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INDUSTRIAL BUILDING LEASE

Industrial Lease Agreement

INDUSTRIAL BUILDING LEASE | Document Parties: SED INTERNATIONAL HOLDINGS INC | CRI Corporate Center, LLC You are currently viewing:
This Industrial Lease Agreement involves

SED INTERNATIONAL HOLDINGS INC | CRI Corporate Center, LLC

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Title: INDUSTRIAL BUILDING LEASE
Governing Law: Florida     Date: 2/14/2007
Industry: Computer Hardware     Law Firm: Piper Rudnick LLP    

INDUSTRIAL BUILDING LEASE, Parties: sed international holdings inc , cri corporate center  llc
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EXHIBIT 10.61

INDUSTRIAL BUILDING LEASE

      1.  Basic Terms:

          This Section 1 contains the Basic Terms of this Lease between Landlord and Tenant, named below. Other Sections of the Lease referred to in this Section 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.

 

1.1

 

Date of Lease: October 01, 2006

 

 

 

 

 

1.2

 

Landlord: CRI Corporate Center, LLC, a Florida limited liability company

 

 

 

 

 

1.3

 

Tenant: SED International, Inc.

 

 

 

 

 

1.4

 

Premises: Approximately 2,400 rentable square feet included in the Improvements (as defined in Exhibit “A” hereto).

 

 

 

 

 

1.5

 

Property: See Exhibit “A”.

 

 

 

 

 

1.6

 

Lease Term: NINETEEN ( 19 ) months (“Term”), commencing October 1, 2006 (“Commencement Date”) and ending April 30, 2008, subject to Section 2.3 below (“Expiration Date”).

 

 

 

 

 

1.7

 

Permitted Uses: Computers ELECTRONIC EQUIP. SALES AND DISTRIBUTION

 

 

 

 

 

1.8

 

Tenant’s Guarantor: (if none, so state): None

 

 

 

 

 

1.9

 

Brokers: (See Section 23; if none, so state)

 

(A)

 

Tenant’s Broker: None

 

 

 

 

 

(B)

 

Landlord’s Broker: PRLM, Inc. — Pauline A. Pappas

 

 

1.10

 

Security/Damage Deposit: (See Section 4.4) $2,500.00

 

 

 

 

 

1.11

 

Vehicle Parking Ratio Allocated Tenant: (See Section 4) 2.2 spaces: 1,000 square feet leased.

 

 

 

 

 

1.12

 

Initial year, monthly base rent (Sec Section 2.2): $ 1,500.00

 

 

 

 

 

1.13

 

Initial Estimated Additional Rent Payable by Tenant (Sec Section 3): $556.00 per month

 

 

 

 

 

1.14

 

Tenant’s Proportionate Share: 2.23%

 

 

 

 

 

1.15

 

Exhibits to Lease: The following exhibits are attached to and made a part of this Lease.

 

(1)

 

Exhibit “A,” Description of Property.

 

 

 

 

 

(2)

 

Exhibit “B,” Landlord’s Repairs and Improvements

 

 

 

 

 

(3)

 

Exhibit “C,” Broom Clean Condition and Repair Requirements

 

 

 

 

 

(4)

 

Exhibit “D,” Notice Regarding Mechanic Liens

 


 

 

      2.  Lease Of Premises; Rent.

          2.1 Lease of Premises for Lease Term. Landlord hereby leases the Premises to Tenant, and Tenant hereby rents the Premises from Landlord, for the Term and subject to the conditions of this Lease.

          2.2 Types of Rental Payments. Tenant shall pay net base rent to Landlord in monthly installments, in advance, on the first (1 st ) day of each and every calendar month during the Term of this Lease (the “Base Rent”) in the amounts and for the periods set forth below:

 

 

 

 

 

Lease Period

 

Monthly Base Rent

October 1, 2006 — October 31, 2006

 

$-0- Additional rent due and payable ($2.78 sf)

 

 

 

 

 

November 1, 2006 — September 30, 2007

 

$

1,500.00

 

     The Base Rent escalates $0.50 per square foot for every twelve-consecutive month period during the Term over the Base Rent prevailing in the immediately preceding twelve-consecutive month period as follows:

 

 

 

 

 

Lease Period

 

Monthly Base Rent

October 1, 2007 — April 30, 2008

 

$

1,600.00

 

     Tenant shall also pay Tenant’s Proportionate Share (as set forth in Section 1.14) of Operating Expenses (as hereinafter defined under Section 3) and any other amounts owed by Tenant hereunder (collectively, “Additional Rent”). In the event any monthly installment of Base Rent or Additional Rent, or both, is not paid within five (5) days of the date when due, a late charge in an amount equal to five percent (5%) of the then-delinquent installment of Base Rent and/or Additional Rent (the “Late Charge”), [the Late Charge, Default Rate (as defined in Section 22.3 below). Base Rent and Additional Rent shall collectively be referred to as “Rent”)] to Landlord, c/o PRLM. Inc. P.O. Box 48547, St. Petersburg, Florida 33743-8547 (or such other entity designated as Landlord’s management agent (the “Agent”), or pursuant to such other directions as Landlord shall designate in this Lease or otherwise in writing.

          2.3 Covenants Concerning Rental Payments. Tenant shall pay all Rent promptly when due, without notice or demand, and without any abatement, deduction or setoff, except as may otherwise be expressly and specifically provided in this Lease. No payment by Tenant, or receipt or acceptance by Agent or Landlord, of a lesser amount than the correct Rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or letter accompanying any payment be deemed an accord or satisfaction, and Agent or Landlord may accept such payment without prejudice to its rights or remedies. If the Commencement Date occurs on a day other than the first (1 st ) day of a calendar month, the Rent due for the first (1 st ) calendar month of the Term shall be prorated on a per diem basis and paid to Landlord on the Commencement Date, and the Term will be extended to terminate on the last day of the calendar month in which the Expiration Date stated in Section 1.6 occurs.

3. Operating Expenses.

          3.1 Definitional Terms Relating to Additional Rent. For purposes of this Section and other relevant provisions of the Lease:

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          3.1.1 Operating Expenses. The term “Operating Expenses” shall mean all costs and expenses paid or incurred with respect to the ownership, repair, replacement, restoration, maintenance and operation of the Property, including, without limitation, the following: (i) services provided directly by employees of Landlord or Agent in connection with the operation, maintenance or rendition of other services to or for the Property; (ii) to the extent not separately metered, billed or furnished, all charges for utilities and services furnished to either or both of the Property and the Premises (including, without limitation, the Common Areas [as hereinafter defined]), together with any taxes on such utilities; (iii) all premiums for casualty, workers’ compensation, liability, boiler, terrorism, flood and all other types of insurance provided by Landlord and relating to the Property, all third-party administrative costs incurred in connection with the procurement and implementation of such insurance policies, and all deductibles paid by Landlord pursuant to insurance policies required to be maintained by Landlord under this Lease; (iv) the cost of all supplies, tools, materials and equipment utilized in the ownership and operation of the Property, and sales and other taxes thereon: (v) amounts charged (including, without limitation, those costs and expenses set forth in Section 13.2(i) below) by any or all of contractors, materialmen and suppliers for services, materials and supplies furnished to Landlord in connection with any or all of the operation, repair and maintenance of any part of the Property (together with a reasonable overhead and administrative fee to Landlord), including, without limitation, the structural elements of the Property and the Common Areas: (vi) management fees to Landlord or Agent or other persons or management entities actually involved in the management and operation of the Property; (vii) any capital improvements made by, or on behalf of, Landlord to the Property that are either or both (a) designed to reduce Operating Expenses and (b) required to keep the Property in compliance with all governmental laws, rules and regulations applicable thereto, from time to time, the cost of which capital improvements shall be reasonably amortized by Landlord over the useful life of the improvement, in accordance with generally accepted accounting principles: (viii) all professional fees incurred in connection with the operation, management and maintenance of the Property; and (ix) Taxes, as hereinafter defined in Section 3.1.2.

          3.1.2 Taxes. The term “Taxes”, as referred to in Section 3.1.1 (ix) above shall mean (i) all governmental taxes, assessments, fees and charges of every kind or nature (other than Landlord’s income taxes), whether general, special, ordinary or extraordinary, due at any time or from time to time, during the Term and any extensions thereof, in connection with the ownership, leasing or operation of the Property, or of the personal property and equipment located therein or used in connection therewith: and (ii) any reasonable expenses incurred by Landlord in contesting such taxes or assessments and/or the assessed value of the Property. For purposes hereof, Taxes for any year shall be Taxes that are due for payment or paid in that year rather than Taxes that are assessed, become a lien, or accrue during such year.

          3.1.3 Operating Year. The term “Operating Year” shall mean the calendar year commencing January 1 st of each year (including the calendar year within which the Commencement Date occurs) during the Term.

          3.2 Payment of Additional Rent. Landlord shall have the right to reasonably estimate the Operating Expenses for each Operating Year. Upon Landlord’s or Agent’s notice to Tenant of such estimated amount. Tenant shall pay, on the first (1 st ) day of each month during that Operating Year, an amount (the “Estimated Additional Rent”) equal to the estimate of the Tenant’s Proportionate Share of Operating Expenses divided by twelve (12) (or the fractional portion of the Operating Year remaining at the time Landlord delivers its notice of the estimated amounts due from Tenant for that Operating Year). If the aggregate amount of Estimated Additional Rent actually paid by Tenant during any Operating Year is less than Tenant’s actual ultimate liability for Operating Expenses for that particular Operating Year, Tenant shall pay the deficiency within thirty (30) days of Landlord’s written demand therefor. If the aggregate amount of Estimated Additional Rent actually paid by Tenant during a given Operating Year exceeds Tenant’s actual liability for such Operating Year, the excess shall be

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credited against the Estimated Additional Rent next due from Tenant during the immediately subsequent Operating Year, except that in the event that such excess is paid by Tenant during the final Lease Year, then upon the expiration of the Term, Landlord or Agent shall pay Tenant the then-applicable excess promptly after determination thereof.

      4.  Use Of Premises And Common Areas: Security/Damage Deposit.

          4.1 Use of Premises and Property. The Premises shall be used solely by the Tenant for the purpose(s) set forth in Section 1.7 above and for no other purpose whatsoever.

          4.2 Use of Common Areas. As used herein, “Common Areas” shall mean all areas within the Property that are available for the common use of tenants of the Property and that are not leased or held for the exclusive use of Tenant or other tenants or licensees, including, but not limited to, parking areas, driveways, sidewalks, loading areas, access roads, corridors, landscaping and planted areas. Tenant shall have the nonexclusive right to use the Common Areas for the purposes intended, subject to such reasonable rules and regulations as Landlord may uniformly establish from time to time. Tenant shall not interfere with the rights of any or all of Landlord, other tenants or licensees, or any other person entitled to use the Common Areas. Landlord, from time to time, may change any or all of the size, location, nature and use of any of the Common Areas so long as such changes do not materially and adversely affect Tenant’s use of the Premises. Landlord may, at any time, close or suspend access to any Common Areas to perform any acts in the Common Areas as, in Landlord’s reasonable judgment, desirable to improve, maintain or repair either or both of the Premises and the Property.

          4.3 Signage. Tenant shall not affix any sign of any size or character to any portion of the Property, without prior written approval of Landlord. Tenant shall remove all signs of Tenant upon the expiration or earlier termination of this Lease and immediately repair any damage to either or both of the Property and the Premises caused by, or resulting from, such removal.

          4.4 Security/Damage Deposit. Simultaneously with the execution and delivery of this Lease. Tenant shall deposit with Landlord or Agent the sum set forth in Section 1.10 above, in cash (the “Security”), representing security for the performance by Tenant of the covenants and obligations hereunder. The Security shall be held by Landlord or Agent, without interest, in favor of Tenant; provided, however, that no trust relationship shall be deemed created thereby and the Security may be commingled with other assets of Landlord. If Tenant defaults in the performance of any of its covenants hereunder. Landlord or Agent may, without notice Tenant, apply all or any part of the Security, to the extent required for the payment of any Rent or other sums due from Tenant hereunder, in addition to any other remedies available to Landlord. In the event the Security is so applied. Tenant shall, upon demand, immediately deposit with Landlord or Agent a sum equal to the amount so used. If Tenant fully and faithfully complies with all the covenants and obligations hereunder, the Security (or any balance thereof) shall be returned to Tenant within thirty (30)  days after the last to occur of (i) the date the Term expires or terminates or (ii) delivery to Landlord of possession of the Premises. Landlord may deliver the Security to any purchaser of Landlord’s interest in the Premises [or any Successor Landlord (defined below), if applicable], and thereupon Landlord and Agent shall be discharged from any further liability with respect to the Security.

          4.5 Parking. Tenant and Tenant’s employees, agents and invitees (hereinafter referred to as “Tenant’s Affiliates”) shall be entitled to utilize only the amount of parking spaces as is consistent with the size of the Premises and the overall ratio of parking spaces to leasable space provided in the Property, as given in Section 1.11. Neither Tenant nor Tenant’s Affiliates shall with their vehicles block parking areas or hinder normal traffic flow within the Property. Violation of this paragraph by Tenant or Tenant’s Affiliates shall be a default under this Lease. The Landlord reserves the right to

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control the method, manner and time of, however, Landlord shall not be responsible for policing, such parking. Tenant hereby agrees and acknowledges that the Vehicle Parking Ratio Allocated Tenant pursuant to Section 1.11 hereof is not a guaranty that specific spaces or the number of spaces will be available at all times. Tenant acknowledges that the Property is a multi-use project occupied by various tenants which share the parking spaces located on the Property and is accessible by customers and invitees of all tenants.

      5.  Condition And Delivery Of Premises.

          5.1 Condition of Premises. Tenant agrees that Tenant is familiar with the condition of both the Premises and the Property, and Tenant hereby accepts the foregoing on an “AS-IS.” “WHERE-IS” basis. Tenant acknowledges that neither Landlord nor Agent, nor any representative of Landlord, has made any representation as to the condition of the foregoing or the suitability of the foregoing for Tenant’s intended use. Tenant represents and warrants that Tenant has made its own inspection of the foregoing. Neither Landlord nor Agent shall be obligated to make any repairs, replacements or improvements (whether structural or otherwise) of any kind or nature to the foregoing in connection with, or in consideration of, this Lease, except (a) as set forth in Sections 13.2 and 18 and (b) with respect to all (if any) repairs and improvements expressly and specifically described in Exhibit “B” attached hereto (“Landlord Work Items”).

          5.2 Delay in Commencement. Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Premises to Tenant on the Commencement Date. The obligations of Tenant under the Lease shall not be affected thereby, except that the Commencement Date shall be delayed until Landlord delivers possession of the Premises to Tenant, and the Lease Term shall be extended by a period equal to the number of days of delay in delivery of possession of the Premises to Tenant, plus the number of days necessary to end the Lease Term on the last day of a month. In the event Landlord is required by local governmental authority to obtain building permits to perform the Landlord Work Items, the date of delivery of the Premises by Landlord shall be deemed the day following the date upon which the Landlord receives from such authority: (a) the Certificate of Occupancy (temporary or permanent) for the Premises, or (b) all final inspections pertaining to the Landlord Work Items, or (c) other consent as deemed adequate by Landlord. Tenant shall not occupy the Premises in any manner until one of such consents is obtained.

      6.  Subordination: Notices To Superior Lessors And Mortgagees; Attornment.

          6.1 Subordination. This Lease shall be subject and subordinate at all times to (a) any mortgage that may now exist or hereafter be placed upon, and encumber, any or all of the Property. Tenant shall execute and deliver, within seven (7) days after delivery thereof by Landlord, and in the form requested by Landlord, any additional documents evidencing the subordination of this Lease with respect to any such mortgage or deed of trust. Failure by Tenant to timely execute and deliver such documents constitutes an acceptance of the terms of such documents, and Tenant hereby appoints Landlord as its attorney-in-fact to execute such documents on Tenant’s behalf.

          6.2 Estoppel Certificate. Tenant agrees, from time to time and within seven (7) days after request by Landlord, to deliver to Landlord, or Landlord’s designee, an estoppel certificate stating such matters pertaining to this Lease as may be requested by Landlord. Failure by Tenant to timely execute and deliver such certificate shall constitute an acceptance of the Premises and acknowledgment by Tenant that the statements included therein are true and correct without exception. Landlord and Tenant intend that any statement delivered pursuant to this Section may be relied upon by any prospective purchaser or mortgagee of the Property or of any interest therein or any other Landlord designee.

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          6.3 Transfer for Landlord. In the event of a sale or conveyance by Landlord of the Property, the same shall operate to release Landlord from any future liability for any of the covenants or conditions, express or implied, herein contained in favor of Tenant, and in such event Tenant agrees to look solely to Landlord’s successor in interest with respect thereto and agrees to attorn to such successor.

      7.  Quiet Enjoyment.

          Subject to the provisions of this Lease, so long as Tenant pays all of the Rent and performs all of its other obligations hereunder, Tenant shall not be disturbed in its possession of the Premises by Landlord. Agent or any other person lawfully claiming through or under Landlord; provided, however, in addition to Landlord’s rights under Section 16 and elsewhere in this Lease, Landlord and Landlord’s agents, employees, contractors and representatives shall be provided reasonable access to the Premises such that Landlord and Landlord’s agents, employees, contractors and representatives may perform the General Maintenance Services (as hereinafter defined) without undue interruption, delay or hindrance. This covenant shall be construed as a covenant running with the Property and is not a personal covenant of Landlord.

      8.  Assignment, Subletting And Mortgaging.

          8.1 Prohibition. Tenant acknowledges that this Lease and the Rent due under this Lease have been agreed to by Landlord in reliance upon Tenant’s reputation and creditworthiness and upon the continued operation of the Premises by Tenant for the particular use described in Section 1.7 above; therefore, Tenant shall not, whether voluntarily, or by operation of law, or otherwise: (a) assign or otherwise transfer this Lease; (b) sublet the Premises or any part thereof, or allow the same to be used or occupied by anyone other than Tenant; or (c) mortgage, pledge, encumber, or otherwise hypothecate this Lease or the Premises, or any part thereof, in any manner whatsoever, without in each instance obtaining the prior written consent of Landlord, which consent may be given or withheld in Landlord’s absolute and sole discretion. Any purported assignment, mortgage, transfer, pledge or sublease made without the prior written consent of Landlord, shall be absolutely null and void. Any consent by Landlord to a particular assignment, sublease or mortgage shall not constitute consent or approval of any subsequent assignment, sublease or mortgage. No consent by Landlord to any assignment or sublease shall be deemed to release Tenant from its obligations hereunder and Tenant shall remain fully liable for performance of all obligations under this Lease.

          8.2 Rights of Landlord. If this Lease is assigned, or if the Premises (or any part thereof) are sublet or used or occupied by anyone other than Tenant, whether or not in violation of this Lease, Landlord or Agent may (without prejudice to, or waiver of its rights), collect Rent from the assignee, subtenant or occupant. Landlord or Agent may apply the net amount collected to the Rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any of the provisions of this Section 8. With respect to the allocable portion of the Premises sublet, in the event that the total rent and any other considerations received under any sublease by Tenant is greater than the total Rent required to be paid, from time to time, under this Lease. Tenant shall pay to Landlord one hundred percent (100%) of such excess as received from any subtenant and such amount shall be deemed a component of the Additional Rent.

          8.3 Transfers. The provisions of Section 8.1 (a) shall apply to a transfer of a majority (i.e., greater than fifty percent (50%) interest) of the voting stock of Tenant or to any other change in voting control of Tenant (if Tenant is a corporation), or to a transfer of a majority of the general partnership or membership interests in Tenant (if Tenant is a partnership or a limited liability company) or to a change in the managerial control of Tenant, or to any comparable transaction involving any other

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form of business entity, whether effectuated in one or more transactions, as if such transfer were an assignment of this Lease.

      9.  Compliance With Laws.

          9.1 Compliance with Laws. Tenant shall, at its sole expense (regardless of the cost thereof), comply with all local, state and federal laws, rules, regulations and requirements now or hereafter in force and all judicial and administrative decisions in connection with the enforcement thereof (collectively. “Laws”), pertaining to either or both of the Premises and Tenant’s use and occupancy thereof. Tenant shall give prompt notice to Landlord of any written notice it receives of the alleged violation of any Law or requirement of any governmental or administrative authority with respect to either or both of the Premises and the use or occupation thereof.

          9.2 Hazardous Materials. Tenant shall not generate, transport, store, use, treat or dispose any Hazardous Material (defined below) at, to, from, on or in either or both of the Premises and the Property by, or as a result of any act or omission of, any or all of Tenant and any or all of Tenant’s Parties (defined below). Tenant shall, at its own cost, at all times comply (and cause all others to comply) with all laws (federal, state or local) relating to Hazardous Materials, including, but not limited to, all Environmental Laws (defined below). Tenant shall promptly provide Landlord or Agent with complete copies of all communications, permits or agreements with, from or issued by any governmental authority or agency (federal, state or local) or any private entity relating in any way to the presence, release, threat of release, or placement of Hazardous Materials on or in the Premises or any portion of the Property, or the generation, transportation, storage, use, treatment, or disposal at, on, in or from the Premises, of any Hazardous Materials. Landlord, Agent and their respective agents and employees shall have the right to either or both (x) enter the Premises and (y) conduct appropriate tests for the purposes of ascertaining Tenant’s compliance with all applicable laws (including Environmental Laws), rules or permits relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from all or any portion of either or both of the Premises and the Property. Upon written request by Landlord or Agent. Tenant shall provide Landlord with the results of reasonably appropriate tests of air, water or soil to demonstrate that Tenant complies with all applicable laws, rules or permits relating in any way to the generation, transport, storage, use, treatment, disposal or presence of Hazardous Materials on, at, in or from all or any portion of either or both of the Premises and the Property. Tenant covenants to investigate, clean up and otherwise remediate, at Tenant’s sole expense, any release of Hazardous Materials caused, contributed to, or created by any or all of (A) Tenant and (B) any or all of Tenant’s officers, directors, members, managers, partners, invitees, agents, employees, contractors or representatives (“Tenant Parties”) during the Term. Such investigation and remediation shall be performed only after Tenant has obtained Landlord’s prior written consent; provided, however, that Tenant shall be entitled to respond immediately to an emergency without first obtaining such consent. All remediation shall be performed in strict compliance with Environmental Laws and to the reasonable satisfaction of Landlord. Tenant shall be liable for any and all conditions covered hereby, and for all costs relating thereto, that are caused or created by any or all of Tenant and any or all of Tenant’s Parties. Tenant shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Materials in any way connected to the Premises without first obtaining Landlord’s written consent (which consent may be given or withheld in Landlord’s sole discretion and affording Landlord the reasonable opportunity to participate in any such proceedings.) As used herein, the term (x) “Environmental Laws” shall mean any and all laws pertaining to Hazardous Materials or that otherwise deal with, or relate to, air or water quality, air emissions, soil or ground conditions or other environmental matters of any kind: and (y) “Hazardous Materials” shall mean any waste, material or substance (whether in the form of liquids, solids or gases, and whether or not airborne) that is or may be deemed to be or include a pesticide, petroleum, asbestos, polychlorinated biphenyl, radioactive material, area formaldehyde or any other pollutant or contaminant that is or may be deemed to

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be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or that presents a risk to public health or to the environment, and that is or becomes regulated by any Environmental Law. The undertakings, covenants and obligations imposed on Tenant under this Section 9.2 shall survive the termination or expiration of this Lease.

      10.  Insurance.

          10.1 Insurance to be Maintained by Landlord. Landlord shall maintain (a) “all-risk” property insurance policy covering the Property (at its full replacement cost), but excluding Tenant’s Property (defined below), and (b) commercial general public liability insurance covering Landlord for claims arising out of liability for bodily injury, death, personal injury, advertising injury and property damage occurring in and about the Property and otherwise resulting from any acts and operations of Landlord, its agents and employees, (c) rent loss insurance, and (d) any and all other insurance required by any lender(s) of Landlord, all of the above with limits that are required by any lender(s) of Landlord, or as are otherwise reasonably determined by Landlord.

          10.2 Insurance to be Maintained by Tenant. Tenant shall purchase, at its own expense, and keep in force at all times during this Lease the policies of insurance set forth below in Sections 10.2.1 and 10.2.2 (collectively, “Tenant’s Policies”). All Tenant’s Policies shall (a) be issued by an insurance company with a Best rating of A-X or better and otherwise reasonably acceptable to Landlord and shall be licensed to do business in the state in which the Property is located; (b) provide that said insurance shall not be cancelled or materially modified unless thirty (30) days’ prior written notice shall have been given to Landlord; and (c) otherwise be in such form, and include such coverages, as Landlord may reasonably require. All Tenant’s Policies (or, at Landlord’s option, Certificates of Insurance, in a form reasonably acceptable to Landlord, evidencing said Tenant’s Policies), shall be delivered to Landlord by Tenant prior to commencement of the Lease and renewals thereof shall be delivered at least thirty (30) days prior to the expiration of each Tenant’s Policy. Tenant shall give prompt notice to Landlord and Agent of any bodily injury, death, personal injury, advertising injury or property damage occurring in and about the Property.

          10.2.1 General Liability and Auto Insurance. Tenant shall purchase and maintain, throughout the Term, a Tenant’s Policy(ies) of (i) commercial general or excess liability insurance, including personal injury and property damage, in the amount of not less than $2,000,000,00 per occurrence, and $5,000,000,00 annual general aggregate, per location: (ii) comprehensive automobile liability insurance covering Tenant against any losses arising out of liability for personal injuries or deaths of persons and property damage occurring in or about the Premises in the amount of not less than $1,000,000, combined single limit. The Tenant’s Policies required by this Section 10.2.1 shall (a) name Landlord, Agent, and any party holding an interest to which this Lease may be subordinated as additional insureds: (b) provide coverage on an occurrence basis; (c) provide coverage for the indemnity obligations of Tenant under this Lease: (d) contain a severability of insured parties provision and/or a cross liability endorsement: (e) be primary, not contributing with, and not in excess of, coverage that Landlord may carry; and (f) provide coverage with no exclusion for a pollution incident arising from a hostile fire.

          10.2.2 Property and Workers’ Compensation Insurance. Tenant shall purchase and maintain, throughout the Term, a Tenant’s Policy or Policies of (i) “all-risk” property insurance covering Tenant’s Property (at its full replacement cost), and damage to other property resulting from any acts or operations of Tenant, and (ii) workers” compensation insurance per the applicable state statutes covering all employees of Tenant.

          10.3 Waiver of Subrogation. To the extent permitted by law, and without affecting the coverage provided by insurance required to be maintained hereunder. Landlord and Tenant each

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waive any right to recover against the other for (a) damages to property, (b) damages to all or any portion of either or both of the Premises and the Property, (c) claims arising by reason of the foregoing, to the extent such damages and claims are insured against, or required to be insured against, by Landlord or Tenant under this Lease, or (d) claims paid by Tenant’s workers’ compensation carrier. This provision is intended to waive, fully and for the benefit of each party, any rights and/or claims which might give rise to a right of subrogation by any insurance carrier. The coverage obtained by each party pursuant to this Lease shall include, without limitation, a waiver of subrogation by the carrier which conforms to the provisions of this section.

      11.  Alterations.

          11.1 Procedural Requirements. Tenant may, from time to time, at is expense, make alterations or improvements in and to the Premises (hereinafter collectively referred to as “Alterations”), provided that Tenant first obtains the written consent of Landlord in each instance which may be withheld in Landlord’s sole and absolute discretion. Before proceeding with any Alterations, Tenant shall (i) at Tenant’s expense, obtain all necessary governmental permits and certificates for the commencement and prosecution of Alterations; (ii) submit to Agent, for Landlord’s written approval, working drawings, plans and specifications and all permits for the work to be done and Tenant shall not proceed with such Alterations until it has received said approval; and (iii) cause those contractors, materialmen and suppliers engage to perform the Alterations to deliver to Landlord certificates of insurance (in a form reasonably acceptable to Landlord) evidencing policies of commercial general liability insurance (providing the same coverages as required in Section 10.2.1 above) and workers’ compensation insurance. After obtaining Landlord’s approval to the Alterations, Tenant shall give Landlord at least five (5) days’ prior written notice of the commencement of any Alterations at the Premises, and Landlord may elect to record and post notices of non-responsibility at the Premises.

          11.2 Performance of Alterations. Tenant shall cause the Alterations to be performed in compliance with all applicable permits, laws and requirements of public authorities, and with Landlord’s reasonable rules and regulations or any other restrictions that Landlord or Agent may impose on the Alterations. Tenant shall cause the Alterations to be diligently performed in a good and workmanlike manner, using new materials and equipment at least equal in quality and class to the standards for the Property established by Landlord or Agent. Alterations shall be performed by properly licensed contractors first approved by Landlord. Tenant shall obtain all necessary permits and certificates for final governmental approval of the Alterations and shall provide Landlord with “as-built” plans, copies of all construction contracts, governmental permits and certificates and proof of payment for all labor and materials, including, without limitation, copies of paid invoices and final lien waivers.

          11.3 Lien Prohibition. Tenant shall pay when due all claims for labor and material furnished to the Premises in connection with the Alterations. Tenant shall not permit any mechanics or materialmen’s liens to attach to the Premises or the Property. Tenant at its expense, shall procure the satisfaction or discharge of record of all such liens and encumbrances within thirty (30) days after the filing thereof; or, within such thirty (30) day period, Tenant shall provide Landlord, at Tenant’s sole expense, with endorsements (satisfactory, both in form and substance, to Landlord and the holder of any mortgage) to the existing title insurance policies of Landlord and the holder of any mortgage, insuring against the existence of, any attempted enforcement of, such lien or encumbrance. In the event Tenant has not so performed, Landlord may, at its option, pay and discharge such liens and Tenant shall be responsible to reimburse Landlord, on demand and as Additional Rent under this Lease, for all costs and expenses incurred in connection therewith, together with interest thereon at the rate set forth in Section 22.3, which expenses shall include reasonable fees of attorneys of Landlord’s choosing, and any costs in posting bond to effect discharge or release of the lien as an encumbrance against the Premises or the Property. Tenant agrees to and shall indemnify and save Landlord free and harmless against liability.

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loss, damage, costs or expense, including attorney’s fees and costs of discovery and suit, on account of claims of liens of laborers or materialmen or others for Alterations performed for, or materials supplies furnished to, Tenant or persons claiming under Tenant.

          The language of this provision shall be binding upon the Landlord, its successors and assigns, and the heirs, assignees, administrators, legal representatives, executors or successors of the Tenant.

          THE INTEREST OF THE LANDLORD IN THE PREMISES AND THE PROPERTY SHALL NOT, UNDER ANY CIRCUMSTANCES, BE SUBJECT TO LIENS FOR ALTERATIONS MADE BY THE TENANT OR ANY OTHER ACT OF TENANT.

          If a memorandum of this Lease or a Notice of Commencement by Tenant is recorded, a notice concerning this provision of this Lease will be executed by Landlord and recorded with the clerk of the Court of the County named in Section 1.3. This Notice reads as set forth on Exhibit D.

      12.  Landlord’s And Tenant’s Property.

          12.1 Landlord’s Property. Subject to Section 12.2, all fixtures, machinery, equipment, improvements and appurtenances attached to, or built into, the Premises at the commencement of, or during the Term, whether or not placed there by or at the expense of Tenant, shall become and remain a part of the Premises; shall be deemed the property of Landlord (the “Landlord’s Property”), without compensation or credit to Tenant; and shall not be removed by Tenant at the Expiration Date unless Landlord requests their removal. Further, any personal property in the Premises on the Commencement Date, movable or otherwise, unless installed and paid for by Tenant, shall be and shall remain the property of Landlord and shall not be removed by Tenant. In no event shall Tenant remove any of the following materials or equipment without Landlord’s prior written consent (which consent may be given or withheld in Landlord’s sole and absolute discretion): any power wiring or power panels, lighting or lighting fixtures, wall or window coverings, carpets or other floor coverings, heaters, air conditioners or any other HVAC equipment, fencing or security gates, or other similar building operating equipment and decorations.

          12.2 Tenant’s Property. All movable non-structural partitions, business and trade fixtures, machinery and equipment, communications equipment and office equipment, that are installed in the Premises by, or for the account of, Tenant without expense to Landlord and that can be removed without structural damage to the Property, and all furniture, furnishings and other articles of movable personal property owned by Tenant and located in the Premises (collectively, the “Tenant’s Property”) shall be and shall remain the property of Tenant and may be removed by Tenant at any time during the Term, provided Tenant repairs or pays the cost of repairing any damage to the Premises or to the Property resulting from the installation and/or removal thereof. At or before the Expiration Date, or the date of any earlier termination. Tenant, at its expense, shall remove from the Premises all of Tenant’s Property and any Alterations (except such items thereof as constitute Landlord’s Property; or as Landlord shall have expressly permitted, in writing, to remain, which property shall become the property of Landlord), and Tenant shall repair (to Landlord’s reasonable satisfaction) any damage to the Premises or the Property resulting from any installation and/or removal of Tenant’s Property. Any other items of Tenant’s Property that shall remain in the Premises after the Expiration Date, or following an earlier termination date, may, at the option of Landlord, be deemed to have been abandoned, and in such case, such items may be retained by Landlord as its property or be disposed of by Landlord, in Landlord’s sole and absolute discretion and without accountability, at Tenant’s expense. Notwithstanding the foregoing, if Tenant is in default under the terms of this Lease, Tenant may remove Tenant’s Property from the Premises only upon the express written direction of Landlord.

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      13.  Repairs And Maintenance.

          13.1 Tenant Repairs and Maintenance. Tenant shall, at its expense, through


 
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