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Exhibit 10.18
This Lease is made this __ day of December, 1994, between TRI-CENTER SOUTH
LIMITED PARTNERSHIP ("Landlord"), a Delaware Limited Partnership, whose address
is c/o Craig Davis Properties, Inc., Suite 435 UCB Plaza, 3605 Glenwood Avenue,
Raleigh, North Carolina 27612, and MICRON ELECTRONICS OF NORTH CAROLINA, INC.
("Tenant"), an Idaho corporation, whose address is Mailstop 702, 8455 Westpark
Street, Boise, Idaho 83704-8366.
I. GENERAL.
1.1 Consideration. Landlord enters into this Lease in consideration
of the payment by Tenant of the rents herein reserved and the keeping,
observance and performance by Tenant of the covenants and agreements herein
contained, and the Guaranty as provided in Section 14.19.
1.2 Exhibits and Addenda to Lease. The Exhibits and Addenda listed
below shall be attached to this Lease and be deemed incorporated in this Lease
by this reference. In the event of any inconsistency between such Exhibits and
Addenda and the terms and provisions of this Lease, the terms and provisions of
the Exhibits and Addenda shall control. The Exhibits and Addenda to this Lease
are:
Exhibit A - Land Description
Exhibit B - Space Plan for Demised Premises
Exhibit C - Sign Criteria
Exhibit D - Environmental Rider
Exhibit E - Site Plan for Building, Land and Parking
Exhibit F - Site Plan for Tri-Center South
Addendum 1 - Tenant Upfit and Termination Rights
Addendum 2 - Tenant's Right of First Offer for Additional Space
Addendum 3 - Rent Schedule
Addendum 4 - Guaranty
II. DEMISE OF PREMISES.
2.1 Demise. Subject to the provisions, covenants and agreements
herein contained, Landlord hereby leases and demises to Tenant, and Tenant
hereby leases from Landlord, the Premises as hereinafter defined, together with
the exclusive right to use the Parking Area, as hereinafter defined, for the
Lease Term as hereinafter defined, subject to existing covenants, restrictions,
easements and encumbrances affecting the same.
2.2 Premises. The "Premises" shall mean the space to be occupied by
Tenant as depicted on Exhibit B attached hereto. The Premises are within the
Building which is located on the Land, as the terms Building and Land are
hereinafter defined.
2.3 Square Footage and Address. The Premises contain 28,474 +/-
rentable square feet. The address of the Premises is, or is expected to be: 2500
South Tri-Center Boulevard, Durham, North Carolina 27713.
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2.4 Land. "Land" shall mean the parcel of real property more
particularly described in Exhibit A attached hereto, containing approximately
494,707.16 square feet of land.
2.5 Building. "Building" shall mean the Building known as Tri-Center
South 1, Phase 2, constructed or to be constructed on the Land, containing
approximately 170,324 rentable square feet.
2.6 Improvements. "Improvements" shall mean the Building, the
Parking Area (as shown on Exhibit E), and all other improvements on the Land,
including landscaping thereon.
2.7 Property. "Property" shall mean the Land, the Building and the
Improvements and any fixtures and personal property used in operation and
maintenance of the Land, Building and Improvements, other than fixtures and
personal property of Tenant and other users of space in the Building.
2.8 Common Facilities. "Common Facilities" shall mean all of the
Property except the Premises and other space in the Building leased or held for
lease to other Tenants. Common Facilities shall include the Parking Area and any
walks, driveways, lobby areas, halls, stairs and restrooms designated for common
use by Tenant and other users of space in the Building.
2.9 Parking Area. "Parking Area" shall mean that portion of the Land
specifically designated on Exhibit E for Tenant's use in the parking of motor
vehicles. The Parking Area so designated shall be for Tenant's use only, and
Tenant shall not park, nor shall it permit its employees to park, in other
parking areas on the Land. Landlord will not grant other tenants the right to
use such Parking Area.
2.10 Park. The Property is located in and is part of Landlord's
development commonly known as Tri-Center South (the "Park"). A site plan of the
Park is attached hereto as Exhibit F.
2.11 Use of Common Facilities. Tenant is hereby granted the
non-exclusive right to use, in common with other users of space in the Building,
so much of the Common Facilities as are needed for the use of the Premises.
2.12 Covenant of Quiet Enjoyment. Provided Tenant is not in default
and keeps, observes and performs the covenants and agreements of Tenant
contained in this Lease, Landlord covenants and agrees that Tenant shall have
quiet and peaceable possession of the Premises.
2.13 Condition of Premises. Tenant covenants and agrees that, upon
taking possession of the Premises, it will have accepted the Premises "as-is"
except for any punch list delivered to Landlord at such time (which Landlord
agrees to address promptly). Tenant acknowledges that neither Landlord nor
Landlord's agent has made any representation or warranty as to suitability of
the Premises for the conduct of Tenant's business.
III. TERM OF LEASE.
3.1 Lease Term. "Lease Term" shall mean the period commencing on the
1st day of March, 1995, and expiring on the last day of February, 2005; provided
that Tenant may occupy the Premises during the month of February, 1995 with all
provisions of this Lease to become effective as of date of Tenant's occupancy
except for payment of Rent and Rent shall commence on the earlier of the date on
or after March 1, 1995 that the Landlord has the Premises ready for occupancy by
Tenant, or the date that Landlord could have had them ready had Landlord not
been delayed in getting them ready by acts attributable to Tenant.
Tenant shall have an option to renew this Lease, upon the same terms at
the Rents set forth on Addendum #3 for an additional period of five years. The
option is to be exercised in writing by Tenant no later than 60 days prior to
the expiration of the Original Lease Term.
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IV. RENT AND OTHER AMOUNTS PAYABLE.
4.1 Basic Rent. Tenant covenants and agrees to pay to Landlord,
without prior demand and without offset, deduction or abatement, monthly rent in
the amounts set forth in Addendum #3 to this Lease. ("Basic Rent").
Basic Rent shall be payable monthly in advance, in the amounts set forth
in Addendum #3 commencing on the first day of the first month of the Lease Term
and continuing on the same day of each month thereafter for the balance of the
Lease Term, unless the commencement date of the Lease Term is other than the
first day of a calendar month, in which event rent shall be payable on the
commencement date for the remaining number of days in that month prorated for
such partial month, and thereafter as provided above.
4.2 [Intentionally Omitted]
4.3 Place of Payments. Basic Rent and all other sums payable by
Tenant to Landlord under this Lease shall be paid to Landlord at the place for
payments specified for notices in Section 14.8, or such other place as Landlord
may, from time to time, designate in writing. In addition to such remedies as
may be provided under the Default provisions of this Lease, Landlord shall be
entitled to collect a late charge of four percent (4%) of the amount of each
monthly payment not received within ten (10) days of the date when due, and a
charge of the lower of the maximum lawful bad check fee or five (5%) of the
amount of any check given by Tenant and not paid when first presented by
Landlord.
4.4 Lease a Net Lease and Rent Absolute. It is the intent of the
parties that the Basic Rent provided in this Lease shall be a net payment to
Landlord; that the Lease shall continue for the full Lease Term, including any
damage or destruction affecting the Premises, and any action by governmental
authority relating to or affecting the Premises, except as otherwise
specifically provided in this Lease; that the Basic Rent shall be absolutely
payable without offset, reduction or abatement for any cause except as otherwise
specifically provided in this Lease; that Landlord shall not bear any costs or
expenses relating to the Premises or provide any services or do any act in
connection with the Premises except as otherwise specifically provided in this
Lease; and that Tenant shall pay, in addition to Basic Rent, Additional Rent to
cover costs and expenses relating to the Premises, the Common Facilities, the
Property, and the Park.
4.5 Additional Rent. Except as otherwise provided herein and
excluding Landlord's administrative costs and expenses, Tenant covenants and
agrees to pay, as Additional Rent, its Proportionate Share of the reasonable
costs and expenses relating to the Premises which shall include: (a) Taxes and
Assessments (as defined in Article V below); (b) insurance costs (as provided in
Article VI below); (c) utility charges (as provided in Section 7.1 below); (d)
operating expenses (as provided in Section 7.2 below); (e) maintenance and
repair expenses (as provided in Section 7.3 below); (f) the HVAC Maintenance
Expense (as defined in Section 4.7 below); and (g) other costs and expenses
relating to the Premises, the Common Facilities, the Property, and the Park
during or attributable to the Lease Term, all as hereinafter provided in this
Lease.
Additional Rent during the first twelve months of the term is estimated to
be approximately $.85 per rentable square foot, which $.85 includes the
foregoing items and Park expenses under Section 4.8.
4.6 Tenant's Proportionate Share. "Tenant's Proportionate Share"
shall mean the percentage derived by dividing the square footage of the
Premises, as set forth in Section 2.3, by the square footage within the Building
as set forth in Section 2.5. Tenant's Proportionate Share on the date of this
Lease is 16.71%. Such percentage shall be appropriately adjusted in the event of
construction of additional building(s) on the Land if such building(s) or
tenants thereof share the Common Facilities.
4.7 Monthly Deposits for Costs and Expenses Payable as Additional
Rent. Tenant covenants and agrees to pay to Landlord, monthly in advance,
without notice, on each day that payment of Monthly Rent is due, amounts as
hereinafter specified (the "Monthly Deposits").
The Monthly Deposits shall each be equal to the aggregate of 1/12 of the
amount, as reasonably estimated by Landlord, of the annual expense of
maintenance of the HVAC and
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Tenant's Proportionate Share of 1/12 of the amounts, as reasonably estimated by
Landlord, of the annual expenses set forth in Section 4.5 (the "Expenses"). If
the Monthly Deposits are insufficient to pay the Expenses, Tenant agrees to pay
to Landlord, within ten (10) days after demand by Landlord, amounts necessary to
provide Landlord with funds to pay the same. To the extent the Monthly Deposits
exceed the Expenses, the excess amount shall, except as may be otherwise
provided by law, either be paid to Tenant or credited against future Monthly
Deposits or against Basic Rent, or other amounts payable by Tenant under this
Lease. The Expenses payable by Tenant for the years in which the Lease Term
commences and expires shall be subject to the provisions hereinafter contained
in this Lease for proration of such amounts in such years. Prior to the dates on
which payment becomes delinquent for Expenses, Landlord shall make payment of
such amounts to the extent of funds from Monthly Deposits available therefor
and, upon request by Tenant, shall furnish Tenant with a copy of any receipt for
such payments. Except for Landlord's obligation to make payments out of funds
available from Monthly Deposits, the making of Monthly Deposits by Tenant shall
not limit or alter Tenant's obligation to pay any part of the Expenses, as
elsewhere provided in this Lease.
4.8 Park Expenses. In addition to all other amounts payable by
Tenant pursuant to the terms of this Lease, Tenant shall pay, as Additional Rent
payable pursuant to the provisions hereinabove for Monthly Deposits, Tenant's
Proportionate Share of the Park Expenses which are deemed allocated to the
Property. "Park Expenses" shall mean all items listed in Section 4.5 hereof as
Additional Rent which relate to the Park and which are not separately
attributable to the Property or any other portion of the Park. 4.19 percent
(4.19%) of Park Expenses is allocated to the Property, which will be
appropriately adjusted downward if additional buildings are constructed in the
Park.
4.9 Proration at Commencement and Expiration of Term. Expenses shall
be prorated between Landlord and Tenant for the year in which the Lease Term
commences and for the year in which the Lease Term expires as of, respectively,
the date of commencement of the Lease Term and the date of expiration of the
Lease Term, except as hereinafter provided. Tenant shall be liable without
proration for the full amount of any Taxes and Assessments relating to
improvements, fixtures, equipment or personal property installed by or on behalf
of Tenant which are levied, assessed, or attributable to the Lease Term.
Proration of Expenses shall be made on the basis of the actual Expenses billed
during the calendar years of the Lease Term, after adjusting such Expenses as
though the Building were 95% occupied. The Tenant's Proportionate Share of
Expenses for the years in which the Lease Term commences and expires shall be
paid and deposited with the Landlord through Monthly Deposits as hereinabove
provided, but, in the event actual Expenses for either year are greater or less
than as estimated for purposes of Monthly Deposits, appropriate adjustment and
payment shall be made between the parties, at the time the actual amounts are
known, as may be necessary to accomplish payment or proration, as herein
provided.
4.10 Upfit Payment. Tenant shall pay Landlord its agreed share of
the cost of upfitting the Premises in the amounts and at the times set forth in
Addendum #1.
4.11 General Provisions as to Monthly Deposits. Landlord shall be
free to commingle the Monthly Deposits with Landlord's own funds and Landlord
shall not be obligated to pay interest to Tenant on account of the Monthly
Deposits. In the event of a transfer by Landlord of Landlord's interest in the
Premises, Landlord may deliver the Monthly Deposits to the transferee of
Landlord's interest and Landlord shall thereupon be discharged from any further
liability to Tenant with respect to such Monthly Deposits. In the event of a
transfer by Tenant of Tenant's interest in the Premises (Tenant's right to do
being limited by Section 8.17), Landlord shall be entitled to deliver the
Monthly Deposits to Tenant's successor in interest and Landlord shall thereafter
have no liability with respect to the Monthly Deposits.
V. TAXES AND ASSESSMENTS.
5.1 Covenant to Pay Taxes and Assessments. Tenant covenants and
agrees to pay, as Additional Rent (as provided in Section 4.5), Tenant's pro
rata share (as described in Section 4.9) of Taxes and Assessments, which are
billed during any calendar year falling partly or wholly within the Lease Term,
payable pursuant to the provisions hereinabove for Monthly Deposits. "Taxes and
Assessments" shall mean all taxes, assessments or other impositions,
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general or special, ordinary or extraordinary, of every kind or nature, which
may be levied, assessed or imposed upon or with respect to the Property or any
part thereof.
5.2 Special Assessments. In the event any Taxes or Assessments are
payable in installments over a period of years, Tenant shall be responsible only
for installments billed during the calendar years within the Lease Term, with
proration, as above provided, of any installment payable prior to or after
expiration of the Lease Term.
5.3 New or Additional Taxes. Tenant's obligation to pay tenant's pro
rata Share of Taxes and Assessments shall include any Taxes and Assessments of a
nature not presently in effect but which may hereafter be levied, assessed or
imposed upon Landlord or upon the Property if such tax shall be based upon or
arise out of the ownership, use or operation of, or the rents received from, the
Property, other than income taxes of Landlord. For the purposes of computing
Tenant's liability for such new type of tax or assessment, the Property shall be
deemed the only property of Landlord.
5.4 Landlord's Sole Right to Contest Taxes. Landlord shall have the
sole right to contest any Taxes or Assessments. Landlord shall pay to or credit
Tenant with Tenant's pro rata share of any abatement, reduction or recovery of
any Taxes and Assessments attributable to the Lease Term, less Tenant's
Proportionate Share of all costs and expenses incurred by Landlord, including
attorneys' fees, in connection with such abatement, reduction or recovery.
VI. INSURANCE.
6.1 Property Insurance. Landlord covenants and agrees to obtain and
keep in full force and effect during the Lease Term, Property Insurance as
hereinafter defined. "Property Insurance" shall mean fire and extended coverage
insurance with respect to the Property, in an amount equal to the full
replacement cost thereof, with coinsurance clauses of no less than 90%, and with
coverage, at Landlord's option, by endorsement or otherwise, for all risks,
vandalism and malicious mischief, sprinkler leakage, boilers, and rental loss
and with a deductible in an amount for each occurrence as Landlord, in its sole
discretion, may determine from time to time. Property Insurance obtained by
Landlord need not name Tenant as an insured party but may, at Landlord's option,
name any mortgagee or holder of a deed of trust as an insured party as its
interest may appear. Tenant covenants and agrees to pay Tenant's Proportionate
Share of the cost of Property Insurance obtained by Landlord as Additional Rent,
payable pursuant to the provisions hereinabove for Monthly Deposits. Tenant
shall be responsible for obtaining, at Tenant's cost and expense, insurance
coverage for property of Tenant and for business interruption of Tenant, and
Tenant shall have no claim against Landlord for damage to its property or
interruption of its business whether or not it insures the same, unless due to
fault on the part of the Landlord. Tenant shall not be responsible for increases
in the cost of Property Insurance attributable to actions by persons other than
Tenant, its officers, directors, employees, agents, guests or invitees.
6.2 Liability Insurance. Tenant covenants and agrees at its expense
to obtain and keep in full force and effect during the Lease Term Liability
Insurance as hereinafter defined. "Liability Insurance" shall mean comprehensive
general liability insurance covering public liability with respect to the
ownership, use and operation of the Premises, with combined single limit
coverage of not less than $10,000,000, with endorsements for assumed contractual
liability with respect to the liabilities assumed by Tenant under Section 8.24
of this Lease, and with no deductible, retention or self-insurance provision
contained therein, unless otherwise approved in writing by Landlord. Landlord
covenants and agrees to obtain and keep in full force and effect during the
Lease Term public liability insurance with respect to the ownership, use and
operation of the Property, and the Common Facilities, but excluding the Premises
and space leased to other tenants, with continued single limit coverage of not
less than $10,000,000, on which Tenant shall be named as an additional insured,
and with no deductible, retention or self-insurance provisions contained therein
unless approved in writing by Tenant. Such liability policies shall contain a
waiver of rights of subrogation as between Landlord and Tenant. Tenant also
covenants and agrees to pay Tenant's Proportionate Share of the premiums and
costs of such liability insurance as Additional Rent, payable pursuant to the
provisions hereinabove for Monthly Deposits.
6.3 General Provisions Respecting Insurance. All general liability
insurance obtained by Tenant shall be with insurers licensed to do business in
North Carolina having Best
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rating of B+(X) or higher; shall name Landlord and the holder of any first
mortgage or deed of trust encumbering the Property as insured parties, as their
interests may appear; shall contain a waiver of rights of subrogation as among
Tenant, Landlord and the holder of any such first mortgage or deed of trust and
any other named party; and shall provide, by certificate of insurance or
otherwise, that the insurance coverage shall not be cancelled or altered except
upon thirty (30) days prior written notice to Landlord and the holder of any
such first mortgage or deed of trust. Certificates of insurance obtained by
Tenant shall be delivered to Landlord, who may deposit the same with the holder
of any such first mortgage or deed of trust.
6.4 Cooperation in the Event of Loss. Landlord and Tenant shall
cooperate with each other in the collection of any insurance proceeds which
may be payable in the event of any loss, including the execution and delivery of
any proof of loss or other actions required to effect recovery.
VII. UTILITY, OPERATING, MAINTENANCE AND REPAIR EXPENSES.
7.1 Utility Charges. Tenant covenants and agrees to pay all charges
for water, sewage disposal, gas, electricity, light, heat, power, telephone or
other utility services used, rendered or supplied to or for the Premises and to
contract for the same in Tenant's own name. Tenant also covenants and agrees to
pay to Landlord Tenant's Proportionate Share of any such charges relating to
Common Facilities, such charges to be payable pursuant to the provisions
hereinabove for Monthly Deposits.
7.2 Tenant's Operating Expenses. Tenant covenants and agrees to pay
all costs and expenses of Tenant's operations on or relating to the Premises,
including costs and expenses for utilities, trash and garbage disposal,
janitorial and cleaning services, gardening and landscaping services, security
services, removal of snow and ice from Parking Areas, sidewalks and driveways
serving the Premises, painting, replacement of damaged or broken glass and other
breakable materials in or serving the Premises and replacement of lights and
light fixtures in or serving the Premises, and to contract for the same in
Tenant's own name. Tenant also covenants and agrees to pay to Landlord the HVAC
Expense and to pay to Landlord Tenant's Proportionate Share of any such costs
and expenses incurred by Landlord (excluding Landlord's administrative costs and
expenses) relating to Common Facilities or which are not separately allocated to
premises in the Building leased or held for lease to tenants, such costs and
expenses to be payable pursuant to the provisions hereinabove for Monthly
Deposits.
7.3 Maintenance and Repair Expenses. Tenant covenants and agrees to
maintain, repair, replace and keep the Premises and all improvements, fixtures
and personal property thereon in good, safe and sanitary condition, order and
repair and in accordance with all applicable laws, ordinances, orders, rules and
regulations [including, without limitation, the Americans with Disabilities Act
("ADA")] of governmental authorities having jurisdiction, now existing or
hereafter enacted; to pay all costs and expenses in connection therewith; and to
contract for the same in Tenant's own name; and to pay to Landlord, pursuant to
the provisions hereinabove for Monthly Deposits, Tenant's Proportionate Share of
any such costs and expenses incurred by Landlord relating to Common Facilities
or which are not separately allocated to premises in the Building leased or held
for lease to tenants. Such costs and expenses as to Common Facilities may
include the costs and expenses of maintenance and upkeep of grass, trees, shrubs
and landscaping, including replanting where necessary; keeping parking areas,
landscaped areas, sidewalks and driveways safe and secure (with guards or
watchmen where indicated) and free from litter, dirt, debris, snow, and
obstructions; and ordinary maintenance and repair of the Property and
Improvements, but excluding Landlord's administrative costs and expenses. All
maintenance and repairs by Tenant shall be, done promptly, in a good and
workmanlike fashion, and without diminishing the original quality of the
Premises or the Property. Landlord shall be responsible for and shall bear the
costs and expenses of replacement of, or maintenance and repairs to, roofs,
exterior walls, and structural elements of the Building and Improvements, and
the extraordinary repair and maintenance of the Parking Area, unless the need
for such replacement or repair is caused by the act or neglect of Tenant.
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VIII. OTHER COVENANTS OF TENANT.
8.1 Limitation on Use by Tenant. Tenant covenants and agrees to use
the Premises only for the following use or uses: manufacturing, testing,
assembling, packaging, storing, shipping and marketing of electronic equipment
and products and for no other purposes, except with the prior written consent of
Landlord, which consent shall not be unreasonably withheld.
8.2 Compliance with Laws. Tenant covenants and agrees that nothing
shall be done or kept on the Premises in violation of any law, ordinance, order,
rule or regulation of any governmental authority having jurisdiction, and that
the Premises shall be used, kept and maintained in compliance with any such law,
ordinance, order, rule or regulation (now existing or hereafter enacted) and
with the certificate of occupancy issued for the Building and the Premises.
8.3 Compliance with Insurance Requirements. Tenant covenants and
agrees that nothing shall be done or kept on the Premises which might make
unavailable or increase the cost of insurance maintained with respect to the
Premises or the Property, which might increase the insured risks or which might
result in cancellation of any such insurance.
8.4 No Waste or Impairment of Value. Tenant covenants and agrees
that nothing shall be done or kept on the Premises or the Property which might
impair the value of the Premises or the Property, or which would constitute
waste.
8.5 No Hazardous Use. Tenant covenants and agrees that nothing shall
be done or kept on the Premises or the Property and that no improvements,
changes, alterations, additions, maintenance or repairs shall be made to the
Premises which might be unsafe or hazardous to any person or property. Tenant
shall at all times comply with its representations, warranties and covenants as
set forth in Exhibit D with respect to the proper use and safeguarding (in
accordance with all applicable governmental regulations) of any hazardous
materials used on the Premises.
8.6 No Structural or Overloading. Tenant covenants and agrees that
nothing shall be done or kept on the Premises or the Building and that no
improvements, changes, alterations, additions, maintenance or repairs shall be
made to the Premises which might impair the structural soundness of the
Building, which might result in an overload of the weight capacity of floors or
of electricity lines serving, the Building or which might interfere with
electric or electronic equipment in the Building or on any adjacent or nearby
property. In the event of violations hereof, Tenant covenants and agrees to
remedy immediately the violation at Tenant's expense and in compliance with all
requirements of governmental authorities and insurance underwriters.
8.7 No Nuisance, Noxious or Offensive Activity. Tenant covenants and
agrees that no noxious or offensive activity shall be carried on upon the
Premises or the Property; nor shall anything be done or kept on the Premises or
the Property which may be or become a public or private nuisance or which may
cause embarrassment, disturbance, or annoyance to others in the Building or on
adjacent or nearby property.
8.8 No Annoying Lights, Sounds or Odors. Tenant covenants and agrees
that no light shall be emitted from the Premises which is unreasonably bright or
causes unreasonable glare; no sound shall be emitted from the Premises which is
unreasonably loud or annoying; and no odor shall be emitted from the Premises
which is or might be extraordinarily noxious or offensive to others in the
Building or on adjacent or nearby property.
8.9 No Unsightliness. Tenant covenants and agrees that no
unsightliness shall be permitted on the Premises or the Property. Without
limiting the generality of the foregoing, all unsightly conditions, equipment,
objects and conditions shall be kept enclosed within the Premises; hallways
adjoining the Premises may not be used for discarding or storing any materials;
no refuse, scrap, debris, garbage, trash, bulk materials or waste shall be kept,
stored or allowed to accumulate on the Premises or the Property except as may be
enclosed within the Premises; all pipes, wires, poles, antenna and other
facilities for utilities or the transmission or reception of audio or visual
signals or electricity shall be kept and maintained underground or
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enclosed within the Premises or appropriately screened from view; and no
temporary structure shall be placed or permitted on the Premises or the Property
without the prior written consent of Landlord.
8.10 No Animals. Tenant covenants and agrees that no animals other
than seeing eye dogs shall be permitted or kept on the Premises or the Property.
8.11 Restriction on Signs and Exterior Lighting. Tenant may install
only such exterior signs as comply with Landlord's "Signage Criteria," a copy of
which is attached as Exhibit C. Tenant covenants and agrees that no other signs
or advertising devices of any nature shall be erected or maintained by Tenant on
the Premises or the Property and no exterior lighting shall be permitted on the
Premises or the Property except as approved in writing by Landlord.
8.12 [Intentionally Omitted]
8.13 Restriction on Changes and Alterations. Tenant may not make any
structural or interior alterations which change the Premises from the condition
that existed at the time Tenant takes possession thereof except as provided
herein. If Tenant desires to have alterations made, Tenant shall provide
Landlord's managing agent with two (2) complete sets of construction drawings,
and such agent shall then determine the cost of the work to be done pursuant to
such drawings (such cost to include a construction supervision fee of 4% of such
cost to be paid to Landlord's managing agent), and submit the cost to Tenant.
Tenant may then either agree to pay Landlord the cost, in which event Landlord
shall cause the work to be done, or Tenant may withdraw its request for
alterations. If Tenant terminates this Lease at the end of two full years after
the commencement date, Landlord may elect to require Tenant to leave alterations
performed for it or may elect to require Tenant to remove the same and restore
the Premises to warehouse condition. If the Lease expires or is terminated after
two full years of the Lease Term have elapsed, Tenant may leave such
alterations, or at its option may remove the same and if Tenant does so remove
Tenant shall repair any damage occasioned by such removal.
8.14 No Mechanics Liens. Tenant covenants and agrees not to permit
or suffer, and to cause to be removed and released, any mechanics, materialmen
or other lien on account of supplies, machinery, tools, equipment, labor or
material furnished or used in connection with the construction, alteration,
improvement, addition to or repair of the Premises by, through or under Tenant.
Tenant shall have the right to contest, in good faith and with reasonable
diligence, the validity of any such lien or claimed lien, provided that Tenant
shall give to Landlord such security as may be reasonably requested by Landlord
to insure the payment of any amounts claimed, including interests and costs, and
to prevent any sale, foreclosure or forfeiture of any interest in the Property
on account of any such lien and provided that, on final determination of the
lien or claim for lien, Tenant shall immediately pay any judgment rendered, with
interests and costs, and will cause the lien to be released and any judgment
satisfied.
8.15 No Other Encumbrances. Tenant covenants and agrees not to
obtain any financing secured by Tenant's interest in the Premises and not to
encumber the Premises, or Landlord or Tenant's interest therein, without the
prior written consent of Landlord, and to keep the Premises free from all liens
and encumbrances except those created by Landlord; provided, however, that
Tenant shall be free to obtain financing secured by, and may create liens and
encumbrances relating to Tenant's equipment and personal property located on the
Premises.
8.16 Subordination to Landlord Mortgages. Tenant covenants and
agrees that, at Landlord's option, this Lease and Tenant's interest in the
Premises shall be junior and subordinate to any mortgage or deed of trust now or
hereafter encumbering the Property if in any mortgage or deed of trust given
hereunder, the mortgagee or beneficiary under such mortgage or deed of trust
agrees in writing, or adequate provision is made in the mortgage or deed of
trust, that, in the event of foreclosure of any such mortgage or deed of trust,
Tenant shall not be disturbed in its possession of the Premises conditioned only
on Tenant attorning to the party acquiring title to the Property as the result
of such foreclosure. Tenant covenants and agrees, within fifteen (15) days of
request of Landlord, to execute such documents as may be necessary or
appropriate to confirm and establish this Lease as subordinate to any such
mortgage or deed of trust in accordance with the foregoing provisions.
Alternatively, Tenant covenants and agrees that at Landlord's request, Tenant
shall execute documents as may be necessary to establish this Lease and Tenant's
interest in the Premises as superior to any such mortgage or deed of trust.
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If Tenant fails to execute any documents required to be executed by Tenant under
the provisions hereof, Tenant hereby makes, constitutes and irrevocably appoints
Landlord as Tenant's attorney in fact and in Tenant's name, place and stead to
execute any such documents.
8.17 No Assignment or Subletting. Tenant covenants and agrees not to
make or permit a transfer by Tenant, as hereinafter defined, without Landlord's
prior written consent, not to be unreasonably withheld. A transfer by Tenant
shall include an assignment of this Lease, a sublease of all or any part of the
Premises or any assignment, sublease, transfer, mortgage, pledge or encumbrance
of all or any part of Tenant's interest under this Lease or in the Premises, by
operation of law or otherwise, directly or indirectly, or resulting from, a
change in the ownership of Tenant, except as results from a merger between
Tenant and a third party, or the use or occupancy of all or any part of the
Premises by anyone other than Tenant. Any such transfer by Tenant without
Landlord's written consent shall be void and shall constitute a default under
this Lease. In the event Landlord consents to any transfer by Tenant, Tenant
shall not be relieved of its obligations under this Lease and Tenant shall
remain liable, jointly and severally and as a principal, and not as a guarantor
or surety, under this Lease, to the same extent as though no transfer by Tenant
had been made, unless specifically provided to the contrary in Landlord's prior
written consent. The acceptance of rent by Landlord from any person other than
Tenant shall not be deemed to be a waiver by Landlord of the provisions of this
Section or of any other provision of this Lease and any consent by Landlord to
transfer by Tenant shall not be deemed a consent to any subsequent transfer by
Tenant.
Notwithstanding the foregoing, Landlord shall, at Landlord's option,
have the right, in lieu of consenting to a transfer by Tenant, to terminate this
Lease as to the portion of the Premises which is subject to the proposed
transfer by Tenant and to enter into a new lease with the proposed transferee
and receive directly from the proposed transferee the consideration agreed to be
given by such transferee to Tenant for the transfer by Tenant.
In the event Landlord consents to a transfer by Tenant, any option
to renew this lease, to expand the Premises, or right to extend the Lease Term
shall automatically terminate unless otherwise agreed in writing by Landlord.
8.18 Annual Financial Statements. Tenant covenants and agrees to
furnish to Landlord annually, within ninety (90) days after the end of each
fiscal year of Tenant, copies of financial statements of Tenant, audited if
requested by Landlord, by a certified public accountant, and which financial
statements Landlord shall hold in trust and confidence and shall not disclose
them to third parties except as provided herein. Tenant agrees that Landlord may
deliver any such financial statements to any existing or prospective mortgagee
or purchaser of the Property. The financial statements shall include a balance
sheet as of the end of, and a statement of profit or loss for, the preceding
fiscal year of Tenant.
8.19 Payment of Income and Other Taxes. Tenant covenants and agrees
to pay promptly when due all property taxes on personal property of Tenant on
the Premises and all federal, state and local income taxes, sales taxes, use
taxes, Social Security taxes, unemployment taxes and taxes withheld from wages
or salaries paid to Tenant's employees, the nonpayment of which might give rise
to a lien on the Premises or Tenant's interest therein, and to furnish, if
requested by Landlord, evidence of such payments.
8.20 Estoppel Certificates. Tenant covenants and agrees to execute,
acknowledge and deliver to Landlord, within ten (10) days of Landlord's written
request, a written statement certifying that this Lease is unmodified (or, if
modified, stating the modifications) and in full force and effect; stating the
dates to which Basic Rent has been paid; stating the amount of Monthly Deposits
held by Landlord for the then tax and insurance year; and stating whether or not
Landlord is in default under this Lease (and, if so, specifying the nature of
the default). Tenant agrees that such statement may be delivered to and relied
upon by any existing or prospective mortgagee or purchaser of the Property.
Tenant agrees that a failure to deliver such a statement within ten (10) days
after written request from Landlord shall be conclusive upon Tenant that this
Lease is in full force and effect without modification except as may be
represented by Landlord; that there are no uncured defaults by Landlord under
this Lease; and that any representation by Landlord with respect to Basic Rent,
and Monthly Deposits are true.
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8.21 Landlord Right to Inspect and Show Premises and to Install for
Sale Signs. Tenant covenants and agrees that Landlord and authorized
representatives of Landlord shall have the right to enter the Premises at any
reasonable time during ordinary business hours without interruption of Tenant's
business for the purposes of inspecting, repairing or maintaining the same or
performing any obligations of Tenant which Tenant has failed to perform
hereunder, or for the purposes of showing the Premises to any existing or
prospective mortgagee, purchaser or lessee of the Property or the Premises.
Landlord agrees that any of its authorized representatives entering the Premises
shall be subject to a written agreement which enforces confidentiality and
prevents disclosure of any information pertaining to Tenant's business. Tenant
covenants and agrees that Landlord may at any time and from time to time place
on the Property or the Premises a sign advertising the Property or the Premises
for sale and during the year prior the expiration or termination of this Lease,
for lease.
8.22 Landlord Title to Fixtures, Improvements and Equipment. Tenant
covenants and agrees that all fixtures and improvements on the Premises and all
equipment and personal property relating to the use and operation of the
Premises (excluding that installed as a part of Tenant's upfit and additional or
replacements thereto, and as distinguished from operations incident to the
business of Tenant), including all plumbing, heating, lighting, electrical and
air conditioning fixtures and equipment, whether or not attached to or affixed
to the Premises, and whether now or hereafter located upon the Premises, shall
be and remain the property of the Landlord if the Lease is terminated at the end
of two full years after the commencement date. However, Landlord reserves the
right to require the Tenant at its expense to restore the Premises to the
"warehouse condition", being the condition of the Premises before being readied
for Tenant's occupancy, if Tenant terminates at the end of two full years after
the commencement date. If termination or expiration occurs after two full years
of the Lease Term have elapsed, then the provisions of Section 8.13 will
control.
8.23 Removal of Tenant's Equipment. Tenant covenants and agrees to
remove, not later than the expiration date of the Lease Term, all of Tenant's
Equipment, as hereinafter defined. "Tenant's Equipment" shall mean all
equipment, apparatus, machinery, signs, furniture, furnishings and personal
property used in the operation of the business of Tenant (as distinguished from
the use and operation of the Premises). If such removal shall injure or damage
the Premises, Tenant covenants and agrees, at its sole cost and expense, at or
prior to the expiration of the Lease Term, to repair such injury and damage in
good and workmanlike fashion and to place the Premises in the same condition as
the Premises would have been in if such Tenant's Equipment had not been
installed. If Tenant fails to remove any Tenant's Equipment by the expiration of
the Lease Term, Landlord may, at its option, keep and retain any such Tenant's
Equipment or dispose of the same and retain any proceeds thereof and Landlord
shall be entitled to recover from Tenant any costs or expenses of Landlord in
removing the same and in restoring the Premises in excess of the actual
proceeds, if any, received by Landlord from disposition thereof.
8.24 Tenant Indemnification of Landlord. Except where caused by
Landlord's actions, Tenant covenants and agrees to protect, indemnify and save
Landlord harmless from and against all liability, obligations, claims, damages,
penalties, causes of action, costs and expenses, including attorneys' fees at
all tribunal levels, imposed upon, incurred by or asserted against Landlord by
reason of (a) any accident, injury to or death of any person or loss of or
damage to any property occurring on or about the Premises; (b) any act or
omission of Tenant or Tenant's officers, employees, agents, guests or invitees
or of anyone claiming by, through or under Tenant; (c) any use which may be made
of, or condition existing upon, the Demised Premises; (d) any improvements,
fixtures or equipment upon the Premises; (e) any failure on the part of Tenant
to perform or comply with any of the provisions, covenants or agreements of
Tenant contained in this Lease; (f) any violation of any law, ordinance, order,
rule or regulation of governmental authorities having jurisdiction by Tenant or
Tenant's officers, employees, agents, guests or invitees or by anyone claiming
by, through or under Tenant; and (g) any repairs, maintenance or changes to the
Premises by, through or under Tenant. Tenant further covenants and agrees that,
in case any such action, suit or proceeding, is brought against Landlord by
reason of any of the foregoing, Tenant will, at Tenant's sole cost and expense,
defend Landlord in any such action, suit or proceeding, with counsel acceptable
to Landlord.
8.25 Waiver by Tenant. Tenant waives and releases any claims Tenant
may have against Landlord or Landlord's officers, agents or employees for loss,
damage or injury to person or property sustained by Tenant or Tenant's officers,
agents, employees, guests, invitees
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or anyone claiming by, through or under Tenant resulting from any cause
whatsoever other than Landlord's gross negligence or willful misconduct.
8.26 Release upon Transfer by Landlord. The provisions of this Lease
shall bind and inure to the benefit of Landlord and Tenant, and their respective
successors, legal representatives and assigns. It is understood and agreed,
however, that the term "Landlord", as used in this Lease, means only the fee
owner or the Landlord for the time being of the Leased Premises, so that, except
as otherwise provided herein, in the event of any sale or sales of Landlord's
interest in the Leased Premises (including, without limitation, any judicial
sale, any sale in foreclosure, and any sale pursuant to a power of sale
contained in a mortgage or deed of trust affecting all or any part of the Leased
Premises), the Landlord named herein shall be, and hereby is, entirely freed and
relieved of all covenants and obligations of Landlord hereunder accruing
thereafter. It shall be deemed without further agreement that the purchaser or
transferee in any such sale or transfer, as the case may be, has assumed and
agreed to carry out any and all covenants and obligations of Landlord hereunder,
during the period such is owner of the Leased Premises. Tenant shall be bound to
any succeeding party Landlord for all the terms, covenants and conditions
hereof, and shall execute any attornment agreement not in conflict herewith at
the request of any succeeding party Landlord.
8.27 Compliance with ADA. Tenant covenants and agrees that nothing
shall be done or kept by Tenant on the Premises or in the Common Facilities in
violation of ADA, and that Tenant shall maintain, repair, replace, keep and use
the Premises and all improvements, fixtures and personal property therein and
thereon, and conduct its business within the Premises, in accordance with the
requirements of ADA. If any improvements, alterations or repairs to the Premises
are required by governmental authority under ADA or its implementing regulations
or guidelines, Tenant shall be solely responsible for all non-structural items
and any structural items due to Tenant's specific use of the Premises. Tenant
covenants and agrees to pay all costs and expenses in connection with the
performance of its obligations under this Section 8.27. Nothing contained in
this Section 8.27 shall be construed to limit the generality of the provisions
of Section 8.2 respecting Tenant's obligation to comply with applicable laws and
of the provisions of Section 8.13 respecting Tenant's obligation to comply with
ADA and other applicable laws in connection with any Change.
IX. DAMAGE OR DESTRUCTION.
9.1 Tenant's Notice of Damage. If any portion of the Premises shall
be damaged or destroyed by fire or other casualty, Tenant shall give prompt
written notice thereof to Landlord ("Tenant's Notice of Damage").
9.2 Options to Terminate if Damage Substantial. Upon receipt of
Tenant's Notice of Damage, Landlord shall promptly proceed to determine the
nature and extent of the damage or destruction and to estimate the time
necessary to repair or restore the Premises. As soon as reasonably possible,
Landlord shall give written notice to Tenant stating Landlord's estimate of the
time necessary to repair or restore the Premises ("Landlord's Notice of Repair
Time"). If Landlord reasonably estimates that repair or restoration of the
Premises cannot be completed within 120 days from the time of Tenant's Notice of
Damage, Landlord and Tenant shall each have the option to terminate this Lease.
In the event, however, that the damage or destruction was caused by the act or
omission of Tenant or Tenant's officers, employees, agents, guests or invitees,
Landlord shall have the option to terminate this Lease if Landlord reasonably
estimates that the repair or restoration cannot reasonably be completed within
120 days from the time of Tenant's Notice of Damage, but Tenant shall not have
the option to terminate this Lease. Any option granted hereunder shall be
exercised by written notice to the other party given within 10 days after
Landlord's Notice of Repair Time. In the event either Landlord or Tenant
exercises its option to terminate this Lease, the Lease Term shall expire 10
days after the notice by either Landlord or Tenant exercising such party's
option to terminate this Lease. In the event of termination of this Lease under
the provisions hereof, Landlord shall refund to Tenant such amounts of Basic
Rent and Additional Rent theretofore paid by Tenant as may be applicable to the
period subsequent to the time of Tenant's Notice of Damage less the reasonable
value (based on Basic Rent applicable at the time of damage) of any use or
occupation of the Premises by Tenant subsequent to the time of Tenant's Notice
of Damage.
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9.3 Obligations to Repair and Restore. In the event there are
sufficient funds, and such funds are available to Landlord to repair and restore
and repair of the Premises, and restoration can be completed within the period
specified in Section 9.2, in Landlord's reasonable estimation, this Lease shall
continue in full force and effect and Landlord shall proceed forthwith to cause
the Premises to be repaired and restored with reasonable diligence and there
shall be abatement of Basic Rent and Additional Rent proportionate to the extent
of the space and period of time that Tenant is unable to use and enjoy the
Premises. Landlord may, at its option, request Tenant to arrange for and handle
the repair and restoration of the Premises, in which case Landlord shall furnish
Tenant with sufficient funds for such repair and restoration, at the time or
times such funds are needed, utilizing any proceeds from insurance and any
additional funds necessary to cover the costs of repair or restoration.
9.4 Application of Insurance Proceeds. The proceeds of any Property
Insurance maintained on the Premises, other than Property Insurance maintained
by Tenant on fixtures and personal property of Tenant, shall be paid to and
become the property of Landlord, subject to any obligation of Landlord to cause
the Premises to be repaired and restored, which obligation is contingent on
Property Insurance proceeds adequate to complete the repair or restoration being
available to Landlord.
X. CONDEMNATION.
10.1 Taking -- Substantial Taking -- Insubstantial Taking. A
"Taking" shall mean the taking of all or any portion of the Premises as a result
of the exercise of the power of eminent domain or condemnation for public or
quasi-public use or the sale of all or part of the Premises under the threat of
condemnation. A "Substantial Taking" shall mean a Taking of so much of the
Premises that the Premises cannot thereafter, be reasonably used by Tenant for
carrying on, at substantially the same level or scope, the business theretofore
conducted by Tenant on the Premises. An "Insubstantial Taking" shall mean a
Taking such that the Premises can thereafter continue to be used by Tenant for
carrying on, at substantially the same level or scope, the business theretofore
conducted by Tenant on the Premises.
10.2 Termination on Substantial Taking. If there is a Substantial
Taking with respect to the Premises, the Lease Term shall expire on the date of
vesting of title pursuant to such Taking. In the event of termination of this
Lease under the provisions hereof, Landlord shall refund to Tenant such amounts
of Basic Rent and Additional Rent theretofore paid by Tenant as may be
applicable to the period subsequent to the time of termination of this Lease.
10.3 Restoration on Insubstantial Taking. In the event of an
Insubstantial Taking, this Lease shall continue in full force and effect,
Landlord shall proceed forthwith to cause the Premises to be restored as near as
may be to the original condition thereof and there shall be abatement of Basic
Rent and Additional Rent proportionate to the extent of the space so taken.
Landlord may, at its option, require Tenant to arrange for and handle the
restoration of the Premises, in which case Landlord shall furnish Tenant with
sufficient funds for such restoration, at the time or times such funds are
needed, utilizing the proceeds of any awards or consideration received as a
result of the Taking and any additional funds necessary to cover the costs of
restoration.
10.4 Right to Award. The total award, compensation, damages or
consideration received or receivable as a result of a Taking ("Award") shall be
paid to and be the property of Landlord, whether the Award shall be made as
compensation for diminution of the value of the leasehold or the fee of the
Premises or otherwise and Tenant hereby assigns to Landlord, all of Tenant's
right, title and interest in and to any such Award. Tenant covenants and agrees
to execute, immediately upon demand by Landlord, such documents as may be
necessary to facilitate collection by Landlord of any such Award. Tenant,
however, shall be entitled to apply for compensation, if available, for its
relocation and for any of its personal property taken.
XI. DEFAULTS BY TENANT.
11.1 Defaults Generally. Each of the following shall constitute a
"Default by Tenant" under this Lease:
11.2 Failure to Pay Rent or Other Amounts. A Default by Tenant shall
exist if Tenant fails to pay when due, Basic Rent, Additional Rent, Monthly
Deposits, Upfit
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Amortization, or any other amounts payable by Tenant under the terms of this
Lease, and such failure shall continue for ten (10) days after notice from
Landlord of non-receipt, providing Landlord shall not be required to give such
notice more than twice in any consecutive twelve month period, and failure to
receive rent within ten days of its due date after two notices during any
consecutive twelve month period shall constitute a "Default by Tenant".
11.3 Violation of Lease Terms. A Default by Tenant shall exist if
Tenant breaches or fails to comply with any agreement, term, covenant or
condition in this Lease applicable to Tenant, and such breach or failure to
comply continues for a period of 20 days after notice thereof by Landlord to
Tenant, or, if such breach or failure to comply cannot be reasonably cured
within such thirty (30) day period, if Tenant shall not in good faith commence
to cure such breach or failure to comply within such thirty (30) day period or
shall not diligently proceed therewith to completion within no more than sixty
(60) days after Landlord's notice.
11.4 Transfer of Interest Without Consent. Except as provided in
Section 8.17, a Default by Tenant shall exist if Tenant's interest under this
Lease or in the Premises shall be transferred to or pass to or devolve upon any
other party (including, without limitation, a change in ownership of Tenant)
without Landlord's prior written consent.
11.5 Execution and Attachment against Tenant. A Default by Tenant
shall exist if Tenant's interest under this Lease or in the Premises shall be
taken upon execution or by other process of law directed against Tenant, or
shall be subject to any attachment at the instance of any creditor or claimant
against Tenant and said attachment shall not be discharged, disposed of, or
bonded against to Landlord's satisfaction within fifteen (15) days after the
levy thereof.
11.6 Bankruptcy or Related Proceedings. A Default by Tenant shall
exist if Tenant shall file a petition in bankruptcy or insolvency or for
reorganization or arrangement under the bankruptcy laws of the United States or
under any similar act of any state, or shall voluntarily take advantage of such
law or act by answer or otherwise, or shall be dissolved or shall make an
assignment for the benefit of creditors or if involuntary proceedings under any
such bankruptcy or insolvency law or for the dissolution of Tenant shall be
instituted against Tenant or a receiver or trustee shall be appointed for the
Premises or for all or substantially all of the property of Tenant, and such
proceedings shall not be dismissed or such receivership or trusteeship vacated
within sixty (60) days after such institution or appointment.
XII. LANDLORD'S REMEDIES.
12.1 Remedies Generally. Upon the occurrence of any Default by
Tenant, Landlord shall have the right, at Landlord's election, then or at any
time thereafter, to exercise any one or more of the following remedies:
12.2 Cure by Landlord. In the event of a Default by Tenant, Landlord
may, at Landlord's option, but without obligation to do so, and without
releasing Tenant from any obligations under this Lease, make any payment or take
any action as Landlord may deem necessary or desirable to cure any such Default
by Tenant in such manner and to such extent as Landlord may deem necessary or
desirable. Landlord may do so after written notice to Tenant and Tenant's
failure within a reasonable time to cure such Default by Tenant. Tenant
covenants and agrees to pay to Landlord, within ten (10) days after written
notice, all advances, costs and expenses of Landlord in connection with the
making of any such payment or the taking of any such action, including
reasonable attorney's fees, together with interest as hereinafter provided, from
the date of payment of any such advances, costs and expenses by Landlord. Action
taken by Landlord may include commencing, appearing in, defending or otherwise
participating in any action or proceeding and paying, purchasing, contesting, or
compromising any claim, right, encumbrance, charge or lien with respect to the
Premises which Landlord, in its discretion, may deem necessary or desirable to
protect its interest in the Premises and under this Lease.
12.3 Termination of Lease and Damages. In the event of a Default by
Tenant, Landlord may terminate this Lease, effective at such time as may be
specified by written notice to Tenant, and demand (and, if such demand is
refused, recover) possession of the Premises from Tenant. Tenant shall remain
liable to Landlord for damages in an amount equal to the Basic Rent, Additional
Rent and other sums which would have been owing by Tenant hereunder for the
balance of the term, had this Lease not been terminated, less the net proceeds,
if any, of any reletting of the Premises by Landlord subsequent to such
termination, after deducting all Landlord's expenses in connection with such
recovery of possession or reletting. Landlord shall
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be entitled to collect and receive such damages from Tenant on the days on which
the Basic Rent, Additional Rent and other amounts would have been payable if
this Lease had not been terminated. Alternatively, at the option of Landlord,
Landlord shall be entitled to recover forthwith from Tenant, as damages for loss
of the bargain and not as a penalty, an aggregate sum which, at the time of such
termination of this Lease, represents the excess, if any, of (a) the aggregate
of the Basic Rent, Additional Rent and all other sums payable by Tenant
hereunder that would have accrued for the balance of the Lease Term, over (b)
the aggregate rental value of the Premises for the balance of the Lease Term,
both discounted to present worth at the greater of Prime Rate (hereafter
defined) or 8% per annum.
12.4 Repossession and Reletting. In the event of Default by Tenant,
Landlord may reenter and take possession of the Premises or any part thereof,
without demand or notice, and repossess the same and expel Tenant and any party
claiming by, under or through Tenant, and remove the effects of both using such
force for such purposes as may be necessary, without being liable for
prosecution on account thereof or being deemed guilty of any manner of trespass,
and without prejudice to any remedies for arrears of rent or right to bring any
proceeding for breach of covenants or conditions. No such reentry or taking
possession of the Premises by Landlord shall be construed as an election by
Landlord to terminate this Lease unless a written notice of such intention is
given to Tenant. No notice from Landlord hereunder or under a forcible entry and
detainer statute or similar law shall constitute an election by Landlord to
terminate this Lease unless such notice specifically so states. Landlord
reserves the right, following any reentry or reletting, to exercise its right to
terminate this Lease by giving Tenant such written notice, in which event the
Lease will terminate as specified in said notice. After recovering possession of
the Premises, Landlord may relet the Premises, or any part thereof, for the
account of Tenant, for such term or terms and on such conditions and upon such
other terms as Landlord, in its reasonable discretion, may determine. Landlord
may make such repairs, alterations or improvements as Landlord may consider
appropriate to accomplish such reletting, and Tenant shall reimburse Landlord
upon demand for all costs and expenses, including attorneys' fees, which
Landlord may incur in connection with such reletting. Landlord may collect and
receive the rents for such reletting but Landlord shall in no way be responsible
or liable for any failure to relet the Premises, or any part thereof, or for any
failure to collect any rent due upon such reletting. Notwithstanding Landlord's
recovery of possession of the Premises, Tenant shall continue to pay on the
dates herein specified, the Basic Rent, Additional Rent and other amounts which
would be payable hereunder if such repossession had not occurred. Upon the
expiration or earlier termination of this Lease, Landlord shall refund to Tenant
any amount, without interest, by which the amounts paid by Tenant, when added to
the net amount, if any, recovered by Landlord through any reletting of the
Premises, exceeds the amounts payable by Tenant under this Lease. If, in
connection with any reletting, the new lease term extends beyond the existing
term, or the premises covered thereby include other premises not part of the
Premises, a fair apportionment of the rent received from such reletting and the
expenses incurred in connection therewith will be made in determining the net
amount recovered from such reletting.
12.5 Suits by Landlord. Actions or suits for the recovery of amounts
and damages payable under this Lease may be brought by Landlord, from time to
time, at Landlord's election, and Landlord shall not be required to await the
date upon which the Lease Term would have expired to bring any such action or
suit.
12.6 Recovery of Landlord Enforcement Costs. All costs and expenses
incurred by Landlord in connection with collecting any amounts and damages owing
by Tenant pursuant to the provisions of this Lease or to enforce any provisions
of this Lease, including reasonable attorneys' fees whether or not any action is
commenced by Landlord, shall be paid by Tenant to Landlord upon demand.
12.7 Interest on Past Due Payments and Advances. In addition to
charges set forth in Section 4.3, Tenant covenants and agrees to pay Landlord on
demand interest at a per annum rate of four percent (4%) in excess of Prime Rate
(hereafter defined) on the amount of any payments due from Tenant to Landlord
not paid when due, and on the amount of any payment made by Landlord on Tenant's
behalf, including reasonable attorneys' fees paid by Landlord in connection with
any action taken to cure a Tenant Default, from the date of such payment. Prime
Rate shall mean the interest rate announced by NationsBank, N.A. from time to
time as such, and if the use of Prime Rate is discontinued then Landlord in its
discretion may select a comparable rate for computing interest charges under
this Section.
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12.8 Landlord's Bankruptcy Remedies. Nothing contained in this Lease
shall limit or prejudice the right of Landlord to prove and obtain as liquidated
damages in any bankruptcy, insolvency, receivership, reorganization or
dissolution proceeding, an amount equal to the maximum allowable by any statute
or rule of law governing such proceeding in effect at the time when such damages
are to be proved, whether or not such amount be greater, equal or less than the
amounts recoverable, either as damages or rent, under this Lease.
12.9 Remedies Cumulative. Exercise of any of the remedies of
Landlord under this Lease shall not prevent the concurrent or subsequent
exercise of any other remedy provided for in this Lease or otherwise available
to Landlord at law or in equity.
XIII. SURRENDER AND HOLDING OVER.
13.1 Surrender Upon Lease Expiration. Upon the expiration or earlier
termination of this Lease, or on the date specified in any demand for possession
by Landlord after any Default by Tenant, Tenant, except as provided herein,
covenants and agrees to surrender possession of the Premises to Landlord in the
same condition as when Tenant first occupied the Premises, ordinary wear and
tear and damage by fully insured casualty excepted.
13.2 Holding Over. If Tenant shall hold over after the expiration of
the Lease Term, without written agreement providing otherwise, Tenant shall be a
tenant from month to month, (terminable on seven (7) days notice) at a monthly
rental, payable in advance, equal to 150% of the Monthly Rental, and Tenant
shall be bound by all of the other terms, covenants and agreements of this
Lease. Nothing contained herein shall be construed to give Tenant the right to
hold over at any time, and Landlord may exercise any and all remedies at law or
in equity to recover possession of the Premises, as well as any damages incurred
by Landlord due to Tenant's failure to vacate the Premises and deliver
possession to Landlord as herein provided.
XIV. COVENANTS, WARRANTIES AND REPRESENTATIONS OF LANDLORD.
14.1 Good Title. Landlord represents that it owns the leased
property in fee simple and that the property is free from encumbrances except as
referred to elsewhere in this Lease. The Landlord further represents that it has
the right to make this Lease and covenants that it will execute or procure any
further necessary assurances of title that may be reasonably required for the
protection of Tenant, including but not limited to a title report respecting the
Premises setting any existing liens, encumbrances and other restrictions
pertaining to the Property. Landlord covenants that it will notify Tenant of any
mortgages or other encumbrances affecting the Premises.
14.2 Assurance of Continuation of Lease. Landlord covenants that in
the event of a sale or foreclosure of the Property of which the Premises is a
part, this Lease shall continue in full force and effect, according to the terms
hereof. Landlord covenants further that in the event of any assignment of
Landlord's interest in the Premises or in this Lease, such assignment shall be
upon and subject to all the terms, covenants and conditions contained in this
Lease.
14.3 Environmental Audit. Landlord represents that it has performed
a Phase 1 environmental audit of the Property and agrees to provide said audit
to Tenant for its inspection. Landlord warrants that the Property is in
compliance with environmental laws and that regulated substances have not been
stored, treated, handled, disposed of, generated or otherwise located on the
Property.
XV. MISCELLANEOUS.
15.1 No Implied Waiver. No failure by Landlord to insist upon the
strict performance of any term, covenant or agreement contained in this Lease,
no failure by Landlord to exercise any right or remedy under this Lease, and no
acceptance of full or partial payment during the continuance of any Default by
Tenant, shall constitute a waiver of any such term, covenant or agreement or a
waiver of any such right or remedy or a waiver of any such Default by Tenant.
15
16
15.2 Survival of Provisions. Notwithstanding any termination of this
Lease, the same shall continue in force and effect as to any provisions hereof
which require observance or performance by Landlord or Tenant subsequent to
termination.
15.3 Right of First Offer to Lease Additional Space. Tenant shall
have the right of first offer to lease additional space as set forth on Addendum
#2.
15.4 Covenants Independent. This Lease shall be construed as if the
covenants herein between Landlord and Tenant are independent, and not dependent.
15.5 Covenants as Conditions. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
15.6 Tenant's Remedies. Tenant may bring a separate action against
Landlord for any claim Tenant may have against Landlord under this Lease,
provided Tenant shall first give written notice thereof to Landlord and shall
afford Landlord a reasonable opportunity to cure any such default. In addition
Tenant shall send notice of such default by certified or registered mail,
postage prepaid, to the holder of any mortgage or deed of trust covering the
Premises, the Property or any portion thereof of whose address Tenant has been
notified in writing, and shall afford such holder a reasonable opportunity to
cure any default on Landlord's behalf. In no event will Landlord be responsible
to Tenant for any damages for loss of profits or interruption of business as a
result of any default by Landlord hereunder, but Landlord shall always be liable
for any damages caused by Landlord to Tenant's physical property.
15.7 Binding Effect. This Lease shall extend to and be binding upon
the heirs, executors, legal representative, successors and assigns of the
respective parties hereto. The terms, covenants, agreements and conditions in
this Lease shall be construed as covenants running with the Land.
15.8 Notices and Demands. Any notices which Landlord or Tenant are
required or desire to give the other hereunder shall be deemed to have been
properly given for all purposes if (i) delivered against a written receipt of
delivery, (ii) mailed by registered or certified mail of the United States
Postal Service, return receipt requested, postage prepaid, or (iii) delivered to
a nationally recognized overnight courier service for next business day
delivery, to its addressee at such party's address as set forth herein or (iv)
delivered via telecopier or facsimile transmission to the facsimile number
listed herein, provided, however, that if such communication is given via
telecopier or facsimile transmission, an original counterpart of such
communication shall concurrently be sent in either the manner specified in
clause (i) or (iii) above. Each such notice, demand or request shall be deemed
to have been given upon the earlier of (i) actual receipt or refusal by the
addressee or (ii) deposit thereof at any main or branch United States post
office if sent in accordance with section (ii) above, and deposit thereof with
the courier if sent pursuant to section (iii) above. Landlord may, by written
notice setting forth the name and address thereof and delivered to the Tenant as
provided in this Section 14.8, require that duplicate copies of any such notice
or communication from Tenant to Landlord be sent to any holder of a mortgage or
deed of trust on Landlord's interest in the Leased Premises. Copies of notices
shall also be sent to: Wolf, Block, Schorr & Solis-Cohen, Twelfth Floor, Packard
Building, 15th and Chestnut Streets, Philadelphia, Pennsylvania 19102-2678, Fax
#215-977-2346, Attn: James R. Williams, Esq.; to Manning, Fulton & Skinner,
P.A., 500 UCB Plaza, 3605 Glenwood Avenue, Raleigh, North Carolina 27612, Fax
#919-781-0811, Attn: Charles L. Fulton, Esq.; and to Craig Davis Properties,
Suite 435 UCB Plaza, 3605 Glenwood Avenue, Raleigh, North Carolina 27612, Fax
#919-781-1262, Attn: Mr. Craig M. Davis,
15.9 Time of the Essence. Time is of the essence under this Lease,
and all provisions herein relating thereto shall be strictly construed.
15.10 Captions for Convenience. The headings and captions hereof are
for convenience only and shall not be considered in interpreting the provisions
hereof.
15.11 Severability. If any provision of this Lease shall be held
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and there shall be deemed substituted for the affected provisions a
valid and enforceable provision as similar as possible to the affected
provision.
16
17
15.12 Governing Law. This Lease shall be interpreted and enforced
according to the laws of the State of North Carolina.
15.13 Entire Agreement. This Lease and any exhibits and addenda
referred to herein, constitute the final and complete expression of the parties'
agreements with respect to the Premises and Tenant's occupancy thereof. Each
party agrees that it has not relied upon or regarded as binding any prior
agreements, negotiations, representations, or understandings, whether oral or
written, except as expressly set forth herein. Both parties have participated in
the preparation of this Lease and in resolving any ambiguities there shall be no
presumption that they are construed against the drafting party.
15.14 No Oral Amendment or Modifications. No amendment or
modification of this Lease, and no approvals, consents or waivers by Landlord
under this Lease, shall be valid or binding unless in writing and executed by
the party to be bound.
15.15 Real Estate Brokers. Tenant covenants to pay, hold harmless
and indemnify the Landlord from and against any and all cost, expense or
liability for any compensation, commissions, charges or claims by any broker or
other agent with respect to this Lease or the negotiation thereof claiming to
represent Tenant.
15.16 Relationship of Landlord and Tenant. Nothing contained herein
shall be deemed or construed as creating the relationship of principal and agent
or of partnership, or of joint venture by the parties hereof, it being
understood and greed that no provision contained in this Lease nor any acts of
the parties hereto shall be deemed to create any relationship other than the
relationship of Landlord and Tenant.
15.17 Authority of Tenant. Each individual executing this Lease on
behalf of Tenant represents and warrants that such individual is duly authorized
to deliver this Lease on behalf of Tenant and that this Lease is binding upon
Tenant in accordance with its terms, and agrees to document such authorization
to Landlord's satisfaction if requested to do so.
15.18 Exculpation. Any provision of this Lease to the contrary
notwithstanding Landlord shall have no personal liability for payment of any
damages or performance of any term, provision or condition under this Lease or
under any other instrument in connection with this Lease, and Tenant shall look
for such payment or performance to the Property, the rents, issues and profits
thereof, in satisfaction of any claim, order or judgment Tenant may at any time
obtain against Landlord in connection with this Lease.
15.19 Guaranty. The entering into of this Lease by Landlord is
contingent upon and subject to Micron Custom Manufacturing Services, Inc.
executing and delivering to Landlord the Guaranty attached hereto as Addendum
#4.
IN WITNESS WHEREOF the parties hereto have caused this Lease to be
executed the day and year first above written.
LANDLORD:
TRI-CENTER SOUTH LIMITED PARTNERSHIP
(SEAL)
ATTEST: By: Durham-South RPF II Realty Corp.
General Partner
/s/ [ILLEGIBLE]
- --------------------------------
Secretary By: /s/ [ILLEGIBLE]
--------------------------------
Its President
(Corporate Seal)
17
18
TENANT:
MICRON ELECTRONICS OF
NORTH CAROLINA, INC.
ATTEST:
By: /s/ Joseph M. Daltoso
--------------------------------
/s/ [ILLEGIBLE] Typed Name: Joseph M. Daltoso
- --------------------------------
Secretary Title: Chairman
(Corporate Seal) By: /s/ Gregory D. Stevenson
--------------------------------
Typed Name: Gregory D. Stevenson
Title: President
18
19
EXHIBIT A
TO
LEASE OF SPACE
Beginning at an iron pipe located in the southwestern right-of-way line of Old
Cornwallis Road, a 60' right-of-way, said pipe marking the southeast corner of
property belonging to Mary E. Fletcher, now or formerly (see deed recorded in
Book 1282, page 931, Durham County Registry), said pipe also being located South
77(degrees) 16' 54" East 247.19 feet from the southeast corner of property
conveyed by Louis Edward Tapp and wife, Irma B. Tapp to GE Investment Realty
Partners II, Limited Partnership ("GEIRP II") by deed recorded in Book 1722,
page 271, Durham County Registry; runs thence along the southwestern
right-of-way line of Old Cornwallis Road South 36(degrees) 49' 15" East 17.52
feet to an iron pipe, and South 36(degrees) 49' 15" East 146.61 feet to an iron
pipe marking the northernmost corner of property belonging to Tri-Center South
Limited Partnership; runs thence along a new line of the property belonging to
Tri-Center South Limited Partnership the following courses and distances: South
53(degrees) 10' 35" West 116.51 feet to an iron pipe, South 11(degrees) 11' 31"
West 34.99 feet to an iron pipe, North 78(degrees) 52' 26" West 5.99 feet to an
iron pipe, South 11(degrees) 10' 45" West 121.01 feet to an iron pipe, South
79(degrees) 06' 06" East 57.85 feet to an iron pipe, South 10(degrees) 53' 54"
West 978.08 feet to an iron pipe, South 77(degrees) 12' 06" West 10.41 feet to
an iron pipe, South 10(degrees) 04' 49" West 140.00 feet to an iron pipe, and
South 63(degrees) 32' 27" East 74.84 feet to an iron pipe located in the
northern line of property conveyed to Tri-Center South III, Limited Partnership
by deed recorded in Book 1931, page 762, Durham County Registry; runs thence
along the northern line of the Tri-Center South III, Limited Partnership
property the following courses and distances: South 88(degrees) 35' 57" West
76.41 feet to an iron pipe, North 71(degrees) 17' 40" West 154.18 feet to an
iron pipe, and North 56(degrees) 14' 39" West 196.30 feet to an iron pipe
located in a new line of property belonging to GEIRP, II; runs thence along the
new eastern line of the GEIRP II property North 11(degrees) 00' 00" East
1,421.86 feet to an iron pipe marking the southeast corner of the GEIRP, II
property conveyed by Louis Edward Tapp and wife, and the southwest corner of the
Fletcher property; runs thence along the southern line of the Fletcher property
South 77(degrees) 16' 54" East 247.19 feet to an iron pipe, the point and place
of beginning, containing 11.311 acres, all as shown on that recombination plat
entitled "Survey for TriCenter South Limited Partnership", dated November 12,
1992 and last revised November 17, 1992, prepared by S.D. Puckett & Assoc.,
Inc., Registered Land Surveyors and recorded in Plat Book 129, page 9, Durham
County Registry.
20
EXHIBIT B
[GRAPHIC OMITTED]
This exhibit consists of a graphic space plan for the Building, indicating where
the manufacturing floor, office space, shipping and receiving docks, and
facilities areas, among others, will be located.
21
Exhibit C - Sign Criteria
The sign criteria for the building must conform to City of Durham requirements.
There will be space provided for Micron Electronics of North Carolina, Inc. on
the following signs:
1. A sign can be placed on the north face of the building tenant will be
allowed at its cost to install a sign in similar proportion and height
location than that sign which currently exists for Glaxo Inc. on Phase 1
or the east side of the facility.
2. Lettering will be allowed to identify tenant on the existing monument sign
at the intersection of Tri-Center South Blvd. and Old Cornwallis Road. The
lettering will need to conform to park standards for multi-tenant
facilities.
3. There will be directional signs at various locations within Tri-Center
South that will direct all visitors and deliveries to their appropriate
locations.
All signs shall be coordinated and approved by Craig Davis Properties (Frank E.
Hellmuth) for conformance with all applicable standards set by The City of
Durham and the owners of the property.
22
EXHIBIT D
ENVIRONMENTAL RIDER
I. Tenant's Representations, Warranties and Covenants Concerning the Use of
Hazardous Substances/Periodic Notice
(a) Acceptance of Property and Covenant to Surrender. Tenant accepts
the Property as being in good and sanitary order, condition and repair and
accepts all buildings and other improvements in their present condition.
Tenant agrees on the last day of the term of this Lease, to surrender the
Premises to Landlord in good and sanitary order, condition and repair,
except for such wear and tear as would be normal for the period of the
Tenant's occupancy.
No spill, deposit, emission, leakage or other release of Hazardous
Substances on the Property or the soil, surface water or groundwater
thereof shall be deemed to be "wear and tear [that] would be normal for
the period of the Tenant's occupancy." Tenant shall be responsible to
promptly and completely clean up any such release caused by Tenant, its
officers and employees, agents, contractors, and invitees as shall occur
on the Property during the term of this Lease and shall surrender the
Property free of any contamination or other damage caused by such
occurrences during the term of the Lease.
(b) Maintenance of Premises. Tenant shall, at its sole cost and
expense, keep and maintain the Premises in good and sanitary order,
condition, and repair. As part of this maintenance obligation, Tenant
shall promptly respond to and clean up any release or threatened release
of any Hazardous Substance into the drainage systems, soil, surface water,
groundwater, or atmosphere, in a safe manner, in strict accordance with
Applicable Law, and as authorized or approved by all federal, state,
and/or local agencies having authority to regulate the permitting,
handling, and cleanup of Hazardous Substances.
(c) Use of Hazardous Substances. Landlord acknowledges advice from
Tenant that in its manufacturing processes that it will be using Hazardous
Substances as defined in this Exhibit D. Tenant agrees that all Hazardous
Substances which it may use on the Property shall be used in strict
compliance with all Applicable Laws (hereafter defined), and that Tenant
shall make such periodic reports to any governmental authority requiring
reports as to the introduction of such Substances onto the Property, their
storage, use and disposition. Should there be any release of Hazardous
Substances Tenant shall immediately notify the appropriate governmental
authorities and the Landlord, and shall remediate any contamination to the
satisfaction of such governmental authorities. Landlord's knowledge of
Tenant's proposed use shall not limit or affect Tenant's obligations under
this Lease, including Tenant's duty to remedy or remove releases or
threatened releases, to comply with Applicable Laws relating to the use,
storage, generation, treatment, transportation, and/or disposal of such
Hazardous Substances; or to indemnify Landlord against all harm or damage
caused thereby.
(d) Reports to Landlord. For months in which any Hazardous
Substances have been used, generated, treated, stored, transported or
otherwise been present on or in the Property pursuant to the provisions of
the preceding paragraph, in which any release occurs, Tenant shall provide
Landlord with a written report listing the Hazardous Substances which were
present on the Property; all releases of Hazardous Substances that to
Tenant's knowledge occurred or were discovered on the Property; all
compliance activities related to such releases, including all contacts
with government agencies or private parties of any kind concerning the
releases or other documents relating to the releases executed or requested
during that time period. The report shall include copies of all documents
and correspondence related to such activities and written reports of all
oral contacts relating thereto with outside authorities or investigators,
but excluding internal communications.
(e) Entry By Landlord. Tenant shall permit Landlord and his agents
to enter into and upon the Premises, without notice, at all reasonable
times during ordinary business hours and without interruption of Tenant's
business for the purpose of inspecting the Premises and all activities
thereon, including activities involving Hazardous Substances, or for
purposes of maintaining any buildings on the property. Such right of entry
and inspection shall not constitute managerial or operational control by
Landlord over any activities or operations conducted on the Property by
Tenant.
23
II. Tenant's Indemnity and Release
(a) Indemnity
(i) Tenant hereby indemnifies, defends and holds harmless
Landlord from and against any suits, actions, legal or
administrative proceedings, demands, claims, liabilities, fines,
penalties, losses, injuries, damages, expenses or costs, including
interest and attorneys' fees, incurred by, claimed or assessed
against Landlord under any laws, rules, regulations including,
without limitation, Applicable Laws (as hereinafter defined), in any
way connected with any injury to any person or damage to any
property or any loss to Landlord caused by Tenant, its officers,
employees, agents, contractors, and invitees occasioned in any way
by Hazardous Substances (as hereinafter defined) on the Property or
the Premises.
(ii) This indemnity specifically includes the direct
obligation of Tenant or Landlord to perform any remedial or other
activities required, ordered, recommended or requested by any
agency, government official or third party, or otherwise necessary
to avoid or minimize injury or liability to any person, or to
prevent the spread of pollution, however it came to be located
thereon during the Term and caused by Tenant (hereinafter, the
"Remedial Work"). Tenant or Landlord shall perform all such work in
its own name in accordance with Applicable Laws (as hereinafter
defined).
(iii) Without waiving its rights hereunder, Landlord may, at
its option, after notice to Tenant to perform Remedial Work and
Tenant's failure to promptly undertake same, perform such remedial
or removal work as described in clause (ii) above, and thereafter
seek reimbursement for the costs thereof. Tenant shall permit
Landlord access to the Property to perform such remedial activities.
(iv) Whenever Landlord has incurred costs described in this
section, Tenant shall, within 10 days of receipt of notice thereof,
reimburse Landlord for all such expenses together with interest from
the date of expenditure at the "applicable federal rate" established
by the Internal Revenue Service.
(b) Agency or Third Party Action. Without limiting its obligations
under any other paragraph of this Agreement, Tenant shall be solely and
completely responsible for responding to and complying with any
administrative notice, order, request or demand, or any third party claim
or demand relating to potential or actual contamination on the Premises if
caused by Tenant.
(c) Release. Tenant hereby waives, releases and discharges forever
Landlord from all present and future claims, demands, suits, legal and
administrative proceedings and from all liability for damages, losses,
costs, liabilities, fees and expenses, present and future, arising out of
or in any way connected with Landlord's use, maintenance, ownership or
operation of the Property, any condition of environmental contamination of
the Property, or the existence of Hazardous Substances in any state on the
Property, unless they came to be emplaced there by reason of Landlord
fault.
(d) Landlord's Responsibility. Should Hazardous Substances be found
on the Premises which are shown to have existed prior to the commencement
of the Lease Term, or which are shown to have been placed there by or due
to the fault of the Landlord, Landlord shall promptly cause Remedial Work
as required, ordered, recommended or requested by any government agency or
official to be performed, and shall indemnify, defend and hold harmless
Tenant from loss, damage or expense occasioned by such Hazardous
Substances.
III. Definitions.
(a) Hazardous Substance. "Hazardous Substance(s)" shall mean any
substance which at any time shall be listed as "hazardous" or "toxic"
under the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended and the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as
amended, or in the regulations implementing such statutes, or which has
been or shall be determined at any time by any agency or court to be a
hazardous or toxic substance regulated under any other Applicable Laws (as
hereinafter defined). The term "Hazardous Substance(s)" shall also
include, without limitation, raw materials, building components, the
products of any manufacturing or other activities on the Property, wastes,
petroleum products, or special nuclear or by-product material as defined
by the Atomic Energy Act of 1954, 42 U.S.C. 3011, et seq., as amended.
24
(b) Applicable Law(s). "Applicable Law(s)" shall include, but shall
not be limited to, CERCLA, RCRA, the Federal Water Pollution Control Act,
33 U.S.C. 1251 et seq., the Clean Air Act, 42 U.S.C. 7401 et seq., as
amended, and the regulations promulgated thereunder, and any other
federal, state and/or local laws or regulations, whether currently in
existence or hereafter enacted or promulgated, that govern or relate to:
(i) The existence, cleanup and/or remedy of contamination of
property;
(ii) The protection of the environment from spilled,
deposited or otherwise emplaced contamination;
(iii) The control of hazardous or toxic substances or wastes;
or
(iv) The use, generation, discharge, transportation,
treatment, removal or recovery of hazardous or toxic
substances or wastes, including building materials.
25
EXHIBIT E
[MAP OMITTED]
This exhibit consists of a plat of the building, parking area, and land on which
the same are located. Adjacent roadways are also shown.
26
EXHIBIT F
[MAP OMITTED]
This exhibit consists of a plat of the Landlord's Tri-Center South development
which includes the Property.
27
Addendum # 1 to Lease between Tri Center South Limited Partnership as
Landlord and Micron Electronics of North Carolina, Inc. as the Tenant
TENANT'S UPFIT AND TERMINATION RIGHTS
1. Tenant Upfit. The cost for upfitting the Premises for Tenant's use is
estimated to cost approximately $980,164.00 (the "Upfit Cost"). Landlord and
Tenant agree to develop and complete the upfit of the Premises in accordance
with Tenant's designs and specifications. All upfits relating to the Premises
will be completed by Landlord subject to Tenant's final approval of upfit
design, costs, and of Landlord's contractor. Landlord shall be solely
responsible for the completion of improvements and upfit of the Parking Area.
Tenant agrees to contribute for such upfit $780,164 in cash, one-half of which
Tenant shall pay Landlord at the time of its execution of this Lease, and the
balance of which Tenant shall pay Landlord not later than February 1, 1995, or
the date Tenant takes possession of any part of the Premises. If the cost of
developing and completing the upfit of the Premises in accordance with Tenant's
designs and specifications exceeds the Upfit Cost, Tenant shall pay such excess
to Landlord prior to or at the time it occupies the Premises. Tenant may audit
at its expense the Upfit Cost, and Landlord shall make available to Tenant at
the offices of Craig Davis Properties, Inc. all invoices and other data that
were used in arriving at the Upfit Cost.
2. Tenant's Rights to Terminate. The Tenant is hereby granted the right to
terminate this lease on three separate occasions, the first after two full years
of the Lease Term have elapsed, the second after five full years of the Lease
Term have elapsed, and the third (and last), after seven full years of the Lease
Term have elapsed. Tenant's right to so terminate is subject to and conditioned
on Tenant's complying with the following conditions, each of which are
independently material:
A. Written notice of intent to terminate must be given to Landlord at
least six months before the date the termination is to be effective, and
failure to give such notice shall be an absolute bar to terminating at the
time the termination might otherwise occur.
B. Tenant's notice to terminate shall be accompanied by payments in the
amounts set forth below as a premium for early termination, which premium
might in part compensate Landlord for unamortized cost of Tenant Fitup and
anticipated vacant time while releasing (if at the two year period), and
defray releasing commissions Landlord is likely to incur in finding a
replacement tenant for the remainder of the initial Lease Term: (i) if at
the end of two full years, a premium of $98,400.00; (ii) if at the end of
five full years, a premium of $36,000.00; and (iii) if at the end of seven
years, no premium will be due.
C. Should Tenant terminate, regardless of the time, Landlord shall have
the right at its option to require that Tenant restore the Premises to the
warehouse condition in which they existed at the date of execution of this
Lease, reasonable wear and tear and damage by insured casualty only
excepted, except as otherwise agreed herein.
D. If Tenant fails to give notice to terminate to be effective after seven
years (no earlier termination having occurred) there shall be no further
right to terminate and the Lease shall be in full force for its entire ten
year Lease Term.
28
12/2/94 Tricenter South I, Phase 2 Fit-up Preliminary Cost Estimate
Micron - 30,000 sf
Preliminary
Site Modifications Budget Comments
- ------------------ ------------------------------------
1. Fencing truck court area $16,000 Incl. Electrical
Gate and vinyl slats
2. Phase 1 parking expansion 77 spaces total for
Micron (incl. 2
handicap spaces)
a. Access Road Construction $57,600
b. 31 Parking spaces added $43,400 Incl. lighting at
lFC average
maintained in
parking area
c. Landscaping parking area $10,000
3. Phase 2 parking expansion 167 spaces total for
Micron use
a. Approx. 90 parking spaces added $126,000 Incl. Lighting at
lFC average
maintained in
parking area
b. Landscaping parking area $15,000
4. Transformer pad and conduit $7,000
5. External tank equipment pads $6,200 Fence with slats,
10' x 12', 6"
concrete with 2
bollards
6. Directional signage at new entrance $5,000
Subtotal Site Costs $286,200
Shell Modifications
1. Add two dock doors, shelter, and 1 leveler $13,500
2. Glass Enhancements
a. Entry way curtainwall glass $48,500 Curtainwall two
sides (similar to
Tricenter South II)
b. Windows along north wall $22,000 7 windows allocated
(5' 4" x 13')
3. Tenant separation wall $31,500
4. Service corridor $51,500
Subtotal Shell Modifications $167,000
29
12/2/94 Tricenter South I, Phase 2 Fit-up Preliminary Cost Estimate
Micron - 30,000 sf
Internal Modifications
1. HVAC - assembly and support area $163,000 Exhaust for
compressors, 110
tons, ductwork at
16' above floor
2. Special exhaust requirements $31,000 2 lines; 1
fiberglass (12"
wide), 1 galvanized
line
3. Electrical
a. New electrical service
(3000 amp service) $43,000
b. Lighting to 150 - 175 FC $60,000 Includes unistrut
supports for process
piping
c. Dedicated panels for operational
equipment $13,000 Excludes separate
breakers, service
runs and hook-up
d. Security electrical $3,000 6 outlets on
perimeter of
building
4. Plumbing
a. Process piping underslab plumbing $18,000 Line back to mech.
area, concrete
removal and replace
5. Office/Bathroom Fit-up (7,400 sf) $177,600 $24 psf allowance,
does not include
modular offices
6. Floor to Deck Interior walls,
doors/O.H. doors $65,000 Office, facilities,
and support area
wals
Subtotal Interior Modification Cost $573,600
Fees
1. GC Conditions & Fee & Permits $82,144
2. Architectural Design/Coordination $8,500
3. Civil Engineering Design/Coordination $6,000
4. Landscape Design/Government Coordination $4,000
5. CDP Management Coordination $5,000
Total Preliminary Budget $1,132,444
Possible Deducts from Initial Budget
1. Deduct Parking Phase 2 Construction
Costs ($152,280)
Total Adjusted Preliminary Budget $980,164
30
12/2/94 Tricenter South I, Phase 2 Fit-up Preliminary Cost Estimate
Micron - 30,000 sf
Budgetary Items not Addressed
1. Air Compressor and associated connections
2. Electrical, plumbing or mechanical connections to operational equipment
3. Modular office cubicle cost and utility installation
4. 3" waterline to space not included, calculations indicate that existing 2"
line is adequate
5. Painting Ceiling
6. ESD floor tiles
7. Glass vestibule at entrance
8. Exterior building tenant sign
9. Cable tray for electrical/communications
10. UPS and conditioned power
11. Air compressor and associated piping
31
Micron - 30,000 sf
Project Specifications
December 16, 1994
Site Modifications
1. Fencing 400 lf of 10' - 0" high galvanized fencing
with slats.
Aluminum framed, cantilever slide gate for
20' - 0" opening.
Gate equipped with a 3/4 hp gate operator.
Double drive gate for a 30' - 0" opening.
2. Phase 1 Access Road 24" Curb and Gutter
Pavement Section = 10"CABC + 2"H - Binder
and 1" I-2 Asphalt.
Phase 1 Parking 24" Curb and Gutter
Pavement Section = 8"CABC = 2" I-2 Asphalt.
3. Phase 2 Parking Not Applicable.
4. Transformer Pad as required by Duke Power.
Shell Modifications
1. Dock Equipment Dock doors, shelters and levelers are to be
building standard.
2. Glass Curtain wall system to be similar to
Tri-Center South II. Windows are to be 5' 4"
x 13' 0". Total of 7 allocated. Glass to be
building standard.
3. Tenant Wall Two hour rated wall extending from floor to
deck. Wall is to be insulated and painted.
4. Corridor Construction to be as shown on building
shell drawings.
Internal Modifications
1. HVAC Manufacturing Floor
Five 20 ton gas rooftop units with gas
piping, thermostat, smoke detector, duct
system, supply grilles and air side
economizer. Three of the units will have an
electric heater for reheat in the
dehumidification mode.
System is designed to handle the following
items: Lighting of 3.5 watts/sf. Internal
gains of 4.0 watts/sf. Exhaust of 5500 cfm.
32
Finished Goods Area
One 6 ton gas rooftop unit with gas piping,
thermostat, smoke detector, duct system and
supply grilles.
Facilities Room
One 4 ton gas rooftop unit with gas piping,
thermostat, smoke detector, duct system and
supply grilles.
Air Compressor Room
This room is to have ventilation only. There
is no heating or cooling in this room. Room
to have two louvers approximately 42" x 36"
and one 1200 cfm exhaust fan
thermostatically controlled.
2. Exhaust Manufacturing Floor
One 3500 cfm fiberglass fan and 14"
fiberglass duct dropped 14' from the fan
between the two wave solder machines and a
12" horizontal fiberglass duct 24' long run
over both machines for future tie-in.
One 2000 cfm standard exhaust fan with a
similar exhaust system. This duct system is
to be galvanized in lieu of fiberglass.
3. Electrical New Service
1 ea. 3000 amp, 480 volt, 3 phase, 4 wire
service.
1 ea. 3000 amp, 480 volt switchboard with
main lugs only.
1 ea. 400 amp, 480 volt panel with main lugs
only.
1 ea. 400 amp, 208 volt panel with main
breaker only installed.
1 ea. 150 kva transformer.
Lighting
380 ea., 8' - 0" long, 2 lamp high output
fluorescent fixtures with reflectors located
12' 0" above finished floor.
Relocate existing high bay lights as
required.
Dedicated Panels
2 ea. 800 amp 400 volt panel with the main
breaker only installed.
4. Plumbing 6" PVC line, cleanouts as required by code.
2" insulated copper water line.
5. Office/Bathroom Fit-up Allowance
Finish Carpentry
Items included are: Vanity tops,
Pre-manufactured wall and base cabinets.
Hollow Metal
Standard 3' x 7', 16 gauge hollow metal
"knock down" door frames.
33
Wood Doors
Standard 3' x 7' solid core birch door.
Hardware
Passage sets to be "cylindrical" type with a
brushed aluminum finish.
Standard hinges.
Push/Pulls at restrooms.
Closures as required.
Drywall
Interior walls to consist of 3-5/8", 25 GA
metal studs, with one layer of 5/8" sheet
rock each side of metal stud. Walls to be
installed under the ceiling grid.
Interior side of pre-cast wall to be furred
out with 7/8" furring channels and one layer
of 5/8" sheet rock which will extend to 10'
- 0" above finished floor.
Acoustical Ceiling
Throughout the space will be a 2' x 2' Class
"A", square edge, fissured mina board.
Floor Finishes
Allowance of 1.35/sf for material and labor.
Base
All walls to receive 4" rubber cove base.
Painting
All walls to receive 2 coats of latex paint.
Finish to be "egg-shell".
Wood doors to receive 1 coat of stain and 1
coat of sealer.
Door frames to receive 2 coats of semi-gloss
paint.
Toilet Partitions
Partitions are to be floor mounted, overhead
rail braced. Finish to be baked enamel,
standard color.
Toilet Accessories
Grab bars
Toilet paper holder
Soap dispenser
Paper towel dispenser
Feminine napkin disposal
Window Treatment
One inch horizontal mini blinds on all
exterior windows.
Color to be standard.
34
Plumbing
System is to be designed to meet code
requirements. Fixtures to include "flush
valve" type water closets, urinal,
lavatories, water cooler and a hot water
heater.
Sprinkler
System designed to meet code requirements.
Sprinkler heads to be building standard.
HVAC
System to be designed using DX rooftop units
complete with roof curbs and outside air
intakes. Perimeter zones to utilize gas
fired rooftop units and straight cooling DX
units with electric heaters for internal
zones.
Duct system to consist of insulated
galvanized steel duct with insulated
flexible runouts.
Standard perforated steel lay-in diffusers
for supply grilles and plastic egg crate
returns.
System is to be a free air return type
system.
Restrooms to be exhausted at a rate of 2
cfm/sf.
Electrical
2' x 4' lay-in lights with acrylic lens.
Lighting to achieve approximately 60 foot
candles at 36" above finished floor.
Standard switches with ivory plate.
Standard receptacles with ivory plate.
Data/telephone stub-up, 6" above ceiling.
Exit and emergency lighting as required by
code.
6. Interior Walls/ O.H. Door Walls
Walls at the electrical and communication
rooms to extend to 10' - 0" above finished
floor. All other walls to extend from floor
to underside of deck.
Wall construction to consist of metal studs
and one layer of 5/8 sheet rock each side of
metal stud.
Walls to receive two coats of latex paint,
"egg-shell" finish, and rubber base.
Overhead Door
Overhead door to be building standard.
Personal Door
Construction similar to doors in the office
fit-up.
35
Addendum # 2 to Lease between Tri Center South Limited Partnership as
Landlord and Micron Electronics of North Carolina, Inc. as the Tenant
RIGHT OF FIRST OFFER TO LEASE ADDITIONAL SPACE
Landlord and Tenant agree that prior to entering into a lease for all or
any part of that portion of the Landlord Property shown on Schedule 1 to this
Addendum (the "Additional Premises") with another tenant, Landlord shall notify
Tenant in writing of the availability of the Additional Premises, which notice
shall be accompanied by a termsheet containing the terms under which Landlord
shall offer the Additional Premises (the "Termsheet"). Tenant shall then have a
period of fifteen (15) days after receipt of such notice and Termsheet (the
"Acceptance Period") within which to deliver written notice to Landlord that
Tenant elects to lease the Additional Premises on the terms and conditions set
forth in such Termsheet. If Tenant makes such election within the Acceptance
Period, an appropriate amendment to this Lease (and a memorandum thereof in
recordable form) shall be entered into by Landlord and Tenant to add the
Additional Premises to the Demised Premises on the terms set forth in the
Termsheet submitted by Landlord. If Tenant does not make the aforesaid election
within the Acceptance Period, or if Landlord and Tenant do not enter into an
amendment to this Lease incorporating the Additional Premises on the terms set
forth in the Termsheet within fifteen (15) days thereafter, having both used
reasonable best efforts to do so, Tenant shall be deemed to have waived its
rights with respect to the Additional Premises, and the Landlord shall be free
to lease the Additional Premises to another tenant; provided that if the
economic terms on which Landlord is to lease the Additional Premises to another
tenant vary from those set form in the Termsheet by ten percent (10%) or more,
or Landlord has not entered into a letter of intent or other serious
negotiations with another tenant for the Additional Premises within six (6)
months of offering the same to Tenant, Landlord shall again offer the Additional
Premises to Tenant, which offer shall be on the same terms then being offered to
the other tenant with which Landlord is negotiating, before Landlord may lease
the Additional Premises to another tenant.
Notwithstanding anything in the preceding paragraph to the contrary,
Landlord agrees that its Termsheet will cover space to the extent then available
in the building which when added to the Premises would total 100,000 rentable
square feet (the "Additional Space"), and will afford Tenant the right to lease
such additional space on the same terms and conditions as then existing as
contained in the attached Lease, except that the term for such Additional Space
shall, at Tenant's option be the longer of the period set in such Termsheet or
the remaining term under this Lease. Tenant may lease all or part of the
Additional Space if it does so during the Acceptance Period, and thereafter
excluding any part of the Additional Space that the Landlord has leased in the
interim period. If during the six months period following delivery of the
Termsheet to Tenant Landlord receives an offer it is willing to accept for a
rental which exceeds by 10% or more the escalated rent under the within lease,
Landlord agrees to first offer such space to Tenant, who must within fifteen
days following receipt of Landlord's offer agree to the same terms or lose its
rights thereto.
Tenant shall have no right to elect to lease any portion of the Additional
Premises pursuant to this Attachment so long as any uncured Default exists under
the Lease, and should Tenant terminate this Lease in accordance with the
provisions of Addendum #1, this Right of First Offer shall automatically
terminate.
Initials: /s/ RY
-------------------
For Landlord
/s/ [ILLIGIBLE]
-------------------
For Tenant
36
ADDENDUM 2
[FLOOR PLAN OMITTED]
This schedule consists of graphics of the Building which indicate the
Additional Premises with respect to which Landlord has an obligation to first
offer to Tenant for lease prior to any third party.
37
MCMS, Inc. Addendum #3
Square Footage 28,474
Escalation Rate 103%
Total Annual P.S.F.
Cost Cost
Year
1 $ 111,902.82 $ 3.93
2 $ 115,259.90 $ 4.05
3 $ 118,717.70 $ 4.17
4 $ 122,279.23 $ 4.29
5 $ 125,947.61 $ 4.42
6 $ 129,726.04 $ 4.56
7 $ 133,617.82 $ 4.69
8 $ 137,626.35 $ 4.83
9 $ 141,755.14 $ 4.98
10 $ 146,007.80 $ 5.13
11 $ 150,388.03 $ 5.28
12 $ 154,899.67 $ 5.44
13 $ 159,546.66 $ 5.60
14 $ 164,333.06 $ 5.77
15 $ 169,263.06 $ 5.94
Page 1
38
Addendum # 4 to Lease between Tri Center South Limited Partnership as
Landlord and Micron Electronics of North Carolina, Inc. as the Tenant
GUARANTY
This Guaranty is made as of the ______ day of December, 1994 by
Micron Custom Manufacturing Services, Inc. ("Guarantor") whose address is 8455
Westpark Street, Boise, Idaho 83704, in favor of Tri-Center South Limited
Partnership, ("Landlord"), whose address is c/o Craig Davis Property, Inc.,
Suite 435 UCB Plaza, 3605 Glenwood Avenue, Raleigh, North Carolina 27612.
1. Lease. The "Lease" shall mean the Lease dated December ____, 1994
to which this Addendum is attached between Landlord and Micron Electronics of
North Carolina, Inc., ("Tenant") and all extensions, renewals, amendments,
supplements or modifications thereto.
2. Purpose and Consideration. The execution and delivery of this
Guaranty by Guarantor is a condition to Landlord's entering into the Lease with
Tenant and is made in order to induce Landlord to enter into the Lease.
Guarantor is the parent company of Tenant.
3. Guaranty. Guarantor hereby absolutely, unconditionally and
irrevocably, guarantees the compliance with and performance by Tenant of each of
the provisions, covenants, agreements and conditions applicable to Tenant
contained in the Lease and guarantees the full and prompt payment by Tenant of
the Basic Rent, Additional Rent and other amount payable by Tenant under the
Lease, as and when the same become due, whether by acceleration or otherwise.
This is a Guaranty of payment and not of collection.
4. Guaranty as Independent. The obligations of Guarantor hereunder
are independent of the obligations of Tenant, and Guarantor expressly agrees
that a separate action or actions may be brought and prosecuted against
Guarantor whether or not any action is brought against Tenant and whether or not
Tenant is joined in any action against Guarantor and that Landlord may pursue
any rights or remedies it has under the Lease and under this Guaranty in any
order or simultaneously or in any other manner.
5. Authorizations to Landlord. Guarantor authorizes Landlord,
without notice or demand and without affecting Guarantor's liability hereunder,
from time to time to (a) change, amend, modify or alter any of the terms,
covenants, agreements, or conditions contained in the Lease; (b) extend or renew
the Lease; (c) change, renew, compromise, extend, accelerate or otherwise change
the time for payment of any amounts payable under the Lease; (d) consent to any
assignment, sublease, pledge or transfer of the Lease by Tenant or of Tenant's
interest in the Premises; (e) release Tenant and substitute any one or more
parties as Tenants or sublessees under the Lease; (f) waive or fail to take
action with respect to any Default by Tenant under the Lease; and (g) waive or
fail to take action with respect to any Remedy under the Lease.
6. Application of Payments Received by Landlord. Any sums of money
that Landlord receives from or on behalf of Tenant may be applied by Landlord to
reduce any indebtedness of Tenant to Landlord as Landlord, in its sole
discretion, deems appropriate.
7. Waiver by Guarantor. Guarantor hereby waives (a) any right to
require Landlord to proceed against, give notice to or make demand upon Tenant;
(b) any right to require Landlord to pursue any remedy of Landlord; (c) any
right to participate in or to direct the application of any security held by
Landlord; (d) any defense arising out of any disability or other defense of
Tenant, including cessation, impairment, modification, or limitation, from any
cause, of liability of Tenant or of any remedy for the enforcement of such
liability; and (e) any rights under G.S. 26-7 et seq.
8. Subordination by Guarantors. Guarantor hereby agrees that any
indebtedness of Tenant to Guarantor, whether now existing or hereafter created,
shall be subordinated to any indebtedness of Tenant to Landlord.
9. Notices and Demands. All notices and demands under this Guaranty
shall be in writing and shall be deemed properly given and received when
actually given and received three business days after mailing, if sent by
registered or certified United States mail, postage prepaid, addressed to the
party to receive the notice or demand at the address set forth for such
39
party in the first paragraph of this Guaranty or at such other address as either
party may notify the other in writing with copies, in the case of notices given
by Guarantor to Landlord, to Craig Davis Properties, Inc., Suite 435 UCB Plaza,
3605 Glenwood Avenue, Raleigh, North Carolina 27612.
10. Payment of Costs of Enforcement. In the event any action or
proceeding is brought to enforce this Guaranty and if Landlord is held entitled
to recovery against Guarantor, Guarantor agrees to pay all costs and expenses of
Landlord in connection with such action or proceeding, including reasonable
attorney's fees.
11. Binding Effect. This Guaranty shall be binding upon Guarantor
and his heirs, personal representatives, successors and assigns and shall inure
to the benefit of Landlord and its successors and assigns.
12. Severability. If any provision of this Guaranty shall be held
invalid or unenforceable, the remainder of this Guaranty shall not be affected
thereby and there shall be deemed substituted for the affected provision, a
valid and enforceable provision as similar as possible to the affected
provision.
13. Governing Law. This Guaranty shall be interpreted under and
enforced according to the laws of the State of North Carolina.
14. Captions for Convenience. The headings and captions hereof are
for convenience only and shall be not considered in interpreting the provisions
hereof.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty the day and
year first above written.
GUARANTOR:
ATTEST: MICRON CUSTOM MANUFACTURING
SERVICES, INC.
/s/ [ILLIGIBLE] By: /s/ [ILLIGIBLE]
- ------------------------------ ------------------------
Secretary
Title: Chairman
----------------------