EXHIBIT 10.6
LEASE AGREEMENT
PREMISES: Colony Center
2990 Gateway Drive
Suite 500
Norcross, GA 30071
LESSOR: Connecticut General Life Insurance Company
LESSEE: Computer Source, Inc.
DATE: July 7, 1994
TABLE OF CONTENTS
Premises ....................................................................1
Term ........................................................................1
Rental ......................................................................1
Security Deposit ............................................................2
Use .........................................................................3
Lessor's Care ...............................................................3
Lessee's Care ...............................................................3
Inspections .................................................................3
Default and Remedies ........................................................4
Personalty of Lessee ........................................................5
Possession ..................................................................5
Utilities ...................................................................5
Assignment and Subletting ...................................................5
Destruction or Damage .......................................................6
Eminent Domain ..............................................................6
Alterations and Improvements ................................................6
Insurance ...................................................................7
Exterior Signs ..............................................................7
Attorney's Fees .............................................................7
Holding Over ................................................................7
Surrender of Premises .......................................................7
Notices .....................................................................8
Parties .....................................................................8
Parking Spaces and Driveways ................................................8
Subordination ...............................................................8
Governmental Orders .........................................................9
Improvements ................................................................9
Estoppel Certificates .......................................................9
Protective Covenants ........................................................9
Liability ...................................................................10
Time is of the Essence ......................................................10
Lessor's Estate .............................................................10
Broker Indemnification ......................................................10
Rules and Regulations .......................................................10
Special Stipulations ........................................................11
Exhibit "A" - Floor Plan
Exhibit "B" - Property Description
Exhibit "C" - Plans and Specifications
Exhibit "D" - Rules and Regulations
Exhibit "E" - Expansion Space Addendum
Exhibit "F" - Tenant Signage Criteria
STANDARD OFFICE LEASE FORM
THIS LEASE AGREEMENT, (the "Lessor") is made this 7th day of July, 1994, by and
between Connecticut General Life Insurance Company, on behalf of its separate
Account R ("Lessor"); and Computer Source, Inc., a South Carolina Corporation
(the "Lessee").
WITNESSETH:
1. PREMISES
Lessor does hereby rent and lease to the Lessee, and Lessee does hereby rent and
hire from Lessor, that certain space containing approximately 17,102 square feet
of space, as shown on floor plan attached hereto as Exhibit A and incorporated
hereby by this reference (such space being hereinafter referred to as the
"Premises"). The Premises are located in Lessors' building (hereinafter referred
to as the "Building") known as 2990 Gateway Drive Suite 500, Norcross, GA 30071
and which is referenced by property description in Exhibit "B" attached hereto.
2. TERM
The term of this Lease shall be for a period of Sixty (60) months, commencing on
August 15, 1994 (the "Commencement Date") and ending on August 14, 1999 (the
"Termination Date") at midnight unless sooner terminated as hereunder provided
or unless such commencement and termination dates are adjusted as herein
provided.
3. RENTAL
Lessee shall pay to Lessor at P.O. 102228, Atlanta Georgia 30368-0228, or at
such other place Lessor may designate in writing, a Base Rental of See Paragraph
#35, payable in equal monthly installments of -See Paragraph #35, to be paid
without notice, demand, deduction, or offset on the first day of each calendar
month in advance. Rental payments not received by Lessor within ten (10)
calendar days after the due date thereof shall be subject to a late charge
payable by Lessee in an amount equal to five percent (5%) of such past due
rental. Lessee shall pay to Lessor an amount equal to Eight Thousand One Hundred
Ninety Four Dollars and 71/100 ($8,194.71) on the date of Lessee's execution of
this Lease. This amount shall be applied towards base rental due for the first
(1st) month of this Lease Agreement. Rental for any portion of a month shall be
on any other day other than the first day of any calendar month or end on any
day other than the last day of any calendar month.
(a) Commencing in the calendar year 1995 and continuing thereafter during
each year of the term of this Lease, in the event Lessor's per square
foot cost of real estate taxes, sanitary taxes, general and special
assessments on the Building and on the land on which the Building is
located increases above 1994 costs, then Lessee shall pay to Lessor as
additional rent the amount of such increase. The term "taxes" shall
include every type of tax, charge or impost assessed against the
Building, or upon the land upon which the Building is located or upon the
operation of the Building together with any and all reasonable costs
protesting and reducing taxes and legal fees incident therewith,
excepting only income taxes imposed upon Lessor.
(b) Commencing in the calendar year 1995 and continuing thereafter during
each year of the term of this Lease, in the event Lessor's per square
foot cost of fire and casualty and liability insurance on the Building
increases above 1994 costs, then Lessee shall pay to Lessor as additional
rent the amount of such increase to Lessor computed by multiplying the
number of square feet in Premises by the amount of such increase. The
term "insurance" shall include all fire and extended casualty insurance
on title Building and all liability coverage on the grounds, sidewalks,
driveways, parking areas and any other exterior or interior areas,
together with such other insurance protection as are from time to time
reasonably deemed necessary by Lessor.
(c) Lessor shall notify in writing, on or reasonably after Lessor's annual
receipt of insurance and tax billings of the amount of any such increase
over the preceding calendar year in insurance and taxes pursuant to
paragraph 3(a) and 3(b) above, and Lessee shall pay the amount of such
increase to Lessor as additional rent within thirty (30) days after
delivery of such notice to Premises or receipt there-of by Lessee. Lessor
shall make its reasonable efforts to ensure that taxes on the Building
are as low as possible and that the fire and casualty and liability
insurance is competitively priced.
(d) Lessee agrees to pay as additional rent, as hereinafter provided, its
share of reasonable expenses incurred by Lessor at its discretion, for
the operation and maintenance of the common areas, including, without
limiting the generality of the foregoing, cost incurred for lighting,
painting, cleaning, traffic control, policing, inspection, landscaping
and repairing and replacing the common areas, or any part thereof
together with a reasonable allowance for Lessor's direct overhead, and
any and all water consumed on the Premises which is not separately
metered to the Lessee. The share to be paid by the Lessee shall be that
percentage of the cost of operation and maintenance of the common areas
which the gross rentable area of the Premises bears to the gross rentable
area of the buildings known as Colony Center which percentage shall be
equal to 17,102 / 220,553 = 7.75%.(*: Comment Illegible) Such common
area maintenance expense shall be billed by the Lessor to the
Lessee monthly based upon the estimated annual cost of operation and
maintenance of the common areas during the term of this Lease and Lessee
shall pay such common area maintenance expense charges to Lessor as
additional rent within thirty (30) days after delivery of such billing to
Premises of a receipt thereof by Lessee. Lessor may, at its option, make
monthly or other periodic charges based upon the estimated annual cost of
operation and maintenance of the common areas. Within ninety days (90)
after the end of each such calendar year, or as soon thereafter as is
reasonably practical, Lessor will furnish to Lessee a statement of
expenses relating to the common areas for such year, such statement to be
prepared in accordance with generally accepted accounting principles and
to include Lessee's proportionate share of the actual expenses relating
to common areas, computed as herein provided. If such statement shows an
amount owing to Lessor that is less than payments for such calendar year
previously made by Lessee, Lessee shall receive a credit against the next
monthly common area maintenance expense to be paid by Lessee. If such
statement shows an amount owed by Lessee, Lessee shall pay the deficiency
to Lessor within thirty (30) days after delivery of such statement.
Lessee's obligation to pay Lessee's proportionate share of common area
maintenance expenses and Lessor's obligation to make adjustments and
settlements with respect thereto shall survive any expiration or other
termination of this Lease.
4. SECURITY DEPOSIT
(INTENTIONALLY OMITTED)
5. USE
Lessee shall occupy and use the Premises for office and general storage and for
no other purpose or use. The Premises shall not be used for illegal purposes;
nor in violation of any regulation of any governmental body; not in any manner
to create any nuisance or trespass; nor in any manner to vitiate the insurance
or increase the rate of insurance on the Premises or the Building. Lessee
agrees, at its own expense, to promptly comply with any and all municipal,
county, state and federal statutes, regulations, and/or requirements applicable
or in any way relating to its specific use and occupancy of the Premises,
including the use, storage, handling, production or disposal of any "Hazardous
Materials" (hereinafter defined) on, from, under or about the Premises to the
extent that such Hazardous Materials are related to Lessee's specific use of the
Premises. In addition, Lessor reserves the right to amortize capital expenses
for non specific use compliance and pass such expenses through pro rata as
common area charges provided, however, that such expenses shall be subject to
the increase limitations outlined in Paragraph 3 (d) of this Lease Agreement.
Hazardous Material shall mean any flammable substances, explosives, radioactive
materials, hazardous materials, hazardous waste, toxic substances, pollutants,
oil or other petroleum products, or related materials identified as such in any
federal, state, or local statue, ordinance or regulation. If Lessee's use should
increase the rate of insurance on the Premises or on the Building, then Lessee
shall pay the entire amount of such increase within thirty (30) days after
notification of same by Lessor.
6. LESSOR'S CARE
Lessor shall not be required to make any reasonable repairs or improvements to
Premises except repairs to the foundation, exterior walls or roof of the
Building as necessary for safety and tenantablity. Lessor shall present to
Lessee and permit Lessee to seek enforcement of any warranties provided to
Lessor in connection with any construction performed by Lessor within Premises.
7. LESSEE'S CARE
Lessee shall repair, maintain, replace as necessary and keep in good, clean and
safe repair all portions of Premises and all equipment, fixtures and systems
therein which are not specifically set forth as the responsibility of Lessor in
Paragraph 6 of this Lease. Lessee's repairs and replacements shall include,
without limitation, all electrical, plumbing, heating and air-conditioning
systems, parts, components and fixtures; Lessee shall also promptly repair or
replace all partitions and all glass and plate glass within Premises immediately
when cracked
2
or broken, and Lessee and Lessor shall indemnify the other and shall hold the
other harmless against any damage or injury to Premises or the Building or to
any person or property caused or contributed to by any act, omissions, or
neglect of the other, any invitee, agent, affiliate, customer or client of the
other or anyone in the other's or employ. Lessee shall make its reasonable
efforts to at once report in writing to Lessor any defective condition known to
Lessee which Lessor is required to repair, and failure to promptly report such
defects shall made Lessee liable to Lessor for any liability incurred by Lessor
by reason of Lessee's failure to notify Lessor of such defects. In no event
shall Lessee cause or allow any outside storage of trash, refuse, debris or
anything else on the Premises, whether in the area of the dumpster or otherwise.
Lessor, at Lessee's expense, shall keep in force a standard maintenance with a
reputable heating and air conditioning service organization, a copy of said
maintenance agreement to be provided to Lessee. Lessee, at its option, may
assume the obligation for maintenance of the HVAC system under a maintenance
agreement comparable to that provided by Lessor if it can do so at a lower price
with a mutually acceptable heating and air conditioning service organization.
Lessor will provide Lessee with all warranties applicable to HVAC system.
8. INSPECTIONS
At reasonable hours and upon reasonable notice except in case of emergencies,
Lessor hereby reserves to itself and its agents the right to exhibit the
Premises to prospective purchasers to inspect the Premises to see that Lessee is
complying with all its obligations hereunder, to make repairs required of Lessor
or Lessee under the terms hereof, to make repairs or modifications to any
adjoining space, to maintain, use, repair, and replace pipes, ducts, wires,
meters and any other equipment, machinery, apparatus, and fixtures located
within or without the Premises which service the Building or the Premises, to
make alterations in and additions to the Building, and to enter upon the
Premises for the foregoing purposes. Lessor agrees that it will not exhibit the
Premises to prospective Lessees until 120 days before the expiration of this
Lease Agreement.
9. DEFAULT AND REMEDIES
In the event that: (A) any rental specified in this Lease is not paid within ten
(10) calendar days after the giving of written notice by Lessor to Lessee that
such rental is due and unpaid; (B) Lessee fails to comply with any other term,
provision, condition, or covenant of this Lease or with any of the Rules and
Regulations now or hereafter reasonably established by Lessor for the government
of the Building and Lessee does not cure such failure within thirty (30)
calendar days after the giving of written notice by Lessor to Lessee of such
failure to comply; (C) any petition is filed by or against Lessee in bankruptcy
and not dismissed within thirty (30) calendar days after the filing thereof or
Lessee takes advantage of any debtor relief proceeding under any present of
future law whereby the rental payable hereunder or any part thereof is or is
proposed to be reduced or deferred; (D) Lessee becomes insolvent or makes a
transfer in fraud of creditors; (E) Lessee makes an assignment for benefit of
creditors; (F) a receiver is appointed for all or a substantial part of the
assets of Lessee: (G) Lessee's Leasehold interest in Premises is levied upon
under execution; thereupon, in any such events, Lessor shall have the right, at
Lessor's election, to do any of the following, in addition and not in limitation
of any other remedy permitted by law or by this Lease:
(i) Lessor shall have the immediate right of re-entry and may remove all
property from the Premises to a warehouse or elsewhere at the cost of,
and for the account of, Lessee, all without being deemed guilty of
trespass, or becoming liable for any loss, damage or damages which may be
occasioned thereby unless such is due to Lessor's gross negligence or
willful misconduct;
(ii) Lessor may enter the Premises and make such alterations and repairs as
may be necessary in order to relet the Premises;
(iii) Lessor, without terminating this Lease may, but shall not be obligated
to, relet the Premises or any part thereof for such term or terms (which
may be for a term extending beyond the Term of this Lease) at such rental
or rentals and upon such other terms and conditions as Lessor in its sole
discretion may deem advisable or acceptable. Upon each reletting all
rentals received by Lessor from such reletting all rentals received by
Lessor from such reletting shall be applied; first, to the payment of any
indebtedness other than rent due hereunder from Lessee to Lessor; second,
to the payment of any unpaid costs and expenses of such reletting,
including brokerage fees and attorney's fees, the costs of such
alterations and repairs and lease considerations and incentives; third to
the payment of the Base Rental due and unpaid hereunder; and fourth, the
residue, if any shall be held by Lessor and applied in payments of
further Base Rental and other additional rent or charges as the same may
become due and payable hereunder. In no event shall Lessee be entitled to
any excess rental received by Lessor over and above that which Lessee is
obligated to pay hereunder, including Base Rental, additional rent and
all other charges.
3
Notwithstanding any such reletting without termination, Lessor may at
any time thereafter terminate this Lease for such previous breach;
(iv) Lessor may terminate this Lease, in which event Lessee shall immediately
surrender possession of the Premises, and Lessor may recover from Lessee
all damages it may incur by reason of such breach, including the cost of
recovering the Premises, reasonable attorneys' fees and costs, the value
of any "free rent" and rental concessions, and the unamortized cost of
Lessee improvements or allowances given to Lessee or made at Lessor's
expense.
All sums due under this Lease shall bear interest at the lesser of a per annum
rate of eighteen percent (18%) or the maximum lawful rate, from due date thereof
until paid-in-full.
All rights and remedies of Lessor created or otherwise existing at law are
cumulative and the exercise of one or more rights or remedies shall not be taken
to exclude or waive the right to exercise any other.
10. PERSONALTY OF LESSEE
Lessee shall not remove any personal property, fixtures or equipment from
Premises at any time at which Lessee is in default under this Lease. If Lessee
shall not remove all Lessee's effects from Premises at any expiration or other
termination of this Lease, Lessor shall have the right, at Lessor's elections,
to remove all or part of said effects in any manner that Lessor shall choose and
store the same without liability to Lessee for ioss thereof, and Lessee shall be
liable to Lessor for all expenses incurred in such removal and also for the cost
of storage of said effects. All personal property of Lessee or Lessee's
employees, agents, affiliates, or invitees, located in or brought upon Premises
or any part of the Building shall be at the risk of the Lessee only, and Lessor
shall not be liable to Lessee or any other part for any damages thereto or theft
thereof resulting from any cause, except if caused by Lessor's willful acts or
gross negligence.
11. POSSESSION
Except as may be shown on the attached Exhibit "C" Plans and Specifications,
Lessee accepts Premises in their present condition and as state for the uses
intended by Lessee. If this Lease is executed before the Premises herein becomes
ready for occupancy and Lessor cannot deliver possession of Premises by the time
the term of this Lease is fixed herein to begin, Lessee hereby waives any claim
for damages due to such delay, and Lessor hereby waives the right to receive any
payment of rental until Lessor delivers possession to Lessee. Premises shall be
deemed ready for occupancy when Lessor delivers to Lessee a certificate of
occupancy for Premises issued by Gwinnett County or other applicable
governmental authority. If any minor punchlist items exist, Lessor or Lessor's
contractor shall complete such work within reasonable timeframes and at
reasonable times that do not interrupt Lessee's business. After completion of
the Premises and in accordance with the terms of the Lease, Lessor, within
thirty (30) calendar days of occupancy, will furnish Lessee with a written
statement requiring Lessee's signature thereby acknowledging Lessee's acceptance
of the Premises and confirming the commencement date of the term of this Lease.
12. UTILITIES
Lessee shall pay all utility bills, including without limitation all gas,
electricity, fuel, light and heat bills for Premises, and Lessee shall pay all
charges for garbage collection service and for all other sanitary services
rendered to Premises or used by Lessee in therewith. If Lessee fails to pay any
of said utility bills or charges for garbage collection or other sanitary
services, Lessor shall have the right but not the obligation to pay the same,
and such payment may be added to the rental of Premises next due as additional
rental. Lessee shall strictly comply with all regulations, codes and regulations
of Gwinnett County or other applicable governmental authority relative to the
storage and collection of garbage and refuse. Lessee shall also provide pest
control service to Premises at Lessee's expense and keep Premises free from
pests.
13. ASSIGNMENT AND SUBLETTING
Lessee shall not, without the prior written consent (which shall not be
unreasonably withheld) of Lessor endorsed thereon, assign this Lease or any
interest thereunder, or sublet Premises or any portion thereof, or permit the
use of Premises by any party other than Lessee. In the event that during the
term of this Lease Lessee desires to sublease and introduces Lessor to a
proposed replacement tenant for Lessee, which replacement tenant is of financial
strength at least equal to that of Lessee and has a use for Premises and a
number of employees reasonably consistent with that of Lessee's operation, the
Lessor shall consider such replacement tenant and notify Lessee with reasonable
promptness as to Lessor's choice, at Lessor's sole discretion, of the following:
4
(1) That Lessor consents to a subleasing of Premises to such replacement
tenant provided that Lessee shall remain fully liable for all of its
obligations and liabilities under this Lease; or;
(2) That upon such replacement tenant's entering into a mutually-satisfactory
new Lease for the Premises with Lessor, then Lessee shall be released for
all further obligations and liabilities under this Lease (excepting only
any unpaid rentals or any unperformed covenants then past due under this
Lease); or;
(3) That Lessor declines to consent to such sublease due to insufficient or
unsatisfactory documentation furnished to Lessor to establish Lessee's
financial strength and proposed use of and operations upon Premises.
In no case may Lessee assign any options granted to Sublessees or Assignees
hereunder, all such options being deemed personal to Lessee and exercisable by
Lessee only.
14. DESTRUCTION OR DAMAGE
Should entire Premises or a substantial portion thereof be damaged by fire or
other casualty to such an extent that rebuilding or repairs cannot reasonably be
completed in Lessor's sole judgement, within one hundred eighty (180) calendar
days of the date of such Casualty, then either Lessor or Lessee shall have the
right with a period of thirty (30) calendar days following such casualty to
terminate this Lease by written notice to the other, in which event all rental
payable under this Lease shall be abated from the date of such Casualty and this
Lease shall end. However, if such damage or- destruction can be repaired or
`replaced within such one hundred eighty (180) day period, Lessor shall make
such repairs or replacements with reasonable promptness and dispatch and, rental
will abate in such proportion as the Premises have been damaged and
untenantable, and Lessor will restore the Premises as speedily as practical,
whereupon full rent will resume. In no event will Lessee be entitled to
terminate this Lease or be entitled to an abatement of rent if the damage or
destruction to the Premises, whether total or partial, is a result of the
negligence or willful misconduct of Lessee, its agents, employees, contractors,
invitees, and licensees.
15. EMINENT DOMAIN
If the whole or any substantial part of Premises shall be taken or condemned
(including without limitation a sale in lieu of condemnation) by any competent
authority for any public use or purpose, then, in that event, the term of this
Lease shall cease and terminate from the date on which possession of the part so
taken shall be acquired for such use or purpose; the full amount of any
resulting condemnation award shall be paid to Lessor and rental shall be
accounted for between Lessor and Lessee as of the date of such taking. However,
if only an insubstantial, in Lessor's reasonable opinion, portion of Premises is
so taken and Premises are not untenantable, then Lessor shall repair any damage
caused by such taking with reasonable promptness and dispatch and shall allow
Lessee an abatement or reduction in rental hereunder for such time as such
portion of Premises is untenantable, and this Lease shall not be otherwise
affected.
16. ALTERATIONS AND IMPROVEMENTS
Lessee shall make no alterations in, or additions to, the Premises without first
obtaining Lessor's written consent thereto, which consent shall not be
unreasonably withheld. No alterations shall lessen the value of Premises or
cause expenses to Lessor at the termination of the Lease. In no event shall any
work be done for Lessor's account or in any way which would allow a lien to be
placed against Premises; any such lien shall create a default of Lessee under
this Lease if not removed or lawfully bonded within ten (10) calendar days
following lessor's discovery thereof. All additions, fixtures and improvements,
whether temporary or permanent in character (except only the movable office
furniture of Lessee) made in or upon Premises, either by Lessee or Lessor, shall
be Lessor's property and shall remain upon Premises at the termination of this
Lease without compensation to Lessee.
17. INSURANCE
Lessee shall obtain and maintain in force throughout the term of this Lease
general public liability insurance in the amount of not less than $1,000,000.00
for any one injury (including death) to persons nor property of not less than
$1,000,000.00 for any one casualty and of not less than $1,000,000.00 for
property damage. Said policy shall name both Lessor and Lessee as additional
insured and shall contain a provision requiring the insurer to give Lessor at
least thirty (30) calendar days prior written notice before any termination or
expiration of said policy for any reason. Prior to the commencement of this
Lease and prior to the expiration of each term of such policy, Lessee shall
deliver to Lessor the original of such policy or a proper certificate from the
insurer.
5
Lessee hereby agrees to insure the contents of Premises including any
improvements or betterment to the extent Lessee deems satisfactory in Lessee's
sole discretion; and Lessor shall have no responsibility whatsoever for any
damage, theft, or other casualty to or involvement in such contents unless due
to Lessor's willful acts or gross negligence.
18. EXTERIOR SIGNS
Except as described in exhibit "F" Tenant Sign Criteria Lessee shall place no
signs upon the outside of the Premises unless consented to in writing by Lessor.
Any and all signs shall be maintained in compliance with applicable governmental
rules and regulations governing such signs, and Lessee shall be responsible to
Lessor for any damage caused by installation, use, or maintenance of said signs.
Lessee agrees upon removal of said signs to repair all damage incident thereto.
No advertisement, sign, or other notice shall be inscribed, painted, or fixed on
any part of the outside or inside of the Premises without the prior written
consent of Lessor, which consent shall not be unreasonably withheld. Lessors
Tenant Signage Criteria is further detailed in Exhibit "F".
19. ATTORNEY'S FEES
Lessee agrees to pay all attorney's fees and expenses incurred by the Lessor in
enforcing any of the obligations of the Lessee under this Lease, or in any
litigation or negotiation in which the Lessor shall, by virtue of this Lease or
Lessor's ownership of the Building, become involved through or on account of the
Lease.
20. HOLDING OVER
If Lessee holds over after the term hereof, with or without the express or
implied consent of Lessor, such tenancy shall be from month to month only, and
not a renewal hereof or an extension for any further term, and in such case
basic monthly rent shall be payable at the rate of one hundred and fifty percent
(150%) of the rent specified in Paragraphs 3 and 35 hereof for the last month of
the Lease term or any extensions thereof, and such month to month tenancy shall
be subject to every other term, covenant and agreement contained herein. Lessor
and Lessee do agree that for the first month of any holding over period the rent
shall be One Hundred Twenty Five percent (125%) of the rent specified in
Paragraphs 3 and 35 hereof for the last month of the Lease term or any
extensions thereof. Nothing contained in this Paragraph 20 shall be construed as
consent by Lessor to any holding over by Lessee and Lessor expressly reserves
the right to require Lessee to surrender possession of the Premises to Lessor as
provided in Paragraph 21 hereof upon expiration of the term of this Lease or
other termination of this Lease.
21. SURRENDER OF PREMISES
At termination of this Lease, Lessee shall surrender Premises and keys thereof
to Lessor in at least as good as condition as at commencement of the term,
natural wear and tear only excepted.
22. NOTICES
All notices as provided herein shall be mailed via registered/return receipt
requested or certified mai~l to the following:
Lessee's Representative: Computer Source, Inc
2990 Gateway Drive
Norcross GA 30071
Lessor's Representative: Peterson Properties
2849 Paces Ferry Road
Suite 700
Atlanta GA 30339
23. PARTIES
"Lessor" as used in this Lease shall include Lessor's assigns and successors in
title to Premises. "Lessee" shall include Lessee and, if this Lease shall be
validly assigned or sublet, shall include such assignee or sublessee, its
successors and permitted assigns. "Lessor" and "Lessee" shall include male and
female, singular and plural, corporation, partnership or individual, as may fit
the particular parties.
6
24. PARKING SPACES AND DRIVEWAYS
Lessee shall have the right of ingress and egress over the driveways located on
or in close proximity to Premises or the Building. If Premises occupy less than
all of the Building, all driveways and parking areas shall be used by Lessee
jointly with Lessor and Lessor's other tenants, their agents, customers and
invitees, and Lessee hereby agrees not to park on nor block said driveways but
in designated areas only.
25. SUBORDINATION
This Lease shall be subordinated to the right, title and interest of any lender
or other party holding a security interest in or lien upon Premises under any
and all security deed or mortgages presently encumbering Premises or the
Building and to any and all other security deeds or mortgages hereafter
encumbering Premises or the Building. Lessee shall, at any time hereafter, on
the demand of Lessor or the holder of such security deed mortgage, execute any
instruments, which may reasonable be required by such secured party for the
purpose of evidencing Lessee's subordination of this Lease to the lien or
security interest of such secured party. *(See par. 42) In the event of the
termination if this Lease through foreclosure of any security deed or mortgage
to which this Lease is subordinated, Lessee shall, upon the demand of the
purchaser of Premises or the Building at foreclosure sale, attorn to and enter
into a new Lease with such purchaser for the unexpired term of this Lease at the
same rent and under the same provisions of this Lease.
26. GOVERNMENTAL ORDERS
Lessee, at Lessee's expense, shall comply with all laws and ordinances, and all
rules, order and regulation of all governmental authorities and of all insurance
bodies, at any time duly issued or in force, applicable to the Premises or any
part thereof or the Lessee's use thereof, except that Lessee shall not hereby be
under any obligation to comply with any law, ordinance, rule, order or
regulation requiring any structural alteration of or in connection with the
Premises, unless such alteration is required by reason of a condition which has
been created by, or at the instance of Lessee, or is attributable to the use or
manner of use to which Lessee puts the Premises, or is required by reason of a
breach of any of Lessee's covenants and agreements hereunder. Where any
structural alteration of or in connection with the Premises is required by any
such law, ordinance, rule order, or regulations, and by reason of the express
exception herein above contained, Lessee is not under any obligation to make
such alteration, then Lessor shall have the option of making such alteration and
paying the cost thereof or of terminating this Lease and the term and estate
hereby granted by giving to Lessee not less than sixty (60) days prior written
notice of such termination; provided, however, that if within fifteen (15) days
after the giving by Lessor of its notice of termination as aforesaid, Lessee
shall give written notice to Lessor stating that Lessee elects to make such
alteration at the expense of Lessee, then such notice of termination shall be
ineffective provided that Lessee, at Lessee's expense, shall, concurrently with
the giving of such notice to Lessor, execute and deliver to Lessor Lessee's
written undertaking, with a surety and in form and substance satisfactory to
Lessor, obligating Lessee to promptly and duly make such alteration in a manner
satisfactory to Lessor and to save Lessor harmless from any and all costs,
expense, penalties and/or liabilities (including, but not limited to,
accountants' and attorneys' fees) in connection therewith or by reason thereof;
and Lessee covenants and agrees that, after so electing to make any such
alteration, Lessee will, at Lessee's expense, and incompliance with all
covenants, agreements, terms, provisions and condition of this Lease, make such
alteration, and Lessee, at Lessee's expense, will promptly and duly perform all
the condition of such undertaking and that all such conditions of such
undertaking shall be deemed to constitute provisions of this Lease to be kept or
performed on the part of Lessee with the same force and effect as if the same
had been set forth herein.
27. IMPROVEMENTS
Lessor shall perform all work and furnish all materials necessary to complete
the Premises in accordance with the Lessee Improvement attached hereto as
Exhibit "C". All improvement shall be done in an workmanlike manner using first
class materials and goods. Lessee reserves the right to request change orders
for any additional improvements or alterations. Such changes shall be subject to
the approval of Lessor which approval shall not be unreasonably withheld. Except
as otherwise noted in this Paragraph, the Premises shall be improved as
specified in Exhibit "C".
28. ESTOPPEL CERTIFICATES
From time to time during the term, or any renewal thereof, Lessee, on request of
Lessor given in writing not less than twenty (20) days prior to the desired date
of such certification, shall execute, acknowledge, and deliver to Lessor, a
statement in writing which certifies that: (a) this Lease is unmodified and is
in full force and effect (or if there shall have been modifications, that this
Lease is in full force and effect as so modified and stating such
7
modification); (b) the dates to which rental hereunder and all other charges
have been paid and whether any such payment represents payment in advance; and
(c) to the best knowledge of the individual executing the statement, after due
inquiry, no default of Lessor in the performance of any covenant, agreement, or
condition has occurred, and remains uncured or has been waived or, if default
has occurred, being the intention of Lessor that the statement or statements to
be delivered from time to time in accordance herewith may be relied upon by any
person to whom such statement may be delivered by Lessor.
29. GOVERNMENTAL ORDERS
(Intentionally Omitted)
30. LIABILITY
Anything in this Lease to the contrary notwithstanding, Lessee agrees that it
shall look solely to the estate and property of Lessor in the land and the
Building and any insurance proceeds thereof (subject to the prior rights of any
mortgagee or security deed holder) for the collection of any judgement or other
judicial process requiring a payment of money by Lessor in the event of any
default or breach by Lessor with respect to their terms, covenants and
conditions of this Lease to be observed and/or performed by Lessor and no other
assets of Lessor shall be subject to levy, execution or other procedures for the
satisfaction of Lessee's remedies. Lessee acknowledges herein that at the time
of execution of this Lease Agreement, Lessor's interest in the land and building
is not less than $100,000.00. In the event Lessor transfers or assigns this
Lease, except as collateral security for a loan, upon such transfer or
assignment, Lessor shall thereupon be released of all further liability and
obligations hereunder.
31. TIME IS OF THE ESSENCE
Time is of the essence with respect to the performance of each of the covenants
and agreements of this Lease.
32. LESSOR'S ESTATE
This contract shall create the relationship of landlord and tenant between
Lessor and Lessee; no estate shall pass out of Lessor; Lessee has only a
usufruct, not subject to levy and sale.
33. BROKER INDEMNIFICATION
Lessee represents and warrants to Lessor that (except with respect to Sonenshine
Enterprises, who has been identified for Lessor by Lessee in writing prior to
Lessor's execution of this Lease and with whom Lessor has entered into a
separate brokerage agreement) no broker, agent, commission salesman, or other
person has represented Lessee in the negotiations for and procurement of this
Lease and of the 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. Lessee agrees to indemnify Lessor against and hold
Lessor harmless from 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 judgements or in connection with the enforcement
of this indemnity) for any fees, commissions, or compensation of any kind which
arise out of or are in any way connected with any claimed agency relationship
with Lessee (except with respect to the broker(s) or other person(s) or firm(s)
excluded above from Lessee's representation and warranty of no broker).
34. RULES AND REGULATIONS
(See Exhibit "D"- Rules and Regulations)
8
35. SPECIAL STIPULATIONS
Insofar as the Special Stipulations attached hereto and incorporated herein
conflict with any of the foregoing provisions, said Special Stipulations shall
control.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands and seals,
the day and year first above written.
LESSOR: Connecticut General Life Insurance Company,
on behalf of its separate Account R
By: CIGNA Investments, Inc.
By: /s/ Stephen J. Olstein
----------------------------------
Its: Managing Director
---------------------------------
LESSEE: Computer Source, Inc., a South
Carolina Corporation
---------------------------------
By: (Illegible)
------------------------------
Its: President
-----------------------------
Attest:
--------------------------
Its:
----------------------------
(Corporate Seal)
Date:
----------------------------
9
SPECIAL STIPULATIONS
36. RENTAL
For the term of this Lease, Lessee shall pay Lessor a base rental as follows:
a) From August 15, 1994 through August 14, 1995 the base rental shall be
Ninety Eight Thousand Three Hundred Thirty Six and 50/100 Dollars ($98,336.50),
paid in twelve (12) equal monthly installments of Eight Thousand One Hundred
Ninety Four and 71/100 Dollars ($8,194.71).
b) From August 15, 1995 through Augst 14, 1996, the base rental shall be One
Hundred Three Thousand Two Hundred Fifty Three and 33/100 Dollars ($103,253.33),
paid in twelve (12) equal monthly installments of Eight Thousand Six Hundred
Four and 44/100 Dollars ($8,604.44 ).
c) From August 15, 1996 through August 14, 1997, the base rental shall be One
Hundred Eight Thousand Four Hundred Fifteen and 99/100 Dollars ($109,415.99),
paid in twelve (12) equal monthly installments of Nine Thousand Thirty Four and
67/100 Dollars ($9,034.67 ).
d) From August 15, 1997 through August 14, 1998, the base rental shall be One
Hundred Thirteen Thousand Eight Hundred Thirty Six and 79/100 ($113,836.79) ,
paid in twelve (12) equal monthly installments of Nine Thousand Four Hundred
Eighty Six and 40/100 ($9,486.40).
e) From August 15, 1998 through August 14, 1999, the base rental shall be One
Hundred Nineteen Thousand Five Hundred Twenty Eight and 63/100 ($119,529.63),
paid in twelve (12) equal monthly installments of Nine Thousand Nine Hundred
Sixty and 72/100 ($9,960.72).
37. CONSTRUCTION OF IMPROVEMENTS
Prior to the Commencement Date, Lessor and Lessee agree to cause to be
constructed certain improvements to the Premises in accordance with the Plans
and Specifications attached as Exhibit "C".
Lessor, at its sole cost and expense, shall pay for development of the Plans and
Specifications (the "Final Plans") (Exhibit "C") which agreement shall be
indicated by a signature of a representative of both Lessor and Lessee on said
Plans and Specifications. When signed, the Plans and Specifications become part
of the Lease as though set forth in full, and no changes in the Plans and
Specifications shall be made unless written change orders are signed by both
Lessor and Lessee.
Lessor shall (subject to the provisions of the following paragraph) construct
the Lessee improvements (the "Improvements") in accordance with the Plans and
Specifications as provided in the preceding paragraph. All costs associated with
construction shall be borne by Lessor. Lessor shall construct the Improvements
subject to the Plans and Specifications and shall deliver the Premises to Lessee
ready for occupancy within thirty (30) days after obtaining a building permit.
Said permit to be obtained by Lessor's contractor no,more than five (5) days
after receipt of both (a) a fully executed Lease Agreement and (b) Acceptance of
Plans and Specifications by Lessee as indicated by Lessee's signature.
Lessor shall perform all work and furnish all materials necessary to complete
the Premises in accordance with the Plans and Specifications. All improvements
shall be done in a workmanlike manner using first class materials and goods.
Lessee reserves the right to request change orders for any additional
improvements or alterations. Such changes shall be subject to the approval of
Lessor which approval shall not be unreasonably withheld. All costs associated
with changes requested by Lessee shall be borne by Lessee. Except as otherwise
noted in this paragraph, the Premises shall be as specified in Exhibit C. To the
best of its knowledge, Lessor represents that no material currently classified
as environmentally hazardous was or will be used in the construction of the
Building or the Premises.
38. ALTERATIONS OR REPAIRS
Notwithstanding anything contained in this Lease to the contrary, Lessee shall
not make any additions, alterations, replacements, improvements or other
modifications (collectively, "Alterations") to the leased premises without the
prior written consent of Lessor, which consent may be withheld in Lessor's sole
discretion, except for the installation of unattached, movable trade fixtures
which may be installed without drilling, cutting or otherwise defacing the
leased premises. Any approval by Lessor of or consent by Lessor to any plans,
10
specifications or other items to be submitted to and/or reviewed by Lessor
pursuant to this Lease shall be deemed to be strictly limited to an
acknowledgement of approval or consent by Lessor thereto and, whether or not the
work is performed by Lessor or by Lessee's contractor, such approval or consent
shall not constitute the assumption by Lessor of any responsibility for the
accuracy, sufficiency or feasibility of any plans, specifications or other such
items and shall not imply any acknowledgement, representation or warranty by
Lessor that the design is safe, feasible, structurally sound or will comply with
any legal or governmental requirements, and Lessee shall be responsible for all
of the same.
39. HVAC AGREEMENT
Lessor agrees to separately meter the space, service all HVAC and mechanical
systems by a reputable company. Lessor shall provide Lessee with documentation
of said service and further agrees to warrant all HVAC systems for six (6)
months to be free of mechanical defects provided Lessee changes the filters
quarterly. Lessor agrees to contribute one-half (1/2) of the expenses in excess
of five hundred dollars ($500.00) for replacement of HVAC parts and equipment
per occurrence that takes place during the initial term set forth herein
provided Lessor has consented to such repairs and any malfunction or damage
requiring repair is not a result of Lessee's negligence.
40. EARLY TERMINATION OPTIONS
a) Provided Lessee is not in default of this Lease Agreement, and
notwithstanding any other provisions of this Lease, Lessee shall have the right
to cancel this Lease at the expiration of the third (3rd) year of the ten-n
hereof, by giving Lessor written notice of its intent to so cancel the Lease,
and paying to Lessor with such notice the sum of Sixty Thousand Dollars
($60,000.00). Lessor must exercise its cancellation rights by giving such notice
at least One Hundred Fifty (150) days prior to the expiration of the third (3rd)
year of the term hereof.
b) Provided Lessee is not in default of this Lease Agreement, and
notwithstanding any other provisions of this Lease, Lessee shall have the right
to cancel this Lease at the expiration of the fourth (4th) year of the term
hereof, by giving Lessor written notice of its intent to so cancel the Lease,
and paying to Lessor with such notice the sum of Thirty Thousand Dollars
($30,000.00). Lessor must exercise its cancellation rights by giving such notice
at least One Hundred Fifty (150) days prior to the expiration of the fourth
(4th) year of the term hereof.
41. EXPANSION
Lessor hereby grants Lessee an option to lease Nine Thousand One Hundred Twenty
Six (9,126) square feet of space in Suite 200 of the Building identified and
described in Exhibit "E", attached hereto and incorporated herein by reference,
which space is now occupied by New View Sunrooms, Inc. ("NVSI"). Such option
shall be granted provided NVSI does not, on or before December 1, 1996, execute
an amendment to extend its Lease Agreement with Lessor. If such amendment has
not been executed, Lessee shall have until December 31, 1996 to exercise this
option to lease the NVSI space. Upon exercise of this option, Lessor shall
deliver such expansion space to Lessee, as is, ready for Lessor's occupancy
between June 1, 1997 and July 31, 1997. The term for such expansion space
pursuant to this option shall be coterminous with the term of this Lease, and
the base rent paid with respect to such expansion space shall be the base rental
per square foot then being paid under this original Lease. All other terms and
conditions shall be the same as this Lease (however, no Tenant Improvement
Allowance shall be provided by Lessor).
In all instances where Lessor is asked to consider Lessee's expansion needs,
Lessor shall make its reasonable effort to lease Lessee the space it needs.
11
42. EXTENSIONS
Provided Lessee is not in default of this Lease Agreement, Lessee shall have the
option to extend the term for an additional five (5) years under the same terms
and conditions contained herein except the space shall be leased "as is" with no
improvements being made by Lessor and the base rental to be paid shall be as
follows:
Year 6: $7.34 per square foot
Year 7: $7.71 per square foot
Year 8: $8.09 per square foot
Year 9: $8.50 per square foot
Year 10: $8.92 per square foot
To exercise this option, Lessee must give Lessor written notice at lease 180
days prior to the expiration of the initial term set forth herein.
43. SUBORDINATION
The following is added after the word "party" in line 7 of paragraph 25:
"Provided however, as a condition to this subordination provision, Lessor shall
obtain from any such mortgagee an agreement in writing, which shall be delivered
to Lessee, providing in substance that, so long as Lessee shall faithfully
discharge the obligations on its part to be kept and performed under the terms
of this Lease, its tenancy shall not be disturbed, nor shall this Lease be
affected by any default under such mortgage, and in the event of foreclosure or
any enforcement of any such mortgage, the Purchaser at such foreclosure sale
shall be bound to Lessee for the term of this Lease, the rights of Lessee
hereunder shall expressly survive, provided however, that Lessee fully performs
all of its obligations hereunder."
12
FIRST AMENDMENT TO LEASE
This First Amendment to Lease, made and entered into as of this 29th day of
June, 1999 by and between Crocker Realty, L.P. (hereinafter referred to as
"Lessor"), Successor in interest to Connecticut General Life Insurance Company,
a Delaware limited liability company, and EMTEC, Inc., a New Jersey corporation
(hereinafter referred to as "Lessee"), Successor in interest to Computer Source,
Inc., a South Carolina corporation.
WITNESSETH:
Whereas, Lessor's predecessor in interest and Lessee entered into a Lease
Agreement dated as of July 7, 1994, for the Premises located in Suite 500 at
2990 Gateway Drive, Norcross, Georgia 30071, containing 17,102 square feet (such
Lease Agreement as so amended by the First Amendment is hereinafter referred to
as the "Lease");
Whereas, Lessor and Lessee desire to further amend the Lease in certain
respects:
Now, Therefore, in consideration of the Premises, the sum of Ten and no/100
Dollars ($10.00) in hand paid by Lessee to Lessor, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Paragraph 2 of the Lease shall be further amended to extend the term an
additional sixty (60) months beginning August 15, 1999 and ending August
14, 2004.
2. Special Stipulations #35 of the Lease shall be further amended to
increase the Annual Base Rental as follows:
-------------------------------------------------------------------------------------------------
Period Per Square Foot Annual Monthly
-------------------------------------------------------------------------------------------------
08/15/99 - 08/14/00 $7.34 $125,528.68 $10,460.72
-------------------------------------------------------------------------------------------------
08/15/00 - 08/14/01 $7.71 $131,805.11 $10,983.76
-------------------------------------------------------------------------------------------------
08/15/01 - 08/14/02 $8.09 $138,395.37 $11,532.95
-------------------------------------------------------------------------------------------------
08/15/02 - 08/14/03 $8.50 $145,315.14 $12,109.59
-------------------------------------------------------------------------------------------------
08/15/03 - 08/14/04 $8.92 $152,580.90 $12,715.07
-------------------------------------------------------------------------------------------------
3. Paragraph 22 of the Lease shall be further amended to change Lessor's
address for notice to:
Crocker Realty Trust, L.P.
433 Plaza Real, Suite 335
Boca Raton, FL 33432
Attn: Richard Ackerman
Telephone: (561) 395-9666
Facsimile: (561) 394-7712
With a copy to:
Crocker Realty, L.P.
2675 Paces Ferry Road, Suite 320
Atlanta, GA 30339
Attn: Christopher L. Becker
Senior Vice President
Telephone: (770) 435-9900
Facsimile: (770) 435-7080
13
And change Lessee's address for notice to
EMTEC, Inc.
817 East Gate Drive
Mt. Laurel, NJ 08054
Attn: John P. Howlett
Telephone: (609) 235-2121
Facsimile: (609) 235-1666
and change Lessor's representative (agent) address to:
Lavista Associates, Inc.
3201 Peachtree Corners Circle
Norcross, GA 30092
Attn: Ivan Smith
Telephone: (770) 448-6400
4. Base Year:
Lessee's Base Year for calculating Taxes and Insurance Increases on the
Expansion Premises shall be 1994.
5. Additional Rent:
Lessee shall pay estimated additional rent to Lessor in advance on or
before the first day of each month in the amount of Nine hundred twenty-one and
26/100 dollars ($921.26) per month. Such Charges are subject to all terms and
conditions set forth in Paragraph 3(d) of the Lease.
6. Improvements:
Lessor agrees to repaint and recarpet the Premises at its sole cost and
expense. Paint and carpet colors shall be selected by Lessee. Carpet shall be
PETO 26 SQ/72 with rubber backing (S.P.E.C. 6'). High traffic areas (conference
rooms, bullpens, and corridors) will receive carpet tiles.
7. Broker:
Lavista Associates, Inc. is acting as agent for Lessor in this
transaction and shall be paid a commission by Lessor. Lavista Associates, Inc.
is not acting as agent in this transaction for Lessee. Sonenshine Enterprises is
acting as agent for Lessee in this transaction and shall be paid a commission by
Lessor. Sonenshine Enterprises is not acting as agent in this transaction for
Lessor.
8. The provisions of Paragraph 38 of the Lease shall apply during the
renewal period except that the Lessor shall not warrant the HVAC systems
and equipment for any period of time. Lessor agrees to contribute
one-half (1/2) of the expenses in excess of five hundred dollars
($500.00) for replacement of HVAC parts and equipment per occurrence
provided any malfunction or damage requiring repair is not a result of
Lessee's negligence.
14
9. Miscellaneous:
Except as expressly amended hereby, tile Lease shall remain in full
force and effect.
15
In Witness Whereof, the parties hereto have set their hand and seal as of the
day and year first above written.
Lessor:
Signed, Sealed and delivered Crocker Realty, L.P., a Delaware limited
in the presence of: partnership
/s/ Kim A. Klamt By: CRT-GP, LLC, a Delaware limited
- --------------------------------- liability company, its sole general partner
Printed Name: Kim A. Klamt
-------------------
/s/ Jewane McBride By: Crocker Operating Partnership, L.P.,
- --------------------------------- a Delaware limited partnership, its sole
Printed Name: Jewane McBride member
-------------------
By: Crocker Realty Trust, Inc.,
a Maryland corporation, its sole
general partner
By: /s/ Christopher L. Becker
------------------------------------
Name: Christopher L. Becker
Title: Vice President
[Corporate Seal]
Lessee:
Signed, Sealed and delivered EMTEC, Inc., a New Jersey Corporation.
in the presence of:
By: /s/ John P. Howlett
---------------------------------
/s/ Sam Bhatt Name: John P. Howlett
- --------------------------------- ---------------------------------
Printed Name: Sam Bhatt Its: CEO
------------------ ----------------------------------
/s/ Robert T. Waite
- ---------------------------------
Printed Name: Robert T. Waite [Corporate Seal]
-------------------
16