EXHIBIT 10.17
WINDHAM INDUSTRIAL CENTER V
ROMEOVILLE, ILLINOIS
LEASE
BETWEEN
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
A NEW JERSEY CORPORATION,
LANDLORD
AND
INNOTRAC CORPORATION,
A GEORGIA CORPORATION
TENANT
CONCESSION GRANTED
Two (2) months of Base Rent shall abate hereunder. See Section 4.2 below.
TABLE OF CONTENTS
SECTION PAGE
- ------- ------
1. FUNDAMENTAL LEASE TERMS 1
2. AGREEMENT TO LEASE 2
3. RENT 2
4. BASE RENT 2
5. ADDITIONAL RENT 3
6. SERVICES 7
7. SECURITY DEPOSIT 8
8. USE 9
9. CONDITION OF PREMISES 9
10. EARLY POSSESSION 10
11. ASSIGNMENT AND SUBLETTING 10
12. REPAIRS AND ALTERATIONS 12
13. CERTAIN RIGHTS RESERVED BY LANDLORD 14
14. COVENANT AGAINST LIENS 15
15. WAIVERS AND INDEMNITIES 15
16. DEFAULTS AND LANDLORD'S REMEDIES 16
17. SURRENDER OF POSSESSION 19
18. INSURANCE 20
19. FIRE OR CASUALTY 21
20. CONDEMNATION 22
21. NOTICES 22
22. ADDITIONAL COVENANTS OF TENANT 23
23. ESTOPPEL CERTIFICATES; MORTGAGE ISSUES 26
24. MISCELLANEOUS 27
25. PARKING 28
26. ERISA 29
27. ATTORNEYS' FEES 29
28. AMERICANS WITH DISABILITIES ACT 29
29. EXPANSION OPTION 30
30. RIGHT OF FIRST OFFER 30
31. OPTION TO EXTEND 32
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EXHIBITS
Exhibit A - Plan of the Premises
Exhibit B - Work Letter
Exhibit C - Legal Description of the Land
Exhibit D - Form of Tenant Estoppel Letter
Exhibit E - Forms of Expansion Option Lease Amendments
ii
WINDHAM INDUSTRIAL CENTER V
LEASE
THIS LEASE ("Lease") is entered into as of the 17th day of September, 2002, by
and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation, whose address is Two Prudential Plaza, 180 North Stetson Street,
Suite 3275, Chicago, Illinois 60601 (together with its successors and assigns,
"Landlord") and INNOTRAC CORPORATION, a Georgia corporation (together with its
permitted successors and assigns, "Tenant").
1. FUNDAMENTAL LEASE TERMS. Certain fundamental lease terms (the
"Fundamental Lease Terms") are set forth below in this Section 1:
1 Building and Address: Windham Industrial Center V
1400-1420 Lakeview Drive
Romeoville, Illinois 60446
2 Tenant: Innotrac Corporation, a Georgia corporation
3 Tenant's Current Address: 6655 Sugarloaf Parkway
Duluth, Georgia 30097
Attention: David L. Gamsey--Chief Financial
Officer
4 Landlord: The Prudential Insurance Company of America,
a New Jersey corporation
5 Landlord's Address: Two Prudential Plaza
180 North Stetson Street, Suite 3275
Chicago, Illinois 60601
6. Premises: The Premises shall constitute the
approximately 150,204 square feet of
warehouse, distribution and office space
located in the Building, as shown as the
"Initial Premises" on the plan attached
hereto and made a part hereof as EXHIBIT A.
The final rentable square footage of the
Premises shall be determined and confirmed
by Landlord and Tenant in writing pursuant
to Section 2 below. In addition, the office
space presently located in the Expansion
Space (as defined below) shall constitute a
portion of the Premises for all purposes
other than the calculation of Base Rent,
Additional Rent, Tenant's Proportionate
Share or the Tl Allowance (all of which
terms as defined below) and for the part of
the Term occurring prior to the Expansion
Deadline (as defined below).
7 Term: Sixty two (62) calendar months commencing on
the Commencement Date, provided that if the
Commencement Date is not the first (1st) day
of a calendar month, the Term shall end
sixty two (62) calendar months after the
last day of the calendar month in which the
Commencement Date occurs.
8 Commencement Date: September 17, 2002
9 Base Rent: Annual Base Rent shall equal the product of
(a) the rentable area of the Premises
determined in accordance with Section 2; and
(b) the following annual rates per rentable
square foot of the Premises for the
applicable periods during the Term:
1st Lease Year $3.59 per square foot
2nd Lease Year $3.70 per square foot
3rd Lease Year $3.81 per square foot
4th Lease Year $3.92 per square foot
5th Lease Year $4.04 per square foot
6th Lease Year $4.16 per square foot
10 Security Deposit: $22,571
11 Work Letter: The work letter attached hereto as EXHIBIT B
and made a part hereof.
12 Tenant Improvements: "Tenant Improvements" shall have the meaning
ascribed to such term in the Work Letter.
13 Broker: Insignia/ESG
2. AGREEMENT TO LEASE. Landlord hereby leases to Tenant, and Tenant
hereby accepts and leases from Landlord the Premises in the Building located on
the real estate legally described on EXHIBIT C attached hereto and made a part
hereof (the "Land") for the Term. The Land, the Building and all other
improvements now or hereafter located on the Land are collectively referred to
herein as the "Property." The rentable area of the Premises, constituting
approximately 150,204 square feet, shall be determined by Landlord's architect
in accordance the current space measurement standards published by BOMA (ANSI
Z65.1-1996), to the extent applicable, and otherwise with standard industry
practices for single story warehouse and distribution facilities and shall be
approved by Tenant's architect, which approval shall not be unreasonably
withheld. At such time as the rentable area of the Premises has been finally
determined, the parties shall jointly execute a written memorandum in the form
attached to the Work Letter as Schedule 2, and such memorandum shall be attached
to and become a part of this Lease. The written memorandum shall confirm the
rentable area of the Premises, the annual and monthly installments of Base Rent
payable by Tenant in accordance with Section 4 below and Tenant's Proportionate
Share in accordance with Section 5.1 (b) below.
3. RENT. Tenant shall pay Rent (as defined below) to:
PDC Properties, Inc.
23333 Network Place
Chicago, Illinois 60673-1227
or to such other person or at such other place as Landlord may designate,
without offsets or deductions of any kind whatsoever, at the times and in the
manner hereinafter set forth. As used herein "Rent" shall mean Base Rent (as
defined below), Additional Rent (as defined below) and all other amounts to be
paid by Tenant to Landlord under this Lease. Tenant's covenant to pay Rent shall
be independent of every other covenant in this Lease.
4. BASE RENT.
4.1 The Base Rent payable for each Lease Year (as defined
below) set forth in Section 1.9 and determined under Section 2 shall be
paid in twelve (12) equal monthly installments, paid in advance not
later than the first (1st) day of each month. If the Commencement Date
is other than the first (1st) day of a month, then the installment of
Base Rent for such initial month shall be prorated on a per diem basis
for such fractional period. Base Rent (calculated based upon the
estimated rentable area of the Premises of 150,889 square feet) for the
first full calendar month for which Base Rent shall be due shall be
paid when Tenant executes this Lease; immediately after the rentable
area of the Premises is determined and approved pursuant to Section 2,
an equitable adjustment shall be made between the parties to reconcile
such estimated Base Rent paid by Tenant for such month with the actual
Base Rent payable for such month. As used herein, "Lease Year" shall
mean each consecutive twelve (12) month period beginning with the
Commencement Date, except that if the Commencement Date is
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other than the first (1st) day of a calendar month, then the first
(1st) Lease Year shall be the period from the Commencement Date
through the date twelve (12) months after the last day of the calendar
month in which the Commencement Date occurs, and each subsequent Lease
Year shall be the period of twelve (12) months following the last day
of the prior Lease Year.
4.2 Notwithstanding anything to the contrary contained in
this Lease and provided that Tenant is not then in default under this
Lease, Base Rent shall abate in full and Tenant shall have no liability
therefor during the two (2) full calendar month period commencing on
the Commencement Date. Landlord and Tenant agree that no portion of the
Base Rent paid by Tenant during the portion of the term of this Lease
occurring after the expiration of any period during which such Rent was
abated shall be allocated, for income tax purposes, nor is such rent
intended by the parties to be allocable, for income tax purposes, to
any abatement period.
5. ADDITIONAL RENT. In addition to paying the Base Rent specified
in Section 4 hereof, Tenant shall pay as "Additional Rent" the amounts
determined as set forth below in this Section 5.
5.1 DEFINITIONS. As used in this Lease, the following
terms shall have the following meanings:
(a) "Calendar Year" shall mean the twelve (12)
month period January through December of any year (or portion
thereof) falling within the Term.
(b) "Tenant's Proportionate Share" shall
initially be 33.31%, a percentage determined by dividing
150,204 square feet, the estimated rentable area of the
Premises, by 450,900 square feet, the rentable area contained
in the Building, subject to confirmation pursuant to Section 2
above. The parties hereby agree that the rentable areas of the
Premises (once determined and approved in accordance with
Section 2) and of the Building, and Tenant's Proportionate
Share (once determined and approved in accordance with Section
2) shall not be contested by either party. Tenant's
Proportionate Share shall otherwise only be revised upon an
actual change in the physical dimensions of the Premises or
upon an actual reconfiguration, addition or modification to
the rentable area of the Building during the Term, each of
which as Landlord may reasonably redetermine from time to time
(provided, however, that no such reconfiguration, addition, or
modification the rentable area of the Building shall result in
an increase in Tenant's Proportionate Share). Similarly, if
the Building shall contain tenants who do not participate in
all or certain categories of Taxes or Operating Expenses on a
prorata basis, Landlord may exclude the amount of Taxes or
Operating Expenses, or such categories of the same, as the
case may be, attributable to such tenants, and exclude the
rentable area of their premises, in computing Tenant's
Proportionate Share so long as no portion of the Taxes or
Operating Expenses attributable to the premises of such
tenants and related common areas (e.g., parking lot) are
included in "Taxes" or "Operating Expenses" hereunder. If the
Building shall be part of or shall include a complex,
development or group of buildings or structures collectively
owned or managed by Landlord or its affiliates or collectively
managed by Landlord's managing agent, Landlord may allocate,
on an equitable basis, Taxes and Operating Expenses within
such complex, development or group, and between such buildings
and structures and the parcels on which they are located, in
accordance with sound accounting and management principles. In
the alternative, Landlord shall have the right to determine,
in accordance, with sound accounting and management
principles, Tenant's Proportionate Share of Taxes and Tenant's
Proportionate Share of Operating Expenses based upon the
totals of each of the same for all such buildings and
structures, the land constituting parcels on which the same
are located, and all related facilities, including common
areas and easements, corridors, lobbies, side-walks,
elevators, loading areas, parking facilities and driveways and
other appurtenances and public areas, in which event Tenant's
Proportionate Share shall be based on the ratio of the
rentable area of the Premises to the rentable area of all such
buildings.
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(c) "Taxes" shall mean all real estate and
personal property taxes and assessments and similar
governmental charges, special or otherwise, direct or
indirect, ordinary or extraordinary (including, without
limitation, real estate taxes, general and special
assessments, transit taxes, water and sewer rents, taxes based
upon the receipt of rent including gross receipts or sales
taxes applicable to the receipt of rent or service or value
added taxes, ad valorem taxes for Landlord's personal
property, and taxes levied or assessed by special taxing
districts now or hereafter created) levied or assessed for any
Calendar Year (without regard to any different fiscal year
used by such government or municipal authority) upon or with
respect to the Property that Landlord shall actually pay
because of or in connection with the ownership, leasing and
operation of the Property. Should any political subdivision or
governmental authority having jurisdiction over the Property,
impose a tax, assessment, charge or fee which Landlord shall
be required to pay, either by way of substitution for such
real estate taxes, or in addition to such real estate taxes,
or impose an income or franchise tax or other tax in the
nature of a sales tax on rents which may be in addition to or
in substitution for a tax levied against the Property, such
taxes, assessments, fees or charges shall be deemed to
constitute Taxes hereunder. "Taxes" shall also include all
reasonable fees and costs actually incurred by Landlord in
connection with protesting, reducing or limiting the increase
in any Taxes. "Taxes" shall not include inheritance, income,
transfer or franchise taxes paid by Landlord to the extent
applicable to Landlord's general or net income (including,
without limitation, rents, receipts or income attributable to
operations at the Property, except as provided in the second
preceding sentence), and shall not include any taxes to be
paid by Tenant under the terms of this Lease. In determining
the amount of Taxes for any Calendar Year, the amount of
special assessments to be included shall be limited to the
amount of the installment (plus any interest payable thereon)
of such special assessment which would have been required to
have been paid during such year if Landlord had elected to
have such special assessment paid over the maximum period of
time permitted by law. Except as provided in the immediately
preceding sentence, all references to Taxes "for" a particular
year shall be deemed to refer to Taxes levied, assessed or
otherwise imposed for such year without regard to when such
Taxes are payable.
(d) "Operating Expenses" shall mean for any
Calendar Year those costs or expenses of every kind and nature
paid or incurred by or on behalf of Landlord for owning,
managing, operating, maintaining, repairing and restoring the
Property including, without limitation: (i) dues and other
amounts payable to the Windham Lakes Business Park Association
(the "Association"), as the Property is located in the Windham
Lakes Business Park (the "Park"), and payments under any other
presently existing easement, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing
of costs in any planned development (collectively, the "Park
Covenants"); (ii) utilities for the Property, including but
not limited to electricity, power, gas, steam, oil or other
fuel, water, sewer, lighting, heating, air conditioning and
ventilating, to the extent not separately metered, (iii) the
cost of fire monitoring, security and security device systems
for the Building, if any; (iv) the cost of maintaining and
repairing the Building and other improvements in the Property,
and all systems, equipment and components thereof, including
but not limited to: (A) sewer, water, mechanical, electrical,
sprinkler and other utility systems and equipment, (B)
heating, ventilating and air conditioning systems and
equipment, (C) the roof and structural components of the
Building, (D) parking lots, driveways and sidewalks, (E)
exterior lighting systems and equipment; (F) window cleaning,
(G) trash removal, (H) cleaning of walks, parking facilities
and building walls, (I) removal of ice and snow, (J)
intentionally omitted, (K) reasonably necessary maintenance
and replacement of shrubs, trees, grass, sod and other
landscaped items, (L) irrigation systems, (M) drainage
facilities, (N) fences, curbs, and walkways, (O) re-striping
and resealing parking facilities, and (P) painting of Building
exteriors; (v) insurance (including but not limited to, fire,
extended coverage, all risk, rent loss, liability, worker's
compensation, and any other insurance reasonably carried by
Landlord and applicable to the Property (to the extent
landlords of similar buildings in the vicinity of the Building
4
generally carry such other insurance) and not carried by
tenants under any provision of their lease); (vi) deductibles
paid by Landlord under the fire, extended coverage, all risk,
insurance policy described above, except to the extent the
claim giving rise to such deductible arises out of or in
connection with the negligence or willful misconduct of
Landlord or its employees, contractors, or agents; (vii)
intentionally omitted; (viii) management agreements (including
the cost of any reasonable and competitive management fee
actually paid thereunder and the fair rental value of any
office space provided thereunder, up to customary and
reasonable amounts); (ix) supplies, tools, equipment and
materials used in the operation, repair and maintenance of the
Property; (x) the cost of wages, salaries and benefits of all
persons at the level of property manager and below, to the
extent engaged in the operation, management, maintenance and
repair of the Property; (xi) accounting services to the extent
performed with respect to the operation and management of the
Property; (xii) governmental permits, licenses and
certificates necessary and required to operate and manage the
Property; (xiii) any rental (excluding, however, any
installment purchase or financing agreements) with respect to
equipment used in the operation, repair or maintenance of the
Property; and (xiv) any other expense or charge which would be
considered as an expense of owning, managing, operating,
maintaining, repairing or restoring the Property under sound
management and accounting principles. Notwithstanding anything
herein to the contrary, Operating Expenses shall not include:
costs or other items included within the meaning of the term
"Taxes"; costs of tenant alterations to tenant space;
marketing costs; costs of capital improvements to the
Property, except as provided below; depreciation charges;
interest and principal payments on mortgages; real estate
brokerage and leasing commissions; and any other expenditures
for which Landlord has been reimbursed (other than pursuant to
rent escalation or tax and operating expense reimbursement
provisions in leases). Notwithstanding the foregoing, the cost
of any capital improvements to the Property made after the
date of this Lease that are primarily intended to reduce
Operating Expenses or that are required under any laws,
statutes, codes, ordinances, or governmental rules,
regulations or requirements, or judicial or administrative
rules, orders or decrees (collectively, "Laws") that were not
applicable to the Property as of the date of this Lease,
amortized over the reasonable life of such improvements, as
determined in according with sound accounting principles,
together with interest on the unamortized cost of any such
improvements (at the prevailing construction loan prime rate
available in the vicinity of the Building on the date the cost
of such improvements was incurred) shall be included in
Operating Expenses. In the event the Property is not fully
occupied during any Calendar Year, the variable Operating
Expenses for that year may be adjusted by Landlord to reflect
the Operating Expenses as though the Property were fully
occupied; provided, however, that in no event shall the
payments made by all tenants of the Property to Landlord for
Operating Expenses exceed the actual Operating Expenses paid
or incurred by Landlord in any Calendar Year. Notwithstanding
anything to the contrary contained in this Section 5.1(e),
Operating Expenses may include, at Landlord's sole, but
reasonable discretion, both (i) snow removal costs, and/or
(ii) maintenance and repair costs of the parking areas for the
Property.
5.2 TAX AMOUNT. Tenant shall pay to Landlord as Rent, in
addition to the Base Rent and the Operating Expense Amount (as defined
below), an amount (the "Tax Amount") equal to Tenant's Proportionate
Share multiplied by the amount of Taxes for each Calendar Year. Tenant
shall pay to Landlord the Tax Amount with respect to each Calendar Year
in monthly installments, at the same time and place as Base Rent is to
be paid, in an amount estimated from time to time by Landlord by a
written notice to Tenant (the "Estimated Tax Payments"). Landlord shall
deliver to Tenant as soon as practical after the close of each Calendar
Year (including the Calendar Year in which this Lease terminates) a
statement showing the amount of the Taxes for such Calendar Year and
the Tax Amount. Tenant hereby acknowledges that Landlord will not be
able to deliver such statement until Landlord receives the real estate
tax bills for each Calendar Year, which bills are currently received
six (6) to nine (9) months after the end of each Calendar Year. If the
Estimated Tax Payments paid by Tenant during any Calendar Year are less
than the Tax Amount
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for such Calendar Year, Tenant shall pay any deficiency to Landlord as
shown by such statement within thirty (30) days after receipt of such
statement. If the Estimated Tax Payments paid by Tenant during any
Calendar Year exceed the Tax Amount due from Tenant for such Calendar
Year, such excess shall be credited against payments of Rent next due
hereunder. If no such payments are next due, such excess shall be
refunded by Landlord. Landlord's failure to deliver an annual statement
of the Taxes for any Calendar Year shall not constitute a waiver or
release of, or relieve Tenant from, its obligations under this
Subsection. If Taxes for any period during the Term or any extension
thereof, shall be increased after payment thereof by Landlord, for any
reason including without limitation error or reassessment by applicable
governmental or municipal authorities, Tenant shall pay Landlord upon
demand Tenant's Proportionate Share of such increased Taxes. Tenant
shall pay increased Taxes whether Taxes are increased as a result of
increases in the assessment or valuation of the Property (whether based
on a sale, change in ownership or refinancing of the Property or
otherwise, but not if attributable to any expansion of the rentable
area of the Building), increases in the tax rates, reduction or
elimination of any rollbacks or other deductions available under
current law, scheduled reductions of any tax abatement, as a result of
the elimination, invalidity or withdrawal of any tax abatement, or for
any other cause whatsoever. Notwithstanding the foregoing, Tenant shall
pay prior to delinquency all taxes, charges or other governmental
impositions assessed against or levied upon Tenant's fixtures,
furnishings, equipment and personal property located in the Premises,
and any Tenant Improvements and Alterations. Whenever possible, Tenant
shall cause all such items to be assessed and billed separately from
the property of Landlord. In the event any such items shall be assessed
and billed with the property of Landlord, Tenant shall pay Landlord its
share of such taxes, charges or other governmental impositions within
thirty (30) days after Landlord delivers a statement and a copy of the
assessment or other documentation, showing the amount of such
impositions applicable to Tenant's property. Tenant shall pay any rent
tax or other sales tax or rent, service tax, transfer tax or value
added tax, or any other applicable tax on the Rent or services herein
or otherwise respecting this Lease. Landlord hereby estimates, in good
faith, to Tenant that Tenant's Proportionate Share of Taxes shall be
approximately $0.80 per square foot per annum as of the Commencement
Date.
5.3 OPERATING EXPENSE AMOUNT. Tenant shall pay to
Landlord as Rent, in addition to the Base Rent and the Tax Amount, an
amount (the "Operating Expense Amount") equal to Tenant's Proportionate
Share multiplied by the amount of Operating Expenses for each Calendar
Year. Tenant shall pay to Landlord the Operating Expense Amount with
respect to each Calendar Year in monthly installments, at the same time
and place as Base Rent is to be paid, in an amount reasonably estimated
from time to time by Landlord by a written notice to Tenant (the
"Estimated Operating Expense Payments"). Landlord shall deliver to
Tenant as soon as practical after the close of each Calendar Year
(including the Calendar Year in which this Lease terminates) a
statement showing the amount of the Operating Expenses for such
Calendar Year and the Operating Expense Amount. If the Estimated
Operating Expense Payments paid by Tenant during any Calendar Year are
less than the Operating Expense Amount for such Calendar Year, Tenant
shall pay any deficiency to Landlord as shown by such statement within
thirty (30) days after receipt of such statement. If the Estimated
Operating Expense Payments paid by Tenant during any Calendar Year
exceed the Operating Expense Amount due from Tenant for such Calendar
Year, such excess shall be credited against payments of Rent next due
hereunder. If no such payments are next due, such excess shall be
refunded by Landlord. Landlord's failure to deliver an annual statement
of the Operating Expenses for any Calendar Year shall not constitute a
waiver or release of, or relieve Tenant from, its obligations under
this Subsection. Landlord hereby estimates, in good faith, to Tenant
that Tenant's Proportionate Share of Operating Expenses shall be
approximately $0.30 per square foot per annum as of the Commencement
Date. Notwithstanding the foregoing, the total Operating Expenses
(excluding amounts relating to insurance, utilities or snow removal)
applicable to any Calendar Year during the initial Term (excluding any
Extension Periods, as defined below) (an "Operating Year") and used
from time to time in the calculation of the Operating Expense Amount or
the Estimated Operating Expense Payments due and payable with respect
to any such Operating Year shall not exceed one hundred ten percent
(110%) of the total Operating Expenses (excluding amounts relating to
6
insurance, utilities or snow removal) applicable to the Calendar Year
immediately preceding such Operating Year and used in the calculation
of the Operating Expense Amount or the Estimated Operating Expense
Payments for such Calendar Year in accordance with this Section 5.3.
5.4 AUDIT RIGHT. Upon reasonable advance written notice,
Tenant may from time to time examine or cause an audit of Landlord's
records relating to Operating Expenses or Taxes, as applicable, for any
Calendar Year within twelve (12) months after Tenant's receipt of the
applicable annual statement from Landlord in accordance with Section
5.2 or Section 5.3. Such examination or audit shall be conducted during
normal business hours, at a time and date reasonably acceptable to each
of Landlord and Tenant. In the event that, as a result of any such
examination or audit, Tenant disputes in a timely manner the Operating
Expense Amount or the Tax Amount, and Landlord disagrees with Tenant
with respect to such dispute, then Landlord (or its property manager)
and Tenant shall each select one of its officers or senior managers to
represent it, and such representatives shall promptly meet or otherwise
communicate and use reasonable, good faith efforts to resolve such
dispute. If such representatives do not resolve any such dispute within
thirty (30) days after their initial meeting or other communication
concerning such dispute, then such dispute shall be resolved by
arbitration in accordance with the rules of the American Arbitration
Association under the Expedited Procedures of its Commercial
Arbitration Rules. The non-prevailing party in the arbitration shall
pay the fees and costs of the arbitrator, who shall be a certified
public accountant with at least ten (10) years' experience with
properties similar to the Property, and the administration of the
arbitration. Each party shall otherwise bear its own costs and expenses
incurred in the course of such arbitration. Notwithstanding the
foregoing, if such dispute is resolved, whether by agreement or
arbitration, in Tenant's favor and the discrepancy with respect to the
Operating Expense Amount or the Tax Amount is in excess of five percent
(5%), then Landlord shall pay to Tenant the reasonable cost of Tenant's
examination or audit within thirty (30) days after Tenant delivers an
invoice therefor, together with reasonable evidence thereof.
5.5 SURVIVAL. Without limiting any other obligations of
Tenant which shall survive the expiration of the Term or a termination
of Tenant's right of possession, the obligations of Tenant to pay the
Additional Rent provided for in this Section 5 shall survive the
expiration of the Term or a termination of Tenant's right of
possession.
6. SERVICES.
6.1 SERVICES FURNISHED BY LANDLORD. During the Term
Landlord shall furnish the following services:
(a) Repairs and maintenance (and if necessary,
replacements) of (i) air conditioning and heating units
providing service to the Premises, (ii) the floor, foundation,
roof and roof structure, exterior walls, and structural
components of the Premises, and (iii) the Parking Areas.
Notwithstanding anything contained herein to the contrary, but
subject to Section 18.1 hereof, if any repairs, maintenance or
replacements are necessitated by the act or neglect of Tenant,
its agents, servants or employees, then the cost thereof shall
be billed directly to Tenant, and Tenant shall pay Landlord
therefor within thirty (30) days after receiving such bill.
Landlord shall not otherwise be responsible for the operation
of air conditioning and heating units exclusively serving the
Premises or the costs thereof, the parties acknowledging that
the use and operation of such units exclusively serving the
Premises shall be within the sole control of Tenant. Landlord
shall not be responsible for inadequate air-conditioning or
ventilation to the extent the same occurs because Tenant uses
any item of equipment that generates excessive hear without
providing adequate air-conditioning and ventilation therefor.
(b) Domestic Water for drinking, lavatory and
toilet purposes at those points of supply provided up to the
demising line of the Premises and refuse disposal service for
the Premises and for the Property in common with other
tenants. In the event that Tenant
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uses or requires a materially greater amount of water or
refuse disposal service than the usual and ordinary use of
either of such services for general office, warehouse and
distribution purposes, then Landlord may bill Tenant for the
additional reasonable cost of such increased use and for the
reasonable cost of determining the amount of such increased
use, and Tenant shall pay Landlord for such costs as Rent
within fifteen (15) days after receiving such bill. If as of
the Commencement Date, water service is not separately metered
for the Premises, Landlord reserves the right to install
separate meters for the Premises at Landlord's cost.
(c) Landlord shall arrange with the public
utility companies and/or municipality providing the Building
with electricity and natural gas service for the supply of
such services to the Premises. Such services are currently
separately metered to the Premises. Tenant shall pay the
public utility companies and/or municipality directly for any
services provided and separately metered to the Premises.
Tenant shall bear the cost of maintaining light fixtures and
replacing bulbs, tubes, ballasts and similar items in the
Premises.
(d) Exterior window washing of all windows in
the Premises, weather permitting, at intervals to be
reasonably determined by Landlord.
6.2 NO OTHER SERVICES. Landlord shall not be obligated to
provide any services other than those expressly set forth above in this
Lease. Landlord does not warrant that any of the services described in
this Section 6 will be free from interruptions caused by repairs,
improvements or alterations of equipment, or by war, insurrection,
civil commotion, acts of God or governmental action, strikes, lockouts,
picketing, whether legal or illegal, accidents, inability of Landlord
to obtain fuel or supplies, or any other cause or causes beyond
Landlord's reasonable control. None of such interruptions shall be
deemed an eviction (constructive or actual) or disturbance of Tenant's
use and possession of the Premises or any part thereof, or render
Landlord liable to Tenant for damages or abatement of Rent, or relieve
Tenant from performance of Tenant's obligations under this Lease.
Landlord in no event shall be liable for damages by reason of loss of
profits, business interruption or other consequential damages.
Notwithstanding the foregoing, if (a) any of the services described in
clauses (a), (b) or (c) of Section 6.1 are interrupted or not provided,
(b) such interruption or non-provision is due to the negligence or
willful misconduct of Landlord or any of its employees, contractors or
agents, (c) as a result of such interruption or non-provision, the
Premises are not reasonably accessible or usable for the purposes
contemplated by this Lease, (d) Tenant gives Landlord prompt notice of
such interruption or non-provision, and (e) Landlord fails to restore
such service within ninety six (96) hours after Landlord's receipt of
Tenant's notice (subject to delays caused by Tenant and Events of Force
Majeure [as defined below]), Base Rent and Additional Rent shall abate
under this Lease from the date of such interruption until such service
is restored to allow Tenant reasonable access to and use of the
Premises as contemplated by this Lease.
7. SECURITY DEPOSIT. As additional security for the full and
prompt performance by Tenant of all its obligations hereunder, Tenant has upon
execution of this Lease paid to Landlord the amount set forth in Section 1.10
hereof (the "Security Deposit"), which amount may be applied by Landlord for the
purpose of curing any default by Tenant under this Lease or the Work Letter.
Landlord shall be permitted to commingle the Security Deposit with Landlord's
general funds. Landlord shall not be required to pay any interest on the
Security Deposit. If any portion of the Security Deposit is applied to cure a
default by Tenant, Tenant shall, within five (5) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant's failure to do so shall be
a breach of this Lease. If Tenant has not defaulted hereunder or if Landlord has
not applied the full amount of the Security Deposit to said default, then the
Security Deposit, or any portion thereof not so applied by Landlord, shall be
paid in cash to Tenant when all Rent payments required under the Lease
(including settlement of the final Tax Amount and Operating Expense Amount) have
been made, Tenant shall have vacated the Premises in accordance with the
provisions of this Lease and all other outstanding obligations of Tenant under
this Lease shall have been satisfied. The Security Deposit is not an advance
8
payment of Rent or an account of Rent, or any part or settlement thereof, or a
measure of Landlord's damages. The use or application of the Security Deposit or
any portion thereof shall not prevent Landlord from exercising any other right
or remedy provided hereunder or under any Laws and shall not be construed as
liquidated damages. In the event Landlord transfers all or any part of its
interest in the Building or this Lease, Landlord shall have the right to
transfer the Security Deposit to the transferee. Upon such transfer, Landlord
shall thereby be released by Tenant from all liability or obligation for the
return of the Security Deposit.
8. USE. Tenant shall use and occupy the Premises for general
office, warehouse and distribution purposes and for no other purpose, unless
otherwise expressly agreed in writing by Landlord. Notwithstanding the
foregoing, Tenant shall not use or occupy the Premises, or permit the Premises
to be used or occupied contrary to or in violation of any Laws or any Park
Covenants or in any manner that would: (i) cause structural injury to the
Premises or the Building; (ii) invalidate any insurance policy affecting the
Premises or the Building; (iii) increase the amount of premiums for any
insurance policy affecting the Premises or the Building; (iv) affect any
certificate of occupancy affecting the Premises or the Building; (v) constitute
a danger to persons or property; or (vi) create a nuisance, or disturb any other
occupant of the Building.
9. CONDITION OF PREMISES.
9.1 Tenant's taking possession of the Premises shall be
conclusive evidence as against Tenant that the Premises were in good,
clean and sanitary order, repair and condition satisfactory to Tenant
and at such time free from defects, other than latent defects of which
Landlord is notified within one (1) year after the Commencement Date;
upon receipt of notice of any such latent defects within such one year
period, Landlord shall promptly repair same. No promise of Landlord to
alter, remodel or improve the Premises or the Building and no
representation respecting the condition of the Premises or the Building
has been made by Landlord to Tenant other than as may be contained in
this Lease (including, without limitation, the Work Letter).
9.2 In consideration of Tenant's taking possession in
accordance with this Section 9, Landlord agrees to pay or credit to
Tenant an amount equal to Ninety Thousand Dollars ($90,000) as a tenant
improvement allowance (the "TI Allowance") in accordance with this
Section 9.2. If Tenant elects to exercise its Expansion Option (as
defined below) prior to the Expansion Deadline (as defined below),
Landlord shall pay to Tenant the entire TI Allowance within 30 days
after such election to reimburse Tenant for all reasonable costs and
expenses of Tenant relating to the construction of initial tenant
improvements and alterations relating to the Premises that Tenant may
desire to construct in accordance with Section 12 and to be used by
Tenant for any other purpose. If Tenant does not exercise its Expansion
Option prior to the Expansion Deadline:
(a) Landlord shall construct a standard demising
wall between the Premises and the Expansion Space (as defined
below) at Landlord's sole cost and expense;
(b) Tenant and Landlord shall enter into a work
letter in substantially the form of the work letter attached
hereto as Exhibit B (with such changes as may be necessary to
cause such work letter to be consistent with the fact that the
Tenant Improvements will be constructed after the Commencement
Date and after Tenant's possession, use and occupancy of the
Premises from and after the Expansion Deadline). The term
"Work Letter" used in this Lease shall be deemed to mean and
refer to such work letter from and after the date Landlord and
Tenant agree upon and execute such work letter. Landlord shall
construct or cause the construction of the Tenant Improvements
in the Premises only in accordance with, and subject to the
terms and conditions of, such executed work letter. The
parties hereto acknowledge and agree that, notwithstanding
anything to the contrary contained in this Lease:
(i) the work letter attached hereto as
Exhibit B is attached solely for the purpose of
providing a substantive form for the work letter to
be executed by
9
the parties pursuant to this subparagraph, and such
work letter attached hereto as Exhibit B is not
intended to, and shall not be deemed to, impose any
duties, obligations, liabilities, or responsibilities
on either party hereto; and
(ii) Landlord may cause to be prepared
at Landlord's cost the plans, drawings and
specifications for the Tenant Improvements based on
the description in Schedule 1 to Exhibit B prior to
Tenant's exercise of the Expansion Option. If
Landlord causes such preparation, Landlord and Tenant
shall act in good faith and cooperate with each other
to finalize and approve such plans, drawings and
specifications as soon as reasonably possible in
accordance with Section 3 of Exhibit B. The
reasonable costs and expenses of such plans, drawings
and specifications shall be payable by Tenant in
accordance with the Work Letter if and only if Tenant
does not exercise its Expansion Option prior to the
Expansion Deadline;
(c) Landlord shall credit against such costs and
expenses an amount equal to the II Allowance in accordance
with the Work Letter; and
(d) If the total reasonable costs and expenses
for the Tenant Improvements are less than the total amount of
the TI Allowance, Landlord shall pay the excess balance of the
TI Allowance to Tenant within 30 days of the Substantial
Completion Date (as defined in the Work Letter).
10. EARLY POSSESSION. If Tenant takes possession of all or any
part of the Premises prior to the Commencement Date, all of the covenants and
conditions of this Lease shall be binding upon the parties hereto the same as if
the Commencement Date had been fixed as of the date when Tenant took such
possession, and Tenant shall pay to Landlord as Rent for the period prior to the
Commencement Date, a proportionate amount of the Rent as set forth in this Lease
based upon the portion of the Premises of which Tenant has taken possession.
Notwithstanding the foregoing, but subject to the terms and conditions of the
Work Letter, Landlord agrees that Tenant may enter the Premises from and after
the date of this Lease for the purpose of fixturing the Premises and otherwise
preparing the Premises for occupancy, and during such fixturing and preparation
Tenant shall not be obligated to pay Rent.
11. ASSIGNMENT AND SUBLETTING.
11.1 PROHIBITIONS. Tenant shall not, without the prior
written consent of Landlord, undertake any of the following
(collectively, a Transfer"): (a) assign, convey or mortgage this Lease
or any interest hereunder; (b) permit any assignment of, or lien upon
this Lease or tenant's interest herein by operation of law or
otherwise; (c) sublet the Premises or any part thereof; or (d) permit
the use of the Premises by any parties other than Tenant and its
Affiliates (as defined below) and their respective agents and
employees. Any Transfer made without complying with this Section 11
shall at Landlord's option be null, void and of no effect and shall
constitute a default under this Lease, subject to any applicable notice
and cure period. Neither a Transfer to any party (including but not
limited to any affiliates or subsidiaries), nor Landlord's consent to
any other Transfer, nor Landlord's election to accept any assignee,
sublessee or transferee as Tenant hereunder shall release the original
Tenant from any covenant or obligation under this Lease. Landlord's
consent to any Transfer shall not constitute a waiver of Landlord's
right to consent to any future Transfer.
11.2 NOTICE TO LANDLORD. Tenant shall give Landlord
written notice of any proposed Transfer (including, without limitation,
a proposed Transfer to an Affiliate) at least thirty (30) days prior to
the effective date of such proposed Transfer. Such written notice shall
include: (a) the name and address of the proposed assignee, sublessee
or transferee (a "Transferee"), and whether the proposed Transferee is
an Affiliate (as defined below), (b) the proposed effective date (which
shall not be less than 30 nor more than 180 days after Tenant's
notice), (c) the portion of the Premises subject to the proposed
Transfer (the "Subject Space"), (d) unless the transferring
10
Tenant or its guarantor shall remain liable under this Lease and in
substantially the same financial condition upon and after such
Transfer, current financial statements of the proposed Transferee
certified by an officer, partner or owner thereof, (e) such any other
information to enable Landlord to determine the financial condition of
the proposed Transferee, nature of such Transferee's business and
proposed use of the Subject Space, and (f) such other information as
Landlord may reasonably require. The term "Affiliate" in this Lease
shall mean an entity that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control
with Tenant. For purposes of this definition, the term "control" shall
mean possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or
otherwise.
11.3 APPROVAL. Landlord will not unreasonably withhold or
delay its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in Tenant's notice. The parties
hereby agree that it shall be reasonable under this Lease and under any
applicable Laws for Landlord to withhold consent to any proposed
Transfer where one or more of the following applies (without limitation
as to other reasonable grounds for withholding consent): (i) the
proposed Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Property, (ii)
the proposed Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease, (iii) the proposed Subject
Space is not regular in shape with appropriate means of ingress and
egress suitable for normal renting purposes, (iv) the proposed
Transferee is either a governmental authority (or agency or
instrumentality thereof) or a current tenant or occupant of the
Property (except that if expansion space suitable for any such current
tenant or occupant is not available at the Park, the fact that such
proposed Transferee is a current tenant or occupant of the Property
shall not be considered by Landlord), (v) unless the transferring
Tenant or its guarantor shall remain liable under this Lease and in
substantially the same financial condition upon and after such
Transfer, the proposed Transferee does not have a reasonable financial
condition in relation to the obligations to be assumed in connection
with the Transfer, (vi) an uncured event of default in the payment of
Rent or other material event of default under this Lease shall exist at
the time Tenant requests consent to the proposed Transfer, or (vii) any
such transfer will cause a violation of ERISA (as defined below) or
other applicable state statutes regulating investments by or fiduciary
obligations with respect to "governmental plans." Notwithstanding
anything in this Section 11.3 to the contrary, Landlord shall be deemed
to have given its consent to any Transfer to any Affiliate of Tenant.
11.4 TERMS OF CONSENT. If Landlord consents to a Transfer
or, in connection with any Transfer to an Affiliate of Tenant, is
deemed to have consented to a Transfer: (a) the terms and conditions of
this Lease shall in no way be deemed to have been waived or modified,
(b) such consent shall not be deemed consent to any further Transfer by
either Tenant or a Transferee, (c) no Transfer relating to this Lease
or agreement entered into with respect thereto, whether with or without
Landlord's consent, shall relieve Tenant or any guarantor of this Lease
from liability under this Lease, (d) unless the proposed Transferee is
an Affiliate, if the proposed Transfer is pursuant to a sublease or
similar occupancy agreement for the Premises, Tenant shall deliver to
Landlord promptly after execution an original executed copy of the
agreement effecting such Transfer, which agreement shall in all events
provide that the Transferee thereunder assumes all duties and
obligations of the "tenant" hereunder from and after the effective date
of such Transfer, and (e) unless the proposed Transferee is an
Affiliate, if the proposed Transfer is pursuant to a sublease or
similar occupancy agreement for the Premises, Tenant shall furnish upon
Landlord's request a complete statement, certified by an independent
certified public accountant or Tenant's chief financial officer or a
partner or owner of Tenant, setting forth in detail the computation of
any profits Tenant shall derive from or otherwise allocated to such
Transfer. Any sublease hereunder shall be subordinate and subject to
the provisions of this Lease, and if this Lease shall be terminated
during the term of any sublease, Landlord shall have the right to: (i)
treat such sublease as canceled and repossess the Subject Space by any
lawful means, or (ii) require that such subtenant attorn to and
recognize Landlord as its landlord under any such sublease. In the
event of monetary default, Landlord is hereby irrevocably authorized,
as Tenant's agent and
11
attorney-in-fact, to direct any Transferee to make all payments under
or in connection with the Transfer directly to Landlord (which Landlord
shall apply towards Tenant's obligations under this Lease) until such
default is cured.
11.5 SHARING OF PROFITS. Without limitation of any other
provision hereof, should Tenant propose to Transfer to any Transferee
(other than an Affiliate) pursuant to a sublease or similar occupancy
agreement for the Premises, Landlord may condition its consent to the
Transfer on the condition that fifty percent (50%) of the profit
derived by Tenant from the Transfer be paid by Tenant to Landlord as
Rent. For purposes of Subsections 11.4 and 11.5, "profits" shall mean
the amount of any and all base rent and additional rent received by
Tenant in connection with, or otherwise allocable to, such Transfer,
minus the amount of Base Rent and Additional Rent to be paid by Tenant
under this Lease for the portion of the Term and the Subject Space,
minus all reasonable, out-of-pocket costs actually incurred by Tenant
in connection with such Transfer (including leasing commissions,
advertising expenses, costs of alterations or improvements to the
Premises approved by Landlord in accordance with this Lease, and
attorney's fees).
11.6 TRANSFER OF OWNERSHIP INTERESTS IN TENANT. For
purposes of this Lease, the term "Transfer" shall also include any one
of the following events if and only if Tenant does not maintain
substantially the same net worth and remain in substantially the same
financial condition upon and after such event: (a) the direct or
indirect sale or other transfer of an aggregate of 50% or more of the
voting or ownership interests of Tenant, (b) the sale, mortgage,
hypothecation or pledge of an aggregate of 50% or more of Tenant's net
assets, or (c) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of a majority of the
partners or the dissolution of the partnership. Any transfer of
ownership interests in Tenant shall not be permitted hereunder, shall
at Landlord's option be null, void and of no effect and shall
constitute a default under this Lease if such transfer would cause any
of the representations and warranties made by Tenant in Section 26
below to be inaccurate or incorrect at any time. Tenant shall
indemnify, defend and hold the Landlord Parties (as defined below)
harmless from all claims, causes of action, liabilities, losses, costs,
damages, liens and expenses related to any transfer of ownership
interests in Tenant that may cause any of the representations and
warranties made by Tenant in Section 26 below to be inaccurate or
incorrect at any time. Notwithstanding anything to the contrary set
forth in this Lease, each of the following Transfers shall be permitted
hereunder without the consent or approval of Landlord (but shall
otherwise comply with all of the other terms and conditions of this
Section 11): (i) any direct or indirect sale or other transfer of any
portion of the voting or ownership interests of Tenant to any person or
entity that is currently an owner of any voting or ownership interests
of Tenant or to the heir(s) of any such person or entity, (ii) any
direct or indirect sale or other transfer of any portion of the voting
or ownership interests of Tenant via a public stock or equity exchange
(including, without limitation, the NYSE and NASDAQ), and (iii) the
sale of substantially all of the voting or ownership interests, or
substantially all of the assets, of Tenant, or any merger or
consolidation involving Tenant, so long as in any such event the net
worth of the resulting Transferee is not less than twenty-five million
dollars ($25,000,000.00).
11.7 LANDLORD'S COSTS. Tenant shall pay to Landlord as
Rent hereunder, all costs and expenses (including, without limitation,
reasonable attorneys' fees) paid or incurred by Landlord in connection
with any proposed assignment or subletting hereunder (not to exceed
$1,500.00), regardless of whether Landlord withholds or grants its
consent to such assignment or subletting in accordance with the terms
and conditions of this Section 11.
12. REPAIRS AND ALTERATIONS.
12.1 TENANT'S REPAIR OBLIGATIONS. Tenant shall, at its own
expense, keep and maintain the Premises in good and sanitary condition,
working order and repair during the Term. Tenant shall promptly and
adequately repair all damage to the Premises and restore, replace or
repair all damaged or broken glass, carpet, wall-covering, doors,
fixtures, equipment, improvements and appurtenances (including but not
limited to the Tenant Improvements and any
12
Alterations); provided, however, that Tenant shall not be obligated to
repair or replace any component of the Premises for which Landlord is
responsible under this Lease (including, without limitation, the
heating and air conditioning systems servicing the Premises), except to
the extent that, subject to Section 18.1, such repair or replacement
are necessitated by the negligence or willful misconduct of Tenant, its
agents, servants or employees. In the event that any such repairs,
maintenance or replacements by Tenant are required, Tenant shall
promptly arrange for the same either through Landlord for such
reasonable charges as Landlord may from time to time establish, or such
contractors as Landlord generally uses at the Property or such other
contractors as may be reasonably acceptable to Landlord (provided such
acceptance is made in writing), and in a first class, workmanlike
manner. If Tenant does not fulfill its obligations under this
Subsection 12.1, Landlord may, but need not, make such repairs and
replacements, and Tenant shall pay Landlord all reasonable
out-of-pocket third party costs and expenses thereof actually incurred
by Landlord in connection with such repairs and replacements
immediately upon written demand therefor. Landlord may enter the
Premises at all reasonable times with reasonable advance notice (except
in the event of an emergency, in which event no notice shall be
required) to make such repairs and replacements and any other repairs,
alterations, improvements and additions to the Premises or to the
Building or to any equipment or system located in the Building.
Notwithstanding anything contained herein to the contrary, if any
damage to the Premises or the Property or to any equipment or system
thereon (including but not limited to the roof of the Building or any
heating, air conditioning and ventilation systems serving the Premises)
or appurtenance thereto results from any negligence or willful
misconduct of Tenant or of Tenant's contractors, agents or employees,
then Landlord may but is not obligated to, at Landlord's option, repair
such damage, and, subject to Section 18.1, Tenant shall pay Landlord
all reasonable out-of-pocket third party costs and expenses thereof
actually incurred by Landlord in connection with such repairs and
replacements immediately upon written demand therefor.
12.2 PROHIBITION ON ALTERATIONS. Tenant shall not, without
the prior written consent of Landlord, make any alterations,
improvements, decorations or additions (collectively, "Alterations") to
the Premises. Landlord may, in its sole discretion, withhold its
consent to any Alteration which: (i) affects the roof or structural
components of the Building; (ii) affects any heating, ventilating, air
conditioning, utility or mechanical systems or equipment in the
Building; (iii) is visible from outside of the Premises; (iv) costs
more than $10,000.00 to complete (including all labor and material
costs); or (iv) requires a building permit to perform. Except as
provided in the immediately preceding sentence, Landlord shall not
unreasonably withhold its consent to any Alterations, and Tenant may
undertake any Alteration costing $10,000 or less without Landlord's
consent so long as such Alteration is not of the type described in the
immediately preceding sentence and so long as Tenant delivers a
reasonably detailed description of such Alterations to Landlord
promptly upon completion of such Alterations. Landlord's consent to any
Alterations (including, without limitation, Landlord's approval of
Tenant's plans, specifications or working drawings therefor), shall
impose no responsibility or liability on Landlord with respect to the
completeness, or design sufficiency thereof or the compliance thereof
with all applicable Laws.
12.3 PERFORMANCE OF ALTERATIONS. The work necessary to
make any Alterations requiring Landlord's consent shall be done by
employees of or contractors employed by Landlord or, with Landlord's
prior written consent, by contractors and subcontractors arranged for
by Tenant and approved by Landlord. If Alterations are, with Landlord's
consent, performed by contractors employed by Tenant, Tenant shall
deliver to Landlord, for its review and approval prior to commencing
any such Alterations, copies of all contracts and subcontracts related
to such Alterations, and plans, working drawings and specifications
necessary to perform such work. Landlord's review of Tenant's plans,
specifications or working drawings shall impose no responsibility or
liability on Landlord, and shall not constitute a representation,
warranty or guarantee by Landlord, with respect to the completeness,
design, sufficiency or compliance thereof with any Laws. In addition,
Alterations shall be performed subject to all of the following
conditions by Tenant and its contractors and subcontractors: insuring
against liabilities which may arise out of such Alterations, as
determined by Landlord; obtaining necessary licenses and permits;
contractor and subcontractor lien waivers; affidavits listing all
contractors, subcontractors
13
and suppliers; use of union labor (if Landlord uses union labor);
affidavits from engineers acceptable to Landlord stating that the
Alterations will not adversely affect the systems and equipment or the
structure of the Building; and requirements as to the manner and times
in which such Alterations shall be done. All Alterations performed by
Tenant or its contractors shall be done in a first-class, workmanlike
manner using only new and good grades of materials and shall comply
with all insurance requirements and all Laws. Tenant shall permit
Landlord to observe and inspect all Alterations, and Tenant shall
reimburse Landlord for its actual, reasonable out of pocket costs and
expenses payable to third parties and related to such observation and
inspection. Tenant shall promptly pay to Landlord and/or to Tenant's
contractors, as the case may be, when due, the cost of all work and of
all decorating required in connection with any Alterations, and if
payment is made directly to Tenant's contractors, upon completion of
the Alterations, Tenant shall deliver to Landlord evidence of payment
and full and final waivers of all liens for labor, services or
materials. Except to the extent caused by Landlord's negligence or
willful misconduct, Tenant shall indemnify, defend and hold Landlord
and its owners and their respective officers, shareholders, directors,
partners, agents and employees (collectively, the "Landlord Parties")
harmless from all claims, causes of action, liabilities, losses, costs,
damages, liens and expenses related to any Alterations performed by
Tenant or its contractors or subcontractors.
13. CERTAIN RIGHTS RESERVED BY LANDLORD. Except to the extent
expressly limited herein, Landlord reserves full rights to control the Property,
including but not limited to the following rights, exercisable without notice
(except as expressly provided below in this Section) and without liability to
Tenant for damage or injury to property, person or business so long as in
exercising such rights, Landlord uses reasonable efforts to minimize any effect
on the use and occupancy of the Premises, and without effecting an eviction,
constructive or actual, or disturbance of Tenant's use or possession of the
Premises or giving rise to any claim for set-off or abatement of Rent:
(a) To change the name or street address of the
Building or the Property;
(b) To install, affix and maintain any and all
signs on the exterior of the Premise or the Building, so long
as the exercise of such rights does not interfere with or
impede Tenant's exercise of its rights with respect to signage
as set forth in Section 22(a);
(c) To designate and/or approve, prior to
installation, all types of window shades, blinds, drapes,
awnings, window ventilators and other similar equipment, and
to control all internal lighting that may be visible from the
exterior of the Premises;
(d) Upon reasonable advance notice, to show the
Premises to prospective tenants at reasonable hours during the
last six (6) months of the Term and to show the Premises to
current and prospective insurers, brokers, purchasers and
lenders of the Building at reasonable hours during the Term;
(e) To retain at all times, and to use in
appropriate instances, keys to all doors within and into the
Premises. No locks shall be changed without the prior written
consent of Landlord;
(f) To decorate or maintain or to make repairs,
alterations, additions or improvements, whether structural or
otherwise, in and about the Property or the Building, or any
part of any thereof, and for such purposes to enter upon the
Premises upon reasonable prior verbal notice (except in an
emergency, in which case no notice shall be necessary), and,
during the continuance of any such work, to take into and upon
or through the Premises all materials required to make such
decorations, repairs, maintenance, alterations or
improvements, to erect scaffolding and other structures as may
be reasonably required, to close roads, drives, doors,
entryways, public space and corridors in the Property or the
Building on a temporary basis (but only if Landlord provides
alternative means of reasonable access to the Premises during
any such
14
closure), and to interrupt or suspend temporarily Building
services and facilities, all without abatement of Rent or
affecting any of Tenant's obligations hereunder, so long as in
any such event the Premises are reasonably accessible;
(g) To have and retain a paramount title to the
Premises free and clear of any act of Tenant purporting to
burden or encumber it;
(h) To grant to anyone the exclusive right to
conduct any business or render any service in or to the
Property, provided such exclusive right shall not operate to
exclude Tenant from the use expressly permitted herein;
(i) To approve the location of fixtures,
equipment and other articles of personal property in and about
the Premises and the Building so as not to exceed the legal
live load;
(j) To prohibit the placing of vending or
dispensing machines of any kind in or about the Premises,
except for vending or dispensing machines for the sole use of
Tenant and its employees and any other person or entity using,
occupying, or performing work in the Premises;
(k) To issue reasonable rules and regulations,
from time to time, governing the use of the Parking Areas (as
defined below); and
(l) To limit or prevent access to the Property
or otherwise take such action or preventative measures as may
be reasonably necessary for the safety of tenants or other
occupants of the Property or the protection of the Property
and other property located thereon or therein, but only in
case of fire, invasion, insurrection, riot, civil disorder,
public excitement or other, similar dangerous condition, or
threat thereof.
14. COVENANT AGAINST LIENS. Tenant covenants and agrees not to
suffer or permit any lien of mechanics or materialmen to be placed against the
Property, the Building or the Premises in connection with any work or
Alterations on or respecting the Premises not performed by or at the request of
Landlord, and Tenant shall indemnify and hold Landlord harmless from and against
any claims, liabilities, judgments, or costs (including attorneys' fees) arising
out of the same or in connection therewith. In the case of any such lien
attaching, Tenant shall pay off and remove or bond over any such lien to
Landlord's satisfaction within thirty (30) days after the filing thereof. If any
such lien attaches, and Tenant fails to remove or bond over such lien within
said thirty (30) day period, Landlord may, but shall not be obligated to, pay
the amount necessary to remove such lien without being responsible for making an
investigation as to the validity or accuracy thereof, and the amount so paid,
together with all costs and expenses (including, without limitation, reasonable
attorneys' fees) incurred by Landlord in connection therewith, shall be deemed
Rent hereunder, payable immediately upon demand. Tenant has no authority or
power to cause or permit any lien or encumbrance of any kind whatsoever, whether
created by act of Tenant, operation of Laws or otherwise, to attach to or be
placed upon Landlord's title or interest in the Property, the Building or the
Premises, and any such claim to a lien or encumbrance shall be null and void, or
at Landlord's option shall attach only against Tenant's interest in the
Premises, and shall in all respects be subordinate to Landlord's title to the
Property and Premises. Tenant shall give Landlord notice at least twenty (20)
days prior to the commencement of any work or Alterations on the Premises (or
such additional time as may be necessary under applicable Laws), to afford
Landlord the opportunity of posting and recording appropriate notices of
non-responsibility.
15. WAIVERS AND INDEMNITIES.
15.1 WAIVER. To the extent not expressly prohibited by
law, Tenant waives all claims it may have against the Landlord Parties
for any damage either to person or property or loss of business due to
the happening of any accident in or about the Property or the Premises
or due to any act or neglect of Tenant or any tenant or occupant of the
Property, or of any other person,
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including the Landlord Parties. This provision shall apply particularly
(but not exclusively) to damage caused by water, snow, frost, steam,
sewage, gas, faucets and plumbing fixtures, and shall apply without
distinction as to the person whose act or neglect was responsible for
the damage and whether the damage was due to any of the causes
specifically enumerated above or to some other cause of an entirely
different kind. Tenant further agrees that all Tenant's property upon
the Premises or the Property shall be there at the risk of Tenant only,
and that Landlord shall not be liable for any damage thereto or theft
thereof.
15.2 INDEMNIFICATION. Tenant hereby agrees to indemnify,
defend and hold harmless the Landlord Parties from and against any
claims or liability for damage to person or property (or for loss or
misappropriation of property) occurring in or on the Property or the
Premises, arising from any breach or default on the part of Tenant
under this Lease, or from any act or omission of Tenant or any
employee, agent, servant, invitee or contractor of Tenant, or from
Tenant's operations or activities on or use of the Property or the
Premises, and from any cost relating thereto (including, without
limitation, attorneys' fees).
15.3 WAIVER OF NOTICE. Except for any notices expressly
provided for in this Lease, Tenant hereby expressly waives the service
of any notice of intention to terminate this Lease or to re-enter the
Premises, and waives the service of any demand for payment of Rent or
for possession.
15.4 NO IMPLICIT WAIVERS. No waiver of any condition
expressed in this Lease shall be implied by any neglect of Landlord or
Tenant to enforce any remedy on account of the violation of such
condition if such violation be continued or repeated subsequently, and
no express waiver shall affect any condition other than the one
specified in such waiver and that one only for the time and in the
manner specifically stated. No receipt of moneys by Landlord from
Tenant after the termination in any way of the Term or of Tenant's
right of possession hereunder or after the giving of any notice shall
reinstate, continue or extend the Term or affect any notice given to
Tenant prior to the receipt of such moneys, it being agreed that after
the service of notice of the commencement of a suit or after final
judgment for possession of the Premises, Landlord may receive and
collect any Rent due, and the payment of said Rent shall not waive or
affect said notice, suit or judgment.
16. DEFAULTS AND LANDLORD'S REMEDIES.
16.1 DEFAULTS. It shall be a "default" or "event of
default" under this Lease if: (i) Tenant fails to pay, when due, Rent
or any installment thereof or any other sum required to be paid by
Tenant under this Lease (including any required replenishment of the
Security Deposit), and such failure continues for more than five (5)
days after notice is given to Tenant; (ii) intentionally omitted; (iii)
Tenant fails to observe or perform any of the covenants, conditions or
obligations not relating to the payment of Rent or other sums that
Tenant is required to observe or perform under this Lease, and such
failure continues for more than fifteen (15) days after notice thereof
to Tenant; provided, however, that Landlord shall not be entitled to
exercise its remedies on account of any default described in this
clause (iii) (subject to Section 16.2(c) below) if (a) such default
cannot reasonably be cured within fifteen (15) days, (b) Tenant
commences to cure such default within said fifteen (15) day period and
thereafter diligently and continuously proceeds with such cure, and (c)
Tenant cures such default within a reasonable period of time not to
exceed sixty (60) days after Landlord's notice of such default; (iv)
the interest of Tenant in this Lease is levied on under execution or
other legal process; (v) an Event of Bankruptcy (as defined below)
occurs; (vi) Tenant dissolves or ceases to exist; (vii) Tenant shall
effect a Transfer in violation of Section 11 hereof; or (viii) any
material misrepresentation herein, or material misrepresentation or
omission in any financial statements or other materials provided by
Tenant in connection with negotiating or entering this Lease or in
connection with any Transfer. For purposes of this Lease, an "Event of
Bankruptcy" means the occurrence of any one or more of the following
events or circumstances:
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(a) If Tenant or any Guarantor shall file in any
court a petition in bankruptcy or insolvency or for
reorganization within the meaning of the Federal Bankruptcy
Code, or for arrangement within the meaning of such Code (or
for reorganization or arrangement under any future bankruptcy
or reform act for the same or similar relief), or for the
appointment of a receiver or trustee of all or a portion of
the property of Tenant or any Guarantor, or
(b) If an involuntary petition in bankruptcy or
insolvency or for reorganization within the meaning of the
Federal Bankruptcy Code shall be filed against Tenant or any
Guarantor, and such petition shall not be vacated or withdrawn
within thirty (30) days after the date of filing thereof, or
(c) If Tenant or any Guarantor shall make an
assignment for the benefit of creditors, or
(d) If Tenant or any Guarantor shall be
adjudicated a bankrupt or shall admit in writing an inability
to pay its debts as they become due, or
(e) If a receiver shall be appointed for the
property of Tenant or any Guarantor by order of a court of
competent jurisdiction (except where such receiver shall be
appointed in an involuntary proceeding and be withdrawn within
thirty (30) days from the date of his appointment).
16.2 LANDLORD'S REMEDIES. Upon a default under this Lease,
Landlord at its option may, without notice or demand of any kind to
Tenant or any other person, exercise any one or more of the following
described remedies in addition to all other rights and remedies
provided at law or in equity:
(a) Landlord may terminate this Lease and the
Term created hereby, in which event Landlord may forthwith
repossess the Premises and be entitled to recover forthwith as
damages a sum of money equal to all Rent accrued and unpaid
for the period up to and including the date of termination,
plus as final and liquidated damages (and not as a penalty)
Landlord's reasonable estimate of the amount of Base Rent
(plus Additional Rent, reasonably adjusted to account for any
net decrease in Operating Expenses that would occur as a
result of Tenant's eviction and subsequent non-occupation of
the Premises) that would be payable from the date of such
termination through the balance of the scheduled Term, less
the fair rental value of the Premises for said period (taking
into consideration the time to relet the Premises, and taking
into consideration and reducing said fair rental value by, the
Costs of Re-Letting [as defined below]), plus any other sum of
money and damages owed by Tenant to Landlord arising prior to
such termination.
(b) Landlord may terminate Tenant's right of
possession and may repossess the Premises by any legal action
against Tenant's unlawful detainer, by taking peaceful
possession or otherwise, without terminating this Lease. If
Landlord terminates Tenant's right of possession without
terminating this Lease, Landlord shall take reasonable
measures to mitigate its damages, to relet the same for the
account of Tenant, for such rent and upon such terms as shall
be reasonably satisfactory to Landlord. Reasonable measures
shall not obligate Landlord to show the Premises before
showing other space in the Building to a prospective tenant.
For the purpose of such reletting, Landlord is authorized to
decorate, repair, remodel, alter or otherwise improve the
Premises and to relet the Premises at such rental rate (which
may be higher than the rental rate then applicable under this
Lease), as Landlord reasonably determines to be necessary to
maximize the effective rent on reletting. If Landlord shall
fail to relet the Premises, Tenant shall pay to Landlord as
damages the amount of the Base Rent (plus Additional Rent,
reasonably adjusted to account for any net decrease in
Operating Expenses that would occur as a result of Tenant's
eviction and subsequent non-occupation of the Premises)
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reserved in this Lease for the balance of the Term as due
hereunder. If the Premises are relet and a sufficient sum
shall not be realized from such reletting after paying all of
the costs and expenses of all decoration, repairs, remodeling,
alterations, installations and additions and the expenses of
such reletting (including all allowances, abatements and other
tenant concessions required under then-existing market
conditions) (collectively, the "Costs of Re-Letting"), to
satisfy the Rent provided for in this Lease, Tenant shall
satisfy and pay the same upon demand therefor from time to
time. Tenant shall not be entitled to any rents received by
Landlord in excess of the Rent provided for in this Lease.
Tenant agrees that Landlord may file suit to recover any sums
falling due under the terms of this paragraph (b) from time to
time and that no suit or recovery of any portion due Landlord
hereunder shall be any defense to any subsequent action
brought for any amount not theretofore reduced to judgment in
favor of Landlord.
(c) Landlord may perform the obligation which is
the subject of such default for the account and at the expense
of Tenant. In addition, if any failure by Tenant described in
Section 16.1(iii) shall give rise to an emergency requiring an
immediate cure, and Tenant shall not have cured such failure
within twenty four (24) hours after notice thereof by
Landlord, Landlord may also perform the obligation which is
the subject of such failure for the account and at the expense
of Tenant (without such failure constituting a "default"
hereunder except in accordance with Section 16.1(iii). All
reasonable out-of-pocket third party costs and expenses
thereof actually incurred by Landlord in connection with such
performance, plus all attorneys' fees and expenses of Landlord
incurred in enforcing any of the obligations of Tenant under
this Lease, shall become Rent hereunder and shall be due and
payable by Tenant immediately on demand.
(d) Landlord may additionally (i) seek any
declaratory, injunctive or other equitable relief, and
specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof, and (ii) sue
Tenant or any Guarantor for and collect any unpaid Rent which
has accrued.
16.3 DEFAULT INTEREST. If any payments of Rent remain
unpaid for more than five (5) days after the date when due, unless
Tenant has not been in default of any monetary obligation under this
Lease within the previous twelve (12) month period, such payments shall
bear interest from the date when due until the date paid at a rate of
interest equal to the lesser of: (i) the maximum rate of interest
permitted by applicable Laws; or (ii) four percent (4%) in excess of
the rate announced or published from time to time by Bank One, N.A. at
its office in Chicago, Illinois as its prime or equivalent base rate of
interest adopted as a general benchmark from which Bank One, N.A.
determines the floating interest rates chargeable on various loans to
borrowers from time to time. Landlord's right to receive such interest
shall not, in any way, limit any of Landlord's other remedies under
this Lease or at law or equity.
16.4 LATE CHARGE. If any payment or installment of Rent
owed by Tenant under this Lease or the Work Letter is not paid when
due, unless Tenant has not been in default of any monetary obligation
under this Lease within the previous twelve (12) month period, in
addition to the amounts due under Section 15.3 above, Tenant shall pay
to Landlord to compensate it for its additional for bookkeeping and
administrative expenses resulting from such late payment an amount
equal to the greater of $100.00 or five percent (5%) of the amount of
Rent overdue for each and every thirty (30) day period or portion
thereof that such Rent remains unpaid.
16.5 OTHER MATTERS. No re-entry or repossession, repairs,
changes, alterations and additions, reletting, acceptance of keys from
Tenant, or any other action or omission by Landlord shall be construed
as an election by Landlord to terminate this Lease or Tenant's right to
possession, or accept a surrender of the Premises, nor shall the same
operate to release the Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention
is sent by Landlord or its agent to Tenant. To the fullest extent
permitted by Laws, all rent and other consideration paid by any
replacement tenants shall be applied: first,
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to the all reasonable costs and expenses incurred by Landlord for any
repairs, maintenance, changes, alterations and improvements to the
Premises, brokerage commissions, advertising costs, attorneys' fees,
any customary free rent periods or credits, tenant improvement
allowances, take-over lease obligations and other customary, necessary
or appropriate economic incentives required to enter leases with
replacement tenants, and costs of collecting rent from replacement
tenants, second, to the payment of any Rent theretofore accrued, and
the residue, if any, shall be held by Landlord and applied to the
payment of other obligations of Tenant to Landlord as the same become
due (with any remaining residue to be retained by Landlord). Rent shall
be paid without any prior demand or notice therefor (except as
expressly provided herein) and without any deduction, set-off or
counterclaim, or relief from any valuation or appraisement laws.
Landlord may apply payments received from Tenant to any obligations of
Tenant then accrued, without regard to such obligations as may be
designated by Tenant. The times set forth herein for the curing of
defaults by Tenant are of the essence of this Lease. Tenant hereby
irrevocably waives any right otherwise available under any Laws to
redeem or reinstate this Lease.
16.6 LANDLORD'S DEFAULT. If Landlord shall fail to perform
any term or provision under this Lease required to be performed by
Landlord, Landlord shall not be deemed to be in default hereunder nor
subject to any claims for damages of any kind, unless such failure
shall have continued for a period of thirty (30) days after written
notice thereof by Tenant; provided, if the nature of Landlord's failure
is such that more than thirty (30) days are reasonably required in
order to cure, Landlord shall not be in default if Landlord commences
to cure such failure within such thirty (30) day period, and thereafter
reasonably seeks to cure such failure to completion. If Landlord shall
fail to cure within the times permitted for cure herein, Landlord shall
be subject to such remedies as may be available to Tenant under
applicable Laws (subject to the other provisions of this Lease);
provided, in recognition that Landlord must receive timely payments of
Rent and operate the Property, Tenant shall have no right of self-help
to perform repairs or any other obligation of Landlord, and shall have
no right to withhold, set-off, or abate Rent, except in connection with
the collection of any final, non-appealable judgment (or any judgment
not timely appealed by Landlord) rendered against Landlord under this
Lease.
17. SURRENDER OF POSSESSION.
17.1 CONDITION OF PREMISES. At the expiration or earlier
termination of this Lease by lapse of time or otherwise, or upon
termination of Tenant's right of possession without terminating this
Lease, Tenant shall surrender possession of the Premises to Landlord
and deliver all keys to the Premises to Landlord, and shall return the
Premises and all equipment and fixtures of Landlord to Landlord in
substantially as good condition as when Tenant originally took
possession, ordinary wear and tear, loss or damage by fire or other
casualty or condemnation, and damage resulting from the act of Landlord
or any other of its employees and agents excepted, failing which
Landlord may restore the Premises and such equipment and fixtures to
such condition and Tenant shall pay the cost thereof to Landlord as
Rent immediately upon demand. Except as provided below, all
improvements, fixtures and other items in or upon the Premises
(including without limitation all Alterations and Tenant Improvements,
but expressly excluding movable office furniture, trade fixtures
(including, without limitation, racking), office equipment and other
personal property belonging to Tenant that they may be removed without
permanent structural damage to the Premises or the Building), whether
temporary or permanent in character and whether made by Landlord or
Tenant, shall become Landlord's property and shall remain upon the
Premises at the expiration or earlier termination of this Lease by
lapse of time or otherwise or upon a termination of Tenant's right of
possession, without compensation to Tenant. Notwithstanding the
foregoing, if within ten (10) days prior to the expiration or earlier
termination of this Lease or Tenant's right of possession thereafter
Landlord so directs by notice, Tenant shall promptly remove such of the
foregoing items as are designated in such notice and restore the
Premises to the condition prior to the installation of such items. If
Tenant does not promptly remove such property upon the expiration or
earlier termination of this Lease, or upon the termination of Tenant's
right of possession, at Landlord's election: (i) Tenant shall be
conclusively presumed to have conveyed the same to Landlord under this
Lease as a bill of sale without payment or credit by Landlord, or
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(ii) Tenant shall be conclusively presumed to have forever abandoned
such property, and without accepting title thereto, Landlord may, at
Tenant's expense, remove, store, destroy, discard or otherwise dispose
of all or any part thereof without incurring liability to Tenant or to
any other person, and Tenant shall pay Landlord immediately upon demand
the expenses incurred in taking such actions. Unless prohibited by
applicable Laws, Landlord shall have a lien against such property for
the costs incurred in removing and storing the same. Tenant's
obligations under this Subsection 17.1 shall survive the expiration or
earlier termination of the Term or a termination of Tenant's right of
possession.
17.2 HOLDING OVER. If Tenant retains possession of the
Premises or any part thereof after the expiration or earlier
termination of this Lease, whether by lapse of time or otherwise, or
after a termination of Tenant's right of possession, then such
retention of possession shall be a tenancy at sufferance upon each of
the terms herein provided as may be applicable to such tenancy at
sufferance, except that Tenant shall pay to Landlord a per diem rent
equal to the per diem Base Rent set forth below, plus the per diem
amount of all Additional Rent (including, without limitation, the Tax
Amount, the Operating Expense Amount, the Estimated Tax Payments and
the Estimated Operating Expense Payments). The provisions of this
Subsection shall not operate as a waiver by Landlord of any right of
re-entry herein provided. In addition to and not in limitation of all
other remedies set out in this Subsection, Tenant shall be liable for
all damages (consequential as well as direct) actually sustained by
Landlord on account of Tenant's holding over. Base Rent payable during
any holding over shall be one hundred fifty percent (150%) of the Base
Rent for the calendar month immediately preceding the expiration or
termination date of this Lease or the termination of Tenant's right of
possession.
18. INSURANCE.
18.1 WAIVER OF SUBROGATION. Landlord and Tenant each
hereby waive all claims against the other for loss of or damage to the
Property or Premises or to the contents thereof, which loss or damage
is covered by valid and collectible fire and extended coverage
insurance policies, to the extent that such loss or damage is
recoverable under said insurance policies. Inasmuch as this mutual
waiver will preclude the assignment of any such claim by subrogation
(or otherwise) to an insurance company (or any other person), Landlord
and Tenant each agree to give each insurance company that has issued,
or in the future may issue, to it policies of fire and extended
coverage insurance, written notice of the terms of this mutual waiver,
and to have said insurance policies properly endorsed, if necessary, to
prevent the invalidation of said insurance coverage by reason of said
waiver.
18.2 TENANT'S INSURANCE. Tenant shall carry insurance
during the entire Term insuring Tenant and Landlord and their
respective agents and employees, and any other parties designated by
Landlord from time to time (including, without limitation, any
Mortgagee [as defined below]) as their interests may appear, with
terms, coverages and in companies satisfactory to Landlord, and with
such increases in limits as Landlord may from time to time request or
as any Mortgagee may from time to time require, but initially Tenant
shall maintain the following coverages in the following amounts:
(a) Comprehensive or Commercial General
Liability insurance, including Contractual Liability coverage
of the indemnification provisions contained in this Lease and
host liquor liability insurance, with limits for bodily injury
or personal injury to or death of any person, or more than one
(1) person, or for damage to property in an amount of not less
than $1,000,000 per occurrence/$3,000,000 aggregate. The
coverage amounts may be provided through an umbrella or excess
liability policy. The Comprehensive or Commercial General
Liability policy shall include Landlord, Landlord's management
agent and any Mortgagee designated by Landlord from time to
time as additional insureds on a primary and non-contributory
basis to any insurance carried by Landlord, Landlord's
management agent and any Mortgagee.
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(b) Property damage insurance against "all risks" of
physical loss for the full insurable replacement value of the
initial build-out of the Premises (including without
limitation, the Tenant Improvements) and all Alterations, and
of all furniture, trade fixtures, equipment, business records,
merchandise and all other items of Tenant's personal property
on the Premises.
(c) Worker's Compensation Insurance in amounts
required by the State of Illinois, including Voluntary
Compensation, Broad Form All States Endorsement, and
employer's liability insurance in an amount of not less than
$500,000 per occurrence.
(d) Automobile Liability Insurance with limits for
bodily injury or personal injury to or death of any person, or
more than one (1) person, or for damage to property in an
amount of not less than $1,000,000 combined single limit,
including Employer's Owned, Non-Owned and Hired Car coverage.
1.8.3 EVIDENCE OF INSURANCE. Tenant shall, prior to the
commencement of the Term, furnish to Landlord certificates of insurance
evidencing the insurance coverage required under this Section 18, and
Tenant shall deliver renewals thereof to Landlord not less than thirty
(30) days prior to the end of the term of such coverage, which
certificates shall state that such insurance coverage may not be
changed or canceled without at least thirty (30) days' prior written
notice to Landlord and any Mortgagee identified by Landlord from time
to time. Said certificates evidencing liability insurance shall be in
the form of ACORD 25 and certificates evidencing property insurance in
the form of ACORD 27.
18.4 LANDLORD'S INSURANCE. Landlord may maintain during
the Term the following insurance with such coverages and deductibles as
Landlord may determine from time to time, the cost of which shall be
included in "Operating Expenses": comprehensive (or commercial) general
liability insurance; worker compensation insurance as required by
statute; employer's liability insurance; fire and extended coverage or
"all-risk" property damage insurance; business interruption insurance
with coverage of at least twelve (12) months rent; and such other
policies as Landlord shall deem appropriate or that may be required by
any Mortgagee.
19. FIRE OR CASUALTY. If the Premises or the Building (including
machinery or equipment used in the operation of the Building) shall be destroyed
or damaged by fire or other casualty and if the Premises (excluding any Tenant
Improvements and Alterations) or the Building may be repaired and restored
within one hundred eighty (180) days after such casualty, then Landlord shall
repair and restore the same with reasonable promptness, but only to the extent
insurance proceeds are actually made available to Landlord for purposes of
repair and restoration; provided, however, that Landlord shall only be obligated
to repair and restore any improvements (including but not limited to Tenant
Improvements and Alterations) made to the Premises to the extent that: (i)
Landlord paid for the initial construction of such improvements (either directly
or through an allowance granted to Tenant), and (ii) Landlord receives the
insurance proceeds related to such improvements under the insurance described in
clause (b) of Subsection 18.2 hereof. In the event Landlord repairs or restores
such improvements, Tenant shall execute all documents and take all actions
necessary to make the insurance proceeds described in clause (ii) of the
immediately preceding sentence available to Landlord for the repair and
restoration of the Premises. Notwithstanding anything contained herein to the
contrary, if the Premises or the Building are substantially damaged or destroyed
during the last twelve (12) months of the Term, either Landlord or Tenant shall
have the right to terminate this Lease as of the date of the fire or other
casualty by giving notice to the other within thirty (30) days after the date of
the fire or casualty, in which event, Rent shall be apportioned on a per diem
basis and paid to the date of such fire or casualty. Notwithstanding anything
contained herein to the contrary, if either: (1) such damage renders the
Premises untenantable in whole or in part and cannot reasonably be repaired and
restored (excluding Tenant Improvements and Alterations) within one hundred
eighty (180) days, or (2) sufficient insurance proceeds are not or will not be
made available to Landlord for repair or restoration, or (3) the cost of the
repairs or restoration would exceed twenty five percent (25%) of the replacement
value of the Building, then each of Landlord and Tenant shall have the right to
cancel and terminate this Lease as of the date of such damage upon giving notice
to the
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other party at any time within ninety (90) days after such damage shall have
occurred. In the event any fire or casualty renders all or any portion of the
Premises untenantable, in whole or in part, and if this Lease shall not be
terminated by reason of such damage, then Base Rent and Additional Rent shall
abate during the period beginning with the date of such fire or other casualty
and ending with the date when Landlord has substantially completed all repairs
to the Premises, including any repairs to the Tenant Improvements and
Alterations or other improvements to the Premises, required to be completed by
Landlord in accordance with the terms and conditions of this Section 19, by an
amount bearing the same ratio to the total amount of Base Rent and Additional
Rent for such period as the untenantable portion of the Premises bears to the
entire Premises (except that if such portion of the Premises is untenantable to
the extent that the Premises in its entirety is not reasonably suitable for the
operation of Tenant's business at the Premises, then Base Rent and Additional
Rent shall abate for the entirety of the Premises). Landlord shall not otherwise
be liable for any inconvenience or annoyance to Tenant or its visitors, or
injury to Tenant's business resulting in any way from any damage or the repair
thereof relating to any fire or other casualty. However, if Landlord has not
commenced any repairs or restoration required under this Section 19 within sixty
(60) days after such casualty and is not diligently prosecuting such repairs and
restoration to completion, or if the Premises (other than any Tenant
Improvements and Alterations) or the Building are not repaired and restored
within said one hundred eighty (180) days or such longer period (not to exceed
two hundred forty (240) days in the aggregate) in the event of delays as a
result of Events of Force Majeure, then Tenant may elect to terminate this Lease
by delivering written notice thereof to Landlord at any time after the
expiration of the one hundred eighty (180) period (as may be extended for Events
of Force Majeure) and before the substantial completion of such repair or
restoration, except that such termination shall be of no effect if Landlord
notifies Tenant in writing within ten (10) days after receipt of Tenant
termination notice that Landlord has, and Landlord in fact has, completed the
repair and restoration of the Premises (other than any Tenant Improvements and
Alterations) or the Building. Tenant agrees that Landlord's obligation to
restore, Tenant's right to terminate the Lease as provided herein and the
abatement of Rent provided herein, shall be Tenant's sole recourse in the event
of such damage, and waives any other rights Tenant may have under any applicable
Laws to terminate the Lease by reason of damage to the Premises or Property.
Tenant acknowledges that this Section 19 represents the entire agreement between
the parties respecting damage to the Premises or Property.
20. CONDEMNATION. If the whole or any part of the Premises or the
Building or any substantial portion of the Parking Areas shall be taken or
condemned by any competent authority for any public use or purpose or if any
adjacent property or street shall be condemned or improved in such a manner as
to require the use of any part of the Premises or of the Building or the Parking
Areas, or if Landlord shall grant a deed or other instrument in lieu of such
taking by eminent domain or condemnation, Landlord shall have the right (but not
the obligation) to end the Term upon the date when the possession of the part so
taken shall be required for such use or purpose, and current Rent shall be
apportioned as of the date of such termination. Tenant shall have no right to
any apportionment of or share in any condemnation award or judgment for damages
made for the taking of any part of the Premises or the Property, but may seek
its own award for loss of or damage to Tenant's business or its property
resulting from such taking, provided that such an award to Tenant does not in
any way diminish the award payable to Landlord on account of such taking.
21. NOTICES.
21.1 ADDRESSES. All notices to be given by one party to
the other under this Lease shall be in writing (except as expressly
provided herein to the contrary) and shall be sent by either: (i)
United States certified mail, return receipt requested, postage
prepaid, (ii) national air courier service for overnight delivery, or
(iii) hand delivery as follows:
(a) To Landlord: The Prudential Insurance Company of
America
Two Prudential Plaza
180 North Stetson Street, Suite 3275
Chicago, Illinois 60601
Attention: Vice President-PRISA
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With a copy to: PDC Properties, Inc.
222 Spring Lake Drive
Itasca, IL 60143
Attention: Margaret Chaney
or to such other person or at such other address
designated by notice sent to Tenant, and during the
Term with a copy to the address to which Rent is then
being paid under this Lease.
(b) To Tenant: Innotrac Corporation
6655 Sugarloaf Parkway
Duluth, Georgia 30097
Attention: David L. Gamsey-
Chief Financial Officer
or to such other person or at such other address
designated by notice sent to Landlord, and during the
Term with a copy to the Premises.
21.2 METHOD. Mailed notices shall be deemed to have been
given two (2) business days after posting in the United States mails.
Notices sent by overnight courier shall be deemed to have been given
one (1) business day after delivery to the overnight courier, and
notices which are hand delivered shall be deemed to have been given on
the day tendered for delivery.
22. ADDITIONAL COVENANTS OF TENANT. Tenant hereby covenants and
agrees to comply with, and to cause its employees, agents, clients, customers,
invitees and guests to comply with, the following provisions:
(a) Any sign, lettering, picture, notice, or
advertisement installed within the Premises or on the Property
shall be installed at Tenant's expense and in compliance with
all Laws. Without obtaining Landlord's prior, written consent
(which consent may not be unreasonably withheld), no sign,
lettering, picture, notice or advertisement may be placed on
any portion of the Premises which is visible from outside the
Premises or on any portion of the Property; provided, however,
that Tenant may install: (i) a sign panel displaying the name
or tradename of Tenant, or any portion thereof, on the
existing Building monument sign or, if applicable, on both
sides of such sign; and (ii) signage on displaying the name or
tradename of Tenant on a portion of the exterior of the
Building located directly outside of the Premises, so long as
any such signage is installed at Tenant's expense and subject
to: (x) the reasonable approval of Landlord as to the style,
size, location, color and lighting (if any) of such signage;
(y) all Park Covenants and any other easements or documents or
record, including but not limited to any approval of the
Association or its design committee as may be required
thereunder; and (z) all applicable Laws.
(b) Tenant shall not use the name of the
Building or the Park is located for any purpose other than for
identifying Tenant's business address, or use any picture or
likeness of the Building in any letterheads, envelopes,
circulars, notices, advertisements, containers or wrapping
material, without Landlord's prior consent in writing.
(c) Except with respect to satellite or other
communication dishes or antennas as may be permitted by
applicable Laws and the Park Covenants and as are installed:
(i) in locations on the roof of the Building specified by
Landlord; (ii) subject to Landlord's reasonable size
restrictions, utility and structural load requirements and
screening criteria; (iii) with the use of Landlord's roofing
contractor; and (iv) subject to other reasonable requirements
relating to any warranty, guaranty or service contract
applicable to the roof of the Building, Tenant shall not place
any radio or television antenna on the roof of the Building or
on any other part of the Property other than inside the
Premises, or operate or permit to be operated any musical or
sound producing instrument or device inside or
23
outside the Premises that may be heard outside the Premises.
Tenant shall not make noises, cause disturbances or vibrations
or use or operate any electrical or electronic devices or
other devices that emit sound or other waves or disturbances,
or create odors, any of which may be offensive to other
tenants and occupants of the Building or that would interfere
with the operation of any device or equipment or radio or
television broadcasting or reception from or within the
Building or elsewhere.
(d) Tenant shall not obstruct sidewalks,
roadways, Parking Areas or entrances in and about the
Property. Tenant shall not place objects against doors or
windows that would be unsightly from the exterior of the
Building, and will promptly remove same upon notice from
Landlord. Tenant shall store and dispose of refuse as directed
by Landlord, including, without limitation, storing and
disposing of all refuse, in a neat and clean condition so as
not to be visible to members of the public and so as not to
create any health or fire hazard.
(e) Tenant shall not make any room-to-room
canvass to solicit business from other tenants in the Building
and shall not exhibit, sell or offer to sell, use, rent or
exchange any item or service in or from the Premises.
(f) Tenant shall not waste electricity or water
and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building's heating and air
conditioning systems, and shall not adjust any controls other
than room thermostats installed for Tenant's use or take any
action which could jeopardize the warranties covering the
heating, ventilating or air conditioning systems. Tenant shall
comply with all programs instituted by Landlord under
applicable federal, state or local energy conservation
standards or other governmental requirements or directives
(whether mandatory or voluntary).
(g) Door keys for doors in the Premises will be
furnished on the Commencement Date by Landlord. Tenant shall
not affix additional locks on doors and shall purchase
duplicate keys only from Landlord. At the end of the Term or
earlier termination of the Lease or upon a termination of
Tenant's right of possession, Tenant shall return all keys to
Landlord and will disclose to Landlord the combination of any
safes, cabinets or vaults left in the Premises in accordance
with the terms and conditions of this Lease.
(h) Tenant assumes full responsibility for
protecting Tenant's property from theft, robbery and
pilferage, which includes keeping doors locked and other means
of entry to the Premises closed and secured. In addition, the
parties acknowledge that safety and security devices, services
and programs provided by Landlord, if any, while intended to
deter crime and ensure safety, may not in given instances
prevent theft or other criminal acts, or ensure safety of
persons or property. The risk that any safety or security
device, service or program may not be effective, or may
malfunction, or be circumvented by a criminal, is assumed by
Tenant with respect to Tenant's property and interests, and
Tenant shall obtain insurance coverage to the extent Tenant
desires protection against such criminal acts and other
losses. Tenant agrees to cooperate in any reasonable safety or
security program developed by Landlord or required by
applicable Laws.
(i) Peddlers, solicitors and beggars shall be
reported promptly to Landlord.
(j) Tenant shall not install or operate
machinery or any mechanical devices of a nature not directly
related to Tenant's permitted use of the Premises.
(k) Tenant shall comply with all covenants,
conditions and restrictions of record encumbering or relating
to the Property or any portion of either thereof (including,
without limitation, any Park Covenants), and with all rules
and regulations issued from time to time by Landlord or by the
Association.
24
(l) Tenant will not in any manner deface or
injure the Property or any part of either thereof or overload
the floors of the Premises.
(m) Tenant will not use the Premises for lodging
or sleeping purposes or for any immoral or illegal purposes.
(n) Tenant shall not at any time manufacture,
sell, use or give away, and shall not at any time permit the
manufacture, sale, use or gift of any spirituous, fermented,
intoxicating or alcoholic liquors on the Premises or the
Property.
(o) In no event shall Tenant permit on the
Property flammables or explosives or any other article of an
intrinsically dangerous nature. If by reason of Tenant's
failure to comply with the provisions of this Subsection, any
insurance coverage is jeopardized or insurance premiums are
increased, in addition to all other rights and remedies
available to Landlord upon a default by Tenant under this
Lease, Landlord shall have the right to require Tenant to make
immediate payment of the increased insurance premium, if any.
(p) Tenant shall not introduce, use, handle,
generate, treat, transport, store or dispose of, or permit the
introduction, use, handling, generation, treatment,
transportation, storage or disposal of any Hazardous Materials
(as defined below) in, on, under, to, from, around or about
the Premises, the Building or the Property, except for
Hazardous Materials contained in products which are reasonably
and customarily used in general office uses, such as photocopy
machine solutions and cleaning solvents, as long as such
Hazardous Materials are only used in compliance with all Laws
(without the need for a special permit) and all manufacturer's
and supplier's instructions and recommendations, and in
quantities and for purposes which are reasonably and
customarily used in general office uses. Tenant shall
indemnify, defend and hold harmless the Landlord Parties from
and against all fines, penalties, liens, suits, procedures,
claims, demands, liabilities, damages (including consequential
damages), actions, causes of action, costs and expenses of
every kind and nature whatsoever (including, without
limitation, reasonable attorneys', engineers', experts' and
consultants' fees and costs of testing, monitoring,
remediation, removal and cleanup), contingent or otherwise,
known or unknown, incurred or imposed, arising directly or
indirectly out of or in any way connected with Tenant's breach
of the covenants set forth in this Subsection 22(p) or
otherwise in connection with the introduction, use, handling,
generation, treatment, transportation, storage or disposal of
any Hazardous Materials. Tenant's obligations under the
immediately preceding sentence shall survive the expiration or
earlier termination of this Lease and a termination of
Tenant's right of possession. For purposes hereof, "Hazardous
Materials" shall mean (i) substances defined as "hazardous
substances", "toxic substances" or "hazardous wastes" in the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C., Sec. 9061, et.
seq.), the Hazardous Materials Transportation Act (49 U.S.C.,
Sec. 1802), the Resource Conservation and Recovery Act (42
U.S.C., Sec. 6901 et. seq.), the Toxic Substances Control Act
of 1976, as amended (15 U.S.C., Sec. 2601, et. seq.) or in any
other Laws now or hereafter in effect governing similar
matters, or in any regulations adopted or publications
promulgated pursuant thereto; (ii) asbestos and asbestos
containing materials; and (iii) petroleum and petroleum based
products. Tenant shall promptly notify Landlord of: (i) any
enforcement, cleanup or other regulatory action taken or
threatened by any governmental or regulatory authority with
respect to the presence of any Hazardous Materials on the
Premises or the migration thereof from or to other property,
(ii) any demands or claims made or threatened by any party
against Tenant or the Premises relating to any loss or injury
resulting from any Hazardous Materials, (iii) any release,
discharge or nonroutine, improper or unlawful disposal or
transportation of any Hazardous Materials on or from the
Premises, and (iv) any matters where Tenant is required by
Laws to give a notice to any governmental or regulatory
authority respecting any Hazardous Materials on the Premises.
25
23. ESTOPPEL CERTIFICATES; MORTGAGE ISSUES.
23.1 ESTOPPEL CERTIFICATES. Tenant agrees that from time
to time upon not less than twenty (20) days prior request by Landlord
or any Mortgagee, Tenant will deliver to Landlord or such Mortgagee an
estoppel certificate substantially in the form of EXHIBIT D attached
hereto and made a part hereof or in such other form as Landlord or any
Mortgagee may request. In the event Tenant fails or refuses to deliver
any such certificate within said 20-day period, in addition to all
other rights and remedies available under this Lease, at law or in
equity upon a default by Tenant under this Lease: (i) Tenant hereby
appoints Landlord as attorney-in-fact for Tenant with full power and
authority to execute and deliver in the name of Tenant any such
certificate, and (ii) Tenant shall be deemed to have accepted, agreed
to and certified to, each of the statements set forth in any such
certificate.
23.2 SUBORDINATION AND ATTORNMENT. Landlord may sell the
Land and become the tenant under a ground or underlying lease of the
Land and this Lease and all rights of Tenant hereunder will then be
subject and subordinate to such underlying lease and any extensions or
modifications thereof. This Lease and all of Tenant's rights hereunder
shall also be subject and subordinate to any mortgage or mortgages (and
the liens thereof) at any time hereafter in force against the Building,
the Land and/or the underlying leasehold estate, and to all advances
made or hereafter to be made upon the security thereof. For purposes of
this Lease, "Mortgagee" shall mean the mortgagee, from time to time,
under any mortgage granted by Landlord and hereafter encumbering the
Property or any portion thereof or interest therein. Tenant shall
execute such further instruments subordinating this Lease to any such
mortgage or mortgages as Landlord from time to time may request. Tenant
covenants and agrees that, if by reason of any default on the part of
Landlord herein as tenant under said underlying lease, or as mortgagor
under any mortgage to which this Lease is subject and subordinate, said
underlying lease is terminated or such mortgage is foreclosed by
summary proceedings, voluntary agreement or otherwise, Tenant, at the
election of the landlord under said underlying lease or the Mortgagee
of such mortgage, as the case may be, will attorn to and recognize such
landlord or Mortgagee as the "Landlord" under this Lease. Tenant
further agrees to execute and deliver at any time upon request of
Landlord, any Mortgagee or any party which shall succeed to the
interest of Landlord as tenant under said underlying lease, any
instrument reasonably necessary to evidence such attornment. However,
in the event of attornment, no Mortgagee or any party which shall
succeed to the interest of Landlord as tenant under said underlying
lease shall be: (i) liable for any act or omission of Landlord, or
subject to any offsets or defenses which Tenant might have against
Landlord (prior to such Mortgagee or other party becoming Landlord
under such attornment), (ii) liable for any security deposit or bound
by any prepaid Rent not actually received by such Mortgagee or other
party, or (iii) bound by any future modification of this Lease not
consented to by such Mortgagee or other party. Tenant waives the
provision of any law now or hereafter in effect which may give to
Tenant any right of election to terminate this Lease or to surrender
possession of the Premises in the event any proceeding is brought by
landlord under said underlying lease or the Mortgagee under any such
mortgage to terminate said underlying lease or foreclose such mortgage.
At the election of any Mortgagee (expressed in a document signed by
such Mortgagee), such Mortgagee may make all or some of Tenant's rights
and interests in this Lease superior to any mortgage held by such
Mortgagee and the lien thereof. Tenant's obligation hereunder to
subordinate its rights under this Lease to any mortgage or mortgages or
underlying lease is expressly subject to Tenant's receiving from the
holder of any such superior interest a non-disturbance agreement in
form and content reasonably acceptable to Tenant, Landlord and such
interest holder.
23.3 NOTICES TO MORTGAGEES. Tenant agrees to give any
Mortgagee, by United States certified mail, return receipt requested,
postage prepaid, a copy of any notice of default served upon Landlord.
Tenant further agrees that if Landlord shall have failed to cure such
default, then such Mortgagee shall have thirty (30) days after such
notice is given within which to cure such default, or if such default
cannot reasonably be cured by such Mortgagee within thirty (30) days,
such Mortgagee shall have such additional time as may be necessary to
cure such default (including, without limitation, time necessary to
obtain possession of the Property if possession is
26
necessary to cure such default), and Tenant shall not pursue any
remedies it may have for such default and this Lease shall not be
terminated, while such cure is being diligently pursued.
23.4 QUIET POSSESSION. Upon payment by Tenant of the Rent
due hereunder, and upon the observance and performance of all the
covenants, terms and conditions on Tenant's part to be observed and
performed under this Lease, Tenant shall peaceably and quietly hold and
enjoy the Premises for the Term, without hindrance or interruption by
Landlord or any other person or persons lawfully or equitably claiming
by, through or under Landlord, always subject, however, to the terms
and conditions of this Lease.
24. MISCELLANEOUS.
24.1 DEFINITION OF LANDLORD. For purposes of this Lease,
Landlord shall mean Landlord named above, except that in the event of
any sale or other transfer of the Property or the Building, the seller
or transferor (and the beneficiaries of any selling or transferring
land trust) shall be and hereby is and are entirely freed and relieved
of all agreements, covenants and obligations of the Landlord hereunder
accruing from and after the effective date of such transfer, and
without further agreement between the parties and the purchaser or
transferee on any sale or transfer, such purchaser or transferee shall
be deemed and held to have assumed and agreed to carry out any and all
agreements, covenants and obligations of the Landlord hereunder
accruing from and after the effective date of such sale or transfer.
24.2 REAL ESTATE BROKERS. Tenant represents that Tenant
has dealt with no broker in connection with this Lease other than the
Broker, and that insofar as Tenant knows, no other broker or finder
negotiated this Lease or is entitled to any fee or commission in
connection herewith. Tenant agrees to indemnify, defend and hold the
Landlord Parties free and harmless from and against all claims for
broker's commissions or finder's fees by any person claiming to have
represented or procured, or to have been engaged by, Tenant in
connection with this transaction other than the Broker. Landlord
represents that Landlord has dealt with no broker in connection with
this Lease other than the Broker and that insofar as Landlord knows, no
other broker or finder negotiated this Lease or is entitled to any fee
or commission in connection herewith. Landlord agrees to indemnify,
defend and hold Tenant free and harmless from and against all claims
for broker's commissions or finder's fees by any person claiming to
have represented or to have been engaged by Landlord in connection with
this transaction.
24.3 CUMULATIVE REMEDIES. Except to the extent expressly
provided herein to the contrary, all rights and remedies of Landlord
and Tenant under this Lease shall be cumulative, and none shall exclude
any other rights and remedies allowed by law.
24.4 GRAMMATICAL INTERPRETATION. The word "Tenant"
wherever used herein shall be construed to mean Tenants in all cases
where there is more than one Tenant, and the necessary grammatical
changes required to make the provisions hereof apply either to
corporations or individuals, men or women, shall in all cases be
assumed as though in each case fully expressed.
24.5 SUCCESSORS AND ASSIGNS. Each of the provisions of
this Lease shall extend to and shall, as the case may require, bind or
inure to the benefit, not only of Landlord and of Tenant, but also of
their respective heirs, legal representatives, successors and assigns,
provided this clause shall not permit any Transfer contrary to the
provisions of Section 11 hereof.
24.6 NO ORAL MODIFICATIONS. All of the agreements,
representations and obligations of Landlord are contained herein, and
no modification, waiver or amendment of this Lease or of any of its
conditions or provisions shall be binding upon Landlord unless in
writing signed by Landlord or by a duly authorized agent of Landlord
empowered by a written authorization signed by Landlord.
27
24.7 EFFECTIVENESS. This Lease shall become effective only
upon execution thereof by both parties and delivery thereof to Tenant.
24.8 NO AIR RIGHTS. No rights to light or air over any
property, whether belonging to Landlord or any other person, are
granted to Tenant by this Lease.
24.9 [INTENTIONALLY OMITTED].
24.10 LANDLORD'S TITLE. Landlord's title to the Property is
and always shall be paramount to the title of Tenant. Nothing herein
contained shall empower Tenant to do any act which can, shall or may
encumber the title of Landlord to the Property.
24.11 RECORDING PROHIBITED. Neither this Lease, nor any
memorandum, affidavit or other writing with respect hereto, shall be
recorded in any public record by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord's
election.
24.12 RELATIONSHIP OF PARTIES. Nothing contained in this
Lease shall be deemed or construed by the parties hereto or by any
third party, to create the relationship of principal and agent,
partnership, joint venture or any association between Landlord and
Tenant, it being expressly understood and agreed that neither the
method of computation of Rent nor any other provisions contained in
this Lease nor any acts of the parties hereto shall be deemed to create
any relationship between Landlord and Tenant other than the
relationship between Landlord and Tenant other than the relationship of
lessor and lessee.
24.13 LIMITATION OF LIABILITY. Any claim against, or
liability or obligation of, Landlord under this Lease or relating to
the Premises or the Property shall be limited solely to and satisfied
solely from the interest of Landlord in the Property and the rents,
profits, issues, and proceeds thereof, and none of the Landlord Parties
(other than Landlord) shall be individually or personally liable for
any claim arising out of this Lease or relating to the Premises or the
Property. A deficit capital account of any partner in Landlord shall
not be deemed an asset or property of Landlord.
24.14 EXCUSE FOR NON-PERFORMANCE. Except as expressly
provided to the contrary in this Lease, and except for Tenant's
obligation to pay Rent hereunder, neither Tenant nor Landlord shall be
in default hereunder, if Tenant or Landlord is unable to fulfill any of
its obligations under this Lease because of any accident, governmental
restriction, inability to obtain fuel or materials, strike or lockout
(whether legal or illegal), act of God or other event, occurrence or
circumstance beyond the reasonable control seeking to perform such
obligations ("Events of Force Majeure").
24.15 RIDERS AND EXHIBITS. All exhibits and riders attached
to this Lease are made a part hereof and are incorporated herein by
reference.
24.16 CAPTIONS AND SEVERABILITY. The captions of the
Sections and Subsections of this Lease are for convenience of reference
only and shall not be considered or referred to in resolving questions
of interpretation. If any term or provision of this Lease shall be
found invalid, void, illegal, or unenforceable with respect to any
particular person or entity by a court of competent jurisdiction, it
shall not affect, impair or invalidate any other terms or provisions
hereof, or its enforceability with respect to any other person or
entity, the parties hereto agreeing that they would have entered into
the remaining portion of this Lease notwithstanding the omission of the
portion or portions adjudged invalid, void, illegal, or unenforceable
with respect to such person or entity.
25. PARKING. Tenant agrees not to utilize (and shall cause its
agents, employees and invitees to not utilize) more than thirty (30) parking
spaces for passenger automobiles in the parking areas located on the Land as
delineated in EXHIBIT A (the "Parking Areas") nor more than ten (10) parking
spaces for tractor trailers or similar vehicles in the parking areas located on
the Land between the two existing docks
28
as delineated in EXHIBIT A (the "Trailer Areas"). Tenant agrees to comply with,
and to cause its agents, employees and invitees to comply with, all reasonable
rules and regulations which may from time to time be promulgated by Landlord
with respect to use of the Parking Areas. Tenant shall be responsible for
supervising the use of the Parking Areas and the Trailer Areas by Tenant's
agents, employees and invitees in order to confirm compliance with the terms set
forth in this Section 25. If Tenant is in default of its covenants and
obligations set forth in this Section 25, Landlord shall have the right, but not
the obligation, in addition to all other rights and remedies under this Lease,
to employ or engage one or more individuals to supervise the use of the Parking
Areas and Trailer Areas by Tenant's agents, employees and invitees in order to
confirm compliance with the terms set forth in this Section 25, and Tenant shall
reimburse Landlord for all costs incurred in connection therewith within ten
(10) days after being billed therefor.
26. ERISA. Tenant hereby represents and warrants that:
26.1 Neither Tenant nor any of its "affiliates" (within
the meaning of Part V(c) of Prohibited Transaction Exemption 84-14, 49
Fed. Reg. 9494 (1984), as amended ("PTE 84-14")) has, or during the
immediately preceding year has exercised the authority to:
(a) appoint or terminate Landlord as investment
manager over assets of any "employee benefit plan" (as defined
in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) invested in, or sponsored by,
Landlord; or
(b) negotiate the terms of a management
agreement (including renewals or modifications thereof) with
Landlord on behalf of any such plan;
26.2 Tenant is not "related" to Landlord (as determined
under in Part V(h) of PTE 84-14);
26.3 Tenant has negotiated and determined the terms of
this Lease at arm's length, as such terms would be negotiated and
determined by the Tenant with unrelated parties; and
26.4 Tenant is not an "employee benefit plan" as defined
in Section 3(3) of ERISA, a "plan" as defined in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or an entity deemed to
hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
any such employee benefit plan or plan.
27. ATTORNEYS' FEES. In the event of any litigation between the
parties, the prevailing party shall be entitled to obtain, as part of the
judgment, all reasonable attorneys' fees, costs and expenses incurred in
connection with such litigation, except as may be limited by applicable Laws.
28. AMERICANS WITH DISABILITIES ACT. The parties acknowledge that
Title III of the Americans With Disabilities Act of 1990 (42 U.S.C. ss. 12101 et
seq.) and regulations and guidelines promulgated thereunder, as all of the same
may be amended and supplemented from time to time (collectively referred to here
as the "ADA") established requirements for accessibility and barrier removal,
and that such requirements may or may not apply to the Premises and Property
depending on, among other things: (a) whether Tenant's business is deemed a
"public accommodation" or "commercial facility", (b) whether such requirements
are "readily achievable", and (c) whether a given alteration affects a "primary
function area" or triggers "path of travel" requirements. The parties hereby
agree that: (x) Landlord shall be responsible for ADA Title III compliance on
the common areas of the Property and in the Building common areas and in the
common area lobby restrooms, if any, (y) Tenant shall be responsible for ADA
Title III compliance in the Premises (provided that Landlord represents and
warrants that as of the date of this Lease, the Premises are currently in
compliance with ADA Title III for their present uses), and (z) Landlord may
perform, or require that Tenant perform, and Tenant shall be responsible for the
cost of, ADA Title III "path of travel" requirements triggered by Alterations in
the Premises. Tenant shall be solely responsible for requirements under Title I
of the ADA relating to Tenant's employees.
29
29. EXPANSION OPTION.
29.1 Subject to the terms and conditions of this Section
29, Tenant shall have and is hereby granted the right to add to the
Premises demised hereunder all (and only all) of the Expansion Space
that becomes available for lease (such right, with respect to each such
portion of the Expansion Space, is hereinafter referred to as an
"Expansion Option") at any time prior to February 28, 2003 (the
"Expansion Deadline"). The "Expansion Space" shall be the area of the
Building identified as the "Expansion Space" on EXHIBIT A.
29.2 If Tenant executes and delivers to Landlord four (4)
counterparts of the amendment to this Lease attached hereto as EXHIBIT
E-1 on or prior to January 15, 2003 (the "Election Deadline"), Tenant
shall be deemed to have validly exercised its Expansion Option and
elected to add all of all of the Expansion Space to the Premises on the
terms and conditions set forth in EXHIBIT E-1. If Tenant executes and
delivers to Landlord four (4) counterparts of the amendment to this
Lease attached hereto as EXHIBIT E-2 after the Election Deadline but on
or prior to the Expansion Deadline, Tenant shall be deemed to have
validly exercised its Expansion Option and elected to add all of all of
the Expansion Space to the Premises on the terms and conditions set
forth in EXHIBIT E-2. Promptly upon receipt of the applicable Lease
amendment in a timely manner, Landlord shall execute and return to
Tenant two (2) counterparts of the applicable Lease amendment. In the
event Tenant fails to exercise its right to add the Expansion Space to
the Premises in accordance herewith, Tenant shall have no further
rights under this Section 29, and Landlord shall thereafter be free to
lease such Expansion Space to any third party upon such terms and
conditions as Landlord in its sole discretion deems advisable (subject
to Section 30 below) upon its construction of a standard demising wall
between the Premises and the Expansion Space at Landlord's sole cost
and expense.
29.3 It shall be a condition to Tenant's right to exercise
the Expansion Option that, at the time Tenant delivers the Lease
amendment counterparts to Landlord in accordance with Section 29.2, (a)
Tenant is not in monetary or material non-monetary Default after notice
and expiration of any applicable cure period, and (b) neither this
Lease nor Tenant's right of possession shall have been terminated and
this Lease shall then be in full force and effect.
30. RIGHT OF FIRST OFFER.
30.1 Subject to the rights of the Existing Tenants (as
defined below), Tenant shall have and is hereby granted the right to
add to the Premises demised hereunder all or a portion of the Eligible
Space (as defined below) from and after the date of this Lease (such
right is hereinafter referred to as the "Right of First Offer") at any
time after the Expansion Deadline and during the Term hereof in
accordance with the terms and conditions of this Section 30. For
purposes of this Lease, the term "Existing Tenants" shall mean: (i)
Newbreed, Inc.; (ii) Amerimax Home Products, Inc., a Delaware
corporation, and (iii) their respective affiliates, successor and
assigns, and Tenant's Right of First Offer shall be expressly subject
to the rights of such Existing Tenants only with respect to the
Eligible Space. The "Eligible Space" shall be the area of the Building
identified as delineated as the "Expansion Space" or the "Amerimax
Space" on EXHIBIT A.
30.2 Landlord shall notify Tenant in writing promptly
after Landlord reasonably anticipates that the Eligible Space or any
portion thereof is or will be available for lease (such available
Eligible Space, the "ROFO Space"). Such notice (an "Offer Notice")
shall include the rentable square footage and location of the ROFO
Space, Landlord's reasonable good faith determinations of the net
effective rental rate Landlord expects to receive for the ROFO Space
(including the proposed base rent, additional rent, proposed term and
other material concessions, if any), and the date that the ROFO Space
will be available for lease to Tenant (after completion of any
improvements Landlord is required to make hereunder). Tenant shall have
twenty (20) business days from its receipt of such notice within which
to notify Landlord in writing of Tenant's acceptance of such offer to
add all (and only all) of the ROFO Space to the Premises on the terms
30
and conditions set forth in the Offer Notice. In the event Tenant fails
to exercise its right to add such ROFO Space to the Premises in
accordance herewith, Tenant shall not be entitled to exercise any
rights under this Section 30 respecting such ROFO Space during the
remainder of the Term, as may be extended or renewed, except as
expressly provided below, and Landlord shall thereafter be free to
lease such ROFO Space to a third party at a net effective rental rate
not less than ninety five percent (95%) of the net effective rental
rate set forth in the Offer Notice and otherwise upon such terms and
conditions as Landlord in its sole discretion deems advisable. If
Landlord is unable to lease such ROFO Space to a third party at a net
effective rental rate not less than ninety five percent (95%) of the
net effective rental rate set forth in the Offer Notice within one
hundred eighty (180) days following Tenant's receipt of the Offer
Notice, Tenant's rights hereunder respecting such ROFO Space shall be
reinstated, and such ROFO Space shall again be deemed to constitute a
portion of the Eligible Space, upon the expiration of such 180-day
period.
30.3 If Tenant has validly exercised the Right of First
Offer pursuant to this Section 30, then the applicable ROFO Space shall
be included in the Premises, subject to all the agreements, terms and
conditions of this Lease, with the following exceptions and
modifications:
(a) The Rentable Area of the Premises shall be
increased by the rentable area of the ROFO Space, as
determined by Landlord's architect in accordance the then
current space measurement standards published by BOMA, to the
extent applicable, and otherwise with standard industry
practices for single story warehouse and distribution
facilities and shall be approved by Tenant's architect, which
approval shall not be unreasonably withheld;
(b) Tenant's Proportionate Share shall be
increased to reflect the rentable area of the ROFO Space;
(c) The term of the demise covering the ROFO
Space shall be coterminous with the Term hereof, as it may be
extended or renewed, or as it may be earlier terminated as
elsewhere provided herein;
(d) Tenant shall take the ROFO Space on an
"as-is" basis without the benefit of any tenant improvement
allowance from Landlord, as set forth in the Offer Notice or
otherwise;
(e) Base Rent per square foot of rentable area
of the ROFO Space, as well as the Additional Rent and other
material concessions (including but not limited to tenant
improvement allowances and rent abatement), shall be those
stated in the Offer Notice; and
(f) Tenant's obligation to pay Base Rent and
Additional Rent with respect to the ROFO Space shall (subject
to any rent abatement, if applicable) commence on such date as
set forth in the Offer Notice as the date on which base rent
and additional rent are first due and payable with respect to
the ROFO Space.
30.4 Following the exercise by Tenant of its Right of
First Offer, and within thirty (30) days following written request by
either Landlord or Tenant, Landlord and Tenant shall enter into a
mutually acceptable amendment to this Lease confirming the terms,
conditions and provisions applicable to the ROFO Space so leased.
30.5 It shall be a condition to Tenant's right to exercise
the Right of First Offer that, at the time Tenant notifies Landlord of
the exercise of its Right of First Offer and to add ROFO Space to the
Premises, (a) there remains not less than twenty four (24) months on
the Term of this Lease, (b) Tenant is not then in monetary or material
non-monetary Default after notice and
31
expiration of any applicable cure period, and (c) neither this Lease
nor Tenant's right of possession shall have been terminated and this
Lease shall then be in full force and effect.
31. OPTION TO EXTEND. Tenant shall have two (2) options (each an
"Extension Option") to extend the Term hereof for one (1) additional period of
five (5) years (each an "Extension Period"), upon the terms and conditions
contained herein. Tenant's right to extend the Term shall be exercised by giving
written notice to Landlord not later than six (6) months prior to the expiration
of the Term or, if applicable, the initial Extension Period. If Tenant fails to
give such notice to Landlord with respect to an Extension Period, Tenant shall
be deemed to have declined to exercise its right to extend the Term (as may have
been previously extended) and shall have no further rights under this Section
31. If Tenant fails to elect to extend the Term for an Extension Period, this
Lease shall terminate on the expiration or earlier termination of the Term (as
may have been previously extended). The extension shall be made upon the
following terms and conditions:
(a) On the date of exercise (or deemed exercise) of such right no
default by Tenant hereunder shall subsist;
(b) This Lease shall not have been terminated and shall be in full
force and effect at the effective date of the extension;
(c) The extension shall be upon the same terms, covenants and
conditions contained in this Lease except that:
(i) The annual Base Rent for the first year of the
applicable Extension Period shall be equal to one hundred two percent
(102%) of the Base Rent in effect immediately prior to the commencement
of the applicable Extension Period. The Base Rent for each twelve-month
period during each Extension Period after the first twelve-month period
shall be at one hundred two percent (102%) of the Base Rent for the
immediate preceding twelve-month Period.
(ii) Landlord shall have no further obligation to install,
or contribute toward the cost of, any improvements to the Premises,
Tenant agreeing that the Premises shall be accepted "as is" by Tenant
for each applicable Extension Period; and
(iii) No further rights to extend the Term beyond the
Extension Options described herein or to lease any additional space
shall be created by any extension, except as mutually agreed to in any
documents extending the Term.
[SIGNATURE PAGE TO FOLLOW]
32
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this Lease as of the date first above written.
TENANT
INNOTRAC CORPORATION,
a Georgia corporation
By:
-------------------------------------------
Name:
-------------------------------------------
Its:
-------------------------------------------
LANDLORD
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey corporation
By: PDC Properties, Inc., its agent
By:
---------------------------------------
Name:
-------------------------------------
Its:
--------------------------------------
33
EXHIBIT A
PLAN OF THE PREMISES
Exhibit A, Page 1
EXHIBIT B
WORK LETTER
All of the terms and conditions of the Lease are incorporated herein by
reference and, except as may be expressly set forth to the contrary in this Work
Letter or the Lease, shall apply as fully to this Work Letter as to the Lease.
The capitalized terms used but not defined in this Work Letter shall have the
meanings ascribed to them in the Lease.
1. CONSTRUCTION OF TENANT IMPROVEMENTS. Except as provided below
to the contrary, Landlord, at Landlord's sole cost and expense, shall construct
and install the Tenant Improvements. "Tenant Improvements" means (i) the
improvements (including, without limitation, materials, hardware and equipment)
to be affixed to or incorporated into the Premises pursuant to the Plans (as
defined below and as the same may be modified pursuant to Section 4 of this Work
Letter), and the labor to construct and install such items, and (ii) the other
building standard items described in the Plans, as the same may be modified
pursuant to Section 4 of this Work Letter. Landlord shall proceed diligently to
cause the Tenant Improvements to be substantially completed in accordance in all
material respects with the Plans and the terms and conditions of the Lease. The
cost to construct the Tenant Improvements, including but not limited to all
costs relating to material, hardware, equipment, labor, applicable governmental
fees and permit cost, taxes, architectural fees, engineering fees, design fees,
but expressly excluding any the cost of Tenant's furniture, trade fixtures or
equipment or other personal property of Tenant that Tenant is permitted or
required to remove from the Premises upon the expiration or earlier termination
of the Lease, is hereinafter referred to as the "Permitted Costs." No
construction management fee shall be payable by Tenant in connection with the
Tenant Improvements.
2. CONTRACTORS. If Tenant elects to engage an interior designer
for the Premises (the "Interior Designer"), Tenant shall have the right to do
so, subject to Landlord's reasonable approval, and Tenant shall contract
directly with the Interior Designer for the provision of services. All other
architects, engineers, contractors, subcontractors, suppliers, manufacturers or
materialmen performing services or supplying materials in connection with the
design and/or construction of the Tenant Improvements (the "Contractors") shall
be selected by Landlord, shall be reasonably acceptable to Tenant, and shall
enter into contracts directly with Landlord for the provision of services and
materials.
3. THE PLANS. Landlord and Tenant have approved the preliminary
description of the Tenant Improvements attached to this Work Letter as Schedule
1 and made a part hereof. Landlord will cause to be prepared at Landlord's cost,
and Landlord and Tenant shall act in good faith and cooperate with each other to
finalize and approve as soon as reasonably possible, the plans, drawings and
specifications for the Tenant Improvements based on the description in Schedule
1. If Landlord and Tenant have not approved the final plans, drawings and
specifications for the Tenant Improvements within [sixty (60) days prior to the
Expansion Deadline], at the request of either party, any disagreements regarding
such final plans, drawings and specifications shall be submitted to and resolved
by arbitration in accordance with under the Expedited Procedures of the
Commercial Arbitration Rules of the American Arbitration Association then in
force except as provided below. Any such arbitration proceedings shall be
conducted through the American Arbitration Association in Chicago, Illinois and
the cost of such arbitration proceedings shall be split evenly between Landlord
and Tenant, provided that each party shall be solely responsible for its own
costs and expenses incurred in connection with any arbitration proceedings. The
final plans, drawings and specifications for the Tenant Improvements approved by
Landlord and Tenant prior to the commencement of construction are collectively
referred to as the "Plans."
4. CHANGES TO THE PLANS.
4.1 Tenant Changes to the Plans.
(a) (a) Tenant may propose one or more changes
to the Plans to Landlord at any time before the Substantial
Completion Date (as defined below), and, as promptly as
Exhibit B, Page 1
reasonably practicable after the receipt and approval thereof
by Landlord (which approval may be withheld in Landlord's sole
discretion), Landlord shall provide Tenant with a written
estimate of the delay (if any) in the Substantial Completion
Date and the additional cost (if any) to complete the Tenant
Improvements which will result from such change (whether hard
costs or soft costs), which costs shall include, without
limitation: (i) the actual cost of all materials, supplies,
equipment and labor used or supplied in making the proposed
change, including general conditions and any contractor's
fees; (ii) any architect and engineer fees; and (iii) any
other additional reasonable costs and expenses of owning and
operating the Premises during the extended construction period
(if any) resulting from such change(s) (collectively, "Change
Order Costs"). If Tenant fails to approve the estimate of
Change Order Costs within five (5) business days after
delivery of same, Tenant shall be deemed to have abandoned its
request for such change, and the Tenant Improvements shall be
constructed substantially in accordance with the then existing
Plans. If Tenant approves the estimate of Change Order Costs
within said 5-day period by signing and returning a copy of
Landlord's estimate, Landlord shall cause the Tenant
Improvements to be constructed substantially in accordance
with the Plans as so revised. Unless requested in writing by
Tenant to the contrary, Landlord shall continue with
construction of the Tenant Improvements according to the then
existing Plans during the pendency of any proposed change in
the Plans until such change is approved by Landlord and Tenant
as provided above.
(b) If Tenant approves Landlord's estimate of
the time and Change Order Costs of a proposed change to the
Plans: (i) Tenant shall be liable for the actual Change Order
Costs, whether or not such actual cost exceeds Landlord's
estimate, and (ii) Landlord shall not be liable for any delay
in the Substantial Completion Date resulting from the
requested change, whether or not the delay exceeds Landlord's
estimate. Upon Tenant's request, Landlord shall provide Tenant
with reasonable evidence of the actual Change Order Costs and
the basis for any delay in the Substantial Completion Date
resulting from such change.
(c) If Tenant requests a change to the Plans
pursuant to this Section 4.1, and Tenant does not ultimately
approve the resulting revised Plans or estimate, Tenant shall
promptly reimburse Landlord, as Rent, for any reasonable costs
and expenses resulting from such requested changes incurred by
Landlord.
4.2 Landlord Changes to the Plans. Landlord may make
changes to the Plans without Tenant's consent, provided that such
changes (a) are necessary to address, and solely for the purpose of
addressing, field conditions, (b) will not create any additional
monetary obligation for Tenant under the Lease, (c) are in material
conformity with the Plans (as they may have been previously revised by
permissible Tenant and/or Landlord changes thereto), and (d) will not
result in the use of materials or equipment which are of a materially
lesser quality than those specified in the Plans.
5. PAYMENT OF COSTS. Within fourteen (14) days after approval of
the Plans, Landlord shall provide Tenant with a reasonably detailed and complete
budget indicating the total Permitted Costs. Within three (3) days after
Tenant's receipt of Landlord's budget for the Permitted Costs, Tenant shall
approve same or provide Landlord with notice or its comments or objections to
same. Such budget, upon approval by Tenant, shall constitute the "Budget," and
the aggregate of all items contained in the Budget shall constitute the
"Budgeted Costs." Notwithstanding anything to the contrary contained in this
Work Letter or in the Lease, Landlord's obligation to construct the Tenant
Improvements shall not require Landlord to expend in excess of Ninety Thousand
Dollars ($90,000) toward the Permitted Costs (the "Tl Allowance"). In the event
that at any time the actual Permitted Costs exceed the TI Allowance, Tenant
shall deposit with Landlord the amount of such excess within ten (10) days after
written demand therefor by Landlord. In addition, Tenant shall deposit with
Landlord the amount of any Change Order Costs within ten (10) days after
Tenant's approval of the estimate of such Change Order Costs in accordance with
Section 4.1 of this Work Letter. Thereafter, in the event that at any time the
actual Change Order Costs
Exhibit B, Page 2
exceed the estimated Change Order Costs, Tenant shall deposit with Landlord the
amount of such excess within ten (10) days after written demand therefor by
Landlord. Upon Tenant's request, Landlord shall provide Tenant with reasonable
evidence of the actual Permitted Costs (including but not limited to actual
Change Order Costs).
6. PUNCHLIST ITEMS. Before Tenant takes occupancy of the
Premises, but no later than five (5) business days after the Substantial
Completion Date, Landlord, Landlord's architect, Tenant and at Tenant's
election, Tenant's consulting architect or other construction consultants shall
conduct an inspection of the Premises and shall work in good faith to jointly
prepare a punchlist for the Tenant Improvements. Any items not on such punchlist
(except latent defects) shall be deemed accepted by Tenant. Landlord shall
complete all punchlist items as soon as reasonably practicable after such
punchlist items are finally determined.
7. REPRESENTATIVES OF LANDLORD AND TENANT. Landlord designates
John Pagliari as its representative for all purposes of this Work Letter. Tenant
designates Robert Toner as its representative for all purposes of this Work
Letter. Wherever this Work Letter requires any notice to be given to or by a
party, or any determination or action to be made or taken by a party, the
representative(s) of each party shall act for and on behalf of such party, and
the other party shall be entitled to rely thereon. Either party may designate
one or more additional or substitute representatives for all or a specified
portion of the provisions of this Work Letter, subject to notice to the other
party of the identity of such additional or substitute representative(s).
8. SUBSTANTIAL COMPLETION DATE. The "Substantial Completion Date"
shall mean the latest of (i) delivery of exclusive possession of the Premises to
Tenant, or (ii) the date on which Landlord receives the approval from the City
of Romeoville authorizing occupancy of the Premises by Tenant, which approval
may take the form of a conditional or temporary certificate of occupancy so long
as Tenant may occupy the Premises, or (iii) the date on which Landlord's
architect issues a certificate to Landlord and Tenant stating that the Tenant
Improvements have been substantially completed substantially in accordance with
the Plans and that the Premises substantially comply with Title III of the ADA.
9. GOVERNMENTAL APPROVALS. Landlord shall use reasonable efforts
to obtain all governmental licenses, permits and approvals necessary for the
construction of the Tenant Improvements. If Landlord is unable to obtain any
permit, license or approval from any governmental authority necessary for the
construction of the Tenant Improvements, Landlord and Tenant shall work together
in good faith to resolve any items that have caused the failure to obtain such
permit, license or approval. If Landlord and Tenant shall be unable to resolve
any such items within thirty (30) days of Landlord's written notice to Tenant of
any such failure, Landlord may elect to terminate the Lease upon written notice
to Tenant delivered within thirty (30) days after the expiration of the thirty
(30) day resolution period, upon which termination Landlord shall return to
Tenant any Security Deposit and Base Rent in Landlord's possession, and
thereafter Landlord shall have no further liability to Tenant hereunder or under
the Lease.
10. ACCESS BY TENANT PRIOR TO COMMENCEMENT DATE. Landlord will
permit Tenant and Tenant's agents, suppliers, contractors and workmen to enter
the Premises prior to the completion of the Tenant Improvements to enable Tenant
to do such other things as may be required by Tenant to make the Premises ready
for Tenant's occupancy, provided that Tenant shall fully perform and comply with
each of the following covenants, conditions and requirements:
(a) Tenant and Tenant's agents, contractors, workmen,
mechanics, suppliers and invitees, shall work in harmony and not
interfere with Landlord and Landlord's agents in performing the Tenant
Improvements or work for other tenants and occupants of the Building,
and if at any time such entry shall in the judgment of Landlord cause
or threaten to cause disharmony or interference, Landlord shall have
the right to withdraw such permission upon twelve (12) hours written
notice.
(b) Tenant agrees that any such entry into the Premises
shall be deemed to be under all of the terms, covenants, conditions,
and provisions of the Lease except the
Exhibit B, Page 3
covenant to pay Rent, and further agrees that in connection therewith
Landlord shall not be liable in any way for any injury, loss or damage
which may occur to any of Tenant's work or installations made in the
Premises or to property placed therein prior to the Commencement Date,
the same being at Tenant's sole risk. In addition, Tenant shall require
all entities performing work on behalf of Tenant to provide protection
for existing improvements to an extent that is satisfactory to Landlord
and shall allow Landlord access to the Premises, for inspection
purposes, at all times during the period when Tenant is undertaking
construction activities therein. In the event any entity performing
work on behalf of Tenant causes any damage to the Tenant Improvements
or the property of Landlord or others, Tenant shall cause such damage
to be repaired at Tenant's expense, and if Tenant fails to cause such
damage to be repaired immediately upon Landlord's demand therefor,
Landlord may in addition to any other rights or remedies available to
Landlord under the Lease or at law or equity cause such damage to be
repaired, in which event Tenant shall immediately upon Landlord's
demand pay to Landlord the cost of such repairs as Rent.
(c) All contractors and subcontractors shall use only
those entrances designated by Landlord for ingress and egress of
personnel, and the delivery and removal of equipment and material
through or across any common areas of the Building or parking areas on
the Property shall only be permitted with the written approval of
Landlord and during hours determined by Landlord. Landlord shall have
the right to order Tenant or any contractor or subcontractor that
violates the above requirements to cease work and remove it, its
equipment, and its employees from the Building or the Property.
(d) During the performance of Tenant's work and Tenant's
fixturing, Landlord may provide trash removal service from a location
designated by Landlord. Tenant shall be responsible for breaking down
boxes and placing trash in Landlord's containers at such designated
location. Tenant shall accumulate its trash in containers supplied by
Tenant and Tenant shall not permit trash to accumulate within the
Premises or in the corridors or public areas adjacent to the Premises.
Tenant shall cause each entity employed by it to perform work on the
Premises to abide by the provisions of this Work Letter as to the
storage of trash and shall require each such entity to perform its work
in a way that dust and dirt is contained entirely within the Premises
and not within any other portion of the Building or the Property and
shall cause Tenant's contractors to leave the Premises broom clean at
the end of each day. Should Landlord deem it necessary to remove
Tenant's trash because of accumulation, an additional charge to Tenant
will be on a time and material basis.
(e) Tenant agrees that all services and work performed on
the Premises by, on behalf of, or for the account of Tenant, including
installation of materials and personal property delivered to the
Premises shall be done in a first-class workmanlike manner using only
good grades of material, shall be performed in accordance with Laws,
and shall be performed only by persons covered by a collective
bargaining agreement with the appropriate trade union.
(f) Tenant agrees to protect, indemnify, defend and hold
harmless the Landlord Parties from and against any and all losses,
damages, liabilities, claims, liens, costs and expenses, including
reasonable attorneys' fees, of whatever nature, including those to the
person and property of Tenant, its employees, agents, invitees,
licensees and others arising out of or in connection with the
activities of Tenant or Tenant's contractors or subcontractors in or
about the Premises and the Property, and the cost of any repairs to the
Premises and the Property necessitated by activities of Tenant or
Tenant's contractors or subcontractors.
(g) Tenant shall secure, pay for, and maintain during the
continuance of its work within the Premises, policies of insurance with
such coverages and such amounts as
Exhibit B, Page 4
Landlord may reasonably require, which policies shall be endorsed to
include Landlord and its contractors and their respective employees and
agents and any Mortgagee as additional insured parties, and which shall
provide thirty (30) days prior written notice of any alteration or
termination of coverage. Tenant shall not permit Tenant's contractors
to commence any work until all required insurance has been obtained by
Tenant and certificates evidencing such coverage have been delivered to
and approved by Landlord in writing.
11. TERMINATION OF WORK LETTER; SURVIVAL OF TERMS. Landlord and
Tenant acknowledge and agree that the provisions of this Work Letter are
intended and designed to govern certain rights and obligations of the parties
relating to the construction of the Tenant Improvements and other matters prior
to the Commencement Date. Accordingly, except as hereinafter set forth in this
Section 11, from and after the Commencement Date, the terms and provisions of
this Work Letter shall become null and void and of no further force or effect.
Notwithstanding anything to the contrary in this Section 11, however, the
following provisions shall not terminate and shall continue in full force and
effect after the Commencement Date, and shall survive the Commencement Date:
Sections 1 and 5 (both of which shall terminate at such time as all punchlist
items have been completed and all claims in connection therewith have been
satisfied in full); Sections 10(b), 10(e), 10(f), 11 and 12 (which shall remain
in effect for the duration of the Term); and Section 13 (which shall terminate
at such time as the parties have executed the Confirmatory Memorandum).
12. APPLICATION OF WORK LETTER. This Work Letter shall not be
applicable to any space added to the Premises or in the event of a renewal or
extension of the Term of the Lease or the exercise of any expansion option
granted to Tenant pursuant to the Lease.
13. CONFIRMATORY MEMORANDUM. At such time as the rentable area of
the Premises has been finally determined, the parties shall jointly execute a
written memorandum in the form attached to this Work Letter as Schedule 2, and
such memorandum shall be attached to and become a part of the Lease. The written
memorandum shall include the final rentable square footage of the Premises, as
reasonably determined by Landlord's architect and reasonably approved by
Tenant's architect, and the Base Rent and Tenant's Proportionate Share based on
such square footage calculation and on Section 1.9 and Section 5.1(b),
respectively, of the Lease.
Exhibit B, Page 5
SCHEDULE 1
DESCRIPTION OF TENANT IMPROVEMENTS
Schedule 1, Page 1
SCHEDULE 2
FORM OF CONFIRMATORY MEMORANDUM
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Landlord") and INNOTRAC
CORPORATION ("Tenant") hereby execute and deliver this Confirmatory Memorandum
pursuant to Section 13 of the Work Letter attached as EXHIBIT B to that certain
Lease between Landlord and Tenant dated September 17, 2002.
1. This Confirmatory Memorandum is for the convenience and reference of
the parties. The provisions of the Lease and the Work Letter shall be valid and
given their full force and effect with respect to the terms contained in this
Confirmatory Memorandum, notwithstanding the failure or refusal of either party
to execute this document.
2. Landlord and Tenant further agree and acknowledge as follows:
(a) the rentable square footage of the Premises
equals____________________________________________;
(b) Tenant's Proportionate Share
equals____________________ _________ percent (_____%);
and
(c) Base Rent equals:
Lease Year Annual Base Rent Monthly Installments
---------- ---------------- --------------------
1st Lease Year
2nd Lease Year
3rd Lease Year
4th Lease Year
5th Lease Year
6th Lease Year
Executed and delivered as of_________________, 2002.
TENANT
INNOTRAC CORPORATION,
a Georgia corporation
By:
-------------------------------------------
Its:
------------------------------------------
LANDLORD
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey
By: PDC Properties, Inc.
By:
-------------------------------------------
Its:
------------------------------------------
Exhibit B, Page 1
EXHIBIT C
LEGAL DESCRIPTION OF THE LAND
THAT PART OF LOT 1 OF WINDHAM LAKES UNIT 15, BEING A SUBDIVISION OF PART OF THE
EAST HALF OF THE SOUTHWEST QUARTER AND THE WEST HALF OF THE SOUTHEAST QUARTER OF
SECTION 20, TOWNSHIP 37 NORTH, RANGE 10 EAST OF THE THIRD PRINCIPAL MERIDIAN
RECORDED AS DOCUMENT R97-084143 IN WILL COUNTY, ILLINOIS, DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 1; THENCE NORTH 01 DEGREES 21
MINUTES 50 SECONDS WEST ALONG THE WEST LINE OF SAID LOT 1, A DISTANCE OF 1280.69
FEET; THENCE NORTH 88 DEGREES 39 MINUTES 10 SECONDS EAST, 789.98 FEET TO THE
EAST LINE OF SAID LOT 1; THENCE SOUTH 01 DEGREES 32 MINUTES 45 SECONDS EAST
ALONG SAID EAST LINE, 917.34 FEET TO A POINT OF CURVATURE; THENCE SOUTHERLY AND
SOUTHWESTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LOT 1, BEING A CURVE CONCAVE
NORTHWESTERLY, TANGENT TO THE LAST DESCRIBED COURSE, HAVING A RADIUS OF 472.24
FEET, A CHORD BEARING OF SOUTH 23 DEGREES 13 MINUTES 27 SECONDS WEST, A CHORD
LENGTH OF 395.71 FEET, AN ARC LENGTH OF 408.31 FEET TO THE SOUTHEAST CORNER OF
SAID LOT 1; THENCE SOUTH 88 DEGREES 21 MINUTES 34 SECONDS WEST ALONG THE SOUTH
LINE OF SAID LOT 1, A DISTANCE OF 628.25 FEET TO THE POINT OF BEGINNING; IN WILL
COUNTY, ILLINOIS.
ALSO KNOWN AS LOT 1 IN WINDHAM LAKES RESUBDIVISION NUMBER 24 (RECORDING STATUS
UNKNOWN).
Exhibit C, Page 1
EXHIBIT D
FORM OF TENANT ESTOPPEL CERTIFICATE
Lease Date: , 200_
Landlord: The Prudential Insurance Company of America
Tenant:
Premises: Unit No.
Rentable Area: square feet
The undersigned, being the Tenant under the above-described Lease hereby
certifies to _____________________________________ ("Lender" or "Purchaser") and
Landlord as follows:
1. The Lease requires monthly base rent installments of $________________
each, commencing on ____________________________, 20__. The Lease requires
monthly installments of Tenant's estimated share of operating expenses of
$________________ and of Tenant's estimated share of taxes of $_______________.
2. Tenant has not prepaid any rent for more than one (1) month, and Tenant
is paying rent under the Lease on a current basis with no offsets, credits,
claims or setoffs. Tenant has not been given any free rent, partial rent,
rebates, rent abatements, or rent concessions of any kind, which are unexpired,
except as disclosed in the Lease.
3. A security deposit in the amount of $________________________ is being
held by Landlord, which amount is not subject to any setoff or reduction or to
any increase for interest or other credit due to Tenant. The Lease
______________ is or ____________ is not (check applicable provision) guaranteed
by a third party. If the Lease is guaranteed by a third party, the name of the
guarantor is _______________________________.
4. To Tenant's knowledge: the Lease is a valid lease and is in full force
and effect, and attached hereto is a true and complete copy of the Lease and all
amendments thereto and other agreements relating to the Lease and the rent
payable thereunder, which documents represent the entire agreement between the
parties.
5. To Tenant's knowledge: there is no existing default by Landlord or by
Tenant under the Lease, and no event has occurred which, with the giving of
notice or the passage of time, or both, would constitute an event of default by
Landlord or by Tenant under the Lease. To Tenant's knowledge, no claim,
controversy or dispute exists between Tenant and Landlord. As of the date
hereof, Tenant is not asserting that the Lease is not fully enforceable by
Landlord in accordance with its terms.
6. The Lease provides for a primary term of _____________________________
(______) months, commencing on _______________________________________, 20__ and
ending on _______________, 20__. The Lease contains an option for (______)
additional terms of (______) years each upon the terms and conditions as set
forth in the Lease. Tenant has not exercised any option or rights to renew,
extend, amend, modify, or change the term of the Lease, except as may be stated
in the Lease. Tenant does not have any preferential right to lease or purchase
all or any part of the property of which the Premises are a part (including any
rights of first refusal or expansion options), except as may be stated in the
Lease. The only interest of Tenant in the Property is that of a tenant pursuant
to the terms of the Lease.
7. There are no actions, voluntary or involuntary, pending against Tenant
under the bankruptcy laws of the United States or any state thereof.
8. Tenant is entitled to no rent concessions under the Lease other than
the following:
Exhibit D, Page 1
9. All construction, build-out, improvements, or alterations work to be
completed to date by Landlord in the Premises under the Lease has been
completed, except___________________________.
10. Tenant has received no notice of any claim, litigation or proceeding,
pending or threatened, against or relating to Tenant that would adversely affect
Tenant's ability to fulfill its obligations under the Lease or with respect to
the Premises. Tenant has received no notice of, and has no knowledge of, any
violations of any federal, state, county or municipal statutes, laws, codes,
ordinances, rules, regulations, orders, decrees or directives relating to the
use or condition of the Premises or Tenant's operation thereon. Tenant has
received no notice from any governmental body or agency or from any person or
entity with respect to any actual or threatened taking of the Property or any
portion thereof for any public or quasi-public purpose by the exercise of
condemnation or eminent domain.
11. Tenant has accepted and is occupying the Premises. Except as specified
below, Tenant has not subleased all or any part of the Premises or assigned the
Lease, or otherwise transferred or hypothecated its interest in the Lease or the
Premises.
This certification is made knowing that Landlord, [Lender]/[Purchaser] is
relying upon the representations herein made.
TENANT
--------------------------, --------------
corporation
-----------------
By:
---------------------------------------
Its:
--------------------------------------
Exhibit D, Page 2
EXHIBIT E-1
FORM OF LEASE AMENDMENT
PRIOR TO ELECTION DEADLINE
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "First Amendment") is made as of the _____
day of ________________, 2003, by and between THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation ("Landlord"), and INNOTRAC CORPORATION, a
______________________ corporation ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant have heretofore entered into that certain
Lease dated as of September 17, 2002 (the "Lease") pursuant to which Tenant is
leasing approximately 150,204 square feet of rentable area (the "Existing
Premises") in the building located at Windham Industrial Center V in Romeoville,
Illinois (the "Building"). Capitalized terms that are not otherwise defined in
this First Amendment shall have the meanings ascribed to them in the Lease; and
WHEREAS, Tenant desires to lease from Landlord and Landlord desires
to lease to Tenant an additional 105,357 square feet of rentable area adjacent
to the Existing Premises;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Additional Premises. As of the date of this First Amendment
(the "Effective Date"), Landlord hereby leases to Tenant and Tenant hereby
accepts from Landlord the 105,357 square feet of rentable area in the Building
depicted on Exhibit A attached hereto and made a part hereof (the "Additional
Premises") for the Term. For all periods from and after the Effective Date,
Exhibit A to the Lease shall be superseded by Exhibit A attached hereto and made
a part hereof. From and after the Effective Date the Premises shall consist of
both the Existing Premises and the Additional Premises, constituting ___ square
feet of rentable area in the aggregate. From and after the Effective Date, all
references to the Premises in the Lease shall be deemed to refer to the Existing
Premises and the Additional Premises.
2. Base Rent and Tenant's Proportionate Share. For all periods
from and after the Effective Date, Section 1.09 of the Lease shall be
superseded by Exhibit B attached hereto and made a part hereof. As of the
Effective Date Tenant's Proportionate Share under the Lease shall be _________%
(rather than _________%).
3. Possession of the Additional Premises. Possession of the
Additional Premises shall be tendered to Tenant by Landlord on the Effective
Date in their "as-is" condition. Tenant's taking possession of any portion of
the Additional Premises shall be conclusive evidence that such portion of the
Additional Premises was in good order and satisfactory condition when the Tenant
took possession. No promise of the Landlord to construct, alter, remodel or
improve the Premises or the Building and no representation by Landlord or its
agents respecting the condition of the Existing Premises, the Additional
Premises or the Building have been made to Tenant or relied upon by Tenant other
than as may be contained in this Amendment to the Lease or except in accordance
with the Work Letter and any amendments to the Plans requested by Tenant and
approved by Landlord thereunder. If Tenant takes possession or enters into
occupancy of the Additional Premises for the purpose of conducting its business
therefrom prior to the Effective Date, such possession and occupancy shall be
pursuant to all of the terms, covenants and conditions of the Lease, including
the obligation to pay Base Rent and Additional Rent for the Additional Premises.
4. Full Force and Effect, Inconsistency. Except as set forth in
this First Amendment, the terms, covenants, conditions and agreements of the
Lease shall remain unmodified and otherwise in full
Exhibit E-1, Page 1
force and effect. In the event of any inconsistency between the terms of the
Lease and the terms of this First Amendment, the terms of this First Amendment
shall control.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
LANDLORD:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: PDC Properties, Inc., its agent
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TENANT:
INNOTRAC CORPORATION,
a Georgia corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Exhibit E-1, Page 2
Exhibit A
Rental Space
Exhibit E-1, Page 3
Exhibit B
Schedule of Base Rent Payments
Lease Year Annual Base Rent per Sq. Ft. Total Annual Base Rent Monthly Installments
- ---------- ---------------------------- ---------------------- --------------------
1st Lease Year $3.49 $__________ $__________
2nd Lease Year $3.56 $__________ $__________
3rd Lease Year $3.63 $__________ $__________
4th Lease Year $3.70 $__________ $__________
5th Lease Year $3.78 $__________ $__________
6th Lease Year $3.85 $__________ $__________
Schedule E-1, Page 4
EXHIBIT E-2
FORM OF LEASE AMENDMENT
AFTER ELECTION DEADLINE
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "First Amendment") is made as of the ______
day of _____________________ , 2003, by and between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey corporation ("Landlord"), and INNOTRAC
CORPORATION, a ___________________ corporation ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant have heretofore entered into that certain
Lease dated as of September 17, 2002 (the "Lease") pursuant to which Tenant is
leasing approximately 150,204 square feet of rentable area (the "Existing
Premises") in the building located at Windham Industrial Center V in Romeoville,
Illinois (the "Building"). Capitalized terms that are not otherwise defined in
this First Amendment shall have the meanings ascribed to them in the Lease; and
WHEREAS, Tenant desires to lease from Landlord and Landlord desires to
lease to Tenant an additional 105,357 square feet of rentable area adjacent to
the Existing Premises;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Additional Premises. As of the date of this First Amendment
(the "Effective Date"), Landlord hereby leases to Tenant and Tenant hereby
accepts from Landlord the 105,357 square feet of rentable area in the Building
depicted on Exhibit A attached hereto and made a part hereof (the "Additional
Premises") for the Term. For all periods from and after the Effective Date,
Exhibit A to the Lease shall be superseded by Exhibit A attached hereto and made
a part hereof. From and after the Effective Date the Premises shall consist of
both the Existing Premises and the Additional Premises, constituting __________
square feet of rentable area in the aggregate. From and after the Effective
Date, all references to the Premises in the Lease shall be deemed to refer to
the Existing Premises and the Additional Premises.
2. Base Rent and Tenant's Proportionate Share. For all periods
from and after the Effective Date, Section 1.09 of the Lease shall be
superseded by Exhibit B attached hereto and made a part hereof. As of the
Effective Date Tenant's Proportionate Share under the Lease shall be ________%
(rather than __________________%).
3. Possession of the Additional Premises. Possession of the
Additional Premises shall be tendered to Tenant by Landlord on the Effective
Date in their "as-is" condition. Tenant's taking possession of any portion of
the Additional Premises shall be conclusive evidence that such portion of the
Additional Premises was in good order and satisfactory condition when the Tenant
took possession. No promise of the Landlord to construct, alter, remodel or
improve the Premises or the Building and no representation by Landlord or its
agents respecting the condition of the Existing Premises, the Additional
Premises or the Building have been made to Tenant or relied upon by Tenant other
than as may be contained in this Amendment to the Lease or except in accordance
with the Work Letter and any amendments to the Plans requested by Tenant and
approved by Landlord thereunder. If Tenant takes possession or enters into
occupancy of the Additional Premises for the purpose of conducting its business
therefrom prior to the Effective Date, such possession and occupancy shall be
pursuant to all of the terms, covenants and conditions of the Lease, including
the obligation to pay Base Rent and Additional Rent for the Additional Premises.
4. Full Force and Effect, Inconsistency. Except as set forth in
this First Amendment, the terms, covenants, conditions and agreements of the
Lease shall remain unmodified and otherwise in full
Exhibit E, Page 1
force and effect. In the event of any inconsistency between the terms of the
Lease and the terms of this First Amendment, the terms of this First Amendment
shall control.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
LANDLORD:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: PDC Properties, Inc., its agent
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
TENANT:
INNOTRAC CORPORATION,
a Georgia corporation
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
Exhibit E, Page 2
Exhibit A
Rental Space
Exhibit E, Page 3
Exhibit B
Schedule of Base Rent Payments
Lease Year Annual Base Rent per Sq. Ft. Total Annual Base Rent Monthly Installments
- ---------- ---------------------------- ---------------------- --------------------
1st Lease Year $3.54 $_____________ $___________
2nd Lease Year $3.61 $_____________ $___________
3rd Lease Year $3.68 $_____________ $___________
4th Lease Year $3.76 $_____________ $___________
5th Lease Year $3.83 $_____________ $___________
6th Lease Year $3.91 $_____________ $___________
Exhibit E, Page 4