EXHIBIT 10.5
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") made and entered into on this 30th
day of November, 2001, by and between NATIONAL SERVICE INDUSTRIES, INC., a
California corporation ("Landlord"), and ACUITY BRANDS, INC., a Delaware
corporation ("Tenant");
WITNESSETH:
For and in consideration of the mutual covenants set forth below,
Landlord and Tenant do hereby agree as follows:
1. LEASE OF PREMISES. Subject to and upon the terms and
conditions herein provided, Landlord does hereby rent, lease, and demise to
Tenant approximately 50,000 square feet of space (the "Premises"), which
Premises includes that office space occupied by employees of Tenant on the date
of the spin-off of Tenant from Landlord located on the 2nd, 7th and 8th Floors
of that certain building located at 1420 Peachtree Street, NE, Atlanta, Georgia
(the "Building"), together with the common areas of the Building, including but
not limited to, the underground parking facilities, lobby and 4th Floor of the
Building, together with all and singular the rights, privileges, and
appurtenances thereto belonging or in any wise appertaining.
2. TERM AND RENTALS. The term of this Lease shall be for a period
of four (4) months, commencing on the 1st day of December, 2001, and terminating
on the 31st day of March, 2002; provided that Tenant shall have the right, upon
one month written notice to Landlord, to extend the term of the Lease for a
period one month at the monthly rental rate set forth in the following sentence.
For the entire term hereof, Tenant agrees to pay Landlord as monthly rental
hereunder the sum of One Hundred Twenty Thousand Dollars and No/100 Dollars
($120,000). All rental provided for hereunder shall be due and payable on the
first day of each month, with rent being prorated for partial months.
3. USE. Tenant shall use and occupy the Premises solely for
general office use, and no other purpose. Tenant shall comply with all laws
applicable to the use, occupancy and condition of the Premises. Tenant shall not
conduct or permit any activities on or about the Premises that would constitute
a nuisance or otherwise interfere with other occupants of the Building.
4. REPAIRS. Landlord shall, for the entire term of this Lease,
maintain and keep in good working order, repair, and condition the structural
integrity of the Building, including the roof and exterior walls.
During the term of this Lease, except as otherwise provided above with
respect to the maintenance and repair requirements of Landlord, Tenant will
maintain the Premises in as good order and repair as at commencement of this
Lease (ordinary wear and tear excepted), will remove or cause to be removed any
and all rubbish and refuse matter from the Premises, and at the termination of
the term, will deliver up the Premises in substantially as good condition,
order, and repair as at commencement of this Lease, except for ordinary wear and
tear and damage by fire or other casualties.
5. INSURANCE. Landlord shall maintain during the term of this
Lease insurance against loss or damage to all of the improvements on the
Premises resulting from fire, extended coverage, vandalism, malicious mischief,
earthquake, flood, collapse, and other all risk perils in commercially
reasonable amounts. Tenant shall, at Tenant's sole cost and expense, but for the
mutual benefit of Landlord and Tenant, maintain workers' compensation coverage
as required by law and general public liability insurance coverage against
claims for personal injury, death, or property damage occurring upon, in, or
about the Premises, such insurance to afford protection to the limit of not less
than Three Million Dollars ($3,000,000) combined single limit coverage and name
Landlord as additional insured. In addition, Tenant shall maintain commercially
reasonable insurance coverage against loss or damage to Tenant's personal
property located upon the Premises.
Insurance required hereunder must be written by a company authorized to
do business in Georgia, subject to the approval of Landlord, which approval
shall not be unreasonably withheld. Each policy of insurance will be endorsed to
provide that Landlord will receive at least thirty (30) days' prior written
notice of any cancellation of, or material change in, said policy. Tenant shall
not cause any insurance to be cancelled nor permit any insurance to lapse
without thirty (30) days' prior written notice to Landlord. A certificate
evidencing liability insurance required to be maintained by Tenant hereunder
naming Landlord as an additional insured shall be delivered to Landlord upon the
execution of this Lease.
6. CASUALTY LOSS. In the event the Building is damaged or
destroyed during the term hereof by fire, storm, tornado, or other casualty of
nature, or otherwise, so as to render the Premises wholly untenantable and unfit
for use, then and in such event, Landlord or Tenant may, at the option of
either, immediately terminate said Lease. If neither party terminates, then
Landlord shall proceed with reasonable speed and dispatch to repair and
reconstruct the Building so damaged or destroyed and shall restore the same to
its former tenantable condition, in which event, the terms, provisions, and
operative effect of this Lease shall be unaffected by said fire, storm, tornado,
or other casualty of nature, except that the rent due and payable hereunder
shall abate and cease for the period during which the restoration of the
Premises is being completed, but shall become immediately payable as herein
provided at such time as the Premises becomes tenantable, as determined in
Landlord's reasonable discretion. Notwithstanding anything in this
Lease to the contrary, there shall be no abatement of rent after a casualty to
the extent that the damage occurred due to fault or neglect on the part of
Tenant, its employees, servants, agents, representatives, or invitees.
7. WAIVER OF SUBROGATION. Tenant and Landlord each hereby waive
any and all rights of recovery against the other, or against the officers,
employees, agents, and representatives of the other, for loss of or damage to
such waiving party or its property or the property of others under its control
or any loss or damage, including consequential loss, to the Premises, or
contents thereof belonging to either, caused by any risk required to be insured
against hereunder, regardless of whether such risk was actually insured.
8. SIGNS. Tenant shall not erect any signs in or upon the
Premises or the Building or the property on which they are located without
Landlord's prior approval in writing. Tenant shall be liable for the payment of
any municipal charges or minor privilege tax levied by reason of the erection
and maintenance of such signs. At the termination of this Lease, Tenant shall
remove all signs installed by Tenant and any damage resulting from the
installation and/or removal of such sign will be repaired by Tenant.
9. DEFAULT BY TENANT. Tenant shall be in default under this Lease
in the event that it (A) fails to pay rent for ten (10) days after it is due
hereunder, or (B) fails to perform or comply with any other provision hereof for
a period of thirty (30) days after receipt of written notice thereof from
Landlord; provided that if, such failure cannot reasonably be cured within
thirty (30) days, then Tenant shall have an additional period of time, not to
exceed sixty (60) days, to cure such failure, so long as Tenant has commenced
and is diligently pursuing appropriate actions to cure such failure. Upon a
default by Tenant, Tenant's right to the further possession of the Premises
shall terminate and Landlord shall become and be entitled to immediate
possession of the Premises, provided Landlord shall so elect, but not otherwise.
Landlord shall thereupon immediately have the full right of re-entry upon the
Premises, by force or otherwise, to the extent permitted by the applicable law
then in force, and without formal notice or demand, and without liability of any
kind; and also the right, but not the obligation, to re-let the Premises for any
unexpired balance of the term, and collect the rent therefor. In the event of
such re-letting by Landlord, the re-letting shall be for such duration (which
may extend beyond the unexpired balance of the term) and on such other terms,
conditions, and rental as Landlord may deem proper, and the proceeds that may be
collected from the same, less the expense of re-letting (including reasonable
leasing costs, fees, and commissions and reasonable costs of renovating the
Premises), shall be applied upon Tenant's rental obligation as set forth in this
Lease for the unexpired portion of the Lease term. Tenant shall be liable for
any balance that may be due under this Lease, although Tenant shall have no
further right of possession of the Premises. Such re-entry by Landlord and any
such re-letting shall not operate as a termination of this Lease, unless
Landlord shall so elect, nor as a waiver or postponement of any right of
Landlord against Tenant. Landlord shall have the further right, in the event of
Tenant's default as aforesaid, and irrespective of whether Landlord shall have
elected to terminate Tenant's right to the further possession of the Premises,
to declare the entire rent for the unexpired portion of the Lease term to be
immediately due and payable and to collect the same by any manner not
inconsistent with applicable law. Mention in this Lease of any particular remedy
shall not preclude Landlord from any other remedy, in law or in equity. To the
extent permitted by law, Tenant hereby consents to summary proceedings in
connection with Landlord's re-entry of the Premises, and expressly waives any
and all rights of redemption, granted by or under any present or future laws in
the event of Tenant being evicted or dispossessed for any cause, or in the event
of Landlord obtaining possession of the Premises, by reason of the violation by
Tenant of any of the covenants and conditions of this Lease, or otherwise.
10. SUBLEASE AND ASSIGNMENT. Tenant shall not have the right to
assign this Lease, or sublet the Premises, or any other part thereof, at any
time during the term hereof, without Landlord's prior written consent which may
be granted or withheld in Landlord's sole discretion. Any attempted assignment
or sublease without the prior written consent of Landlord shall be of no legal
force and effect. If Tenant assigns this Lease or sublets the Premises with
Landlord's consent, Tenant shall remain liable for all terms and covenants of
this Lease including, without limitation, the covenant to pay rent.
11. INDEMNIFICATION. Tenant shall be liable to Landlord for all
liabilities, damages, costs, and expenses (including attorney's fees) which may
be incurred or sustained by Landlord by reason of Tenant's breach of any of the
provisions of this Lease. Landlord shall be liable to Tenant for all
liabilities, damages, costs, and expenses (including attorney's fees) which may
be incurred or sustained by Tenant by reason of Landlord's breach of any of the
provisions of this Lease.
12. NOTICES. Notices to Landlord shall be given in writing by mail
or by fax to it at: 1420 Peachtree Street, N.E., Atlanta, Georgia 30309,
Attention: General Counsel, FAX Number (404) 853-1015 or such other address or
number as Landlord may from time to time designate by written notice to Tenant.
Notices to Tenant shall be given in writing by mail or by fax to Tenant at: 1420
Peachtree Street, N.E., Atlanta, Georgia 30309-3002, Attention: General Counsel,
FAX Number (404) 853-1415, or such other address or number as it may from time
to time designate by written notice to Landlord. Notices hereunder shall be
effective upon receipt.
13. SUCCESSORS AND ASSIGNS. This Lease shall inure to the benefit
of and be binding upon the successors and permitted assigns of Landlord and
Tenant.
14. TIME. Time is and shall be of the essence hereof.
15. ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between Landlord and Tenant with respect to the lease of the Premises and
supersedes all prior discussions, understandings, and agreements with respect
thereto.
16. AMENDMENT; WAIVER. This Lease may not be modified or amended
except by written instrument executed by Landlord and Tenant. No waiver of any
provision hereof shall be effective unless in a writing executed by the party
against whom the waiver is sought to be enforced.
17. LATE CHARGE. All payments or installments of any rent
(including additional rent) hereunder and all sums whatsoever due under this
Lease, shall be paid to Landlord at the address designated by Landlord, and if
not paid within ten (10) days of when due, shall be subject to a late charge
equal to three percent (3%) of the amount of the late payment for each late
payment and shall bear interest at the rate of fifteen percent (15%) per annum
(but not more than the maximum allowable legal rate applicable to Tenant) until
paid. If either party engages an attorney to enforce its rights under this
Lease, the nonprevailing party shall pay all reasonable fees and expenses of
such attorney actually incurred by the prevailing party.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day first above written.
LANDLORD:
ATTEST OR WITNESS: NATIONAL SERVICE
INDUSTRIES, INC.
By: /s/ Carol E. Morgan By: /s/ Brock A. Hattox
--------------------- -------------------------
Carol E. Morgan Brock A. Hattox
Executive Vice President
and Chief Financial Officer
[CORPORATE SEAL]
TENANT:
ATTEST OR WITNESS: ACUITY BRANDS, INC.
By: /s/ Kenyon W. Murphy By: /s/ James S. Balloun
--------------------- -------------------------
Kenyon W. Murphy James S. Balloun
Chairman, President and
CEO
[CORPORATE SEAL]