EXHIBIT 10.1
CENTRE POINTE DISTRIBUTION PARK
BASIC LEASE INFORMATION
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LANDLORD: CRESCENT RESOURCES, LLC
400 South Tryon Street, Suite 1300 zip code
28202
P.O. Box 1003 zip code 28201-1003 Charlotte,
North Carolina Attention: Director of
Property Management
TENANT: HOT TOPIC, INC.
Address: 18305 San Jose Avenue
City of Industry, California 91748-1237
Attention: Real Estate
LEASE EXECUTION
DATE: June 1, 2004
ADDRESS OF
PREMISES: 6001 Reliance Drive (Street # to be verified
prior to Execution)
LaVergne, Tennessee 37086
PREMISES: Approximately 300,000 gross square feet of
space in the Building, of which
approximately 17,000 square feet is office
space and the balance is warehouse space.
BUILDING: That certain building known as Centre Pointe
Building Six (6) to be constructed by
Landlord in the Center which is located at
6001 Reliance Drive in the City of LaVergne,
Tennessee, and located on that certain tract
of land that is more particularly described
on EXHIBIT A hereto (the "Land").
CENTER: That certain complex of land and buildings,
including the Land and the Building, and
designated by Landlord as "Centre Pointe
Distribution Park", LaVergne, Tennessee.
TENANT OPERATIONS: General offices, warehousing, and
distribution of men's and women's apparel,
lingerie, swimwear, sleepwear, T-shirts,
shoes; accessories to include but not be
limited to hats, handbags, hosiery, hair
goods, belts, beauty products, jewelry,
watches, sunglasses; miscellaneous gift
items to include, but not be limited to,
stickers, posters, patches, calendars,
buttons, books, magazines, paper goods,
scented products; consumables (including
candy and soda pop); compact discs, vinyl,
tapes and videos; ear piercing; and other
consumer products.
LEASE TERM: Ten (10) years commencing on the
Commencement Date. The Lease Term is subject
to extension to include any partial calendar
month at the end of the Lease Term (as
provided in the definition of Expiration
Date set forth below).
BENEFICIAL
OCCUPANCY DATE: Tenant will have limited occupancy on
October 4, 2004, described as "Stage 1"
below ("Beneficial Occupancy"). Landlord
will deliver the Building to the Tenant in
separate stages. Stage 1 (column lines 1
thru column line 7) will be delivered on or
before October 4, 2004.
Completion will require the following items
to be constructed and complete (and for
purposes of Stage 1, Beneficial Occupancy
will require the following as to Stage 1):
Floor slab poured (unless noted otherwise in
the Lease), tilt-up concrete, exterior walls
erected, structural steel erected, roof
decking installed, roof insulation & roof
membrane installed, ESFR sprinkler piping
roughed-in, temporary lighting installed,
(2) dock door openings with levelers &
bumpers installed, paved access to the same
(2) dock door openings and temporary
electrical service available for the
Tenant's use.
(By December 1, 2004, the entire Building
will be secure & lockable.)
LEASE
COMMENCEMENT
DATE: March 1, 2005, or such later date as same
may be extended pursuant to PARAGRAPH 3
herein (herein, the "Commencement Date").
Further, the Commencement Date may be
earlier as set forth in Paragraph 3(c)
herein.
EXPIRATION DATE: The day immediately preceding the
tenth (10th) anniversary of the Commencement
Date. Provided, however, if the Commencement
Date is any day other than the first day of
a calendar month, the Expiration Date shall
be extended automatically through the last
day of the calendar month in which the tenth
(10th) anniversary of the Commencement Date
occurs. Additionally, the Expiration Date is
subject to extension pursuant to PARAGRAPH 3
herein.
RENEWAL TERM: See Exhibit F
EXPANSION: See Exhibit H
OPTION TO PURCHASE: See Exhibit G.
BROKER: The Staubach Company
(Agents: Chris Skibinski and Jeff Manley)
LANDLORD'S INITIALS: /S/ PGE
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TENANT'S INITIALS: /S/ EM
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TABLE OF CONTENTS
PAGE
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1. DESCRIPTION OF PREMISES; PURPOSE.........................................................................1
2. LEASE TERM...............................................................................................1
3. CONSTRUCTION AND ACCEPTANCE OF PREMISES..................................................................1
4. ANNUAL RENTAL............................................................................................2
(a) MINIMUM RENTAL....................................................................................2
(b) ANNUAL ADJUSTMENTS IN MINIMUM RENTAL..............................................................2
(c) TENANT'S PROPORTIONATE SHARE......................................................................3
(1) TENANT'S PROPORTIONATE SHARE OF TAXES...................................................3
(2) TENANT'S PROPORTIONATE SHARE OF INSURANCE PREMIUMS.......................................3
(3) TENANT'S PROPORTIONATE SHARE OF COMMON AREA MAINTENANCE COSTS............................3
(d) PAYMENT OF TENANT'S PROPORTIONATE SHARE...........................................................3
(e) LATE CHARGE.......................................................................................4
5. ALTERATIONS AND IMPROVEMENTS BY TENANT..................................................................4
6. USE OF PREMISES..........................................................................................4
7. TAXES....................................................................................................5
8. FIRE AND EXTENDED COVERAGE INSURANCE.....................................................................5
9. LANDLORD'S LIMITED COVENANT TO REPAIR AND REPLACE........................................................5
10. TENANT'S COVENANT TO REPAIR..............................................................................6
11. TRADE FIXTURES AND EQUIPMENT; NON-LIABILITY FOR CERTAIN DAMAGES..........................................6
12. UTILITIES................................................................................................7
13. DAMAGE OR DESTRUCTION OF PREMISES........................................................................7
14. MUTUAL WAIVER; WAIVER OF SUBROGATION.....................................................................7
15. SIGNS AND ADVERTISING....................................................................................7
16. INDEMNIFICATION, LIABILITY INSURANCE AND HAZARDOUS SUBSTANCES............................................8
(a) INDEMNIFICATION BY TENANT.........................................................................8
(c) LIABILITY INSURANCE...............................................................................8
(d) PRESENCE AND USE OF HAZARDOUS SUBSTANCES..........................................................8
(e) UNAUTHORIZED RELEASES OF HAZARDOUS SUBSTANCES; CLEANUP COSTS; DEFAULT AND INDEMNIFICATION.........9
17. LANDLORD'S RIGHT OF ENTRY...............................................................................10
18. EMINENT DOMAIN..........................................................................................10
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19. EVENTS OF DEFAULT AND LANDLORD'S REMEDIES...............................................................10
20. SUBORDINATION...........................................................................................11
21. ASSIGNING AND SUBLETTING................................................................................11
22. COVENANT OF QUIET ENJOYMENT.............................................................................12
23. ESTOPPEL CERTIFICATES...................................................................................12
24. PROTECTION AGAINST LIENS................................................................................12
25. FORCE MAJEURE...........................................................................................12
26. NONWAIVER...............................................................................................12
27. LANDLORD LIABILITY......................................................................................13
28. HOLDING OVER; ABANDONMENT...............................................................................13
29. NOTICES.................................................................................................13
30. MISCELLANEOUS...........................................................................................13
(a) RULES AND REGULATIONS............................................................................13
(b) EVIDENCE OF AUTHORITY............................................................................13
(c) NATURE AND EXTENT OF AGREEMENT...................................................................14
(d) SEVERABILITY.....................................................................................14
(e) BINDING EFFECT...................................................................................14
(f) CAPTIONS AND HEADINGS............................................................................14
(h) LEASE REVIEW.....................................................................................14
(i) BROKERAGE........................................................................................14
(j) MEMORANDUM OF LEASE..............................................................................14
(l) SURVIVAL OF OBLIGATIONS..........................................................................14
(m) CONFIDENTIALITY..................................................................................15
(n) ATTORNEYS' FEES..................................................................................15
(o) TIME OF PERFORMANCE..............................................................................15
(p) REAL ESTATE INVESTMENT TRUST.....................................................................15
Exhibit A - Legal Description
Exhibit B - Building Plans and Designation of Premises (5 sections)
Exhibit C - Workletter
Exhibit D - Rules and Regulations
Exhibit E - Rent Schedule
Exhibit F - Renewal Terms
Exhibit F-1 - Arbitration of Renewal Term Rent
Exhibit G - Option to Purchase
Exhibit H - Expansion Option
Exhibit H-1 - Right of First Offer
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THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
Lease Execution Date by and between
CRESCENT RESOURCES, LLC,
A Georgia limited liability company,
hereinafter called "Landlord"; and
Hot Topic, Inc,
a California corporation
hereinafter called "Tenant";
W I T N E S S E T H:
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In consideration of the mutual covenants and agreements contained
herein, the parties agree for themselves, their successors, and assigns, as
follows:
(The provisions of the Basic Lease Information are hereby incorporated into and
made a part of this Lease, provided in the event of any inconsistency the terms
used in this Lease shall govern. Capitalized terms used in this Lease and not
otherwise defined shall have the meanings ascribed to them in the Basic Lease
Information (e.g., the headings of the Basic Lease Information).)
1. DESCRIPTION OF PREMISES; PURPOSE. Landlord hereby leases to Tenant,
and Tenant hereby accepts and rents from Landlord, the Premises located in the
Building (as those terms are defined in the Basic Lease Information), together
with the exclusive right to use all parking areas, driveways, sidewalks and
other common facilities furnished by Landlord from time to time in the Building
or on the Land for the common use of tenants in the Building. Provided however,
in the event Tenant fails to exercise its Expansion Option and Landlord
constructs additional space on the Expansion Premises for an adjoining tenant,
Tenant's parking rights shall become exclusive only as to a minimum of 200
spaces adjacent to the Premises (although it is understood that Landlord may,
consistent with the foregoing, build over or move some parking spaces to
accommodate expansion of the Building contemplated hereby) and nonexclusive as
to remaining spaces. The Premises and Building shall be as described in the
documentation, collectively, attached as EXHIBIT B. Tenant shall use the
Premises with respect to its Tenant Operations only and for no other purpose.
2. LEASE TERM. The term of this Lease (the "Lease Term") shall commence
on the Commencement Date and shall end at midnight on the Expiration Date. As
used herein, the term "Lease Year" shall mean each year of the Lease Term
commencing on the Commencement Date, or any anniversary thereof, and ending at
the expiration of twelve (12) months thereafter. In the event the Commencement
Date is any day other than the first day of a calendar month, there will be a
partial Lease Year at the end of the Lease Term (which partial Lease Year shall
consist of a partial calendar month).
3. CONSTRUCTION AND ACCEPTANCE OF PREMISES.
(a) Landlord shall proceed with reasonable diligence to construct the
Building and improvements upon the Premises in compliance with EXHIBIT C
attached hereto, with such minor and reasonable variations as Landlord may deem
advisable, and shall tender the Premises to Tenant. The Premises shall be deemed
to be "Ready for Occupancy" when Landlord has substantially completed the work
as described in Exhibit C and consistent herewith, and has obtained and
delivered an appropriate Certificate of Occupancy. The Commencement date shall
be determined as set forth in Paragraph 3(c) below. After the Commencement Date
has been delayed for sixty (60) days beyond March 1, 2005 for reasons other than
Force Majeure Matters and Tenant Delay Factors (which shall mean delays caused
by Tenant and Tenant's agents, employees, contractors, subcontractors or
licensees, including, without limitation, change orders requested by Tenant
relative to the Description of Landlord's Work), the Annual Rental shall be
abated (i.e.. accrued as a credit against amounts later payable as Annual
Rental) at the rate of $3,200.00 for each day the Commencement Date is so
delayed beyond said sixty (60) day period. After the Commencement Date has been
delayed for one hundred eighty (180) days beyond March 1, 2005 for reasons other
than Force Majeure Matters and Tenant Delay Factors, or for two hundred seventy
(270) days for any reason other than Tenant Delay Factors, Tenant may, at its
option, terminate this Lease by written notice to Landlord delivered within
thirty (30) days following the expiration of such respective period, in which
event neither party shall have any further liabilities or obligations hereunder,
except Landlord shall repay to Tenant any prepaid rent or security deposit
previously given and all indemnification obligations herein shall survive such
termination. Time is of the essence relative to Tenant's right to terminate this
Lease pursuant to this PARAGRAPH 3(A). By accepting possession of the Premises,
Tenant shall be deemed to have accepted the same and to have acknowledged that
the same fully comply with Landlord's covenants and obligations hereunder;
subject to representations and warranties of Landlord herein and in exhibits
hereto and workletters executed in connection herewith.
(b) If any Tenant Work is specified in EXHIBIT C, Tenant
agrees to proceed with due diligence to perform the work as described in EXHIBIT
C, all of such work to be performed in a good and workmanlike manner, using new
materials, in accordance with EXHIBIT C, and to install Tenant's fixtures,
furniture and equipment in the Premises. Any Tenant Work or any other work in or
with respect to the Premises performed by Tenant in the future causing venting,
opening, sealing, waterproofing or any altering of the roof of the Building
shall be performed by Landlord's roofing contractor at Tenant's expense provided
the rates, quality and availability are reasonably acceptable to Tenant. Tenant
shall provide Landlord with a certificate from Landlord's roofing contractor
that all such work causing venting, opening, sealing, waterproofing or in any
way altering the roof of the Building has been performed properly. Tenant hereby
holds Landlord harmless from any damage to the Premises resulting, directly or
indirectly, from Tenant's venting, opening, sealing, waterproofing or in any
other way altering the roof of the Building unless such a certificate from
Landlord's roofing contractor was delivered (unless it is unreasonably withheld
by Landlord's contractor) to Landlord contemporaneously with the completion of
such work.
(c) In the event the Premises shall be Ready for Occupancy (as
defined in PARAGRAPH 3(A) herein) prior to the Commencement Date that is set
forth in the Basic Lease Information, the Commencement Date shall be the earlier
of (i) the date that is set forth as the Commencement Date in the Basic Lease
Information or (ii) the date that Tenant commences product distribution from the
Premises. In the event of a delay in the completion of Landlord's Work beyond
March 1, 2005, the term "Commencement Date" herein shall automatically be
modified to become the actual date the Premises shall become Ready for Occupancy
(following reasonable notice) and the Expiration Date shall automatically be
modified on a consistent basis (i.e., to afford the full Lease Term, as defined
in the Basic Lease Information). Provided, however, and notwithstanding the
foregoing terms and provisions to the contrary, to the extent the Premises are
not Ready for Occupancy on or before the Commencement Date set forth in the
Basic Lease Information as a result of one or more Tenant Delay Factors, the
Commencement Date and the Expiration Date that are set forth in the Basic Lease
Information (and Tenant's obligation to pay Annual Rent hereunder) are not to be
adjusted.
(d) In the event Landlord fails to deliver Beneficial Occupancy by
October 4, 2004, except to the extent such failure is the result of Force
Majeure Matters and/or Tenant Delay Factors, the Annual Rental shall be abated
(i.e.. accrued as a credit against amounts later payable as Annual Rental) at
the rate of $3,200.00 for each day of delay in so delivering Beneficial
Occupancy.
4. ANNUAL RENTAL. During the full Lease Term, Tenant shall pay to
Landlord, without notice, demand, reduction, setoff or any defense (except as
provided herein), a total annual rental (the "Annual Rental") consisting of the
sum total of the Minimum Rental and Tenant's Proportionate Share (as said terms
are defined herein). If the Commencement Date is a date other than the first day
of a calendar month and/or the Expiration Date is a date other than the last day
of a calendar month, the Annual Rental shall be prorated daily and paid in
advance on the Commencement Date and/or the first day of the calendar month in
which the Expiration Date occurs.
(a) MINIMUM RENTAL. Tenant shall pay annually a minimum rental
(the "Minimum Rental") as shown on Exhibit E payable in equal monthly
installments as set forth in Exhibit E each in advance on or before the first
day of each calendar month during the Lease Term.
(b) ANNUAL ADJUSTMENTS IN MINIMUM RENTAL. Minimum Rental
payable hereunder shall be adjusted pursuant to EXHIBIT E.
(c) TENANT'S PROPORTIONATE SHARE. "Tenant's Proportionate
Share" of the taxes, of the insurance premiums and of common area maintenance
costs (including any assessment by a property owner's association), as described
herein, shall be determined by multiplying each such amount by a fraction, which
fraction in each case is described below.
(1) TENANT'S PROPORTIONATE SHARE OF TAXES. Tenant
shall pay an amount equal to Tenant's Proportionate Share of any ad valorem
taxes (or any tax hereafter imposed in lieu thereof) payable for the Building
and Land relative to the Lease Term. Tenant's Proportionate Share of taxes shall
be paid as provided in PARAGRAPH 4(D) herein. Anything contained herein to the
contrary notwithstanding, any increase in ad valorem taxes on the Premises as a
result of alterations, additions or improvements made by, for or on account of
Tenant shall be reimbursed entirely by Tenant to Landlord (as additional rent
hereunder) within thirty (30) days after Tenant's receipt of written demand
therefor. The applicable fraction for such taxes shall be the total rentable
square feet of the Premises as to the total rentable square feet of the
Building.
(2) TENANT'S PROPORTIONATE SHARE OF INSURANCE
PREMIUMS. Tenant shall pay an amount equal to Tenant's Proportionate Share of
any amount of premiums charged for fire and extended coverage, together with all
endorsements thereto, carried by Landlord on the Building relative to the Lease
Term. Tenant's Proportionate Share of insurance premiums shall be paid as
provided in PARAGRAPH 4(D) herein. The applicable fraction in this case shall be
the total rentable square feet of the Premises as to the total rentable square
feet of the Building.
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(3) TENANT'S PROPORTIONATE SHARE OF COMMON AREA
MAINTENANCE COSTS. Tenant shall pay an amount equal to Tenant's Proportionate
Share of the costs of maintaining the Building's common areas (as designated
from time to time by Landlord for the common use of tenants of the Building)
relative to the Lease Term. Common area maintenance costs shall include, but are
not limited to, the cost of grass mowing, shrub care and general landscaping;
the cost of repairing, replacing and maintaining parking areas, driveways,
sidewalks, exterior lighting, common plumbing, common advertising signs and
other facilities operated with respect to the Building; the cost of providing
security for the Building and the Land; the cost of providing fire alarm
monitoring for the Building; and property management fees and expenses (provided
the parties agree property management fees and expenses shall not be increased
more than four percent (4%) per calendar year). Tenant's Proportionate Share of
common area maintenance costs shall be paid as provided in PARAGRAPH 4(D)
herein. Landlord shall use good faith efforts to keep the operating and
maintenance costs in line with costs for other similarly situated first class
centers. Tenant, at its expense, shall provide its own garbage collection,
recycling and disposal provided however, Landlord shall provide sufficient power
hookups for installation and maintenance of one baler and trash compactor. For
purposes of this paragraph, the applicable fraction for the common area
maintenance costs attributable to the Building's common areas shall be the total
rentable square feet of the Premises as to the total rentable square feet of the
Building.
(d) PAYMENT OF TENANT'S PROPORTIONATE SHARE. The estimated
amounts of Tenant's Proportionate Share for taxes, insurance premiums and common
area maintenance costs for the partial Lease Year ending December 31 of the
calendar year in which the Commencement Date (i.e., the Commencement Date that
is set forth in the Basic Lease Information) falls shall be set forth in a
notice to be given by Landlord to Tenant prior to the Commencement Date. For
each succeeding calendar year during the Lease Term, Landlord shall submit a
good faith estimate of Tenant's Proportionate Share for taxes, insurance
premiums and common area maintenance costs on or before April 1 of each such
succeeding calendar year. If an estimate of Tenant's Proportionate Share of
expenses for any calendar year during the Lease Term has not been submitted on
or before the first day of any month in such calendar year, Tenant shall pay
Tenant's Proportionate Share for such month(s) at the estimated rate for the
previous calendar year, and such payment(s) shall be adjusted effective as of
January 1 of such calendar year at such time as the estimate for such calendar
year is submitted, at which time the deficiency or overage (as the case may be)
in the estimated payments for the preceding months in such calendar year also
shall be collected or credited (as the case may be). Landlord shall charge, and
Tenant shall pay, the estimated Tenant's Proportionate Share of expenses on a
monthly basis, payable in advance and subject to adjustment after the end of the
respective calendar year on the basis of the actual costs incurred for such
calendar year. Tenant's Proportionate Share of estimated taxes, insurance
premiums and common area maintenance costs shall be paid in a like manner, with
the monthly rental installments being adjusted accordingly. In the event such
costs actually decrease for any such calendar year, Landlord shall reimburse
Tenant for any overage paid and the monthly rental installments for the next
period shall be reduced accordingly (but in no event below the then-current
Minimum Rental). Upon the Expiration Date of this Lease, Landlord may elect to
either (i) require Tenant to pay any unpaid estimated Tenant's Proportionate
Share within thirty (30) days after the Expiration Date, which estimate shall be
made by Landlord based upon actual and estimated costs for such year, or (ii)
elect to withhold Tenant's Security Deposit until the exact amount of Tenant's
Proportionate Share shall have been determined and paid, after which Landlord
shall return any excess Security Deposit to Tenant. With respect to the taxes,
insurance premiums and common area maintenance costs referenced above, Landlord
shall maintain reasonable books and records providing documentation thereof.
Tenant, at Tenant's sole cost and expense, and after giving Landlord reasonable
advance notice may cause an examination to be made of such books and records
(but not more than once a year). If it discloses an error in calculation of the
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billings to Tenant (in examination of which the parties shall with reasonable
good faith consider and agree upon), Tenant shall promptly pay any underpayment
and Landlord shall promptly pay any overpayment, whichever the case may be, and
if there has been an overpayment of more than 5%, Landlord shall reimburse
Tenant for the reasonable cost of such examination.
(e) LATE CHARGE. If Tenant should fail more than twice in any
calendar year to pay to Landlord when due any installment of Annual Rental or
other sum to be paid hereunder, Tenant shall pay Landlord within ten (10) days
on demand a late charge of four percent (4%) of the amount due. Failure to pay
such late charge within ten (10) days following demand therefore shall be an
Event of Default (as defined herein) hereunder. Provision for such late charge
shall be in addition to all other rights and remedies available to Landlord
hereunder or at law or in equity and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner; and such late charge
shall accrue automatically, regardless of whether Landlord shall have given
Tenant written notice of any such delay in payment.
5. ALTERATIONS AND IMPROVEMENTS BY TENANT. Any (i) structural changes
or (ii) other material alterations, additions, or improvements made to the
Premises by Tenant to the extent exceeding $25,000 in a particular case, shall
be subject to the prior written consent of Landlord and shall be at the sole
cost and expense of Tenant. All such alterations, additions or improvements
shall be constructed in a good and workmanlike manner, using new materials, in
accordance with plans and specifications approved by Landlord and in compliance
with the term of PARAGRAPH 3(B) herein and all Applicable Laws. As used herein,
"Applicable Laws" shall mean all material laws, ordinances (including Fire and
Building Codes), regulations, orders, interpretations and zoning requirements of
any governmental authority, agency or other public or private regulatory
authority (including insurance underwriters or rating bureaus) which may be in
effect from time to time and relating to the Tenant Operations, the Premises or
Tenant's business conducted therein. Additionally, Tenant covenants and agrees
that no improvements, changes, alterations, additions, maintenance or repairs
shall be made by Tenant to the Premises which impair the structural soundness of
the Building, which result in an overload of the weight capacity of floors in
the Building, which result in an overload of capacity of electric lines serving
the Building, or which interfere with electric or electronic equipment in the
Building or on any adjacent or nearby property. Upon the expiration or earlier
termination of this Lease, other than with respect to the improvements made in
accordance with Exhibit C, or structural changes approved by Landlord in
accordance with the above provisions (for which Landlord and Tenant shall
reasonably determine at the time of approval the appropriate treatment upon
termination of the lease), all alterations, additions or improvements,
including, without limitation, all walls, railings, carpeting, floor and wall
coverings and other permanent real estate fixtures (excluding, however, Tenant's
trade fixtures and equipment, as described in PARAGRAPH 11 herein) made by, for,
or at the direction of Tenant, and upon the reasonable election of Landlord,
shall either: (i) become the property of Landlord and remain upon the Premises
or (ii) be removed from the Premises by Tenant, at Tenant's sole cost and
expense.
6. USE OF PREMISES. Tenant shall use the Premises only for the Tenant
Operations and for no other purpose and shall comply with all Applicable Laws in
connection with the use of the Premises. Tenant shall be responsible for any and
all costs and expenses associated with Tenant's compliance with all Applicable
Laws, including the cost of altering the Tenant Improvements to comply with
Applicable Laws (including changes therein from time to time). Without limiting
the generality of the foregoing, Tenant shall be responsible, at Tenant's
expense, for all costs of complying with the requirements of the Americans With
Disabilities Act (as amended) (the "ADA"), including costs for alterations, (i)
relative to the Premises and, (ii) to the extent such compliance is required as
a result of the specific use made by Tenant of the Premises, relative to the
exterior and common areas and facilities of the Building. Landlord shall be
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responsible for complying with the requirements of the ADA relative to the
exterior and common areas and facilities of the Building in all instances other
than where such compliance is required as a result of the specific use made of
space in the Building by any tenant in the Building. Additionally, Tenant
covenants and agrees that nothing shall be done or kept in the Premises which
result in an overload of the weight capacity of floors in the Building, which
result in an overload of capacity of electric lines serving the Building, or
which interfere with electric or electronic equipment in the Building or on any
adjacent or nearby property. Tenant shall not do any act or follow any practice
relating to the Premises which shall constitute a nuisance. If, within thirty
(30) days of demand therefor by Landlord, Tenant fails, at its expense, to make
any alterations required to be made by Tenant pursuant to this paragraph, then
Landlord shall have the right to make such alterations (including any entry
required in the Premises to make such alterations), and Tenant shall pay to
Landlord (as additional rent hereunder) all costs and expenses reasonably
incurred by Landlord relative to such alterations; and such additional rent
shall be paid by Tenant to Landlord within thirty (30) days after demand
therefor by Landlord. Additionally, Tenant shall save Landlord harmless from any
penalties, fines, costs, expenses or damages resulting from Tenant's failure to
comply with the terms and requirements of this paragraph.
7. TAXES. Tenant shall pay in a timely manner and prior to delinquency
any taxes or assessments of any nature imposed or assessed upon its trade
fixtures, equipment, machinery, inventory, merchandise or other personal
property located on the Premises and owned by or in the custody of Tenant.
Landlord shall pay all ad valorem property taxes which are now or hereafter
assessed upon the Center, the Building and the Premises, except as otherwise
expressly provided in this Lease.
8. FIRE AND EXTENDED COVERAGE INSURANCE. Landlord shall maintain and
pay for fire insurance, with extended coverage, covering the replacement value
of the Building exclusive of coinsurance. Provided, however, if Tenant uses the
Premises for any purpose or in any manner which causes an increase in Landlord's
insurance rates, Tenant shall pay such additional insurance premium (in addition
to all other payments due under this Lease) to Landlord as additional rent
within thirty (30) days after demand from Landlord. Tenant shall maintain and
pay for all fire and extended coverage insurance on its contents in the
Premises, including trade fixtures, equipment, machinery, merchandise or other
personal property belonging to or in the custody of Tenant.
9. LANDLORD'S LIMITED COVENANT TO REPAIR AND REPLACE.
(a) During the Lease Term, Landlord shall be responsible for
repairs or replacements to the roof, exterior walls and structural members,
including foundation and subflooring of the Premises (except office fronts,
plate glass windows, doors, door closure devices, window and door frames,
nailing, locks and hardware and painting or other treatment of interior walls),
and underground utility lines that are not the responsibility of the respective
utility provider. Landlord's efforts to repair and replace pursuant to this
paragraph shall be made within a reasonable time after written notice from
Tenant of the need for such repair or replacement to be made (exclusive of
repairs and replacements necessitated by an "Event of Tenant Misconduct," as
defined in PARAGRAPH 16(A) herein). If Landlord cannot, using due diligence,
complete its repairs and replacements within sixty (60) days after written
notice from Tenant and if the resulting condition renders a material portion of
the Premises untenantable for the Tenant Operations, then, following the
expiration of such sixty (60) day period and continuing until such time as the
repair or replacement is completed (or is completed sufficiently so as to not
render a material portion of the Premises untenantable for the Tenant
Operations), Tenant may terminate this Lease effective upon thirty (30) days
prior written notice, without prejudice to Landlord's rights to receive payment
from Tenant for uninsured damages caused directly or indirectly by Tenant as
6
stated below. If the cause of such repairs or replacements is the result of an
Event of Tenant Misconduct, then Tenant shall not be entitled to terminate this
Lease pursuant to this paragraph, and Tenant shall pay Landlord the full amount
of such cost, damage, and expense (except as otherwise provided in PARAGRAPH 14
herein). Furthermore, in the event Landlord diligently pursues the completion of
the required repairs and replacements during the sixty (60) day period provided
above but is unable to complete such repairs and replacements prior to the
expiration of such period, such sixty (60) day period shall be extended for all
purposes under this paragraph (including Tenant's termination right) for such
additional, reasonable period of time (not to exceed thirty (30) days) as is
necessary to allow Landlord to complete such repair or replacement (provided
Landlord must continue to pursue the completion of such repair or replacement in
a diligent manner). Landlord's duty to repair or replace as prescribed in this
paragraph shall be Tenant's sole remedy and shall be in lieu of all other
warranties or guaranties of Landlord, express or implied, except as set forth
herein or any Exhibit hereto or workletter executed in connection herewith.
Furthermore, the terms of this PARAGRAPH A shall have no application to casualty
events and exercises of the power of eminent domain that affect the Building or
the Land, which shall be governed by the terms and provisions in PARAGRAPH 13
herein and PARAGRAPH 18 herein, respectively.
(b) In addition to and notwithstanding the provisions above,
if any repairs required to be made by Landlord hereunder are not made within
sixty (60) days after written notice delivered to Landlord by Tenant (provided
no advance written notice shall be required in cases of emergency), Tenant may,
at its option, make necessary repairs described above, and Landlord shall
reimburse reasonable expenses of Tenant in connection therewith. If Landlord
diligently pursues the completion of required repairs or replacements during the
sixty (60) day period provided above but is unable to complete such repairs and
replacements prior to the end of such period, such period shall be extended for
all purposes of this paragraph (including applicable termination rights) for
such additional, reasonable period of time (not to exceed 30 days) as is
necessary to allow Landlord to complete such repair or replacement (provided
Landlord must continue to pursue the completion of such repair or replacement in
a diligent manner).
10. TENANT'S COVENANT TO REPAIR.
(a) Tenant shall be responsible for the repair, replacement
and maintenance in good order and condition of all parts and components of the
Premises, other than those specified for maintenance by Landlord herein,
including, without limitation, the plumbing, wiring, electrical system, heating
system, air conditioning system, glass and plate glass, equipment and machinery
constituting fixtures located within the Premises and shall keep all plumbing
units, pipes and connections free from obstruction and protected against ice and
freezing. At the end of the Lease Term, Tenant shall return the Premises to
Landlord in as good of a condition as existed at the time all of the Landlord's
Work and all of the Tenant's Work (if any) was completed pursuant to PARAGRAPH 3
herein, excepting only normal wear and tear, acts of God and repairs required to
be made by Landlord hereunder. Tenant's duty to maintain the heating and air
conditioning system serving the Premises shall specifically include the duty to
inspect the system, to replace filters as recommended and to perform other
recommended periodic servicing. During the entire Lease Term, Tenant shall
obtain and maintain a service contract with an independent maintenance
contractor reasonably satisfactory to Landlord to provide such service for the
heating and air conditioning system. The service contract must include all
services suggested by the applicable equipment manufacturer(s) in the operation
and maintenance manual(s) and must become effective on the Commencement Date.
(b) In addition to and notwithstanding the provisions above,
if any repairs required to be made by Tenant hereunder are not made within sixty
7
(60) days after written notice delivered to Tenant by Landlord (provided no
advance written notice shall be required in cases of emergency), Landlord may,
at its option make necessary repairs described above, and Tenant shall reimburse
reasonable expenses of Landlord in connection therewith. If Tenant diligently
pursues the completion of required repairs or replacements during the sixty (60)
day period provided above but is unable to complete such repairs and
replacements prior to the end of such period, such period shall be extended for
all purposes of this paragraph (including applicable termination rights) for
such additional, reasonable period of time (not to exceed 30 days) as is
necessary to allow Tenant to complete such repair or replacement in a diligent
manner).
11. TRADE FIXTURES AND EQUIPMENT; NON-LIABILITY FOR CERTAIN DAMAGES.
(a) Except as otherwise provided herein, any trade fixtures
and equipment installed in the Premises at Tenant's expense (including using any
allocated tenant improvement allowance) shall remain Tenant's personal property,
and Tenant shall have the right at any time during the Lease Term to remove such
fixtures and equipment provided Tenant makes reasonable repairs to and/or
restoration of the Premises, ordinary wear and tear and acts of God alone
excepted. Any trade fixtures and equipment not removed by Tenant at the
expiration or an earlier termination of this Lease shall, at Landlord's
reasonable option, either: (i) become the property of Landlord or (ii) be
removed by Landlord, at Tenant's expense.
(b) Except as provided herein, neither party shall be liable
to the other for any injury to person or damage to property caused by the
Premises becoming out of repair or by defect in or failure of equipment, pipes
or wiring, or broken glass, or by the backing up of drains, or by gas, water,
steam, electricity or oil leaking, escaping or flowing into the Premises, nor
shall either party be liable to the other for any loss or damage that may be
occasioned by or through the acts or omissions of other tenants of the Center or
of any other persons or entities whomsoever, excepting only duly authorized
employees and agents of the party. Landlord shall not be liable to Tenant for
any compensation, damages or reduction of rent by reason of inconvenience or
annoyance or loss of business arising from power losses or shortages or from the
necessity of Landlord's entering the Premises for any of the purposes authorized
in this Lease or for repairing the Premises provided Landlord's activities are
conducted in a reasonable manner so as to minimize any disruption to Tenant's
occupancy.
12. UTILITIES. Tenant shall pay in a timely manner and prior to
delinquency for all utilities or services related to its use of the Premises,
including electricity, gas, heat, sewer, water, telephone and janitorial
services. Landlord shall not be responsible for the stoppage or interruption of
utilities services, other than as required by its limited covenant to repair and
replace set forth herein.
13. DAMAGE OR DESTRUCTION OF PREMISES. If the Building is so damaged by
fire or other casualty that substantial alteration or reconstruction to greater
than 50% of the Building shall be required (whether or not the Premises shall
have been damaged by such casualty) or in the event any mortgagee of Landlord
should require that all or any substantial portion of the insurance proceeds
payable as a result of a casualty amounting to greater than 50% of the fair
market value of the Building be applied to the payment of the underlying
mortgage debt, Landlord or Tenant may, at its reasonable option, terminate this
Lease by notifying the other in writing of such termination within sixty (60)
days after the date the casualty event occurs. If the Premises are damaged by
fire or other casualty but are not rendered untenantable for Tenant's business,
either in whole or in part, and if either party does not terminate this Lease
pursuant to the immediately preceding sentence, Landlord shall cause such damage
to be repaired without unreasonable delay and the Annual Rental shall not be
abated. If by reason of such casualty, the Premises are rendered untenantable
8
for Tenant's business, either in whole or in part, and either party does not
terminate this Lease as provided in the first sentence above in this PARAGRAPH
13, Landlord shall cause the damage to be repaired or replaced without
unreasonable delay, and in the interim, the Annual Rental shall be equitably
reduced as appropriate. Any such abatement of rent shall not, however, create an
extension of the Lease Term. Provided, however, if by reason of such casualty,
the Premises are rendered substantially untenantable, and Landlord fails to give
Tenant reasonable assurances that the amount of time required to repair the
damage, using due diligence, shall not exceed two hundred ten (210) days from
the date the casualty event occurs, then either party shall have the right to
terminate this Lease by giving written notice of termination within sixty (60)
days after the date the casualty event occurs. Notwithstanding the other
provisions of this PARAGRAPH 13, in the event there is a casualty loss to the
Premises to the extent of fifty percent (50%) or more of the replacement value
during the last Lease Year of the Lease Term, including any extended Lease Term
that has then been exercised by Tenant, either party may, at its option,
terminate this Lease by giving written notice within sixty (60) days after the
date the casualty event occurs; and, in such case, rent shall abate as of the
date of the occurrence of such casualty. Except as provided herein, there shall
be no obligation of Landlord to rebuild or repair in case of fire or other
casualty, and no termination under this PARAGRAPH 13 shall affect any rights of
Landlord or Tenant hereunder because of prior defaults of the other party.
Tenant shall give Landlord immediate notice of any fire or other casualty in the
Premises.
14. MUTUAL WAIVER; WAIVER OF SUBROGATION. The parties mutually release
and waive unto the other, all rights to claim damages, costs or expenses for any
injury to persons (including death) or property caused by a casualty of any type
whatsoever in, on or about the Premises, the Building or the Center to the
extent of such damages, costs or expenses has been paid to such damaged party
under the terms of any policy of insurance. All insurance policies carried with
respect to this Lease, if permitted under applicable law, shall contain a
provision whereby the insurer waives prior to loss all rights of subrogation
against either Landlord or Tenant (as the case may be).
15. SIGNS AND ADVERTISING. In order to provide architectural control
for the Center, Tenant may install, at Tenant's expense, only such exterior
signs, marquees, billboards, outside lighting fixtures and/or other decorations
on the Premises as shall have been approved in advance and in writing by
Landlord which approval shall not be unreasonably withheld. The care and
maintenance of all such approved signs shall be the sole responsibility of
Tenant. Landlord shall have the right to remove any such sign or other
decoration and fully restore the exterior of the Premises at the cost and
expense of Tenant if any such exterior work is done without Landlord's prior
written approval. Upon the expiration or earlier termination of this Lease,
Tenant shall remove any such sign or decoration and fully restore the exterior
of the Premises, at Tenant's sole cost and expense
16. INDEMNIFICATION, LIABILITY INSURANCE AND HAZARDOUS SUBSTANCES.
(a) INDEMNIFICATION BY THE PARTIES. Each party shall indemnify
and save the other harmless against any and all claims, suits, demands, actions,
fines, damages and liabilities and all costs and expenses thereof (including,
without limitation, reasonable attorneys' fees) arising out of injury to persons
(including death) or property occurring in, on or about, or arising out of, the
Premises, the Building or other areas in the Center if caused by or occasioned
wholly or in part by any willful or negligent act or omission of the such party,
its agents, subtenants, licensees, invitees, contractors, subcontractors or
employees (collectively, an "Event of Tenant Misconduct as to Tenant"). Each
party shall give the other immediate written notice of any such happening
causing injury to persons or property which would be the subject of their
indemnification.
9
(b) Intentionally Deleted.
(c) LIABILITY INSURANCE. At all times during the Lease Term,
Tenant shall, at its own expense, keep in force comprehensive public liability
insurance in such amounts and with such companies as shall, from time to time,
be reasonably acceptable to Landlord (and to any mortgagee having a mortgage
interest in the Premises) and naming Landlord as an additional insured. The
amounts of such coverage, until changed at Landlord's reasonable request, shall
be $1,000,000.00 with respect to bodily injury or death of one person as a
result of any one accident and $500,000.00 with respect to damage to property.
Tenant shall first furnish to Landlord a copy of the required policy or
certificate of insurance, evidencing the required coverage and naming Landlord
as an additional insured under such policy, prior to the Commencement Date and
thereafter prior to each policy renewal date. Such policy also shall include
contractual liability coverage, to the extent insurable, for the performance by
Tenant of the indemnity obligations of Tenant under this Lease and such policy
shall contain a provision whereby the insurer is not allowed to cancel, fail to
renew or materially change the coverage without first giving thirty (30) days
written notice to Landlord.
(d) PRESENCE AND USE OF HAZARDOUS SUBSTANCES. Tenant shall
not, without Landlord's prior written consent, keep on or around the Premises,
the common areas or facilities in or relating to the Building, the Land, or the
Center, for use, disposal, treatment, generation, storage or sale, any
substances designated as, or containing components designated as, hazardous,
dangerous, toxic or harmful, and/or any substance that is subject to regulation
by any then-current federal, state or local law, statute or ordinance and the
rules and regulations implementing them, including, but not limited to, the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 ET SEQ.); the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
ss. 9601 ET SEQ.); the Clean Water Act (33 U.S.C. ss. 1251 ET SEQ.); the Clean
Air Act (42 U.S.C. ss. 7401 ET SEQ.); and the Toxic Substances Control Act (15
U.S.C. ss. 2601 ET SEQ.) (such substances being herein collectively referred to
as "Hazardous Substances"). With respect to any Hazardous Substance brought to
or kept at the Premises by Tenant, Tenant shall:
(1) Comply promptly, timely and completely with all
governmental requirements for reporting, keeping and submitting manifests and
obtaining and keeping current identification numbers;
(2) Submit to Landlord true and correct copies of all
reports, manifests and identification numbers at the same time as they are
required to be and/or are submitted to the appropriate governmental authorities;
(3) Within five (5) days of Landlord's request from
time to time, submit written reports to Landlord regarding Tenant's use,
storage, treatment, transportation, generation, disposal or sale of Hazardous
Substances and provide evidence satisfactory to Landlord of Tenant's compliance
with the applicable governmental laws, statutes, ordinances, rules, regulations
and requirements;
(4) Allow Landlord or Landlord's agent or
representative to enter the Premises at all times to check Tenant's compliance
with all applicable governmental laws, statutes, ordinances, rules, regulations
and requirements regarding Hazardous Substances;
(5) Comply with minimum levels, standards or other
performance standards or requirements which may be set forth or established for
certain Hazardous Substances; and if minimum standards or levels are applicable
10
to Hazardous Substances present on the Premises, such standards or levels shall
be established and documented by an on-site inspection by the appropriate
governmental authorities and shall be set forth in an addendum to this Lease;
(6) Comply with all applicable governmental laws,
statutes, ordinances, rules, regulations and requirements regarding the proper
and lawful use, sale, transportation, generation, treatment and disposal of such
Hazardous Substances; and
(7) Pay to Landlord upon demand as additional rent
any and all reasonable costs incurred by Landlord and associated with Landlord's
inspection of the Premises and Landlord's monitoring of Tenant's compliance with
this PARAGRAPH 16(D), including Landlord's attorneys' fees and costs.
The terms and provisions in this PARAGRAPH 16(D) shall survive the expiration of
the Lease Term or the earlier termination of this Lease.
(e) UNAUTHORIZED RELEASES OF HAZARDOUS SUBSTANCES; CLEANUP
COSTS; DEFAULT AND INDEMNIFICATION.
(1) Tenant shall give prompt written notice to
Landlord of any release, spill, discharge or threatened discharge of any
Hazardous Substance on or at the Premises, the common areas or facilities in or
relating to the Building, the Land, the Center, or the surrounding environment,
which release, spill, discharge or threatened discharge was not made pursuant to
or in conformance with the terms of any permit or license issued to Tenant by
the appropriate governmental authority. Such notice shall include a description
of measures taken or proposed to be taken by Tenant to contain and/or remedy the
release, spill, discharge or threatened discharge and any resultant damage to
property, persons, the Premises, the common areas or facilities in or relating
to the Building, the Land, the Center, and/or the surrounding environment.
Tenant also shall give immediate written notice to Landlord of any private or
governmental investigation relating to Hazardous Substances on or about the
Premises.
(2) At Tenant's own expense, Tenant shall promptly
take all steps necessary to contain and remedy any release, spill, discharge or
threatened discharge of Hazardous Substances on or at the Premises, the common
areas or facilities in or relating to the Building, the Land, the Center, or the
surrounding environment, and all resultant damage or injury to property,
persons, and the environment resulting from Tenant's activities. Landlord shall
have the right, but not the obligation, to participate in and approve any
environmental assessment or remedial cleanup plan for the Premises, the common
areas or facilities in or relating to the Building, the Land and the Center.
Tenant, its employees, agents and contractors shall fully cooperate with any and
all federal, state and local governmental officials having jurisdiction over the
Premises in resolving or addressing any situation involving the presence of
Hazardous Substances on or about the Premises.
(3) Tenant shall be fully and completely liable to
Landlord for any and all cleanup costs and any and all other charges, fees, and
penalties (civil and criminal) imposed by any governmental authority with
respect to Tenant's use, generation, handling, storage, containment, disposal,
transportation, and/or sale of Hazardous Substances.
11
(4) Tenant shall indemnify, defend and save Landlord
harmless from any and all of the costs, fees, penalties and charges assessed
against or imposed upon Landlord (as well as Landlord's attorneys' fees and
costs) as a result of Tenant's use, generation, handling, storage, containment,
disposal, transportation, and/or sale of Hazardous Substances.
(5) Upon Tenant's default under PARAGRAPH 16(D)
herein or this PARAGRAPH 16(E) and in addition to the rights and remedies set
forth elsewhere in this Lease, Landlord shall be entitled to the following
rights and remedies:
(A) At Landlord's option, to terminate this
Lease immediately; and
(B) To recover any and all damages
associated with the default, including, but not limited to, cleanup costs and
charges, civil and criminal penalties and fees, all liability to third parties,
and Landlord's attorneys' fees and costs.
and
(C) With respect to the Premises and Center,
Landlord warrants and represents to Tenant that Landlord has not disposed of nor
placed thereon any Hazardous Substances. Further, Landlord has no knowledge of
the presence of any Hazardous Substances on the Premises or Center. Landlord's
knowledge is limited to the knowledge of F. David McRae. Landlord shall
indemnify, defend and save Tenant harmless from any and all of the costs, fees,
penalties and charges assessed against or imposed upon Tenant (as well as
Tenant's attorneys' fees and costs) in the event of a breach of the
representation and warranties of this paragraph.
The terms and provisions in this PARAGRAPH 16(E) shall survive the expiration of
the Lease Term or the earlier termination of this Lease.
17. LANDLORD'S RIGHT OF ENTRY. Landlord and those persons authorized by
Landlord shall have the right to enter the Premises at all reasonable times and
upon reasonable notice for the purposes of making repairs, making connections,
installing utilities, providing services to the Premises or for any other
tenant, making inspections or showing the Premises to prospective purchasers
and/or lenders during the hours of 9:00 am and 5:00 pm. Further, during the last
six (6) months of the Lease Term, including any extended Lease Term that has
then been exercised by Tenant, Landlord and those persons authorized by it shall
have the right, at reasonable times and upon reasonable notice to Tenant, to
show the Premises to prospective tenants during the hours of 9:00 am and 5:00
pm. Notwithstanding any term or provision in this Lease, including this
PARAGRAPH 17, to the contrary, Landlord shall be entitled to enter the Premises
at all times and without any advance notice to Tenant if Landlord reasonably
determines or believes that an emergency circumstance or situation exists that
requires such entry.
18. EMINENT DOMAIN. If any substantial portion of the Premises is to be
taken under the power of eminent domain (including any conveyance made in lieu
thereof) or if any such taking shall materially impair the normal operation of
Tenant's business, then either party shall have the right to terminate this
Lease by giving written notice of such termination within thirty (30) days after
such taking or the notice thereof. If neither party elects to terminate this
Lease pursuant to the immediately preceding sentence, Landlord shall repair and
restore the Premises to a tenantable condition and the Annual Rental shall be
equitably reduced as to the portion of the Premises that is taken. All
12
compensation awarded for any taking (or the proceeds of a private sale in lieu
thereof) shall be the property of Landlord, whether such award is for
compensation for damages to Landlord's or Tenant's interest in the Premises, and
Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, Landlord shall not have any interest in any separate award
made to Tenant for loss of business, moving expenses or the taking of Tenant's
trade fixtures or equipment if a separate award for such items is made to
Tenant.
19. EVENTS OF DEFAULT AND LANDLORD'S REMEDIES.
(a) Upon the occurrence of any one or more of the following
events (each, an "Event of Default"; collectively, "Events of Default"),
Landlord shall be entitled to exercise any rights or remedies available in this
Lease, at law or in equity. Events of Default shall be:
(1) Tenant's failure to pay when due any rental or
other sum of money payable hereunder if not remedied within ten (10) days after
written notice thereof is given to Tenant (provided, however, and
notwithstanding the foregoing to the contrary, Tenant shall not be entitled to
such notice and cure period more than two (2) times during any given Lease
Year).
(2) Failure by Tenant to perform any of the other
material terms, covenants or conditions contained in this Lease if such failure
is not remedied within thirty (30) days after written notice thereof is given to
Tenant or such extended time during which Tenant is diligently pursuing curing
such failure; and
(3) Tenant, or any guarantor of Tenant's obligations
under this Lease (if any), becomes bankrupt or insolvent, files any debtor
proceedings, files pursuant to any statute a petition in bankruptcy or
insolvency or for reorganization, or files a petition for the appointment of a
receiver or trustee for all or substantially all of such party's assets and such
petition or appointment is not set aside within sixty (60) days from the date of
such petition or appointment or if such party makes an assignment for the
benefit of creditors or petitions for or enters into such an arrangement.
(b) In addition to its other remedies at law or in equity,
Landlord, upon an Event of Default by Tenant, shall have the immediate right to
re-enter and remove all persons and property from the Premises and dispose of
such property as it deems fit, all without resort to legal process and without
being guilty of trespassing or being liable for any damages caused thereby. If
Landlord re-enters the Premises, either with or without legal process, it may
either terminate this Lease or, from time to time without terminating this
Lease, make such alterations and repairs as may be necessary or appropriate to
relet the Premises, and relet the Premises upon such terms and conditions as
Landlord deems advisable, without any responsibility of Landlord whatsoever to
account to Tenant for any surplus rents collected. Tenant also shall be liable
for and shall pay to Landlord, in addition to any other sum provided to be paid
herein, brokers' fees incurred by Landlord in connection with reletting the
whole or any part of the Premises; the costs of removing from the Premises and
storing Tenant's or other occupants' property which shall not be treated
unreasonably; the reasonable costs of repairing, altering, remodeling or
otherwise putting the Premises into condition acceptable to a new tenant or
tenants, and all reasonable expenses incurred by Landlord in enforcing or
defending Landlord's rights and/or remedies under this Lease, including
reasonable attorneys' fees. No retaking of possession of the Premises by
Landlord shall be deemed as an election to terminate this Lease unless a written
notice of such intention is given by Landlord to Tenant at the time of re-entry;
but, notwithstanding any such re-entry or reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
13
previous default. In the event of an elected termination of this Lease by
Landlord, whether before or after re-entry, Landlord may recover from Tenant
damages, including the costs of recovering the Premises, and Tenant shall remain
liable to Landlord for the total Annual Rental that would have been payable by
Tenant hereunder for the remainder of the Lease Term, less the rentals actually
received by Landlord from any reletting. If any rent owing under this Lease is
collected by or through an attorney, Tenant agrees to pay Landlord's reasonable
attorneys' fees to the extent allowed by applicable law.
(c) Upon the occurrence of any one or more failures to perform
material obligations hereunder by Landlord, Tenant shall be entitled to exercise
any rights or remedies available at law or in equity, except as expressly
limited by the terms of this Lease. In addition to such rights, Tenant, upon
failure by Landlord to perform any of its covenants hereunder to act with
respect to the Premises, if such failure is not remedied within the longer of
(i) thirty (30) days or (ii) such other period permitted by the terms hereof
(including such extended time during which Landlord is permitted hereby to
diligently pursue curing such failure), after written notice thereof is given to
Landlord, shall have the immediate right to perform such covenants. Landlord
shall be liable for and shall pay to Tenant all reasonable expenses incurred by
Tenant in connection herewith.
20. SUBORDINATION. Subject to Tenant's nondisturbance rights set forth
below, this Lease is subject and subordinate to any and all mortgages or deeds
of trust now or hereafter placed upon the property of which the Premises are a
part, and this clause shall be self-operative, without any further instrument
necessary to effect such subordination, provided any such lender may, at its
option and without seeking or obtaining Tenant's consent, subordinate the lien
of its mortgage or deed of trust to this Lease. At the request from time to time
of Landlord or any lender that holds a mortgage or deed of trust on the property
of which the Premises are a part, Tenant shall promptly execute and deliver to
Landlord any such instrument or instruments as Landlord or such lender may
reasonably request evidencing the subordination of this Lease to such mortgage
or deed of trust. Provided, however, as a condition to Tenant's obligation to
execute and deliver any such instrument(s), the applicable lender must agree
that Tenant's rights to quiet enjoyment and possession of the Premises under
this Lease shall not be divested by foreclosure or other default proceedings
under the applicable mortgage or deed of trust so long as Tenant shall not be in
default under this Lease. Tenant shall continue its obligations under this Lease
in full force and effect, notwithstanding any foreclosure or default proceedings
by any such lender. In the event that a mortgage is placed on the Building or
any part thereof, the Landlord will use good faith best efforts to provide
Tenant a mutually agreed upon subordination and non-disturbance agreement
executed by the mortgagor.
21. ASSIGNING AND SUBLETTING. Tenant shall not assign, sublet,
mortgage, pledge or encumber this Lease, the Premises, or any interest in the
whole or in any portion thereof, without the prior written consent of Landlord.
Landlord agrees not to withhold its consent (i) for assignment to a parent,
affiliate or subsidiary of Tenant or to an entity acquiring all or substantially
all of the assets of Tenant (including by way of a merger or reverse merger), or
(ii) for other assignment or subletting provided Landlord has determined in its
reasonable discretion that the proposed assignee or subtenant is not materially
incompatible with Landlord's rules and regulations applicable to the Center as
in effect from time to time. If Tenant makes any such assignment, mortgage,
sublease or pledge (whether with or without Landlord's written consent), except
as permitted by Landlord and except for a complete assignment to an entity
acquiring all or substantially all of the assets of Tenant (including by way of
a merger or reverse merger), Tenant named herein and any guarantor of Tenant's
obligations under this Lease will nonetheless remain primarily liable for the
performance and observation of all of the terms of this Lease required to be
observed or performed by Tenant hereunder. One half of any rental or any fee or
charge received by Tenant in connection with any such assignment or sublease
14
which is in excess of the Annual Rental payable to Landlord hereunder shall be
paid immediately by Tenant to Landlord as additional rental under this Lease.
Consent by Landlord to one or more assignments or sublettings shall not operate
as a waiver of Landlord's rights as to any subsequent assignments or
sublettings.
22. COVENANT OF QUIET ENJOYMENT. Landlord represents that it has full
right and authority to lease the Premises and that Tenant shall peacefully and
quietly hold and enjoy the Premises for the full Lease Term so long as Tenant
does not default in the performance of any of the terms hereof.
23. ESTOPPEL CERTIFICATES. Within fifteen (15) days after any request
by Landlord, but not more than once per calendar year, Tenant shall deliver a
written estoppel certificate addressed to Landlord and/or any other party
designated by Landlord, certifying any facts that are then true with respect to
this Lease, including, without limitation, that this Lease is in full force and
effect, that no default known to Tenant exists on the part of Landlord or Tenant
hereunder, that Tenant is in possession of the Premises, that Tenant has
commenced the payment of rent hereunder, and that there are no defenses or
offsets claimed by Tenant with respect to payment of rentals under this Lease.
24. PROTECTION AGAINST LIENS. Tenant shall do all things necessary to
prevent the filing of any mechanic's, materialmen's or other types of liens
whatsoever, against all or any part of the Premises, the Building, the Land or
the Center by reason of any claims made by, against, through or under Tenant. If
any such lien is filed against the Premises, the Building, the Land or the
Center (or any portion thereof), Tenant shall either cause the same to be
discharged of record within twenty (20) days after filing or, if Tenant, in its
discretion and in good faith, determines that such lien should be contested,
Tenant shall furnish such security as may be necessary to prevent any
foreclosure proceedings against the Premises, the Building, the Land or the
Center (or any portion thereof) during the pendency of such contest. If Tenant
shall fail to discharge such lien within said time period or fail to furnish
such security, then Landlord may, at its election and in addition to any other
right or remedy available to it, discharge the lien by paying the amount claimed
to be due or by procuring the discharge by giving security or in such other
manner as may be allowed by law. If Landlord acts to discharge or secure any
such lien as permitted herein, then Tenant shall promptly (pursuant to the terms
hereof) reimburse Landlord (as additional rent) for all sums paid and all costs
and expenses (including reasonable attorneys' fees) incurred by Landlord
relative to such lien, together with interest on the total expenses and costs at
the maximum lawful rate.
25. FORCE MAJEURE. Following the Commencement Date, whenever a period
of time is herein prescribed for the taking of any action by Landlord, Landlord
shall not be liable or responsible for, and there shall be excluded from the
computation of such period of time, any delays due to any condition, matter or
circumstance beyond the reasonable control of Landlord (collectively, "Force
Majeure Matters"; each, a "Force Majeure Matter"), resulting from the following:
strikes; lockouts; acts of God; war or enemy action or invasion; civil
commotion; insurrection; riot; mob violence; malicious mischief or sabotage;
fire or any other casualty; adverse weather conditions or unusual inclement
weather; or condemnation or any law subsequently enacted. Prior to the
Commencement Date, in the event a Force Majeure Matter affects Landlord's
construction and delivery obligation(s) relative to the Premises under this
Lease, the period of time during which Landlord may complete such construction
and delivery obligation(s) shall be extended by the same number of days as the
number of days of delay caused by such Force Majeure Matter on the critical path
of completing such construction and delivery obligation(s).
26. NONWAIVER. No course of dealing between Landlord and Tenant and no
delay or omission of Landlord in exercising any right arising from Tenant's
default shall impair such right or be construed to be a waiver of a default.
15
27. LANDLORD LIABILITY. All obligations of Landlord hereunder will be
construed as covenants, not conditions, and all such obligations will be binding
upon Landlord only during the period of its ownership and possession of the
Building and not thereafter. The term "Landlord," under this Lease, shall mean
only the owner, for the time being, of the Building. If Landlord shall sell,
assign or transfer all or any part of its interest in the Premises or in this
Lease to a successor in interest which expressly assumes the obligations of
Landlord hereunder, then the selling, assigning or transferring Landlord shall
thereupon be released and discharged from all covenants and obligations
hereunder, and Tenant shall look solely to such successor in interest for the
performance of all of Landlord's obligations hereunder. Tenant's obligations
under this Lease shall in no manner be affected by Landlord's assignment or
transfer hereunder, and Tenant shall thereafter attorn and look solely to such
successor in interest as the landlord hereunder. Notwithstanding any other
provision hereof, Landlord's directors, officers and employees shall not have
any personal liability hereunder. In the event of any breach or default by
Landlord in any term or provision of this Lease, Tenant agrees to look solely to
Landlord's interest in the Land and the Building; however in no extent shall any
deficiency judgment or any money judgment of any kind be sought or obtained
against Landlord; notwithstanding the foregoing, however, Tenant shall not be
prohibited from seeking and obtaining equitable relief such as specific
performance where appropriate.
28. HOLDING OVER; ABANDONMENT. If Tenant remains in possession of the
Premises or any part thereof after the expiration of the Lease Term, whether
with or without Landlord's acquiescence, Tenant shall be deemed only a tenant at
will and there shall be no renewal of this Lease without a written agreement
signed by both parties specifying such renewal; in addition, the monthly Minimum
Rental required to be paid under this Lease relative to any holdover period
shall automatically become one hundred fifty percent (150%) of the monthly
Minimum Rental payable immediately prior to the expiration of the Lease Term.
Tenant also shall be liable for any and all damages, direct and consequential,
suffered by Landlord as a result of any holdover without Landlord's unequivocal
written acquiescence. If during the Lease Term Tenant shall vacate or abandon
the Premises for greater than twelve (12) consecutive months, Landlord may, at
its option, so long as Tenant has not reinhabited same, terminate this Lease by
written notice to Tenant in which event neither party shall have any further
liabilities or obligations hereunder, except Landlord shall repay to Tenant any
prepaid rent or security deposit previously given and all indemnification
obligations herein shall survive such termination.
29. NOTICES. Any notice allowed or required by this Lease shall be
deemed to have been sufficiently served if the same shall be in writing and
placed in the United States Mail, via certified mail or registered mail, return
receipt requested, with proper postage prepaid and addressed or reputable
national overnight delivery service:
AS TO LANDLORD: To Landlord's address set forth
in the Basic Lease Information.
AS TO TENANT: to Tenant's address set forth
in the Basic Lease Information.
The addresses of Landlord and Tenant to which notices shall be directed
may be changed or added from time to time by either party giving notice to the
other in the prescribed manner.
16
30. MISCELLANEOUS.
(a) RULES AND REGULATIONS. Attached hereto as EXHIBIT D are
the rules and regulations currently in effect with respect to the Building.
Landlord shall have the right from time to time to reasonably amend these rules
and regulations for Tenant's use of the Premises, the Building and the Land.
Tenant shall abide by and actively enforce such rules and regulations,
including, without limitation, rules and regulations governing parking of
vehicles on designated portions of the Land as to its employees, agents,
invitees and licensees. Notwithstanding the foregoing, in the event of any
inconsistency between this Lease (exclusive of Exhibit D) and such rules and
regulations, as the same may be amended from time to time, the provisions of
this Lease shall govern with respect to Tenant.
(b) EVIDENCE OF AUTHORITY. If requested by Landlord, Tenant
shall furnish appropriate legal documentation evidencing the valid existence and
good standing of Tenant and the authority of any parties signing this Lease on
behalf of Tenant to act for Tenant.
(c) NATURE AND EXTENT OF AGREEMENT. This Lease, together with
all exhibits hereto and workletters that shall be entered into in connection
herewith, contains the complete agreement of the parties concerning the subject
matter hereof, and there are no oral or written understandings, representations,
or agreements pertaining thereto (including, without limitation, the two letters
between the parties dated May 4, 2004, which shall hereafter be of no force and
effect) which have not been incorporated herein. This Lease creates only the
relationship of landlord and tenant between the parties, and nothing herein
shall impose upon either party any powers, obligations or restrictions not
expressed herein. This Lease shall be construed and governed by the laws of the
state in which the Premises are located.
(d) SEVERABILITY. If any term or provision of this Lease, or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and enforced to the fullest
extent permitted by law, notwithstanding the invalidity of any other term or
provision hereof.
(e) BINDING EFFECT. This Lease shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. This Lease shall not be binding on Landlord until
executed by an officer of Landlord having a title of Vice President or higher
and delivered to Tenant. No amendment or modification of this Lease shall be
binding upon either party unless same is in writing and executed by an officer
of the party having a title of Vice President or higher.
(f) CAPTIONS AND HEADINGS. The captions and headings in this
Lease are for convenience and reference only, and they shall in no way be held
to explain, modify, or construe the meaning of the terms of this Lease.
(g) Intentionally deleted.
(h) LEASE REVIEW. The submission of this Lease to Tenant for
review does not constitute a reservation for or option for the Premises, and
this Lease shall become effective as a contract only upon execution and delivery
by Landlord and Tenant.
17
(i) BROKERAGE. Landlord warrants and represents to Tenant that
Landlord has not engaged or contracted with any person, firm or entity to serve
or act as a Realtor(R), broker, agent or finder, other than Broker (if any)
identified in the Basic Lease Information, for the purpose of leasing the
Premises or in regard to this Lease. Tenant warrants and represents to Landlord
that Tenant has not engaged, contracted with or dealt with any person, firm or
entity (other than Broker, if any) to serve or act as a Realtor(R), broker,
agent or finder for the purpose of leasing the Premises or in regard to this
Lease. Landlord agrees to be solely responsible for the payment of any
commission to Broker (if any) relating to this Lease pursuant to a separate
agreement between Landlord and Broker (if any). Tenant shall and does hereby
indemnify and hold harmless Landlord from and against any claim for any
consulting fee, finder's fee, commission, or like compensation, including
reasonable attorneys' fees in defense thereof, payable in connection with this
Lease and asserted by any party arising out of any act or agreement by Tenant,
excluding the commission payable by Landlord to Broker (if any) as described
above. Landlord shall and does hereby indemnify and hold harmless Tenant from
and against any claim for any consulting fee, finder's fee, commission, or like
compensation, including reasonable attorneys' fees in defense thereof, payable
in connection with this Lease and asserted by any party arising out of any act
or agreement by Landlord (including the commission payable by Landlord to
Broker, if any, as described above).
(j) MEMORANDUM OF LEASE. Upon the request of either party, the
other party shall join in the execution of a memorandum of this Lease (a
"Memorandum") in recordable form. Either party may record the Memorandum in the
appropriate land record office, at its own expense. However, neither party shall
record this Lease (or any portion thereof) without the written consent of the
other party.
(k) Intentionally Deleted.
(l) SURVIVAL OF OBLIGATIONS. Notwithstanding any term or
provision in this Lease to the contrary, any liability or obligation of Landlord
or Tenant arising during or accruing with respect to the Lease Term shall
survive the expiration or earlier termination of this Lease, including, without
limitation, obligations and liabilities relating to (i) rental payments, (ii)
the condition of the Premises and the removal of Tenant's property, and (ii)
indemnity and hold harmless provisions in this Lease.
(m) CONFIDENTIALITY. Tenant shall not disclose the terms of
this Lease to any third party except (i) legal counsel to Tenant, (ii) any
assignee of Tenant's interest in this Lease or any sublessee of Tenant relative
to the Premises (or any portion thereof), (iii) as required by applicable law or
by subpoena or other similar legal process or by any government or securities
regulatory agency, or (iv) for financial reporting purposes.
(n) ATTORNEYS' FEES. In the event of a dispute regarding the
performance of any of the terms of this Lease and the other party employs
attorney(s) in connection therewith, the prevailing party shall be entitled to
prevailing party's reasonable attorneys' fees actually incurred (calculated at
such attorneys' reasonable and customary hourly rates and without regard to the
amount in controversy) and costs of litigation.
(o) TIME OF PERFORMANCE. Except as expressly otherwise herein
provided, with respect to all required acts of Tenant, time is of the essence of
this Lease.
(p) REAL ESTATE INVESTMENT TRUST. During the Lease Term,
should a real estate investment trust become Landlord hereunder, all provisions
of this Lease shall remain in full force and effect except as modified by this
18
PARAGRAPH 30(P). If Landlord in good faith determines that its status as a real
estate investment trust under the provisions of the Internal Revenue Code of
1986, as heretofore or hereafter amended, will be jeopardized because of any
provision of this Lease, Landlord may request reasonable amendments to this
Lease and Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such amendments do not (a) increase the monetary
obligations of Tenant pursuant to this Lease or (b) in any other manner
adversely affect Tenant's interest in the Premises.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed under seal as of the Lease Execution Date pursuant to authority duly
given.
LANDLORD:
CRESCENT RESOURCES, LLC
BY: /S/ PATRICK G.EMERY
-----------------------------------------
ITS: PATRICK G. EMERY, REGIONAL VICE PRESIDENT
TENANT:
HOT TOPIC, INC
[CORPORATE SEAL]
/S/ JAMES MCGINTY BY: /S/ ELIZABETH MCLAUGHLIN
- ----------------------------- ----------------------------------------
ITS: JAMES MCGINTY, SECRETARY ITS: ELIZABETH MCLAUGHLIN, CEO
------------------------ ----------------------------------------
19
EXHIBIT A
TO
LEASE AGREEMENT
LEGAL DESCRIPTION
-----------------
NOTE: THIS IS INTENDED TO BE A LEGAL DESCRIPTION OF THE REAL ESTATE SHOWN ON THE
SITE PLAN. THE LEGAL DESCRIPTION SHALL BE PREPARED BY RAGAN-SMITH ASSOCIATES AND
ADDED TO THIS LEASE BY AMENDMENT SIGNED BY THE PARTIES.
EXHIBIT B
TO
LEASE AGREEMENT
ATTACH: 1. SITE PLAN
2. PLAN SHOWING DIMENSIONS OF BUILDING (FLOOR PLAN)
3. BUILDING ELEVATIONS (INCLUDING EXTERIOR MATERIALS SPECIFICATIONS)
4. MECHANICAL PLAN
5. BUILDING SPECIFICATIONS
EXHIBIT C
WORKLETTER
Landlord: Crescent Resources, LLC
Tenant: Hot Topic, Inc.
RECITALS
A. This workletter is attached to and forms a part of the certain lease
dated June 1, 2004, (the "Lease"), pursuant to which Landlord has leased to
Tenant certain space (the "Premises") in the Building.
B. The Lease provides for Landlord to build a Building (the "Building")
on the Land, make office improvements to the Premises (the "Tenant
Improvements"), and Tenant desires to have Landlord make them, prior to
occupancy, upon the terms and conditions contained in this workletter.
1. Definitions. In this workletter, some defined terms
are used. They are (in addition to other defined
terms either defined herein or in the Lease):
(a) Base Building Plans: Landlord will have T.W. Frierson
prepare civil, architectural, electrical, mechanical,
plumbing and fire protection construction documents
as required to obtain all applicable permits and to
construct the building. The Base Building Plans will
be consistent with the drawings and specifications
included in Exhibit B. On June 21, 2004 the Landlord
will submit a complete set of the Base Building Plans
to the Tenant for review. The Tenant will have 5
working days to review the plans and submit written
comments to the Landlord. The Landlord will make
reasonable efforts to incorporate the Tenant's
comments into the Base Building Plans, provided such
comments do not result in a material increase in the
construction cost of the Building, and will issue
modified Base Building plans to the Tenant within 5
working days after receiving comments from the
Tenant.
(b) Tenant Improvement Allowance: $595,000.00 and is to
be applied by Landlord to the cost of Tenant
Improvements to the office and/or warehouse portion
of the Premises as approved by the Tenant.
(c) Tenant Plans: Tenant Plans for the Tenant
Improvements will be prepared by an Architect and MEP
engineers mutually agreed to by the Landlord and
Tenant. The Architect and MEP engineers will contract
directly with the Landlord. The cost of the
Architecture and MEP fees will be approved by the
Tenant in writing and shall be paid from the Tenant
Improvement Allowance. The Tenant at its sole option
may require that Architecture and MEP design be
competitively bid. The Tenant will engage a Designer
to complete a "Design Package" (consisting of a space
plan, finish selections and general requirements) for
the Tenant Improvements. The Tenant will submit this
design package to the Landlord and Tenant Improvement
Architect by July 15, 2004 for use in completing the
Tenant Plans. The Architect and MEP engineers will
prepare Construction Documents (including
architectural, electrical, mechanical, plumbing and
fire protection design) based upon the "Design
Package". The Landlord will submit the Tenant Plans
to the Tenant by August 16, 2004 for review. The
Tenant shall have 5 working days to review the Tenant
Plans and provide written comments to the Landlord.
The Landlord will incorporate the Tenants comments
into the Tenant Plans and will issue the documents to
the Tenant for written approval.
(d) Change Order: any change, modification, or addition
to the final Tenant Plans or Base Building Plans.
2. Project Design and Construction. All work relative to the Base
Building will be performed by designers and contractors
selected and engaged by Landlord. All work relative to the
Tenant Improvements will be performed by designers and
contractors mutually selected by the Tenant and Landlord but
contracted by the Landlord.
3. Cost Responsibilities.
(a) Landlord: Landlord shall construct the Building at its
sole cost and expense in accordance with Exhibit B of the
Lease and the Base Building Plans. Landlord also will pay up
to the amount of the Tenant Improvement Allowance for the cost
of the Tenant Improvements related to the office portion of
the Premises.
(b) Tenant: Tenant will pay for:
(1) Tenant-initiated Change Orders to the final
Tenant Plans or Base Building plans after written approval by
the parties.
(2) Any additional Tenant Improvement Allowance which
will be paid on an amortized basis at 9.5% per annum as a
portion of Minimum Rental.
(c) In the event the entire Tenant Improvement Allowance is
not used, Tenant shall receive a credit for such unused
portion against the payment of Annual Rent.
4. Construction. Landlord shall cause the Building and Tenant
Improvements to be constructed substantially in accordance
with the Base Building Plans and Tenant Plans. All
construction shall be in a good and workmanlike manner, using
new materials, consistent with industry standards and in
accordance with all applicable building codes and laws. All
warranties from the Landlord's contractor and subcontractors
shall be assigned to Tenant to the extent the Lease requires
Tenant to be responsible for repair or replacement of such
items.
5. Condition of the Premises.
(a) Prior to the Commencement Date, Tenant will conduct a
walk-through inspection of the Premises with Landlord and prepare a
punch-list of items needing additional work by Landlord. Other than the
items specified in the punch-list and latent defects (as defined
below), and subject to the representations and warranties set forth
herein and in the Lease, by taking possession of the Premises, Tenant
will be deemed to have accepted the Premises in their condition on the
date of delivery of possession and to have acknowledged that Landlord
has installed the Tenant Improvements as required by this workletter
and that there are no items needing additional work or repair. The
punch-list will not include any damage to the Premises caused by
Tenant's move-in or early access, if permitted. Damage caused by Tenant
will be repaired or corrected by Landlord at Tenant's expense. Tenant
acknowledges that neither Landlord or its agents or employees have made
any representations or warranties as to the suitability or fitness of
the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents or employees agreed to
undertake any alterations or construct any Tenant Improvements to the
Premises except as expressly provided in the Lease and this workletter.
Landlord's contractor will complete all reasonable punch-list items
within 30 days after the walk-through inspection or as soon as
practicable after such walk-through.
(b) A "latent defect" is a defect in the condition of the
Building or the Premises, caused by Landlord's failure to construct the
Building or Tenant Improvements in a good and workman-like manner and
in accordance with the working drawings, or in violation of the
provisions of the Lease or Applicable Law, which would not ordinarily
be observed during a walk-through inspection. If Tenant notifies
Landlord of a latent defect within one year following the Commencement
Date, then Landlord, at its expense, will repair the latent defect as
soon as practicable.
The terms hereof are approved.
LANDLORD:
CRESCENT RESOURCES, LLC
By: /S/ PATRICK G. EMERY
-----------------------------
Name: PATRICK G. EMERY
---------------------------
Title: REGIONAL VICE PRESIDENT
TENANT:
HOT TOPIC, INC.
By: /S/ ELIZABETH MCLAUGHLIN
-----------------------------
Name: ELIZABETH MCLAUGHLIN
----------------------------
Title: CHIEF EXECUTIVE OFFICER
----------------------------
EXHIBIT D
TO
LEASE AGREEMENT
RULES AND REGULATIONS
---------------------
1. RESTRICTED USES. Neither the Premises nor any part of the common areas
of the Building, the Land or the Center shall be used by Tenant for any
one or more of the following uses:
(a) Agriculture or any related use, including any roadside stand
for the display and sale of agricultural products and any use
which involves the raising, breeding, or keeping of any
animals or poultry;
(b) Processing or slaughter of livestock, swine, poultry or other
animals;
(c) Manufacture of leather goods;
(d) Manufacture of explosives or explosive agents;
(e) Manufacture, sale, rental, repair or storage of heavy
equipment, buses, trucks, trailers, automobiles, recreational
vehicles and mobile or trailer homes;
(f) Unscreened outdoor storage, outdoor fabrication or outdoor
handling of any machinery, parts, material, supplies or
products;
(g) Residential uses;
(h) Overnight parking of campers, mobile homes, boats, trailers or
motor homes;
(i) Erecting and maintaining structures of a temporary nature,
except that during the period of construction of improvements
to the Premises, Tenant's contractors or subcontractors may be
permitted to erect or maintain such temporary structures upon
Landlord's prior written approval;
(j) Jails, prisons, labor camps, penal, detention or correction
facilities or farms;
(k) Cemeteries or mausoleums;
(l) Mining, including the extraction, processing and removal of
sand, gravel, stone, minerals or clay;
(m) Any land fills, any hazardous waste disposal or storage
facilities and any incinerators;
(n) Racetracks, raceways and drag strips; and
(o) Massage parlors, topless night clubs or similar business
operations.
2. NUISANCES. Tenant shall not cause any unclean, unhealthy, unsightly or
unkempt condition to exist in the Premises or in the common areas of
the Building, the Land or the Center. Tenant shall not use the Premises
or any portion of the common areas of the Building, the Land or the
Center, in whole or in part, for the deposit, storage or burial of any
property or thing that will cause the above-mentioned areas to appear
to be in an unclean or untidy condition or that will be obnoxious to
the eye; nor shall Tenant allow any substance, thing, or material to be
kept, utilized or carried out in the Premises or the common areas of
the Building, the Land or the Center that will emit foul or obnoxious
odors, fumes, smoke or dust or that will cause any vibration or noise
or other condition that will or might disturb the peace, quiet, safety,
comfort, or serenity of the occupants of the Building or the Center.
Provided however, so long as there is no adjacent tenant in the
Building, Tenant may have music associated with the nature of Tenant's
business so long as local ordinances are complied with. No obnoxious,
offensive or illegal trade or activity shall be carried out in the
Premises or in the common areas of the Building, the Land or the
Center, nor shall anything be done to cause embarrassment, discomfort,
annoyance, or nuisance to any person using any portion of the Building,
the Land or the Center.
3. RESTRICTED ACTIONS ON COMMON AREAS OF THE BUILDING, THE LAND AND THE
CENTER. Tenant shall not cause or allow any cutting of vegetation,
dumping, digging, filling, destruction or other waste to be committed
on the common areas of the Building, the Land or the Center. Tenant
shall not cause any obstruction of, or allow or cause anything to be
kept or stored on, altered, constructed or planted in, or removed from
the common areas of the Building, the Land or the Center, without
Landlord's prior written consent.
4. SIGN DISPLAY. All signage will be coordinated by Landlord throughout
the Center for uniformity and attractiveness. The size, shape, design,
lighting, materials and location of all signs shall conform to the
uniform signage plan for the Center, however, Tenant shall be able to
use its logos on signs. Tenant shall not cause any sign, tag, label,
picture, advertisement or notice to be displayed, distributed,
inscribed, painted or affixed by Tenant on any part of the Building,
the Land, the Center or the Premises without the prior written consent
of Landlord. Landlord shall have the right, at Tenant's sole cost and
expense, to remove all unapproved signs installed by or on behalf of
Tenant, without notice to Tenant.
5. DRIVES AND PARKING AREAS. All parking shall be within the boundaries of
the Land and within marked parking spaces. There shall be no on-street
parking and at no time shall Tenant obstruct drives and loading areas
intended for the joint use of all tenants of the Building. The drives
and parking areas on the Land are for the joint use of all tenants of
the Building unless specifically marked. If there is an adjacent tenant
in the Building, truck traffic and parking will be restricted to areas
designated by Landlord. Tenant, its employees, agents and invitees
shall comply with reasonable parking rules and regulations as they may
be posed and distributed from time to time. Tenant is responsible for
controlling all of its truck traffic in accordance with the reasonable
restrictions and regulations imposed by Landlord.
6. STORAGE AND TRASH DISPOSAL. No materials, supplies or equipment
belonging to Tenant shall be stored in any area of the Building, the
Land or the Center, except inside the Premises. Trash disposal is
confined to the receptacles provided by Tenant in a location approved
by Landlord and no trash receptacles may be placed in any other
location in the Premises, in the Building, on the Land or in the
Center.
7. LOCKS. No additional locks shall be placed on the doors of the Premises
by Tenant which would prohibit Landlord's reasonable access to the
Premises permitted by the Lease. If Tenant changes any existing locks,
Tenant shall immediately furnish Landlord with two keys to such new
locks. Landlord will, without charge, furnish Tenant with two keys for
each lock existing upon the entrance door when Tenant assumes
possession of the Premises, with the understanding that, at the
termination of the Lease, the keys shall be returned.
8. IMPROVEMENTS, CONTRACTORS AND SERVICE MAINTENANCE. Except as provided
in the Lease, Tenant shall not make any improvements to the exterior of
the Building or the Center and Tenant shall not make any structural
changes or other material alterations, additions or improvements to the
Premises without the prior written consent of Landlord.
9. REGULATIONS FOR OPERATION AND USE. Tenant shall not place, install or
operate in the Premises or in any part of the Building, the Land or the
Center any engine, stove or machinery, nor shall Tenant conduct any
mechanical or cooking operations therein, nor place or use in or about
the Premises or any part of the Building, the Land or the Center any
explosives, gasoline, kerosene, oil, acids, caustics or any other
flammable, explosive or hazardous material, without the prior written
consent of Landlord, which shall not unreasonable be withheld; provided
it is agreed Tenant shall have and operate forklifts and other
mechanical items consistent with is business.
10. WINDOW COVERINGS. Windows facing the Building exterior shall at all
times be wholly clear and uncovered (except for such blinds or curtains
or other window coverings as Landlord may provide or approve which
approval shall not be unreasonably withheld) so that a full
unobstructed view of the interior of the Premises may be had from the
exterior of the Building.
11. NO VIOLATIONS OF FIRE LAWS OR HEALTH CODE. Tenant shall not do or
permit anything to be done in the Premises, or bring or keep anything
therein, which will obstruct or interfere with the rights of other
tenants in the Building or the Center or in any other way injure or
annoy them or conflict with any laws relating to fires, or with any
regulations of the Fire Department or with any insurance policy upon
the Building or the Center, or any part thereof, or conflict with any
of the rules and ordinances of the Board of Health.
12. NO VIOLATIONS OF LAWS. Tenant shall promptly and at its expense execute
and comply with all laws, rules, orders, ordinances, including all
applicable zoning ordinances, and regulations of the City, County,
State or Federal Government, and of any department or bureau of any of
them and of any other governmental authority having jurisdiction over
the Premises, affecting Tenant's occupancy of the Premises or Tenant's
business conducted therein.
13. NO USE OF ROOF. Neither Tenant, nor Tenant's servants, employees or
agents shall go upon the roof of the Building without the written
consent of Landlord.
14. NO CANVASSING. Canvassing, soliciting and peddling in and about the
Building, the Land and the Center is prohibited.
15. INTENTIONALLY DELETED.
16. USE OF WASHROOMS. Tenant shall not use the washrooms, restrooms, and
plumbing fixtures of the Premises or the Building, and appurtenances
thereto, for any purposes other than the purposes for which they were
constructed, and Tenant shall not deposit any sweepings, rubbish, rags,
or other improper substances therein. If Tenant or Tenant's servants,
employees, agents, contractors, jobbers, licensees, invitees, guests or
visitors cause any damage to such washrooms, restrooms, plumbing
fixtures or appurtenances, such damage shall be repaired, at Tenant's
expense, and Landlord shall not be responsible therefor.
17. NO UNPLEASANT ODORS. Tenant shall not cause or permit any unpleasant
odors to emanate from the Premises, or otherwise interfere, injure or
annoy in any way other tenants in the Building or the Center, or
persons conducting business with them.
18. DISPOSAL OF CRATES. When conditions are such that Tenant must dispose
of crates, boxes, etc. on the sidewalk or parking areas on the Land, it
will be the responsibility of Tenant to dispose of same only between
the hours of 5:45 p.m. until 7:15 a.m.
19. NO FOOD DISTRIBUTION. No prepared food and/or beverages shall be
distributed from the Premises, but, notwithstanding the provisions of
PARAGRAPH 9 hereof or this PARAGRAPH 19, Tenant may operate a cafeteria
and offer items for the consumption of Tenant's employees and invitees
provided Tenant complies with all applicable local health department
rules and regulations.
20. LOCATION OF IMPROVEMENTS. Tenant will not locate furnishings or
cabinets adjacent to mechanical or electrical access panels or over air
conditioning outlets in the Premises so as to prevent operating
personnel from servicing such units as routine or emergency access may
require. Tenant shall be responsible for any cost associated with
moving such furnishings for Landlord's access to such mechanical or
electrical access panels or air conditioning outlets.
21. MODIFICATIONS. Landlord shall have the right from time to time to make
any and all such reasonable modifications and additions to these Rules
and Regulations as may be necessary for the safety, care, quiet
enjoyment and cleanliness of the Building, the Land and the Center.
Tenant agrees to abide by these Rules and Regulations and any
reasonable modifications and additions as are hereafter adopted by
Landlord, including, but not limited to, modifications made by Landlord
as a result of any changes in the city zoning ordinance.
EXHIBIT E
TO
LEASE AGREEMENT
RENT SCHEDULE
PROJECT: CENTRE POINTE DISTRIBUTION PARK
TENANT: HOT TOPIC, INC.
DATE: 06/01/04
RENTABLE SF: 300,000
PERIOD SF NET RATE MONTHLY RENT ANNUAL RENT
------ -- -------- ------------ -----------
May-05 300,000 $ 3.85 $ 96,250.00 $1,155,000.00
May-06 300,000 $ 3.93 $ 98,175.00 $1,178,100.00
May-07 300,000 $ 4.01 $ 100,138.50 $1,201,662.00
May-08 300,000 $ 4.09 $ 102,141.27 $1,225,695.24
May-09 300,000 $ 4.17 $ 104,184.10 $1,250,209.14
May-10 300,000 $ 4.25 $ 106,267.78 $1,275,213.33
May-11 300,000 $ 4.34 $ 108,393.13 $1,300,717.59
May-12 300,000 $ 4.43 $ 110,750.00 $1,329,000.00
May-13 300,000 $ 4.52 $ 112,965.00 $1,355,580.00
May-14 300,000 $ 4.61 $ 115,224.30 $1,382,691.60
EXHIBIT F
TO
LEASE AGREEMENT
RENEWAL TERMS
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Provided Tenant is not in default at the time, Tenant will have the right to
renew the lease for two (2) successive five (5) year terms upon one hundred
eighty (180) days prior written notice ("Renewal Notice") before the expiration
date of each term. The rental rate for the Renewal Terms shall be determined by
the procedure set forth on Exhibit F-1.
EXHIBIT F-1
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ARBITRATION OF RENEWAL TERM RENT
If the parties are unable to agree on the rent for a Renewal Term within thirty
(30) days after Tenant gives its Renewal Notice for such Extension Term, then
upon written request from either party, each party, at its cost, shall appoint a
person with at least ten (10) years' active commercial real estate appraisal or
brokerage experience in the county in which the Land is located to act as an
appraiser hereunder, to determine the fair market rent for the Premises for the
Renewal Term. If a party does not appoint a person to act as an appraiser within
fifteen (15) days, the sole appointed appraiser shall determine fair market
rent.
The two (2) appraisers shall meet promptly and attempt to determine the fair
market rent. If they are unable to agree within fifteen (15) days after the
appointment of the second appraiser, they shall attempt to select a third person
meeting the qualifications stated in the immediately preceding paragraph within
five (5) days after the last day the two (2) appraisers are given to determine
the fair market rent. If they are unable to agree on the third person to act as
appraiser within five (5) days, the third person shall be appointed by the
American Arbitration Association, upon the application of Landlord or Tenant to
the office of the Association nearest the Building, which appraiser shall meet
the qualifications stated above. Each of the parties shall bear 50% of the cost
of appointing the third person and of paying the third person's fees. A decision
in which two (2) of the three (3) appraisers concur shall be binding and
conclusive upon the parties. In the event two (2) appraisers are unable to agree
upon the fair market rent, the three (3) appraisals shall be averaged and the
average shall be the fair market rent.
If the rent for the Renewal Term has not been agreed to or established prior to
the commencement of the Term, then Tenant shall pay to Landlord an annual rent
("Temporary Rent") which Temporary Rent shall be equal to 100% of the rent
payable by Tenant for the last year of the Term and once rent for the Renewal
Term is determined, Tenant shall pay or Landlord shall credit any amounts
underpaid or overpaid, as applicable.
In determining the fair market rent during the Renewal Term, the appraiser or
appraisers shall be required to take into account all relevant factors.
EXHIBIT G
OPTION TO PURCHASE
Tenant shall have the right to purchase the Premises and Land by giving
Landlord notice of such election any time prior to the later of (i) May 31,
2005, and (ii) ninety days following the Commencement Date. The Tenant shall
have 90 days thereafter to close subject to the parties reasonable cooperation,
diligence and good faith. The purchase price shall be $14,260,000 and there
shall be no credit against the purchase price for rent paid prior to closing
except rent for the month in which the closing occurs shall be prorated through
the date of closing, and other terms of the sale (including reasonable
representations and warranties) and required performance and deliverables of the
parties shall be determined through reasonable, good faith negotiation of the
parties, consistent with sales transactions of a similar nature. Real estate
taxes shall be prorated through the Lease Commencement Date. Landlord shall
provide at Landlord's cost an owner's title insurance policy in the amount of
the purchase price and issued by Old Republic National Title Insurance Company,
and shall provide other information and documents as required by the title
insurer. Landlord shall provide a Special Warranty Deed to convey the Premises.
Tenant shall be responsible for paying the cost to record the Deed including the
State of Tennessee Transfer Tax.
EXHIBIT H
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EXPANSION
Tenant shall have the right ("Expansion Right") to have an additional
200,000 square feet of adjacent building ("Expansion Premises") as shown on
Exhibit B as "200,000 SF Future Expansion". Tenant may only exercise the
Expansion Right by giving Notice ("Expansion Notice") prior to the last day of
the fourth year of the Lease Term of the Original Premises. The Lease Term for
Expansion Premises shall be for the remainder of the Lease Term for the Original
Premises; provided however in the event the Expansion Notice is given after the
end of the third year of the Lease Term of the Original Premises, the Lease Term
for the Expansion Premises shall be ten years and the Lease Term for the
original Premises shall be extended so that both Terms shall terminate at the
same time. After the Expansion Notice is given, the parties shall have ninety
(90) days ("Negotiation Period") to agree upon the construction plans for the
Expansion Premises to be based upon construction costs in effect at that time
and the fair market rent and reasonable tenant improvement allowance for
comparable tenants, comparable space, and comparable terms and conditions.
During the Negotiation Period, the parties shall enter into a written agreement
("Lease Amendment") modifying and supplementing this Lease so as to incorporate
the Expansion Premises as a part of the Premises subject to all of the terms and
conditions of this Lease. Regarding all of the foregoing provisions, the parties
shall cooperate and proceed in reasonable good faith to consummation; and pursue
activities diligently in efforts to provide occupancy to Tenant of the Expansion
Premises within twelve (12) months following Tenant's exercise of its rights
hereunder.
After the end of the fifth year of the initial Terms in the event
Tenant has not previously properly exercised the Expansion Right or Right of
First Offer as set forth on Exhibit H-1 and the appropriate Lease Amendment has
not been executed by both parties, Landlord may construct an additional building
on all or a portion of the Expansion Premises and lease the same to one or more
tenants. Landlord may to the extent reasonably necessary move to another part of
the Land any parking area which interferes with such construction so long as the
same number of parking spaces is maintained.
EXHIBIT H -1
------------
RIGHT OF FIRST OFFER
Provided this Lease is then in full force and effect, provided Tenant
has not exercised the Expansion Right and there is no uncured event of default
hereunder as described herein at the time such right is exercised by Tenant,
then commencing upon the first day of the fourth year of the Lease Term and
ending on the last day of the fifth year of the Lease Term, Tenant shall have a
one time right of first offer to lease the Expansion Premises for a term
beginning on the Effective Date, hereinafter defined, and ending
contemporaneously with the expiration of the Term, unless sooner terminated as
provided in the Lease. The right of first offer granted herein shall be
exercisable at the following time and upon the following conditions:
(A) Landlord will notify Tenant of Landlord's intent to enter into
negotiations with a bona fide third party tenant desiring to lease the Expansion
Premises. Tenant shall then have a period of twenty-one (21) days after receipt
of Landlord's notice in which to notify Landlord in writing regarding whether
Tenant elects to exercise its right granted hereby to lease all (but not less
than all) of the Expansion Premises. If Tenant elects not to lease such
Expansion Premises or fails to give any notice to Landlord within the required
twenty-one (21) day period, then Landlord shall have the right to lease all or
any portion of such Expansion Premises to a prospective tenant or tenants upon
terms and conditions no more favorable than those offered to Tenant. If Tenant
fails to exercise its right to lease any Expansion Premises, then Tenant shall
have no further right of first offer hereunder with respect to such Expansion
Premises, provided the space is leased to a bona fide third party tenant within
ninety (90) days thereafter.
(B) Upon the exercise by Tenant of its right of first offer as provided
in this Exhibit H-1, Landlord and Tenant shall, within ninety (90) days after
Tenant delivers to Landlord notice of its election to lease the Expansion
Premises, enter into a written agreement modifying and supplementing this Lease
so as to incorporate the Expansion Premises as a part of the Premises, subject
to all of the terms and conditions of this Lease. The cost to construct the
Expansion Premises and Rent for the same shall be based upon the construction
costs then in effect and the fair market rent then in effect to be agreed upon
by both parties and negotiated by them reasonably and in good faith. The Lease
Term for the Expansion shall be ten (10) years and the initial Lease Term for
the Premises shall be extended so as to terminate upon the same date; provided
in the event Landlord's notice was given prior to the end of the third year of
the Original Term, the Lease Term for the Expansion Premises shall terminate as
of the end of the Term for the Original Premises.
(C) Fair market base rental shall mean the fair market value base
rental per rentable square foot per year in effect on the Effective Date for
comparable space, comparable terms and conditions and comparable tenants.