepaid courier service (such as Federal Express),
requiring signed receipt; (iii) by delivering the same in person to such party;
or (iv) by prepaid telegram, telecopy or telex with delivery of an original copy
of any such notice delivered pursuant to (ii) or (iii) above to be received no
later than the next business day. Notice personally delivered or sent by
courier service, telegram,
-13-
telecopy or telex shall be effective upon receipt. Any notice mailed in the
foregoing manner shall be effective three (3) business days after its deposit in
the United States mail. Either party may change its address for notices by
giving notice to the other as provided above. For purposes of notice, the
addresses of the parties shall be as follows:
(a) To Tenant at 1828 Meca Way, Norcross, Georgia 30093
(b) To Landlord, addressed to Landlord at 4497 Part Drive, Norcross,
Georgia 30093, with a copy to such other place as Landlord may from
time to time designate by notice to Tenant.
WAIVER
26.01 The waiver by Landlord 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.
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 subparagraph 3.01 hereof shall be 125% of the rent payable pursuant
to subparagraph 3.01.
SUBORDINATION
28:01 This lease, at Landlord's option, shall be subordinate to any ground
lease, first priority mortgage, first priority deed of trust, or first priority
security deed now or hereafter placed upon the real property of which the Leased
Premises are a part and to any and all advances made on the security thereof and
to all renewals, modifications, consolidations, replacements and extensions
thereof.
28.02 Tenant agrees to execute any documents required to effectuate such
subordination or to make this Lease prior to the lien of any such ground lease,
mortgage, deed of trust, or security deed, as the case may be, including
specifically a subordination, non-disturbance and attornment agreement in the
form hereto attached as Exhibit "D", and failing to do so within ten (10)
business days after written demand, does hereby make, constitute and irrevocably
appoint Landlord as Tenant's attorney in fact and in Tenant's name, place and
stead, to do so. If requested to do so, Tenant agrees to attorn to any person
or other entity that acquires title to the
-14-
real property encompassing the Leased Premises, whether through judicial
foreclosure, sale under power, or otherwise, and to any assignee of such person
or other entity.
ESTOPPEL CERTIFICATE
29.01 Upon ten (10) business 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 require and stating but not limited to
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 and (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.
PARKING
30.01 Tenant agrees to park all Tenant's trucks in the parking spaces
designated on the attached Exhibit B-1. "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 of serviced in the parking area and any vehicle deemed abandoned by
Landlord will be towed from the project and all costs therein shall be borne by
the Tenant. No areas outside of the Leased Premises shall be used by Tenant for
storage without Landlord's prior written permission. There shall be no parking
permitted on any of the streets or roadways located in Meadowbrook.
MORTGAGEE 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 beneficiary of a deed or
trust or holder of a security deed or mortgage covering the Leased Premises
whose address shall have been furnished it, and shall offer such beneficiary or
holder 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.
PROTECTIVE COVENANTS
32.01 This lease is subject to the Protective Covenants of Meadowbrook,
and to such rules and regulations as may hereafter be adopted and promulgated.
In addition, 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.
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RELOCATION
33.01 Intentionally Deleted
BROKERAGE COMMISSIONS
34.01 Tenant's Agent and Landlord's Agent (collectively, "Agent") shall
each be entitled to receive a commission in the amounts, and upon the terms and
conditions, contained in a commission agreement between Landlord and such
parties.
34.02 Tenant warrants and represents to Landlord that, other than Agent,
no other party is entitled as a result of the actions of Tenant, to a commission
or other fee resulting from the execution of this Lease; and in the event Tenant
extends or renews this Lease, or expands the Leased Premises, and Tenant's Agent
is entitled to a commission under the above-referenced commission agreement,
Tenant shall pay all commissions and fees payable to any party (other than
Tenant's Agent) engaged by Tenant to represent Tenant in connection therewith.
Landlord warrants and represents to Tenant that, except as set forth above, no
other party is entitled, as a result of the actions of Landlord, to a commission
or other fee resulting from the execution of this Lease. Landlord and Tenant
agree to indemnify and hold each other harmless from any loss, cost, damage or
expense (including reasonable attorneys' fees) incurred by the nonindemnifying
party as a result of the untruth or incorrectness of the foregoing warranty and
representation, or failure to comply with the provisions of this subparagraph.
34.03 Tenant's Agent is representing Tenant in connection with this Lease,
and is not representing Landlord. Landlord's Agent, or employees of Landlord or
its affiliates, are representing Landlord and are not representing Tenant.
34.04 The parties acknowledge that certain officers, directors,
shareholders, or partners of Landlord or its general partner(s), are licensed
real estate brokers and/or salesmen under the laws of the State of Georgia.
Tenant consents to such parties acting in such dual capacities.
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 paragraphs of this Lease are for convenience
only 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.
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D. Where the consent of a party is required, such consent will not be
unreasonably withheld.
E. This Lease shall crate the relationship of Landlord and Tenant between
Landlord and Tenant; no estate shall pass out of Landlord; Tenant has only a
usufruct, not subject to levy and/or sale and not assignable by Tenant except as
provided in paragraph 20.01 hereof.
F. 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.
G. 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. No payment by Tenant or receipt by Landlord of a lesser amount than
any installment or payment of rent due shall be deemed to be other than on
account of the amount due, and no endorsement or statement on any check or
payment of rent shall be deemed an accord and satisfaction. Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such installment or payment of rent, or pursue any other remedies
available to Landlord.
I. Subject to paragraph 20, 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. In the event of
any conveyance by Landlord of its interest in and to the Leased Premises, the
Building or the Land, all obligations under this Lease of the conveying party
shall cease and Tenant shall thereafter look solely to the party to whom the
Leased Premises were conveyed for performance of all of Landlord's duties and
obligations under this Lease.
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.
K. This Lease shall be governed by Georgia law.
L. Time is of the essence of each term and provision of this Lease.
M. Tenant shall not record this Lease or a memorandum thereof without the
written consent of Landlord. Upon the request of Landlord, Tenant shall join in
the execution of a memorandum or so-called "short form" of this Lease for the
purpose of recordation. Said memorandum or short form of this Lease shall
describe the parties, the Leased Premises and the lease term, and shall
incorporate this Lease by reference.
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N. Landlord's liability for performance of its obligations under the
terms of this Lease shall be limited to its interest in the Leased Premises.
(SIGNATURES CONTAINED ON FOLLOWING PAGE)
-18-
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.
Signed, sealed and delivered LANDLORD:
as to Landlord, in the
presence of: WEEKS REALTY, L.P.,
a Georgia limited partnership
/s/ By: Weeks Corporation,
- ----------------------------- a Georgia corporation,
its sole general partners
/s/ By: /s/ A.R. Weeks, Jr.
- ----------------------------- ---------------------
Notary Public Name: A.R. Weeks, Jr.
Its: Chairman/CEO
(Corporate Seal)
Signed, sealed and delivered TENANT:
as to Landlord, in the
presence of: INNOTRAC CORPORATION
Nyra P. Williams By: /s/ David Ellin
- ----------------------------- ---------------------
Name: David Ellin
-------------------
Its: Vice President
--------------------
/s/ Nyra P. Williams
- -----------------------------
Notary Public
ATTEST:
By:
--------------------------------
Name:
------------------------------
Its:
-------------------------------
(Corporate Seal)
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EXHIBIT "C"
ACCEPTANCE OF PREMISES
Lessee: Innotrac Corporation
---------------------------------------------------
Lessor: Weeks Realty, L.P.
---------------------------------------------------
Date Lease Signed: April 1, 1996
---------------------------------------------------
Term of Lease: 3 (Three) Years
---------------------------------------------------
Address of Leased Premises: Suite ________ containing approximately 53,481
2505 Meadowbrook Parkway square feet, located at
Duluth, Georgia
Duluth, Georgia
---------------------------------------------------
Commencement Date May 1, 1996
---------------------------------------------------
Expiration Date: April 30, 1999
---------------------------------------------------
The above described premises are accepted by Lessee as suitable for the purpose
for which they were let. The above described lease term commences and expires
on the dates set forth above. Lessee acknowledges that it has been received
from Lessor ____________ number of keys to the leased premises. It is
understood that there is a punch list which will be completed after move-in and
will be an exhibit to the Tenant Estoppel.
LESSEE
Innotrac Corporation
- -------------------------------
(Type Name of Lessee)
WITNESS
By: /s/ T. Hawkins /s/ Nyra O. Williams
--------------------------- ------------------------------
(Signature) (Signature)
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Terri Hawkins, Office Manager Innotrac Corporation
- ------------------------------- ------------------------------
(Type Name and Title) (Company)
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EXHIBIT "D"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-------------------------------------------------------
THIS AGREEMENT, made as of the __ day of _________, 1995, between
_________________ with offices at ____________________("Tenant") and
_______________________________ (herein, together with its successors,
transferees and assigns, the "Mortgagee");
W I T N E S S E T H:
WHEREAS, Mortgagee is about to or has theretofore granted to
________________, a Georgia limited partnership (the "owner") a first mortgage
loan, which loan is secured by a security deed (herein "Mortgage") dated as of
______, 199_ and duly recorded on ______, 199_ in the land records of Gwinnett
County, Georgia; and
WHEREAS, the Mortgage is to be a first and prior lien upon the Owner's fee
estate in the real property described in Exhibit "A" annexed hereto ("Mortgaged
Premises"); and
WHEREAS, Tenant is occupying a portion of the Mortgaged Premises under a
lease dated as of _____________, 199___ in which Owner is Landlord (the "Lease")
covering that portion of the Mortgaged Premises therein more particularly
described (the "Leased Premises"); and
WHEREAS, Tenant desires to be assured of its continued and undisturbed
occupancy of the Leased Premises should the Mortgage be foreclosed or the
Mortgaged Premises sold pursuant to any power of sale contained therein and
Mortgagee is agreeable thereto.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and in further consideration of the sum of ONE DOLLAR ($1.00) each to
the other in hand paid, the receipt whereof is hereby acknowledged, Tenant and
Mortgagee mutually covenant and agree as follows:
FIRST: The Lease and all of Tenant's rights, interest and estate therein
and thereunder are hereby made subject and subordinate to the lien of the
Mortgage and to any extensions, renewals, replacements, modifications, additions
or consolidations thereof and to all rights, title and interest of Mortgagee and
its successors and assigns therein and thereunder.
SECOND: In the event, however, proceedings shall ever be instituted by
Mortgagee to foreclose or liquidate the Mortgage, the Tenant's possession of its
leased portion of the Mortgaged Premises shall not be disturbed by the
foreclosure proceedings and the Mortgaged Premises shall be sold at any
foreclosure sale subject to Tenant's possession on condition that:
(a) there shall be, at the time of commencement of foreclosure
proceedings, as well as all subsequent times, no default by Tenant in
the due and timely observance and performance of any covenant and
agreement in the Lease to be observed and performed by Tenant; and
(b) the Tenant shall not have entered into any agreement modifying any
term, condition or agreement of the Mortgagee-approved Lease without
the prior written consent of Mortgagee.
THIRD: Tenant shall attorn to Mortgagee while Mortgagee is in
possession of the Mortgaged Premises, or to a Receiver appointed in any
action or proceeding to foreclose the Mortgage. In the event of the
completion of foreclosure proceedings and sale of the Mortgaged Premises or
in the event the Mortgagee should otherwise acquire possession of the
Mortgaged Premises, the Tenant will promptly upon demand attorn to the
purchaser at the foreclosure sale or to the Mortgagee, as the case may be,
and will recognize such purchaser or the Mortgagee as the Tenant's
landlord. The Tenant agrees to execute and deliver, at any time and from
time to time, upon the request of the Mortgagee or the purchaser at the
foreclosure sale, as the case may be, any instrument which may be necessary
or appropriate to such successor landlord to evidence such attornment. The
Tenant shall, upon demand of the Mortgagee or any Receiver or purchaser at
the foreclosure sale, pay to the Mortgagee or to such Receiver or
purchaser, as the case may be, all rental monies then due or as they
thereafter become due.
FOURTH: Upon the attornment provided for in preceding Paragraph THIRD
the Tenant's occupancy shall thereafter be in full force and effect as
under a direct Lease between Mortgagee, the Receiver or the purchaser at
the foreclosure sale, as the case may be, and Tenant. It is specifically
understood and agreed that Mortgagee or any such Receiver or purchaser
shall not be:
(a) liable for any act, omission, negligence or default of any prior
landlord, or
(b) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord; or
(c) bound by any rent or additional rent which Tenant might have paid
for more than one month in advance to any prior landlord; or
(d) bound by any amendment or modification of the Lease made without
the prior written consent of the Mortgagee.
FIFTH: On and after the date Tenant in good standing attorns to
Mortgagee or any Receiver or subsequent owner in pursuance of its agreement
herein set forth, Mortgagee, the Receiver or such subsequent owner will
undertake and perform all subsequent obligations of the Landlord as set
forth in the Lease for the benefit of and undisturbed occupancy of Tenant
under the Lease.
SIXTH: Tenant agrees it will not amend, modify nor abridge the
Lease in any way, nor cancel or surrender the same without prior written
approval of the Mortgagee other than by reason of a continued uncured
material default of the landlord under the Lease, nor will the Lease ever
merge into the fee in the event that Mortgagee acquires fee title to the
Mortgage Premises.
SEVENTH: Any notices or other communication to be given hereunder by
either party shall be in writing and shall be deemed to have been
sufficiently given or served for all purposes if sent by registered or
certified mail with return receipt requested to the other party hereto at
its address above stated or such other address of which written
notification has been timely given to the other party.
-2-
EIGHTH: Mortgagee has and shall have the continuing right to execute
and record in the Land Records of Gwinnett County, Georgia at any time, in
its unilateral discretion, a Declaration of Subordination for the purpose
of thereby subordinating its rights, title and interest in and under the
Mortgage to the rights, title and interest of Tenant under the Lease. Such
Declaration of Subordination shall, at Mortgagee's election, operate,
function and be in full force and effect for whatever period of time
Mortgagee declares therein that it shall be in force not exceeding the term
of the Lease and any extensions thereof and the said Declaration may be
voided unilaterally by Mortgagee when it so elects.
NINTH: Tenant waives any and all rights it may have to execute and
record after the date hereof any document purporting to again or further
subordinate its right, title or interest under the Lease to the lien of
either the Mortgage or any other mortgage or deed of trust or any ground
lease or any agreement modifying or amending the Mortgage except with the
written consent of Mortgagee.
TENTH: This Agreement cannot be changed orally but only in writing
signed by both parties hereto.
ELEVENTH: This Agreement may be recorded by either party at its own
expense in the Land Records of Gwinnett County, Georgia whenever, in its
sole discretion, either party elects so to do.
TWELFTH: All of the terms, covenants and conditions hereof shall run
with the Mortgaged Premises and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, acknowledged and delivered the day and year first above
written.
SIGNED, SEALED AND DELIVERED TENANT:
in the presence of:
- ----------------------------- BY:
------------------------------
- -----------------------------
MORTGAGEE:
- ----------------------------- BY:
------------------------------
- -----------------------------
The undersigned Owner of the leased and mortgaged premises hereby
consents to the foregoing Agreement and agrees to be bound by and subject
to the terms thereof.
-3-
EXHIBIT "E"
SPECIAL STIPULATIONS
OPTION TO RENEW:
(a) Provided Tenant is not then in default beyond any applicable notice and
cure period provided for herein, Tenant shall have the option to renew this
Lease for one (1) two (2) year term. Such option may be exercised by written
notice to Landlord of its intention to renew at least six (6) months prior to
the expiration of the initial term of this Lease. The renewal term shall be
on the same terms and conditions as contained herein for the initial term of
this Lease, except as expressly provided herein to the contrary with respect
to Base Rent and except for such as are, by their terms, inapplicable to a
renewal term.
It is expressly understood that Tenant shall have no option to
extend the term of this Lease if at the time of such attempted exercise of the
option this Lease is not then in full force and effect and if Tenant is then
in default of any terms and conditions of this Lease beyond any applicable
notice and cure period provided for herein.
The Base Rental for the renewal term shall be $5.50 per square foot
per annum, payable in monthly installments on or before the first day of each
calendar month in the renewal term.