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Sample Business ContractsHome: Sample Business Contracts:
SUBLEASE
THIS SUBLEASE made and entered into to be effective as of the 27 day of
March, 1997, by and between BELLSOUTH TELECOMMUNICATIONS, INC., a Georgia
corporation ("Tenant"), successor in interest to Southern Bell Telephone &
Telegraph Company and SELECT COMFORT SC CORPORATION, a Minnesota corporation
("Subtenant").
PRELIMINARY STATEMENT
Tenant, as successor in interest to Western Electric Company, Incorporated,
is a party to that certain Lease Agreement effective June 12, 1975, as amended
by that certain First Amendment to Lease dated March 27, 1991, and that certain
Second Amendment to Lease Agreement dated February 23, 1993, (as amended the
"Lease") whereby Tenant, leased certain property more fully described on
EXHIBIT "A" attached hereto, together with the building (the "Building") and
other improvements and property situate thereon (the "Demised Premises" or
"Premises"), from Frastacky (U.S.) Properties Limited Partnership (the
"Landlord"), successor in title to J. L Williams & Co., Inc. Tenant now desires
to sublease the Demised Premises to Subtenant subject however to the terms and
conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and provisions
contained herein, Tenant hereby subleases and demises to Subtenant, the Demised
Premises subject to the following:
SECTION 1 - DEFINITIONS. For purposes of this Sublease, the capitalized
terms hereinafter set forth shall have the following meanings:
"Additional Rent" shall mean all sums due and owing to the Landlord under
the Lease which accrue after the Commencement Date except Base Annual Rent and
Subtenant Rent.
"Base Annual Rent" shall mean the Base Annual Rent of $300,000.00, due in
equal monthly installments of $25,000.00 as set forth in the Lease for the
remainder of the Term.
"Subtenant Rent" shall mean the sum of $3,750.00 commencing on June 1, 1997
(subject to the terms of Section 4 hereof) and continuing on the first day of
each and every month through the remainder of the Term.
"Commencement Date" shall have the meaning set forth in SECTION 2 herein.
"Expiration Date" shall have the meaning set forth in SECTION 2 herein.
"Rent" shall mean Base Annual Rent, Subtenant Rent and Additional Rent.
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"Term" shall have the meaning set forth in SECTION 2 herein.
"Hazardous Materials" shall mean any substance, chemical, compound,
product, solid, gas, liquid, waste, byproduct, pollutant, contaminant, or
material which is hazardous or toxic, and includes, without limitation, (a)
asbestos, polychlorinated biphenyls, and petroleum (including crude oil and any
fraction thereof) and (b) any such material classified or regulated as
"hazardous" or "toxic" pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Re-authorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous
and Solid Waste Amendments of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq.,
Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control
Act of 1976, 15 USC 2601 et seq., or Hazardous Materials Transportation Act, 49
USC App. 1801 et seq.
"Exclusive Possession" shall mean the time at which Tenant and all persons
or entities claiming by or under Tenant have removed all personal property and
fixtures from the Demised Premises that it intends to remove or is required to
remove hereunder and Tenant and all persons or entities claiming by or under
Tenant no longer require access or have the right of access to the Demised
Premises, except for Tenant's limited rights of access set forth elsewhere in
this Sublease.
All capitalized terms not otherwise defined herein shall have the
respective meaning set forth in the Lease.
SECTION 2 - COMMENCEMENT DATE AND POSSESSION. Subject to the provisions
of Section 8 below, the "Term" of this Sublease shall commence on the date
Tenant delivers Exclusive Possession of the Demised Premises to Subtenant in
the condition required herein (subject to Landlord's right of access under
the Lease) ("Commencement Date") and continue, unless earlier terminated as
provided herein, through February 27, 2003 ("Expiration Date").
Notwithstanding the Commencement Date of this Sublease, Tenant shall provide
Subtenant with non-exclusive access to and from the Building and parking from
and after the date hereof and Exclusive Possession of the Building from and
after the date hereof except for those areas of the Building shown on EXHIBIT
"B" attached hereto which are specifically designated for use by Tenant prior
to the Commencement Date. In the event that Tenant fails to provide
Subtenant access and possession as provided in the preceding sentence above,
or fails to deliver Exclusive Possession (subject to Landlord's rights of
access under the Lease) to the Demised Premises in the condition required
herein by May 15, 1997, Subtenant, at its option may, for a period of ten
(10) days after said failure of either of the above, terminate this Sublease
effective upon written notice to Tenant. Except for the terms of Sections 5
and 18 herein, Subtenant's obligations contained herein shall not commence
until the Commencement Date. Upon the request of either party, the parties
shall execute an instrument confirming the Commencement Date.
SECTION 3 - CONDITION OF DEMISED PREMISES. Except as otherwise provided
herein, the Demised Premises shall be delivered and Subtenant shall accept the
Demised Premises in "AS IS" condition.
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SECTION 4 - PAYMENT OF RENT. All Rent due and owing by Subtenant except
Subtenant Rent shall be payable directly to the Landlord as specified in the
Lease; provided, however, if Landlord will not accept said payments, Subtenant
shall notify Tenant of the same and Subtenant shall make such payments directly
to Tenant, which will make such payments to Landlord. The Subtenant Rent shall
be payable directly to Tenant. In connection with the payment of any Rent by
Tenant or Subtenant to the Landlord throughout the Term, a copy of the check or
other confirmation of the payment thereof shall be sent by the party making such
payment to the other party to this Sublease at the notice address set forth
herein.
Tenant hereby acknowledges and agrees that notwithstanding the Commencement
Date and Subtenant's early access, if any, Subtenant shall not be required to
pay Base Annual Rent nor Subtenant Rent or any Additional Rent, including taxes
and assessments, until June 1, 1997, and during such period Tenant shall be
responsible to Landlord for payment of the same. In the event the Commencement
Date has not occurred by April 21, 1997, the June 1, 1997 date set forth above
shall be advanced to July 1, 1997. In addition, should the Commencement Date
occur after May 15, 1997, the July 1, 1997 date set forth above shall be
advanced one (1) day for each day the Commencement Date is delayed past May 15,
1997 because Tenant has failed to deliver Exclusive Possession of the Demised
Premises to Subtenant as provided in Section 2 above in the condition required
herein.
Subtenant shall deliver herewith to Tenant the sum of $28,750.00 which
shall be retained by Tenant as a security deposit and, provided there is no
default by Subtenant hereunder, shall be applied by Tenant against the last
installment of Rent due by Subtenant hereunder.
It is the intention of the parties that the Rent payable hereunder shall be
net to Landlord/Tenant so that this Sublease shall yield to Landlord/Tenant the
net Rent specified herein during the term of this Sublease, and that all costs,
expenses and obligations of every kind and nature whatsoever relating to the
Demised Premises during the Term shall be paid by Subtenant, except as otherwise
herein noted or noted in the Lease.
Notwithstanding anything to the contrary contained herein, in the event of
a fire or casualty to or condemnation of, the Demised Premises, all Rent payable
hereunder shall abate as provided in Sections 9 and 10 of the Lease and
Subtenant shall have the right to terminate this Sublease (but not the Lease)
pursuant to the terms of Sections 9 and 10 of the Lease, subject to the terms of
Sections 9 and 10 of the Lease. No termination of this Sublease pursuant to
this Section will be effective unless Tenant is given notice of Subtenant's
termination of this Sublease at least five (5) days prior to the time Tenant is
required to give notice of termination of the Lease to Landlord pursuant to the
provisions of Sections 9 and 10 of the Lease.
SECTION 5 - ENVIRONMENTAL COMPLIANCE. Subtenant acknowledges the receipt
of the Limited Site Assessment by General Engineering Laboratories dated January
20, 1997 ("Environmental Report") and further acknowledges that Subtenant has
been given the opportunity to conduct its own environmental assessment. Tenant
hereby represents and warrants to Subtenant that, to the best of its knowledge,
except as set forth and disclosed in the Environmental Report, there are no
Hazardous Materials on, in or about the Demised Premises.
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It is the express intent of Subtenant and Tenant that Subtenant should
not be responsible for any contamination of the Demised Premises by Hazardous
Materials, including contamination from Hazardous Materials on, in or under
the soils or groundwater of the Demised Premises, arising or present on or
before Commencement Date which are not introduced by Subtenant during the
exercise of its early access rights hereunder and that thereafter Subtenant's
liability shall be limited to any contamination of Hazardous Materials on, in
or under the soils or groundwater of the Demised Premises after the
Commencement Date resulting from the introduction or use of Hazardous
Materials on the Demised Premises after the Commencement Date by any person
or entity other than Tenant or Landlord or their respective agents, employees
or contractors. Similarly, it is the express intent of Tenant and Subtenant
that Tenant shall not be liable for any contamination, including
contamination from Hazardous Materials on, in or under the soils or
groundwater of the Demised Premises, resulting from Subtenant's introduction
or use of Hazardous Materials on the Demised Premises. Tenant (and not
Subtenant) shall be responsible to Landlord for compliance with the terms of
the Lease regarding the existence of Hazardous Materials and any required
removal, monitoring or remediation under applicable laws as a result of
Hazardous Materials present on the Demised Premises prior to the Commencement
Date, except for any Hazardous Materials first introduced by Subtenant on the
Demised Premises during Subtenant's early access period as provided above.
The provisions of this Sublease to the contrary notwithstanding, Tenant
and Subtenant agree that Tenant shall not be responsible to Subtenant for the
removal of the asbestos containing adhesive which secures the floor tile or
asbestos containing materials in the roof unless (a) said removal is ordered
by a Governmental entity having the authority to order said removal or such
removal is required by Landlord under the terms of the Lease, and (b) said
removal is not required as a result of modifications to the Demised Premises
being undertaken by Subtenant.
Tenant covenants and agrees to indemnify, defend and hold Subtenant
harmless from any and all claims, judgments, damages, penalties, fines,
causes, liabilities or losses, (including reasonable attorneys' fees and all
other out-of-pocket expenses) resulting from or related to the introduction,
use, presence or existence of any Hazardous Materials on the Demised Premises
before the Commencement Date, except for any Hazardous Materials first
introduced by Subtenant on the Demised Premises during Subtenant's early
access period provided above.
Subtenant covenants and agrees to indemnify, defend and hold Tenant
harmless from any and all claims, judgments, damages, penalties, fines,
causes, liabilities or losses, (including reasonable attorneys' fees and all
other out-of-pocket expenses) resulting from or related to the introduction
or use of Hazardous Materials on the Demised Premises after the Commencement
Date or resulting from or related to the presence or existence of Hazardous
Materials on the Demised Premises first introduced on the Demised Premises
after the Commencement Date, except to the extent due to the acts or
omissions of Tenant or Landlord or their respective agents, contractors or
employees.
The above notwithstanding, no allegations by Subtenant alleging
non-compliance with this Section shall allow Subtenant to withhold any Rent
or otherwise release Subtenant of any obligation under this Sublease and
shall not be considered an event of default under this Sublease
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unless the existence of Hazardous Materials present prior to the Commencement
Date and/or Tenant's failure to perform its obligations under this Section 5
materially adversely affects Subtenant's ability to use the Demised Premises
or shall cause an event of default under the Lease as evidenced by a final
determination of default under the Lease. It is agreed that the
indemnification and other obligations of Tenant and Subtenant as set forth in
this Section shall survive the expiration, cancellation or termination of the
Lease and this Sublease.
SECTION 6 - ALTERATIONS AND IMPROVEMENTS. In addition to any consent
required by the Landlord under the Lease, all alterations, additions or
improvements made by Subtenant to the Demised Premises in excess of
$75,000.00 during any 120 day period shall require the prior written approval
of Tenant, with such approval not to unreasonably be withheld or delayed.
Tenant hereby approves Subtenant's alterations, additions, signage and
improvements referenced in EXHIBIT "C" attached hereto.
SECTION 7 - MAINTENANCE, REPAIR AND REPLACEMENT. Tenant's
responsibility for maintenance, repair, and replacement to the Demised
Premises shall be those of the Landlord under the Lease. In addition, Tenant
shall be responsible for the maintenance, repair and replacement of the roof
of the Building in accordance with the terms of the Lease, so that the roof
of the Building is kept in good repair and condition; provided, however,
Tenant shall not be responsible for any maintenance or repair of the roof of
the Building which is necessitated by the acts of Subtenant or its agents,
contractors and employees and Subtenant shall be responsible therefor.
Except as otherwise provided herein, Subtenant shall be responsible for
all maintenance, repairs and replacements of the Demised Premises in
accordance with the terms of the Lease, including those of a structural
nature.
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SECTION 8 - SURRENDER OF THE PREMISES. At the end of the Term,
Subtenant shall deliver the Demised Premises to Tenant in the same condition
as at the Commencement Date (ordinary wear and tear and casualty and
condemnation and alterations set forth below excepted). It is agreed and
understood by Subtenant and Tenant that in no event shall Subtenant be
required to remove any improvements, alterations, additions or fixtures in
the Demised Premises at the end of the Term, including, without limitation,
the alterations, additions and improvements referenced in Section 6 above,
unless such improvements, alterations and additions were made by Subtenant
and are required to be removed by Landlord at the end of the Term pursuant to
the Lease. All other provisions hereof notwithstanding, if by December 31,
2002, Landlord and Subtenant have not entered into an agreement whereby
Subtenant will lease the Demised Premises directly from Landlord following
the termination of the Lease between Tenant and Landlord, then this Sublease
will terminate on January 31, 2003 so as to allow Tenant time to remove its
fixtures, improvements, alterations and additions pursuant to the
requirements of the Lease. Subtenant must provide Tenant with written notice
of its lease with Landlord by January 10, 2003 to avoid the early termination
above.
Should Subtenant and Landlord enter into a direct lease as above, then
it shall become Subtenant's obligation to remove any of Tenant's equipment,
personal property, or fixtures remaining at the termination of the Lease as
required by the terms of the Lease. Tenant, on its own behalf and on behalf
of its affiliates, hereby agrees that it shall not compete with Subtenant in
the negotiation of any lease with Landlord for any occupancy of the Demised
Premises after February 28, 2003.
SECTION 9 - ASSIGNMENT AND SUBLETTING AND SUBORDINATION. Subtenant may
not assign, sublease or otherwise alienate or encumber this Sublease or any
portion of Subtenant's interest in the leasehold estate, without the consent
of Tenant, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Subtenant may assign or sublease all or any
portion of the Demised Premises without Tenant's consent to an affiliate of
Subtenant or to an entity resulting from a merger or consolidation or sale of
all or substantially all of Subtenant's assets. Tenant shall not transfer
Tenant's interest in the Lease without the consent of Subtenant, which
consent may not be unreasonably withheld or delayed. No such assignment
shall serve to release Subtenant or Tenant from its obligations hereunder.
As used in this Section 9, "affiliate" shall mean any entity which is
controlled by Subtenant, or which controls Subtenant or is under common
control with Subtenant. Tenant hereby agrees that Tenant, except to the
extent that Tenant is required to do so under the Lease, will not enter into
any subordination agreement requested or required by Landlord's lender
without notice to Subtenant. Subtenant shall be afforded the opportunity to
participate in the drafting of said agreement, but may not prohibit the
execution of an agreement by Tenant which is required under the Lease.
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SECTION 10 - INSURANCE. Subtenant shall have the right to request Landlord
to cause all policies of insurance regarding the Demised Premises which name
Tenant as an insured to also name Subtenant as an additional insured, as its
interests may appear. During the Term, all policies of insurance required of
Tenant under the Lease shall become the responsibility of Subtenant which
shall name both Landlord and Tenant as additional insureds, thereunder.
Tenant hereby assigns to Subtenant its right, if any, under the Lease, to
request Landlord to cause all policies of insurance regarding the Demised
Premises which name Tenant to contain an endorsement related to the waiver of
subrogation set forth in Section 19 of the Lease.
SECTION 11 - BREACH OR DEFAULT. For purposes of this Sublease, an
"Event of Default" shall mean the following: (a) any failure of Subtenant to
pay any Rent under the terms of this Sublease to the Landlord (or if Landlord
will not accept such payments as described in Section 4 hereof, to Tenant) by
its due date and such failure continues for a period of five (5) days after
Subtenant receives written notice thereof; (b) any failure of Subtenant to
pay Rent or any other sum due to Tenant under the terms of this Sublease,
which is not also an event of default under the Lease, which default
continues for a period of more than fifteen (15) days after receipt of
written notice of default from Tenant; (c) the failure of Subtenant to
perform any obligation of Tenant under the Lease required to be performed by
Subtenant hereunder other than the payment of Rent and such failure continues
for a period of twenty (20) days after receipt of written notice of default;
provided however, that if such default cannot be cured within twenty (20)
days, such default shall nevertheless be deemed cured if within such twenty
(20) day period after receipt of written notice from Tenant, Subtenant
commences to cure such default and continues with all reasonable diligence
until the cure is completed; (d) the failure of Subtenant to perform any
obligation other than the payment of Rent under the terms of this Sublease
which is not also an event of default under the Lease and such failure
continues for a period of thirty (30) days after receipt of written notice of
default; provided however, that if such default cannot be cured within thirty
(30) days, such default shall nevertheless be deemed cured if within such
thirty (30) day period after receipt of written notice from Tenant, Subtenant
commences to cure such default and continues with all reasonable diligence
until the cure is completed, or; (e) the filing under the United States
Bankruptcy Act or any law of like import by or against Subtenant of a
petition, not removed within sixty (60) days, for adjudication as a bankrupt
or insolvent, or for reorganization or appointment or a receiver or trustee
of Subtenant's property by any governmental officer or agency pursuant to
statutory authority for the dissolution or liquidation of Subtenant.
Tenant agrees to forward to Subtenant any notice of default and any
other notice received by Tenant from Landlord via facsimile and registered
mail as provided in Section 17(i) below within two (2) business days of the
receipt thereof; provided, however, Tenant's failure to forward such notice
during the above two (2) business day period shall not permit Subtenant to
terminate this Sublease based on such default. With respect to a default
hereunder which is also a default under the Lease, Subtenant shall then have
until the end of the cure period provided for above or in the Lease,
whichever is shorter, in which to cure said default.
Upon notice of default under the Lease from Landlord to Tenant,
following the expiration of the notice and cure periods of Subtenant provided
herein and to the extent the default is an obligation under the Lease which
Subtenant is required to perform under this Sublease, Tenant shall have the
absolute right (but not the obligation) to proceed to cure the said default
and upon
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demand shall be reimbursed by Subtenant for all sums expended in connection
with such curative actions, together with interest at the rate of 6% per
annum until all sums due and owing to Tenant have been paid in full. In
addition to Tenant's rights to cure Subtenant's default(s), following the
expiration of the notice and cure periods provided above, Tenant shall be
entitled to pursue all remedies available at law or in equity for a breach of
the terms of this Sublease. Tenant shall not be liable to Subtenant for any
default of the Lease or Sublease which default results in whole or in part
from the actions or inactions of Subtenant. Subtenant shall not be liable to
Tenant for any default of the Lease or Sublease which default results in
whole or in part from the actions or inactions of Tenant.
The above notwithstanding, Tenant shall have the absolute right but not
the obligation to cure a default by Tenant if there are five (5) days or less
remaining in the cure period afforded Tenant by Landlord under the Lease for
a non-monetary default under the Lease and two (2) days or less remaining in
the cure period afforded Tenant by Landlord under the Lease for a failure to
pay rent under the Lease and Subtenant has not cured a failure to pay rent
under the Lease or commenced to cure a non-monetary default under the Lease
in accordance with the requirements of the Lease. In the event Tenant fails
to forward to Subtenant a notice of default under the Lease from Landlord
within the period as provided above, and such default is an obligation under
the Lease which Subtenant is required to perform under this Sublease,
Subtenant shall only be responsible for the reasonable costs of cure
performed by Tenant and shall not be required to pay the interest set forth
in this Section; provided, however, if Subtenant is not provided with notice
within the two (2) day period set forth above and such default is cured by
Tenant, Subtenant shall have the right to contest whether the default
referenced in the Landlord's notice of default was in fact a condition
creating a default under the Lease and/or whether Tenant's cure of such
default was at a reasonable cost. Failure to pay any such amounts to Tenant
while Subtenant is protesting such cure shall not constitute a default by
Subtenant hereunder.
In the event that Tenant fails to forward to Subtenant any notice of
default under the Lease received by Tenant from Landlord in the two (2) day
period provided above and Tenant fails to cure such default, Tenant hereby
agrees to defend Subtenant (with counsel reasonably acceptable to Subtenant)
in any action brought to evict or dispossess Subtenant from the Demised
Premises based on such default, agrees to be liable for all costs of such
defense, including all costs required in any appeal, and agrees to indemnify
and hold harmless Subtenant from any and all claims, judgments, damages,
penalties, fines, causes, liabilities, or losses resulting from or related to
Subtenant's eviction or dispossession from the Demised Premises based on such
default following a final non-appealable order of eviction or dispossession
from the Demised Premises.
SECTION 12 - COMPLIANCE WITH LEASE. Except for the terms set forth in
this Sublease which are contrary to the Lease and except as otherwise
modified herein, (a) all obligations, responsibilities, requirements and
indemnifications of and from Tenant to Landlord under the Lease shall be
deemed obligations, responsibilities, requirements and indemnifications of
and from Subtenant to Tenant under the Sublease; (b) all of the terms,
provisions, covenants and conditions of the Lease are made a part of this
Sublease and this Sublease is subject to all the terms, conditions, covenants
and conditions contained therein, and for the purposes of this Sublease, each
reference in the Lease to "Landlord" and "Tenant" shall be read as referring
to
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Tenant and Subtenant, respectively, wherever appropriate; (c) all obligations
of Landlord to Tenant under the Lease shall be considered the responsibility
of Tenant to Subtenant; (d) all reservations, exclusions, conditions and
limitations of liability, contained in the Lease in favor of Landlord shall
be, reservations, exclusions, conditions and limitations of liability in
favor of Tenant under the Sublease.
SECTION 13 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF TENANT.
Tenant represents, warrants and covenants as follows: (a) the only documents
establishing the relationship between the Landlord and Tenant are the Lease
and amendments which are attached hereto as EXHIBIT "F"; (b) the Lease and
amendments attached hereto as EXHIBIT "F" are currently in full force and
effect and neither the Landlord nor Tenant is in default with respect to any
obligation set forth therein, and there are no existing events which would,
with the passage of time or giving of notice or both, become a default under
the Lease; (c) All rent and other charges due and payable as of the date
hereof by Tenant under the Lease have been paid in full; (d) Tenant has full
right and lawful authority to enter into this Sublease, and possesses a
leasehold interest in and to the Demised Premises under the Lease and the
Lease expires on February 28, 2003; (e) No consent of Landlord is required
under the Lease as a condition to the execution or effectiveness of this
Sublease and this Sublease complies with the requirements of the Lease; (f)
Tenant, except as set forth in the Environmental Report, has received no
notice of any violation of any governmental law, rule, regulation or
ordinance relating to the Demised Premises which remains uncured as of the
date hereof; (g) to the extent that the use complies with zoning regulations,
the Demised Premises can be used for administration, warehousing,
distribution, assembly, manufacturing, office, telemarketing, company store,
customer pickup, and customer service uses under the provisions of the Lease
and under the restrictions recorded upon the Demised Premises; (h) Tenant has
not assigned or transferred its interest in the Demised Premises or the Lease
to any other person or entity nor has it mortgaged, encumbered or otherwise
subjected its interest in the Demised Premises, its fixtures, personal
property or equipment contained therein or the Lease to the lien of any
security instrument, and will not do any of the foregoing during the Term.
Tenant covenants and agrees to indemnify Subtenant and hold it harmless from
and against any and all liabilities, claims, demands, costs, losses and
expense (including reasonable attorneys' fees) arising out of, by reason of
or resulting from any breach of any representations and warranties of Tenant
contained herein in any material respect. This indemnity shall survive the
expiration or earlier termination of this Sublease.
SECTION 14 - QUIET ENJOYMENT. On the payment by Subtenant of the Rent
provided herein and upon observance and performance of all the covenants,
terms and conditions on Subtenant's part to be observed and performed
hereunder and except as otherwise may be provided herein, Subtenant shall
peaceably and quietly hold and enjoy the Demised Premises for the Term hereby
demised subject nevertheless to the terms and conditions of the Sublease and
the Lease. Provided, however, that the provisions of this Section will not
create any liability on the part of the Tenant for the acts or omissions of
Subtenant.
SECTION 15 - LEASE MODIFICATION. Neither Subtenant nor Tenant shall amend,
modify, surrender or terminate the Lease without the express written consent of
Subtenant and Tenant, which consent may be withheld in Tenant's or Subtenant's
sole and absolute discretion.
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SECTION 16 - TENANT'S RIGHT OF ENTRY. Tenant or Tenant's representative
shall have the right at all reasonable times during business hours and upon
reasonable notice to Subtenant during the Term to enter upon the Demised
Premises for the purpose of determining whether the conditions and covenants
contained in this Sublease are being kept and performed. Provided further,
that Tenant shall have the right to enter onto the Demised Premises for the
purpose of complying with any environmental responsibilities on the Demised
Premises including without limitation the monitoring of any Hazardous
Materials. Subtenant agrees that it will not tamper with any of Tenant's
monitoring equipment which remains on the Demised Premises. In the conduct
of its activities under this Section 16, Tenant agrees not to unreasonably
interfere with Subtenant's use or occupancy of the Demised Premises or its
conduct of business thereon.
SECTION 17 - NOTICE. Any notice or demand under the terms of this
Sublease or under any statute which must or may be given or made by a party
hereto shall be in writing and shall be deemed given (i) upon receipt if
delivered by nationally recognized overnight courier or if delivered by
facsimile during normal business hours and followed with an additional copy
of the notice by registered mail addressed to the respective parties as
follows or (ii) three (3) business days after mailing such notice by
registered mail addressed to the respective parties as follows:
TO TENANT: BellSouth Telecommunications, Inc.
675 West Peachtree Street
Suite 20C75
Atlanta, GA 30375
Attn: Wilma Bugg, Property Administrator
Fax: 404/525-0048
Phone: 404/420-6581
COPY TO: BellSouth Telecommunications, Inc.
675 West Peachtree Street
Suite 20C75
Atlanta, GA 30375
Attn: Real Estate Manager
Fax: 404/525-0048
Phone: 404/420-6581
TO SUBTENANT: Select Comfort SC Corporation
6105 Trenton Lane North, Suite 400
Minneapolis, MN 55442
Attn: Daniel J. McAthie
Fax: 612/551-7826
Phone: 612/551-7000
COPY TO: Oppenheimer Wolff & Donnelly
45 South Seventh Street, Suite 3400
Minneapolis, MN 55402
Attn: Mark A. Kimball, Esq.
Fax: 612/344-9376
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Phone: 612/344-9300
Any party may change its notice address by notice to the other parties as
provided above.
SECTION 18 - INDEMNIFICATION AND WAIVER OF SUBROGATION. Subtenant shall
keep, save and hold harmless Tenant and its affiliates and their respective
officers, directors and employees, from any and all losses, costs, damages
and liabilities for anything and everything whatsoever (including, without
limitation, any events, circumstances, occurrences and conditions) relating
to or arising from or out of the occupancy or use (to include by occupancy or
use prior to the Commencement Date) of the Demised Premises by or under
Subtenant, Subtenant's agents, contractors, licensees, invitees or servants,
or from any loss or damage arising from any negligent or intentional act or
omission by Subtenant or any failure on Subtenant's part to comply with any
of the covenants, terms and conditions contained in this Sublease or the
Lease (to the extent applicable), except to the extent that such loss, cost,
damage or liability arises from the negligence or willful misconduct of the
Landlord or Tenant or their respective agents, contractors, licensees,
invitees or servants or from the failure of the Landlord or Tenant to perform
any of its obligations under the terms of this Sublease or the Lease. It is
agreed that the indemnification obligations of Subtenant as set forth in this
Section 18 shall survive the expiration, cancellation or termination of this
Sublease. This paragraph, however, shall not govern Subtenant's
responsibility for environmental matters which are exclusively governed by
the provisions of Section 5 hereof.
Except as set forth below in this paragraph and except to the extent
caused by the negligence or willful misconduct of Subtenant, or its agents,
contractors, licensees, invitees or servants, Tenant shall keep, save and
hold harmless Subtenant and its affiliates and their respective officers,
directors, and employees, from any and all losses, costs, damages and
liabilities for anything and everything whatsoever (including, without
limitation, any events, circumstances, occurrences and conditions) relating
to or arising from or out of the use, ownership or occupancy by Tenant or its
agents, contractors, licensees, invitees or servants of the Demised Premises
or from any loss or damage arising from any negligent or intentional act or
omission of Tenant, Tenant's agents, contractors, or others under Tenant's
control after delivery of the Demised Premises. It is agreed that the
indemnification obligations of Tenant as set forth in this Section 18 shall
survive the expiration, cancellation or termination of this Sublease. This
paragraph, however, shall not govern Tenant's responsibility for
environmental matters which are exclusively governed by the provisions of
Section 5 hereof.
Tenant and Subtenant each hereby waive any and all rights of recovery
against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by
any insurance policy in force (whether or not described in this Sublease) at
the time of such loss or damage. Upon obtaining the required policies of
insurance, Tenant and Subtenant shall give notice to the insurance carriers
of this mutual waiver of subrogation. If Tenant elects to self-insure, the
above waiver shall nonetheless apply to Tenant so long as Subtenant has
complied with Subtenant's insurance obligations required pursuant to the
terms of this Sublease.
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SECTION 19 - ESTOPPEL CERTIFICATES. Tenant and Subtenant shall, from
time to time, and upon reasonable written request to the other party, furnish
a written statement signed by Tenant or Subtenant and addressed to the person
designated in such request, on the status to the best of its knowledge of any
matter pertaining to this Sublease or the Lease, including that at the date
of such statement, (i) the provisions and conditions of this Sublease or the
Lease have been complied with; (ii) there are no defaults by Tenant or
Subtenant, and (iii) this Sublease or the Lease is still in force and effect.
If any or all of (i), (ii), (iii) are not stated in the affirmative in the
statement, the statement shall describe the facts and matters which Tenant or
Subtenant alleges prevent such affirmative statement.
SECTION 20 - FINDER'S OR BROKER'S FEES. Tenant shall be solely
responsible for payment of any finder's or broker's fee in connection with
this Sublease. The parties represent and warrant that they have dealt with no
broker in connection with this Sublease. Tenant and Subtenant each hereby
agree to indemnify and hold the other harmless from any loss, cost, damage or
expense (including reasonable attorneys' fees) arising from the breach by the
indemnifying party of the representation contained in this Section.
SECTION 21 - ATTORNEYS' FEES. In the event that either party hereto is
required to seek or bring suit to enforce any of the terms and conditions of
this Sublease, it is agreed that the Court may assess reasonable attorneys'
fees and costs to be paid by the non-prevailing party to the prevailing party.
SECTION 22 - NO WAIVER. No failure of either party hereto to exercise
any power or right given unto such party hereunder to insist upon strict
compliance by the other party with any obligation of the other party
hereunder, and no custom or practice of either party at variance with the
terms hereof shall constitute a waiver of the other party's right to demand
exact compliance with the terms hereof.
SECTION 23 - RIGHTS OF SUCCESSORS AND ASSIGNS. The covenants and
conditions contained in this Sublease shall bind and inure to the benefit of
Tenant and Subtenant and their respective permitted successors and assigns,
but neither Tenant nor Subtenant shall be bound or liable unless and until
this Sublease shall have been executed and delivered by both Tenant and
Subtenant.
SECTION 24 - DIVISIBILITY. If any term or provision of this Sublease or
the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Sublease shall not be
affected thereby, and each term and provision of this Sublease shall be valid
and enforceable to the fullest extent permitted by law.
SECTION 25 - ENTIRE AGREEMENT. This instrument and the exhibits hereto
and any other instrument executed by Tenant and Subtenant of even date
herewith contain the entire and only agreement between the parties, and no
oral statement or representation or prior written matter not contained in
this instrument or in any other instrument executed by Tenant and Subtenant
of even date herewith shall have any force or effect. This Sublease shall
not be modified or amended in any way except by a writing executed by both
parties.
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SECTION 26 - MEMORANDUM OF SUBLEASE. The parties hereto agree that this
instrument shall not be recorded and in lieu thereof a short form sublease or
memorandum of sublease executed by the parties hereto and of even date may be
recorded by either party. The Memorandum of Sublease shall be in the form
attached hereto as EXHIBIT "G".
SECTION 27 - GOVERNING LAW. This Sublease shall be governed by the laws
of the State of South Carolina.
SECTION 28 - EXCLUSIONS FROM LEASE. The following items of the Lease
are excluded from this Sublease:
(a) Section 9 (Paragraph G only)
(b) Section 10 (Paragraphs D and E only)
(c) Section 28 (Paragraph A only) (Deleted by First Amendment)
(d) Section 31
(e) Section 33 (Deleted by First Amendment)
(f) Section 34
(g) Section 35
SECTION 29 - MODIFICATIONS OF LEASE PROVISIONS. The following sections
of the Lease are modified as follows:
(a) Tenant represents to Subtenant that it has received no
notification as to any item referenced in Paragraph 5.C of the
Lease.
(b) Tenant may not exercise any right of termination contained in
Paragraph 9.C or 9.D of the Lease unless Subtenant also
terminates the Sublease.
(c) The limits contained in Paragraph 11 shall be increased as
follows: Property Damage $1,000,000.00, Personal Injury or
Wrongful Death $1,000,000.00 per person, and $2,000,000.00 per
accident.
(d) Taxes and assessments for the year 1997 (Paragraph 16 of the
Lease) shall be pro-rated upon the receipt of the tax bill to the
following date: June 1, 1997; provided, however, if the
Commencement Date has not occurred on or before April 21, 1997,
the proration date shall be advanced to July 1, 1997, and if the
Commencement Date has thereafter not occurred on or before May
15, 1997, the proration date shall be advanced past July 1, 1997
one (1) day for each day after May 15, 1997 in which the
Commencement Date is delayed. Tenant, within fifteen (15) days
after written notice from Subtenant requesting payment and
enclosing evidence of the payment of the taxes and assessments
for the year 1997, shall pay its prorata amount of taxes and
assessments for the year 1997 to Subtenant.
(e) Paragraph 17 is amended so as to cause Subtenant to be
responsible for all utility connections to the Demised Premises;
provided, however, Tenant agrees to use
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best efforts to assist Subtenant in the enforcement of the
provisions of Paragraph 17 related to utility connections
against Landlord.
(f) Tenant may not exercise any right under Paragraphs 9.G., 10.D. or
E, 34 or 35 of the Lease without the prior consent of Subtenant
which consent may be withheld in its sole and absolute
discretion.
The above modifications and exclusions serve to amend the provisions of the
Lease as said provisions pertain to the relationship between Tenant and
Subtenant under the Sublease but do not otherwise modify the terms of the Lease
itself which shall remain in full force and effect.
SECTION 30 - CONTRACTOR RELATIONSHIPS. In accordance with Tenant's
policy with respect to contractor relationships, it is hereby stipulated by
the Subtenant that, to the best of Subtenant's knowledge and belief,
Subtenant has not employed, retained, induced or directed any person employed
by Tenant to solicit or secure this Sublease upon agreement, offer,
understanding or implication involving any form of remuneration whatsoever.
That Subtenant agrees that in the event of an allegation of substance
(the determination of which will be made solely by Tenant) that the paragraph
regarding Contractor Relationships has been violated, Subtenant will
cooperate in a reasonable manner with Tenant to establish whether the
allegation is true.
SECTION 31 - LICENSE. Notwithstanding the termination of the Term on
February 27, 2003, Tenant hereby grants Subtenant a license to occupy the
Demised Premises on February 28, 2003 free of any Rent or other charge
whatsoever, provided, however that Subtenant prior to December 31, 2002 must
have entered into a lease with Landlord for the Demised Premises for a term
commencing March 1, 2003.
SECTION 32 - SUBLEASE. Nothing contained in this Sublease shall be
deemed to confer any right or benefit on any person or entity who is not a
party to this Sublease. This Sublease is made for the sole benefit of Tenant
and Subtenant, and no other person or entity is granted any right of action
hereon or hereunder, it being the intent of the parties that no person or
entity shall be third party beneficiary of this Sublease, including, without
limitation, Landlord. It is also agreed by the parties that this agreement
shall be deemed a sublease rather than assignment. It being the intent of
this agreement that no payment of Rent directly to the Landlord shall create
any rights of Landlord against Subtenant or under this agreement.
SECTION 33 - WORK. Prior to the Commencement Date, Tenant hereby agrees
to complete the work more particularly set forth in EXHIBIT "H".
SECTION 34 - TENANT DEFAULT:
a. Subject to the other provisions hereof, the occurrence of any of the
following shall constitute a default of this Sublease by Tenant.
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(i) Any failure by Tenant to make any payment required to be made
by Tenant under the Lease when due, when such failure continues
for five (5) days after delivery of written notice of such
failure by Subtenant or Landlord to Tenant and such payment is
not also the responsibility of Subtenant, Subtenant not having
paid the same.
(ii) Any failure by Tenant to make any payment required to be made
by Tenant to Subtenant hereunder when due, when such failure
continues for fifteen (15) days after delivery of written
notice of such failure by Subtenant to Tenant.
(iii) Any failure by Tenant to perform or comply with any other
provisions of the Lease to be performed or complied with by
Tenant, if such failure continues for twenty (20) days after
delivery of written notice of such failure by Subtenant or
Landlord to Tenant, or if such failure cannot reasonably be
cured within said twenty (20) days and Tenant shall not have
commenced to cure such failure within such twenty (20) day
period and shall not thereafter with reasonable diligence and
good faith cure said default; provided, however, that the said
performance or compliance is not also a responsibility of
Subtenant under the Sublease which Subtenant has failed to
perform or comply with.
(iv) Any failure by Tenant to perform or comply with any other
provisions of this Sublease to be performed or complied with by
Tenant, if such failure continues for thirty (30) days after
delivery of written notice of such failure by Subtenant to
Tenant, or if such failure cannot reasonably be cured within
said thirty (30) days and Tenant shall not have commenced to
cure such failure within such thirty (30) day period and shall
not thereafter with reasonable diligence and good faith cure
said default.
(v) Any representation or warranty of Tenant being false or
misleading in any material respect when made which
substantially interferes with Subtenant's ability to use the
Demised Premises.
Notwithstanding the above, with respect to a default hereunder, which
is also a default under the Lease, Tenant shall have until the end of
the cure period provided for above or in the Lease, whichever is
shorter, in which to cure said default.
b. If Tenant's default materially and adversely affects Subtenant's
ability to utilize the Demised Premises under the Sublease and it
cannot be cured by Tenant within the cure periods provided herein,
Subtenant may terminate the Sublease. In addition, in the event of
default by Tenant, Subtenant may cure the same at the expense of
Tenant only: (i) in the case of an emergency or where such default
will result in irreparable harm to Subtenant, if not cured immediately
and (ii) in any other case if such default is not cured by Tenant
within the applicable cure periods provided herein. All reasonable
costs incurred in good faith by Subtenant in
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curing such default shall be reimbursable by Tenant within fifteen
(15) days of demand. Tenant hereby agrees to defend Subtenant
(with counsel reasonably acceptable to Subtenant) in any action
brought to evict or dispossess Subtenant from the Demised Premises
based on a default by Tenant hereunder, agrees to be liable for any
costs of such defense, including all costs required in any appeal,
and agrees to indemnify and hold harmless Subtenant from any and
all claims, judgments, damages, penalties, fines, causes,
liabilities, or losses resulting from or related to Subtenant's
eviction or dispossession from the Demised Premises based on such
default following a final non-appealable order of eviction or
dispossession from the Demised Premises.
SECTION 35 - TERMINATION: Tenant and Subtenant acknowledge that
Subtenant's structural improvements, additions and alterations to the Demises
Premises must be approved by the holder of the mortgage executed by Landlord
which encumbers the Demised Premises. Accordingly, Subtenant shall have the
right to terminate this Sublease by written notice to Tenant in the event such
mortgagee fails by its action or inactions to approve Subtenant's structural
alterations, improvements and additions on or before the thirty-fifth (35th) day
after such request for consent is received by such mortgagee. Subtenant must
exercise its right of termination within ten (10) days of the end of said
thirty-five (35) day period.
SECTION 36 - ROOF AMENDMENT. Tenant agrees to use best efforts to
negotiate an amendment to the Lease acceptable to Tenant, Landlord and Subtenant
wherein Landlord would assume responsibility for the maintenance, repair and
replacement of the roof of the building on the Demised Premises. In connection
with the execution of an amendment to the Lease which transfers the
responsibility for the maintenance, repair and replacement of the roof under the
Lease to Landlord, Tenant and Subtenant agree to enter into an amendment to the
Sublease reasonably acceptable to Subtenant and Tenant which will provide that
for the remainder of the term of the Sublease, Landlord shall be responsible for
the maintenance, repair or replacement of the roof. In no event shall any such
amendments increase the obligations of Subtenant under the Sublease or under the
Lease.
SECTION 37 - GUARANTEE. As a condition to the execution of this Sublease,
Tenant has required the execution and delivery of that certain Guarantee dated
of even date herewith from Select Comfort Corporation.
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IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed as a sealed instrument as of the day and year first above written.
TENANT:
BELLSOUTH TELECOMMUNICATIONS, INC.,
a Georgia corporation
WITNESSES:
/s/ By: /s/
---------------------------- ------------------------------
/s/ Its: MANAGER - REAL ESTATE
---------------------------- ------------------------------
SUBTENANT:
SELECT COMFORT SC CORPORATION,
a Minnesota corporation
WITNESSES:
/s/ By: /s/
---------------------------- ------------------------------
/s/ Its: TREASURER, CFO AND SECRETARY
---------------------------- ------------------------------
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EXHIBIT "A"
LEGAL DESCRIPTION OF PREMISES
All that certain piece, parcel or tract of land, containing 31.95
acres, more or less, together with the improvements thereon, if any, situate,
lying and being on the Northeastern side of the Frontage Road along Interstate
Highway I-26, near the intersection of said highway with U.S. Highways No. 76
and No. 176, near Columbia, County of Richland, State of South Carolina, the
said tract being more particularly described as follows:
BEGINNING at an iron located on the Eastern right-of-way of said
highway at a point where the within described property adjoins property now or
formerly of Roof E. Lowman and running North 64DEG. 44' East along said property
now or formerly of Roof E. Lowman for a distance of 413.10 feet to an iron;
THEN turning and running North 67DEG. 59' East along property now
or formerly of Roof E. Lowman for a distance of 1598.79 feet to a concrete
monument;
THEN turning and running South 49DEG. 17' East along property now
or formerly of O.D. Lowman and R.E. Lowman for a distance of 500.00 feet to
an iron;
THEN turning and running South 55DEG. 28' West along property now
or formerly of Baco, Inc. for a distance of 2048.31 feet to an "X" mark in
the invert of a concrete box culvert located on the Eastern right-of-way of
said Frontage Road;
THEN turning and running North 38DEG. 24' West along said Eastern
right-of-way of said Frontage Road for a distance of 866.06 feet to a
concrete right-of-way marker;
THEN turning and running North 15DEG. 49' West along said
right-of-way for a distance of 33.94 feet to the point of commencement, be
all measurements a little more or less; all of which is more clearly shown
and delineated upon a plat of the same prepared by Belter and Associates,
Surveyors and Planners, dated December 19, 1974, and recorded in the Office
of the Register of Mesne Conveyance for Richland County in Plat Book X at
Page 3779; this being the same property heretofore conveyed to William S.
Nelson, as agent for an undisclosed principal, by Baco, Inc., by deed dated
April 22, 1975, and recorded in the Office of the Register of Mesne
Conveyance for Richland County, South Carolina, in Deed Book D-345 at Page
590.
<PAGE>
EXHIBIT "B"
[SEE ATTACHED]
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EXHIBIT "C"
SUBTENANT IMPROVEMENTS
Offices - Remove wallcovering, repaint walls, clean or paint ceiling system,
install telephone and data cables, refurbish carpeting and floor tile.
Paint - Clean concrete perimeter walls and underside of roof structure, paint
wall and structural columns to 12 ft. above floor.
Add overhead light fixtures in production area of plant.
Add air compressor and overhead piping distribution system for equipment in
plant.
Add 10-12 roof-top air conditioning units including roof curbs and structural
angle supports over plant area.
Add overhead electrical distribution system for equipment in plant.
Remove existing fire sprinkler piping in areas to contain high pile storage and
upgrade with Early Suppression - Fast Response (ESFR) fire sprinkler piping
system.
Install 4 additional dock doors for Shipping and Receiving in side and rear
perimeter walls adjacent to existing dock doors.
Upgrade break room in plant.
Install identification sign to front building wall.
Refurbish existing security and paging systems.
20
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EXHIBIT "D"
INTENTIONALLY DELETED
21
<PAGE>
EXHIBIT "E"
INTENTIONALLY DELETED
22
<PAGE>
EXHIBIT "F"
THE STATE OF SOUTH CAROLINA )
)
COUNTY OF RICHLAND )
LEASE AGREEMENT
This Agreement of lease made and entered into by and between J.L. WILLIAMS
& CO., INC., referred to herein as "Landlord", 1200 Mockingbird Towers East,
1341 W. Mockingbird Lane, Dallas, Texas, 75247, and WESTERN ELECTRIC COMPANY,
INCORPORATED, referred to herein as "Tenant", 222 Broadway, New York, New York,
10038.
WITNESSETH:
That for and in consideration of the rents to be paid and the conditions and
covenants to be performed and observed as hereinafter set forth, the Landlord
hereby leases to the Tenant and the Tenant hereby takes from the Landlord
certain property containing approximately 31.95 acres, located in Richland
County, South Carolina,
and more particularly described in Exhibit "A" attached hereto and made a
part hereof, together with improvements to be built on the demised premises.
This lease shall be for a primary term of Fifteen (15) years commencing on
the Commencement Date, as defined in Section 6 of Exhibit "B" annexed hereto,
such Commencement Date estimated to be November 15, 1975.(*)
In the event Landlord is to construct additional improvements on the demised
premises, such construction shall be performed in accordance with the Plans
and Specifications to which the parties will agree as provided in Exhibit "B"
attached hereto, and the primary term of this lease shall commence on the
date Landlord delivers written notice to the Tenant the premises are
substantially completed and ready for occupancy by Tenant as provided in
Exhibit "B".
Tenant agrees to pay to Landlord during the term aforesaid a monthly rental
of $20,648.25, payable on the first day of each and every month in advance
during the term of this lease. Rent for a fractional month at the beginning
or end of the lease term shall be prorated. All such rent shall be payable
to the order of the Landlord and delivered or mailed to the Landlord at such
address as the Landlord may designate in writing.
---------------
(*) In the event that Tenant takes occupancy of a portion of the premises
before the Commencement Date of the lease, Tenant agrees to pay to Landlord
partial rent for such use based upon the percentage of space
occupied.
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The lease shall be subject to the following terms, covenants and conditions:
USE OF PREMISES: The demised premises shall be used and occupied only for the
purpose of:
administration, warehousing, distribution, and any other lawful
business purpose not in violation of any legally enforceable recorded
restrictions upon the premises,
and not otherwise. Use of the Tenant does not permit the stacking of
merchandise or materials against the walls of the building so that pressure
or live load will be exerted against the walls, nor the hanging of equipment
from (or otherwise loading) the roof or structural members of the building,
without the express written consent of the Landlord. provided no such consent
is required if the service loads specified in the Plans and Specifications
outlined in Exhibit "B" hereto are not exceeded. Tenant shall at its own
risk and expense obtain any and all governmental licenses and permits
necessary for such use.
MAINTENANCE BY TENANT: During the term of this lease the Tenant shall, at
its own expense, maintain the building and other improvements on the demised
premises in good repair and condition (including all necessary replacements)
including, but not limited to, regular mowing of any grass, trimming, weed
removal, prompt repair of roof leaks and removal of snow from the roof of the
building and the demised premises, regular removal of debris, and maintenance
of the water and sewer systems servicing the building and demised premises.
Tenant shall take good care of all the property and its fixtures, including
all glass, and suffer no waste. Should Tenant neglect to reasonably keep and
maintain the herein demised premises, the Landlord shall have the right after
thirty (30) days' written notice to Tenant and Tenant's failure during said
thirty-day period to correct the condition (but not the obligation) to have
said work done, and any reasonable costs therefor shall be charged to the
Tenant as additional rental and paid by the Tenant with the payment of the
rental next due. At the termination of this lease agreement the Tenant shall
deliver the premises broom-clean in the same good order and condition as
existed at the beginning date of this lease, ordinary wear and natural
deterioration beyond the control of the Tenant excepted provided, however,
Tenant agrees to make such repairs and replacements as may be necessary so
that all air conditioning and heating equipment and all plumbing and
electrical systems shall be left by Tenant in operable condition at the
termination of this lease. "Broom clean" means reasonably free from all
debris, dirt, rubbish and personal property of Tenant inside and outside the
building and on the grounds comprising the demised premises. Tenant shall
not be obligated to repair any damage caused by fire, tornado or other
insured casualty. All claims of Landlord against Tenant with respect to the
condition of the demised premises upon termination of the lease shall be
deemed waived unless presented in writing to Tenant within 30 days after
expiration or other termination of the lease.
ASSIGNMENT BY LANDLORD: Landlord shall have the right to assign its rights
under this lease but Landlord shall have no such right of assignment until 3
months after the Commencement Date provided nothing herein shall prohibit
Landlord's assignment of this lease as security in connection with a first
mortgage loan from a financial institution or institutional lender. Such
assignment shall not affect the rights of the Tenant under this lease so long as
the
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Tenant is not in default in the performance of its covenants under this lease
and Tenant attorns to the Landlord's assignee.
ALTERATIONS, ADDITIONS AND IMPROVEMENTS:
A. Tenant may, at its own cost and expense, without Landlord's prior
consent, make structural or non-structural alterations, additions and
improvements to the demised premises. Except as otherwise provided in this
paragraph 5, title to all alterations, additions and improvements constructed on
the demised premises shall vest in Landlord and shall be deemed a part of the
premises.
B. No work shall be done by Tenant pursuant to subparagraph A above or
pursuant to paragraph 34 hereof unless (i) the structural integrity and market
value of the premises shall not be materially lessened by reason thereof, (ii)
such work shall be completed in a good and workmanlike manner in compliance with
all applicable laws, rules, regulations and ordinances, and the specifications
for such work shall equal or exceed the specifications for the original
construction of the improvements under this lease, taking into consideration any
changes in construction practices and technology which may exist at the time of
the alteration or expansion, (iii) Tenant shall have procured and paid for all
permits and licenses required in connection therewith, and (iv) during the
period when any alteration, addition or improvement is being made, Tenant shall
maintain or require its contractors to maintain the following insurance on the
premises:
(i) public liability insurance insuring Landlord and Tenant and the
contractor under any contract entered into by Tenant with respect to any such
addition, improvement, alteration, removal or rebuilding against any liability
to persons or property in any way occurring during the progress of any such
addition, improvement, alteration, removal or rebuilding or in any way arising
therefrom, whether injury shall be to employees or others, in the minimum
amounts of $500,000.00 for each claim with respect to any one death or bodily
injury, $1,000,000.00 with respect to any one occurrence, and $500,000.00 for
all claims for property damage with respect to any one occurrence;
(ii) completed value builder's risk insurance for the premises during the
period of construction, including building materials on the premises, covering
loss or damage from fire, lightning, extended coverage perils, sprinkler
leakage, vandalism and malicious mischief in an amount not less than the final
cost, as estimated by Tenant, of the job during the period when construction or
reconstruction is being done;
(iii) workmen's compensation insurance coverage of the contractor's full
statutory liability as an employer.
C. With respect to any improvements, alterations or additions (other than
items specified in subparagraph D hereof), if Landlord, within thirty (30) days
after receiving written notice by Tenant that the work has been completed,
informs Tenant in writing that it does not desire such improvements, alterations
or additions to remain a part of the demised premises, Tenant shall, at
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its sole cost and expense, remove any alterations, additions, and
improvements at the expiration or other termination of this lease, repair all
damage caused by such removal and restore the premises to the condition they
were in prior to the installation of any such alteration, addition or
improvement, ordinary wear and tear excepted.
D. Tenant may, at its cost and expense, install, replace or remove any
fixtures, trade fixtures, machinery, and equipment. Any such fixtures, trade
fixtures, machinery, and equipment shall not become the property of Landlord
(other than replacement of trade fixtures, machinery and equipment which were
the property of, and were originally installed by, Landlord) and any such
fixtures, trade fixtures, machinery, and equipment shall, at Tenant's cost and
expense, be removed, at Tenant's option, upon expiration or termination of the
lease and Tenant shall effect such removal and restore the premises to their
original condition, in a good and workmanlike manner, reasonable wear and tear
excepted.
E. In the event improvements are to be removed by Tenant after the
expiration of the lease term, Tenant shall pay rent until such improvements are
removed. Tenant's time for removal shall be extended for any delay attributable
to any cause specified in Section 5 of Exhibit "B" - Force Majeure.
F. Tenant agrees to obtain the consent of Landlord's mortgagee to any
structural alterations or additions to the demised premises which are required
to be consented to by the mortgagee under the terms of the loan agreement and/or
mortgage or deed of trust between Landlord and said mortgagee. Landlord agrees
that any mortgage will provide that non-structural changes may be made without
Landlord's or mortgagee's consent, provided there is compliance with
subparagraph B above. If the mortgagee's consent is required for structural
changes, the mortgagee will agree not to unreasonably withhold such consent and
to act upon Tenant's request within thirty days after receipt thereof. Failure
to so act will constitute approval. Landlord agrees to furnish Tenant with
written notice of the provision of any mortgage which requires the consent of
the mortgagee in regard to alterations, additions and improvements.
6. MECHANIC'S LIENS: Tenant agrees to indemnify and hold harmless Landlord
of and from all liability arising out of the filing of any mechanic's lien
against the demised premises by reason of any act or omission of Tenant, and
Landlord at its option may, after ten (10) days' written notice to Tenant and
failure of Tenant within said period to remove said lien(s) by payment, bond or
otherwise, satisfy such liens and collect the amount expended from Tenant as
additional rent. If in fact any mechanic's liens which are in violation of the
provisions of this lease exist at the commencement of the term of this lease,
then Landlord agrees to indemnify and hold harmless Tenant from any and all
liabilities arising out of any and all such mechanic's liens.
7. COMPLIANCE WITH LAW: Landlord shall comply with all governmental laws,
ordinances and regulations applicable to the original construction of the
improvements for the uses designated by Tenant in the final specifications, and
Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the demised premises enacted after the commencement of
the lease or uses not included in said specifications. Each party shall
promptly comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances in or upon or in connection with the
demised premises for
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which such party is responsible, all at such party's sole risk and expense.
In the event that during the term of the lease there are any additional
requirements of any governmental agency, law, ordinance or regulation
relating solely to the structural portions of the building that require
additional improvements to the building, Landlord and Tenant agree that the
cost of such structural improvements shall be pro rated between Landlord and
Tenant. The portion of such cost to be paid by Tenant shall be determined by
multiplying the cost of such improvements by a fraction, the numerator being
the balance of the lease term and the denominator being the estimated useful
life of such improvements. As and when options to extend the lease are
exercised by Tenant as provided herein, Tenant shall pay an additional
portion of the cost of such improvements which shall be determined by
multiplying the cost of such improvements by a fraction, the numerator being
the period of the option and the denominator being the estimated useful life
of the improvements. The estimated useful life of the improvements shall be
determined at the time the improvements are made. The cost of such
improvements and whether such improvements will be made by Landlord or Tenant
shall be determined in the same manner as herein provided for expansion of
the leased premises. If such additional requirements relate to Tenant's
particular use of the premises and not to the structural changes to the
building for general use, they shall be made and paid for by Tenant.
8. ASSIGNMENT AND SUBLETTING: Provided Tenant is not in default of any of
the terms, conditions or covenants contained in this lease, Tenant may, without
the consent of the Landlord, assign this lease or sublet the whole or any part
of the demised premises. Any such assignment or subletting shall be subject to
all the terms and conditions of this lease agreement, including the provisions
of paragraph 1 hereof relating to the use of the demised premises.
Notwithstanding any such assignment or subletting, the Tenant shall at all times
remain fully responsible and liable for the payment of the rent herein specified
and for compliance with all of its other obligations under the terms, provisions
and covenants of this lease. If an "event of default", as hereinafter defined,
should occur while the demised premises or any part thereof are then assigned or
sublet, the Landlord, in addition to any other remedies herein provided or
provided by law, may at its option collect directly from such assignee or
subtenant all rents becoming due to Tenant under such assignment or sublease and
apply such rent against any sums due to it by Tenant hereunder. No direct
collection by the Landlord from any such assignee or subtenant shall be
construed to constitute a novation or a release of Tenant from the further
performance of its obligations hereunder.
As a condition precedent to such subletting or assignment, the Tenant agrees to:
(a) give the Landlord immediate written notice of such assignment or subletting;
and (b) furnish the Landlord with an executed copy of such assignment or
sublease at the time such instrument is executed.
9. FIRE AND CASUALTY DAMAGE:
A. In case of fire or other casualty, Tenant shall give immediate notice to
Landlord. If the premises shall be partially damaged by fire, the elements or
other casualty, but not so as to render the premises partially or wholly
untenantable, Landlord shall restore the same and Tenant's obligation to pay
rent shall continue.
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B. If the premises be so extensively and substantially damaged as to render
them untenantable in whole or in part (but such damage is not as extensive as
specified in subparagraph C hereof), then the rent shall cease or be diminished
partially in the case of a partial untenantability, until such time as the
premises shall be made tenantable by Landlord.
C. If the premises are rendered wholly or substantially destroyed so as to
require practically a rebuilding thereof, Landlord shall give written notice to
Tenant within thirty (30) days after the damage either (i) declaring this lease
null and void in which event this lease shall terminate and the rent shall be
abated from the date of destruction, provided Landlord shall only have such
option if the damage occurs on or after the fifth (5th) anniversary date of the
lease, or (ii) informing Tenant that it shall restore the demised premises and
furnishing a certificate from Landlord's architect as to whether (a) the
premises can be restored within one hundred eighty (180) days from the date of
the damage or whether (b) the premises cannot be restored within such time
period. If the Landlord notifies Tenant under clause (ii)(a) above, this lease
shall continue in effect, Landlord shall restore the premises and the rent shall
continue abated until such time as the premises are tenantable. If Landlord
gives the notification under clause (ii)(b) above, Tenant may, within fifteen
(15) days after such occurrence, elect to terminate this lease by giving written
notice to Landlord, in which case the lease shall terminate and the rent shall
be paid up to the time of the damage. If the Tenant does not make this election
within such fifteen (15) day period, this lease shall continue, Landlord shall
restore the premises and the rent shall continue abated until the premises are
tenantable.
D. If Landlord, having given the notification under clause C(ii)(a) above,
fails to remake the premises substantially tenantable within two hundred ten
(210) days from the date of the damage, Tenant may give Landlord written notice
canceling this lease twenty (20) days thereafter if said improvements are not
completed prior to the expiration of the twenty (20) days specified in such
notice. Such period shall be extended for a period equivalent to the time lost
attributable to any cause listed in Section 5 of Exhibit "B" - Force Majeure,
but no extension shall be granted unless Landlord gives Tenant written notice of
such event within three (3) business days after such event commences. In the
event the premises are not made substantially tenantable on or prior to two
hundred eighty-five (285) days from the date of the damage, without regard to
whether such situation results from Force Majeure or any other cause, Tenant may
give Landlord written notice canceling this lease twenty (20) days thereafter if
said improvements are not completed prior to the expiration of the twenty (20)
days specified in such notice. In lieu of terminating the lease as provided in
this paragraph 9D, Tenant may elect within twenty (20) days after Landlord fails
to remake the premises within the two hundred ten (210) days specified herein
(as such time may be extended because of the operation of Force Majeure) to
restore the premises itself at Landlord's cost and expense, for which Landlord
shall reimburse Tenant, or, if Landlord fails to do so, Tenant may resort to its
remedies under paragraph 37C of this lease. If Tenant does not elect either to
terminate this lease or to restore the premises itself within such twenty (20)
day period, this lease shall continue, Landlord shall complete its restoration
of the premises, and the rent shall continue abated until the premises are
tenantable.
E. In the event the damages as such as to make the premises partially
untenantable, Tenant shall pay only a pro rata portion of the total monthly rent
as shall be equitable in view of the
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portion of the premises remaining tenantable, until such time as the premises
shall be repaired and wholly tenantable.
F. Whenever Landlord must repair, restore or make the premises tenantable
under this section, such work shall be done as speedily as possible and the
premises shall be made tenantable and restored to at least as good a condition
as existed prior to the casualty in accordance with the applicable sections of
Exhibit "B".
G. If this lease is terminated under Clause C of this paragraph 9, then the
Tenant may, within twenty (20) days after the termination of the lease, give
written notice to Landlord that it elects to pay Landlord an amount equal to the
Landlord's Amount provided on Exhibit "C" (the "Landlord's Amount") for the pro
rated portion of the applicable lease year, provided that Tenant's obligation to
pay Landlord's Amount shall be released to the extent of any insurance proceeds
received subject to such Landlord's Amount created under paragraph 16 hereof, on
or after the fifth (5th) anniversary date of this lease, when Tenant may, within
twenty (20) days after the termination of the lease, give written notice to
Landlord that it elects to pay Landlord an amount equal to the Landlord's Amount
provided on Exhibit "C" for the pro rata portion of the applicable lease year.
Upon such election and the making of all required payments by Tenant to
Landlord, the said premises, or the untaken portion thereof, shall be conveyed
to Tenant. In addition, Landlord shall assign or pay over to Tenant all of the
Landlord's award or all of Landlord's right, title and interest in any
uncollected award for the taking attributable to said premises and the
improvements. If Tenant does not make the election specified herein, or if this
lease is terminated under paragraph 10A hereof prior to the fifth (5th)
anniversary date of this lease, all of Tenant's options to purchase the premises
shall automatically terminate, all of the damages shall belong to Landlord, and
paragraph 10C hereof will apply. Upon Landlord's request Tenant will furnish
written confirmation that it has not made the election specified in this
paragraph 10E, and retained by Landlord or its mortgagee. Upon the payment by
Tenant of all sums due and owing, this lease shall expire as fully as if it were
the date herein fixed for the expiration of the term. In such event the
unrestored premises, together with the balance of all insurance proceeds, net of
any such proceeds applied to reduce Landlord's Amount, as above provided, will
be conveyed to and become the property of Tenant without further payment by
Tenant, and thereafter neither party shall have any further obligation to the
other hereunder or under Tenant's options to purchase said property.
H. Landlord and Tenant agree that Landlord shall carry, throughout the term
of the lease, rent insurance which will provide for the payment of rent to
Landlord for the time that the premises are untenantable by reason of any loss
or damage occurring under the provisions of this paragraph relating to fire or
casualty damage and that the cost of such insurance shall be paid one-half (1/2)
by Landlord and one-half (1/2) by Tenant, Landlord to obtain such insurance and
to bill Tenant for one-half (1/2) of such cost, furnishing to Tenant at the time
of such billing written evidence of such cost from the insurance carrier or its
agent.
10. CONDEMNATION:
A. If, during the term of this lease, or any extension or renewal thereof,
all or a substantial part of the demised premises should be taken for any public
or quasi-public use under any
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governmental law, ordinance or regulation or by right of eminent domain, or
should be sold to the condemning authority under threat of condemnation, this
lease shall terminate and the rent shall be abated during the unexpired
portion of this lease, effective as of the date when the physical taking of
said premises shall occur. Substantial part, as used herein, means that the
remainder cannot be reconstructed or restored to make the remainder
reasonably tenantable and suitable for the Tenant's business needs.
B. If less than a substantial part of the demised premises shall be taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain, or should be sold to the condemning
authority under the threat of condemnation, this lease shall not terminate but
Landlord shall, at its sole expense, restore and reconstruct the building and
other improvements situated on the demised premises, provided such restoration
and reconstruction shall make the same reasonably tenantable and suitable for
the uses for which the premises are leased as defined in paragraph 1 hereof.
The rent payable hereunder during the unexpired portion of this lease shall be
adjusted to such extent as is fair and reasonable under the circumstances.
C. All damages awarded for any such taking under the power of eminent
domain, whether for the whole or part of the demised premises, shall belong to
and be the property of the Landlord, whether such damages shall be awarded as
compensation for diminution in value of the leasehold, or for the fee of the
demised premises; provided, however, that Landlord shall not be entitled to any
award made to Tenant for loss of or damage to Tenant's trade fixtures and
removable personal property or for damages for cessation or interruption of
Tenant's business, to the extent such cessation or interruption damages are
awarded exclusive of and separate and apart from damages for diminution in value
of the leasehold.
D. Any damages awarded to Landlord for a taking under paragraph 10B hereof
shall automatically reduce by the same amount the option price to Tenant
specified in the Option Agreement of even date herewith between Landlord and
Tenant and shall also reduce by an equivalent amount the Landlord's Amount
specified in Exhibit "C" hereof.
11. HOLD HARMLESS: Landlord shall not be liable to the Tenant or Tenant's
employees, agents or invitees, or to any other person whomsoever, for any injury
to person or damage to property on or about the demised premises caused by the
negligence or misconduct of the Tenant, its agents or employees, or by reason of
said building becoming out of repair or by Tenant failing to perform any other
covenant required of the Tenant; and the Tenant agrees to indemnify Landlord and
hold it harmless from any loss, expense or claims (including reasonable
attorneys' fees) arising out of any such damage or injury, and to insure such
indemnity the Tenant agrees, at its own cost and expense, to keep the demised
premises insured under a public liability policy against claims for property
damage with limits of $100,000 for any one occurrence and personal bodily injury
(including wrongful death) with limits of $100,000 for any one person and
$300,000 for any one accident. Upon Landlord's request, the Tenant shall
furnish to Landlord written proof as to the required insurance.
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12. QUIET ENJOYMENT AND SUBORDINATION: Landlord covenants, represents and
warrants that it has full right and power to execute and perform this lease and
to grant the estate demised herein, and that Tenant, upon payment of the rents
herein reserved, and performance of the terms, conditions, covenants and
agreements herein contained, shall peaceably and quietly have, hold and enjoy
the demised premises during the full term of this lease and any extension or
renewal thereof; provided, however, that Tenant accepts this lease subject and
subordinate to any recorded mortgage, deed of trust or other lien presently
existing upon the demised premises.
Landlord is hereby irrevocably vested with full power and authority to
subordinate Tenant's interest hereunder to any mortgage, deed of trust or
other lien now existing or hereafter placed on the demised premises, and
Tenant agrees upon demand to execute such further instruments subordinating
this lease as Landlord may request, provided such subordination shall be upon
the express condition that this lease shall be recognized by the mortgagee
and that all of the rights of the Tenant including Tenant's options to renew
the lease and to purchase the demised premises shall remain in full force and
effect during the full term of this lease on condition that the Tenant attorn
to the mortgagee, its successors and assigns, and perform all of the
covenants and conditions required by the terms of this lease. In the event
of foreclosure or any enforcement of any such mortgage, the rights of the
Tenant hereunder shall expressly survive and this lease shall in all respects
continue in full force and effect; provided, however, that the Tenant shall
fully perform all its obligations hereunder and attorn to the purchaser.
All of the Landlord's personal liability under this lease shall terminate
upon conveyance of the property, provided Landlord (J.L. Williams & Co.,
Inc.) has completed the construction of the improvements in accordance with
Exhibit "B" and the purchaser has sufficient financial net worth, in Tenant's
opinion, to discharge the obligations of the Landlord, and the purchaser
assumes Landlord's obligations hereunder. Such a sale will not relieve J.L.
Williams & Co., Inc. of its responsibility for any uncorrected details
existing at the time of the conveyance or the warranties of J.L. Williams &
Co., Inc. under the terms of the lease. provided that the obligations of the
Landlord under this lease are covenants running with the land and shall be
binding upon the purchaser of Landlord's interest in the demised premises.
13. WAIVER. No waiver by the parties hereto of any default or breach of
any term, covenant, condition, agreement, provision or stipulation herein
contained shall be treated as a waiver of any subsequent default or breach of
the same or any other term, condition, covenant, agreement, provision or
stipulation hereof.
14. SIGNS: Tenant shall have the right of erecting signs in good taste on
the exterior walls of the building only, subject to all applicable laws, deed
restrictions and regulations. No signs or other objects shall be erected which
are attached to the roof of the building, and no signs shall be attached to the
building at right angles suspended by guy wires, but shall be attached flush to
the building in a safe and secure manner, and not on the canopy. All such signs
erected shall advertise the Tenant's business only and no revenue-producing
advertising shall be erected on the demised premises without the specific
written permission of the Landlord. Tenant shall not paint any signs directly
on the walls of the building or otherwise deface, damage or overload the
building. Tenant shall remove all signs at the termination of this lease, at
Tenant's sole risk and expense, and shall in a workmanlike manner properly
repair any damage and close any holes
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caused by removal of the Tenant's signs. Anything in this paragraph 14 to the
contrary notwithstanding, Tenant shall have the right, without the consent of
Landlord, to erect signs on the exterior walls of the building or on the
grounds, similar to other Western Electric or Bell System signs, provided the
same are in accordance with applicable laws, deed restrictions and
regulations.
16. REAL ESTATE TAXES. Tenant agrees to pay before they become delinquent
all real estate taxes and special assessments lawfully levied or assessed
against the demised premises; provided, however, Tenant may, at its expense,
contest and dispute the taxes?, and in such case the disputed item need not
be paid until finally adjudged to be valid. In the event of such contest the
Tenant may make such contest in the name of the Landlord. Taxes for the
beginning and ending years of the lease term shall be prorated, in the event
Tenant fails to pay such taxes when due, then Landlord may, at its option,
pay the same and collect the amount expended from Tenant as additional rent.
In the event that during the term of this lease or any renewal or extension
thereof any taxes or other charges shall be levied or assessed against said
property in lieu of or as a substitute for all or a part of the ad valorem
taxes upon the leased premises and improvements situated thereon, then for
the purposes of this lease such levy and assessment shall be treated the same
as real estate taxes and shall be the responsibility of the party who would
be required to pay such charges and assessment had such charges and
assessment been a part of the ad valorem taxes on the leased premises. In
the event that substitute taxes or assessment are included in the income
taxes of the landlord, then the amount of such taxes to be paid by the Tenant
shall be limited to so much of such tax as the Landlord would be obligated to
pay in case it derived no income from any source other than the real estate
hereby demised.
17. UTILITIES SERVICES: Landlord shall provide the _________ utility
service connections into the demised premises as required in the plans and
specifications? and shall pay the initial connection charges for such
utilities. Tenant shall pay all other costs for utility services, including
all charges for gas, water and electricity used on the demised premises and
all electric light lamps or tubes.
18. INSURANCE:
A. Tenant shall not permit the demised premises to be used for any
operation deemed extra hazardous on account of fire or otherwise.
B. Any insurance which may be carried by Landlord or Tenant against loss
or damage to the building and other improvements situated on the demised
premises shall be carried for the benefit of the Landlord to the extent of
loss or damage to the building or improvements owned by the Landlord and for
the benefit of the Tenant to the extent of loss or damage to improvements
owned by the Tenant, and the proceeds of such insurance shall be under the
control of the party for whom such insurance is carried.
C. Tenant agrees that throughout the term of this lease it will, at Tenant's
cost, keep all buildings and improvements situated on the demised premises
insured against fire and extended coverage perils, including malicious mischief
and vandalism and against all losses incident to
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any sprinkler system installed in the premises to the extent of the full
insurable value of said buildings and improvements with Replacement Cost
Endorsement. Such insurance shall be with insurance companies acceptable to
the Landlord. Tenant agrees to furnish, on the date of the commencement of
the lease term, Landlord with a copy of the insurance policy for such
insurance or a certificate as to such insurance from the insurance company,
which shall name the Landlord and the Landlord's mortgagee (if requested by
Landlord, as their interests may appear) and shall furnish such additional
policies as may be necessary to keep such insurance in continuous force and
effect during the lease term. Tenant agrees that all proceeds of insurance
on the demised premises shall be paid directly to the Landlord and the
Landlord's mortgagee. Tenant acknowledges the right of the Landlord to
assign the insurance proceeds to the Landlord's mortgagee in connection with
any mortgage indebtedness on the premises provided that Landlord agrees that
any mortgage it obtains on the premises will require the mortgagee to make
available to Landlord the insurance proceeds for the purpose of
reconstructing or rebuilding the premises, subject to such reasonable time
requirements and other conditions which the mortgagee may reasonably require.
Should Tenant fail to furnish such insurance, then the Landlord may, at its
option, supply such insurance and recover the amount expended from the Tenant
as additional rent.
19. WAIVER OF SUBROGATION. Each party hereby waives any and every claim
which arises or may arise in its favor and against the other party hereto
during the term of this lease or any extension or renewal thereof for any and
all loss of, or damage to, any of its property located within or upon, or
constituting a part of, the premises leased to the Tenant hereunder, which
loss or damage is covered by valid and collectible fire and extended coverage
insurance policies, to the extent that such loss or damage is recoverable
under said insurance policies. Said mutual waivers shall be in addition to,
and not in limitation or derogation of, any other waiver or release contained
in this lease with respect to any loss or damage to property of the parties
hereto. Inasmuch as the above mutual waivers will preclude the assignment of
any aforesaid claim by way of subrogation (or otherwise) to an insurance
company (or any other person), each party hereto hereby agrees immediately to
give to each insurance company which has issued to it policies of fire and
extended coverage insurance written notice of the terms of said mutual
waivers, and to have said insurance policies properly endorsed, if necessary,
to prevent the invalidation of said insurance coverages by reason of said
waivers.
20. HOLDING OVER: Should Tenant, or any of its successors in interest,
hold over the herein demised premises, or any part thereof, after the
expiration of the term of this lease, unless otherwise agreed in writing,
such holding-over shall constitute and be construed as tenancy from
month-to-month only at a monthly rental equal to the rent paid for the last
month of the term of this lease. Tenant shall pay rent until such
alterations and corrections as are required to be made by the Tenant are made
and until such additions and improvements as Tenant is entitled to remove
have been removed.
21. DEFAULT BY TENANT: The following events shall be deemed to be events
of default by Tenant under this lease:
A. Tenant shall fail to pay any installment of rent on the date the same is
due and such failure continues for a period of ten (10) days after Tenant
receives written notice thereof in
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which event Tenant shall pay as additional rental an amount equal to ten per
cent (10%) of the amount of rent in default. The penalty in this subparagraph
A shall not apply as long as Western Electric Company, Incorporated is in
possession of the premises.
B. Tenant shall fail to comply with any material term, provision or
covenant of this lease, other than the payment of rent, and shall not cure
such failure within thirty (30) days after written notice thereof to Tenant
or if such failure cannot reasonably be cured within the said thirty (30)
days and Tenant shall not have commenced to cure such failure within such
(30) day period and shall not thereafter with reasonable diligence and good
faith cure such failure.
C. Tenant shall become insolvent, or shall make a transfer in fraud of its
creditors, or shall make an assignment for the benefit of its creditors or
its interest is levied on by execution or other legal process.
D. Tenant shall file a petition under any section or chapter of the
National Bankruptcy Act, as amended, or under any similar law or statute of
the United States or any State thereof; or Tenant shall be adjudged bankrupt
or insolvent in proceedings filed against Tenant thereunder.
E. A receiver or trustee shall be appointed for all or substantially all
of the assets of Tenant.
Upon the occurrence of any of such events of default, the Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand whatsoever:
(1) Terminate this lease, in which event Tenant shall immediately
surrender the premises to Landlord, and if Tenant fails so to do Landlord
may, without prejudice to any other remedy which it may have for possession
or arrearages in rent, enter upon or take possession of the leased premises
and expel or remove Tenant and any other person who may be occupying said
premises or any part thereof, by force if necessary, without being liable for
prosecution or any claim for damages therefor; and Tenant agrees to pay to
Landlord on demand the amount of all loss and damage which the Landlord may
suffer by reason of such termination, whether through inability to relet the
premises on satisfactory terms or otherwise.
(2) Enter upon and take possession of the leased premises and expel or
remove Tenant and any other person who may be occupying said premises or any
part thereof, by force if necessary, without being liable for prosecution or
any claim for damages therefor, and mature the rental payments for the
balance of the lease term, and relet the premises and receive the rent
thereof; and Tenant agrees to pay to Landlord on demand any deficiency that
may arise by reason of such reletting.
(3) Enter upon the leased premises, by force if necessary, without
being liable for prosecution or any claim for damages therefor, and do
whatever Tenant is obligated to do under the terms of this lease, and Tenant
agrees to reimburse Landlord on demand for any expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this
lease, and Tenant further agrees that Landlord shall not be liable for any
damages resulting to the Tenant from such action, whether caused by the
negligence of Landlord or otherwise, provided Landlord acts reasonably.
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(4) Correct such default and recover the amounts expended from the
Tenant as additional rent.
(5) Enter upon and take custodial possession of the leased premises,
maintaining the same, and use reasonable efforts to relet the premises for
the balance of the lease term without thereby causing a termination or
anticipatory breach of the lease and Tenant agrees to pay the Landlord the
full amount of the rental, specified in the lease during the time that the
premises are vacant, and in addition thereto to pay the Landlord for any
deficiency by reason of reletting of the premises for less than the rental
specified in the lease agreement.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided by
law, nor shall pursuit of any remedy herein provided constitute a forfeiture
or waiver or any rent due to Landlord hereunder or any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants herein contained. Failure by Landlord to enforce one or more of
the remedies herein provided upon an event of a default shall not be deemed
or construed to constitute a waiver of such default, or of any other
violation or breach of any of the terms, provisions and covenants herein
contained.
If, on account of any breach or default by Tenant of the terms,
covenants and conditions of this lease, Landlord employs an attorney to
enforce Landlord's rights or remedies hereunder, Tenant shall be liable for
any reasonable attorney's fees incurred by Landlord.
23. LANDLORD'S RIGHT OF ENTRY: As long as there is no unreasonable
interference with Tenant's business, Landlord and its authorized agents shall
have the right to enter the demised premises during normal working hours for
the following purposes: (a) inspecting the general condition and state of
repair of the premises; (b) making repairs required of Landlord; (c) showing
the premises to any prospective tenant or purchaser; (d) showing the premises
for lease if the Tenant shall not have renewed or extended this lease; or (e)
showing the building for any other legal or reasonable purpose. If Tenant
shall not have renewed or extended this lease prior to the final one hundred
twenty (120) day period of the lease term, the Landlord and its authorized
agents shall have the right to erect on or about the demised premises a
customary sign advertising the property for lease or for sale.
24. NOTICES AND LEGAL ADDRESSES: Each provision of this instrument or any
applicable governmental laws, regulations, ordinances and any other
requirements with reference to the mailing, sending or delivery of any notice
or with reference to the making of any payment by Tenant to Landlord shall be
considered complied with when and if the following steps are taken:
A. All rent and other payments required to be made by the Tenant to
the Landlord hereunder shall be payable to the Landlord at Landlord's
address set forth hereinbelow, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance
herewith.
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B. Any notice or document required or permitted to be delivered
hereunder by Landlord or Tenant shall be deemed to be delivered when same
is deposited in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, addressed to the parties
hereto at their respective addresses.
25. PRIOR AGREEMENTS, AMENDMENTS: This agreement supersedes all prior
agreements and understandings, whether oral or written, and all
contemporaneous oral agreements and understandings relating to the demised
premises. No agreement hereafter made shall be effective to change, modify,
discharge or effect an abandonment of this lease, in whole or in part, unless
such agreement is in writing and signed by or on behalf of the party against
whom enforcement of the change, modification, discharge or abandonment is
sought.
26. SUCCESSORS: All of the terms, covenants and conditions contained in
this lease shall apply to, inure to the benefit of and be binding upon the
parties hereto and their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. All of the
rights, powers, privileges, immunities and duties of Landlord under this
lease, including, but not limited to, any notices required or permitted to be
delivered by Landlord to Tenant hereunder, may at Landlord's option be
exercised or performed by Landlord's agent or attorney.
27. CAPTIONS OR HEADINGS: The captions or headings of the paragraphs in
this agreement are inserted and included solely for convenience and shall
never be considered or given any effect in construing the provisions hereof
if any question of intent should arise.
28. SHORT FORM LEASE AND ESTOPPEL: Tenant and Landlord agree at any time,
on request of the other party, to execute a short form of this lease in form
permitting its recording which shall include appropriate references to the
options to extend the lease term and to purchase the demised premises.
Tenant agrees that from time to time, upon not less than ten (10) days'
prior written request by Landlord, it will deliver to Landlord a statement in
writing certifying that:
(a) The lease is unmodified and in full force and effect (or if there
have been modifications, that the lease as modified is in full force and
effect).
(b) The dates to which rent and other charges have been paid.
(c) Tenant has no knowledge of a default of Landlord under any
provision of the lease or if in default the nature thereof in detail.
(d) If requested by Landlord, it will not pay rent for more than one
month in advance and that such lease will not be amended without notice to
the Landlord's mortgagee and that same will not be terminated without the
same notice required by the lease to be furnished to the Landlord also
furnished to the Landlord's mortgagee.
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28a. The parties have executed a separate document granting Tenant certain
options to purchase the premises and the provisions of such document are an
integral part of this lease.
29. CONSENT: Landlord and Tenant agree that whenever consent or approval
is required of either of them under the terms of this lease, such consent or
approval will not be unreasonably withheld.
30. ATTORNEY'S FEES: In the event either party defaults in the performance
of any of the terms, covenants, agreements, or conditions contained in this
lease and the other party places the enforcement of this lease, or any
portion thereof, or the collection of any rent or charge due, or to become
due, or the recovery of the possession of the premises, in the hands of
attorneys, or files suit upon the same, the unsuccessful party agrees to pay
the reasonable attorneys' fees of the prevailing party.
31. BROKERAGE FEES: In connection with the negotiation and execution of
this lease agreement, J.L. Williams & Co., Inc. hereby represents (i) that no
brokers' commissions are payable as the result of this transaction, (ii) that
no brokerage commission or fee has been or will be paid to any individual,
firm, brokerage company or agency, and (iii) that no amount of money has been
or will be offered or paid, directly or indirectly, to any individual, firm,
agency, or company as a brokerage fee, commission, finder's fee, or otherwise
in regard to this transaction.
32. PARTIES: Wherever in this lease the name Western Electric Company,
Incorporated is used, it shall mean Western Electric Company, Incorporated,
any parent, affiliate, subsidiary, or any member of the Bell System.
33. RENEWAL OPTION:
A. If Western Electric Company, Incorporated is not in possession of
the leased premises at the time of giving notice and at the time of the
commencement of the term for which the option is exercised, and provided the
Tenant is not in default of any term, condition or covenant contained in this
lease and has not assigned or sublet the leased premises, the Tenant shall
have the option of renewing this lease for 5 additional terms of one (1) year
each on the same terms and conditions as provided herein, save and except
that $20,648.25 (the monthly rental during the primary term), which shall be
the base rental; provided, however, in no event shall the rental during a
renewal period be less than the rental during the primary term. The rental
for such month during the renewal lease term shall be determined by dividing
the base rental (the numerator) by the index number (denominator) for the
last day for which computation has been made in the column "All Items" in the
table "Consumer's Price Index - U.S. Average, All Items and Commodity
Groups," published monthly in the "Monthly Labor Review" of the Bureau of
Labor Statistics for the United States Department of Labor in the issue of
said "Monthly Labor Review" for the first month of the 15th year of the
primary lease term, and subsequently multiplying that amount (quotient) by
the index number for the last month of the last year of the primary lease
term. The product shall be the monthly rental during the renewal period. In
the event that the Bureau of Labor Statistics shall change the base period,
now 1967, the new index numbers shall be substituted for the old index
numbers in making the above
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computation. Said monthly payments of rental shall be paid in advance on the
same day of each month as rent was payable during the primary term of this
lease.
If the Tenant is granted more than one renewal, then the rental for the
second and subsequent renewal terms shall be determined for each of such
renewal terms by dividing the base rental (the numerator) by the index number
(denominator) for the last day for which computation has been made in the
column "All Items" in the table "Consumer's Price Index - U.S. Average, All
Items and Commodity Groups," published monthly in the "Monthly Labor Review"
of the Bureau of Labor Statistics for the United States Department of Labor
in the issue of said "Monthly Labor Review" for the first month of the 15th
year of the primary lease term, and subsequently multiplying that amount
(quotient) by the index number for the last month of the last year of the
previous renewal lease term.
In the Event of Discontinuation of Cost of Living Index: The above
mentioned cost of living index has been published continuously since 1913,
and the parties believe it improbable that same will be discontinued during
the term of this lease. It is agreed, however, that in the event the
Consumer's Price Index of the United States Bureau of Labor Statistics is
discontinued, the parties shall accept comparable statistics on the
purchasing power of the consumer's dollar as published at the time of said
discontinuance by a responsible financial periodical or recognized authority
to be then chosen by the parties. In the event the parties cannot agree upon
a financial periodical as the source of said comparable statistics after
attempting for ten (10) days to reach such an agreement, said periodical
shall be chosen by arbitration. Each of the parties shall choose one
arbitrator and said two arbitrators shall choose a third. The arbitrators
shall be approved reputable bankers in the community in which the premises
are located and shall be competent and impartial and of good moral and
business reputation. They shall be directed to deliver a report in writing,
signed by each of them, within twenty (20) days. The decision of any two of
said arbitrators shall be binding. The expenses of arbitration shall be
borne equally by the parties and the report of the arbitrators shall be
binding upon the Landlord and the Tenant.
Notice of the exercise of such option shall be given by Tenant to
Landlord in writing not later than 120 days prior to expiration of the
primary term hereof or any prior renewal term hereof.
B. Provided Western Electric Company, Incorporated is in possession of
the leased premises at the time of the commencement of the term for which the
options hereinafter provided are exercised and is not in default of any term,
condition or covenant contained in the lease, Western Electric Company,
Incorporated shall have the option of renewing this lease for five (5)
additional terms of one (1) year each on the same terms, conditions and
rental as provided for in the original term of this lease. Notice of the
exercise of such option shall be given by Tenant to Landlord as provided in A
above.
34. EXPANSION OPTIONS: Provided Western Electric Company, Incorporated is
the tenant in possession of the premises, then at any time during the term
hereof, prior to two (2) years before the expiration thereof, and during any
extension of the term by Tenant, Tenant shall have an unlimited number of
expansion options for improvements. For the purpose of this paragraph 34
"expansion" shall be deemed to occur only if Tenant desires to increase the
gross
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square feet of building space located on the premises by 15,000 square feet
or more. Any work not included within such definition shall be deemed an
alteration, addition or improvement pursuant to paragraph 5 hereof.
If Tenant seeks to expand the improvements as provided above, Tenant will
deliver to Landlord a written request for a bid for such expansion work and
upon receiving such written request by Tenant and after submission by Tenant
to Landlord of plans and specifications, Landlord will submit a lump-sum bid
to Tenant which will be good for a period of thirty (30) days.
In the event Tenant does not accept such lump-sum bid, Landlord shall obtain
bids from three (3) other contractors acceptable to Tenant and qualified to
perform the construction work for the expansion and Landlord shall submit a
revised bid. If one or more of those bids from other contractors, plus ten
percent (10%) of such bid to be added by Landlord, is lower than the revised
bid submitted by Landlord, Landlord shall have the option to contract with
such (lowest bid) contractor or to perform the expansion work at such lowest
bid plus ten percent (10%) thereof. If Landlord's revised bid is less than
the lowest bid of any of the other contractors, after adding ten percent
(10%) to the amount of such other contractor's bid, then Landlord shall
perform the expansion work at the amount of Landlord's revised bid. Landlord
may refuse to perform the expansion work at the lowest bid plus ten percent
(10%) thereof, and in such event Tenant shall have the right to have such
work performed by such lowest bidder without any compensation pursuant to
this paragraph 34 to Landlord. Tenant reserves the right to refuse to accept
any of such bids and in such event the expansion will not occur.
The cost of any expansion work performed by Landlord shall be paid on a
monthly basis by Tenant as the work is performed, less a retainage of ten
percent (10%) which shall be paid thirty (30) days after completion of the
work certified by Landlord's architect.
In the event that J.L. Williams & Co., Inc. is no longer Landlord, Tenant
shall have the right to perform expansion work with a contractor of its own
choosing, provided only that the landlord then in possession of the premises
shall be afforded an opportunity to bid, which bid or bids may be rejected by
Tenant in its sole discretion.
Any expansion work shall be in accordance with the standards set forth in
paragraph 5B relating to alterations, additions and improvements, and shall
be deemed an alteration, addition or improvement subject to the provisions of
said paragraph 5.
35. PURCHASE OF LAND: Landlord agrees to purchase from Tenant the property
described in Exhibit "A" and will pay Tenant therefor the sum of $575,000.00,
or such other amount as may be certified to by Tenant as being its total
cost, including commissions, attorneys' fees, closing costs and other
expenses in acquiring the property; provided, however, that to the extent
that such costs may vary from $575,000.00, such difference in land cost shall
be used in determining the rent as provided in Exhibit "B", Section 10(b).
Closing of said purchase of said property shall occur within seven (7) days
following the execution of the lease. Tenant agrees to assign to Landlord
the obligations relating to the installation of the water line which Tenant
acquired in connection with its purchase of said property. Landlord and
Tenant agree to cooperate in regard to the acquisition of the title to said
property so as to minimize the expense
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and avoid the unnecessary duplication of title insurance policies and
documentary or transfer stamps. Landlord agrees to accept conveyance of said
property subject to the conditions of title affecting the title set forth on
the attached binder as Exhibit "D" to this lease; otherwise free and clear of
all liens and encumbrances.
36. LIMITATION OF MORTGAGE AMOUNTS:
A. Landlord will limit the aggregate outstanding principal amount of
indebtedness form time to time outstanding and secured by one or more
mortgages covering the premises or any portion thereof in the following
amounts:
One hundred per cent (100%) of $2,679,000 at the end of the 60th month
Ninety-five per cent (95%) of $2,562,000 at the end of the 120th month
Ninety per cent (90%) of $2,374,000 at the end of the 180th month.
This lease shall not be subject and subordinate to, and Tenant shall not be
obligated to subordinate this lease to, any mortgages to the extent the same
secure indebtedness exceeding such amounts. For purposes of this paragraph,
the aggregate outstanding principal amount of indebtedness shall be computed
upon the assumption that all principal and interest payments to be made by
the mortgagor pursuant to its amortization schedule have been made,
regardless of whether or not the mortgagor has in fact made such payments.
B. Landlord agrees that the aggregate amount of all monthly payments under
any permanent mortgage or mortgages to which this lease shall be subordinate
shall not exceed the monthly rental payments provided for in this lease.
37. TENANT'S REMEDIES:
A. Landlord shall use its best efforts to obtain a provision in any
mortgage which may hereafter be placed on or against the premises that the
Mortgagee shall give the Tenant written notice of any default under said
mortgage and twenty (20) days within which to cure said default. If Landlord
is not able, in spite of its best efforts, to obtain agreement from its
Mortgagee to the above provision, Landlord agrees to furnish Tenant
appropriate evidence that it has made all payments and performed all
obligations required under the mortgage within ten (10) days after such
payments or obligations are required. "Best efforts", as used herein, does
not require the Landlord to pay additional interest or other additional
amounts.
B. In the event of a default by the Landlord in any of the payments due
under any mortgage to which this lease may be subordinated, the Tenant, upon
ten (10) days' written notice to the Landlord, sent by registered or
certified mail, shall, if such default is not cured, have the right to cure
the same by applying thereto on behalf of the Landlord such rental payments
as may thereafter come due, and when so applied, said rental payments shall
be considered as having been duly made to Landlord.
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C. Landlord agrees that upon its failure to perform its obligations
hereunder, Tenant may, after giving not less than twenty (20) days' written
notice to Landlord and any first mortgagee of which it has actual knowledge,
take any reasonable steps to cure such failure and deduct any amounts so
expended from the monthly rentals subsequently accruing.
EXECUTED this 12th day of June, 1975.
LANDLORD
J. L. Williams & Co., Inc.
Attest:
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