MULTI-TENANT INDUSTRIAL NET LEASE

Exhibit 10.3

LEASE

BY AND BETWEEN

ACQUIPORT DFWIP, INC.,

A DELAWARE CORPORATION,

AS LANDLORD

AND

PRECISE MACHINE PARTNERS, L.L.P.,

A TEXAS LIMITED LIABILITY PARTNERSHIP,

AS TENANT

 

 

 

 

MULTI-TENANT INDUSTRIAL NET LEASE

REFERENCE PAGES

 

 

ANNUAL RENT and MONTHLY INSTALLMENT

OF RENT (Article 3):

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

MULTI-TENANT INDUSTRIAL NET LEASE

REFERENCE PAGES

 

 

ANNUAL RENT and MONTHLY INSTALLMENT

OF RENT (Article 3):

LEASE

By this Lease Landlord leases to Tenant and Tenant leases from Landlord the Premises in the Building as set forth and described on the Reference Pages. The Premises are depicted on the floor plan attached hereto as Exhibit A . and the Building is depicted on the site plan attached hereto as Exhibit A-1 . The Reference Pages, including all terms defined thereon, are incorporated as part of this Lease.

1.            USE AND RESTRICTIONS ON USE.

1.1           The Premises are to be used solely for the purposes set forth on the Reference Pages. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or injure or unreasonably annoy or disturb them, or allow the Premises to be used for any improper, immoral, unlawful, or objectionable purpose, or commit any waste. Tenant shall not do, permit or suffer in, on, or about the Premises the sale of any alcoholic liquor without the written consent of Landlord first obtained. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders and directions for the correction, prevention and abatement of any violations in the Building or appurtenant land, caused or permitted by, or resulting from the specific use by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant's sole expense. Landlord shall cause the parking and sidewalk areas which comprise a portion of the Building to comply with all governmental laws, ordinances, and regulations during the Term of this Lease. Tenant shall not do or permit anything to be done on or about the Premises or bring or keep anything into the Premises which will in any way increase the rate of, invalidate or prevent the procuring of any insurance protecting against loss or damage to the Building or any of its contents by fire or other casualty or against liability for damage to property or injury to persons in or about the Building or any part thereof.

1.2           (a) Tenant agrees that Tenant and its agents, employees, contractors, licensees, and invitees (collectively, the "Tenant Entities") shall not handle, use, manufacture, store or dispose of any flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives (collectively "Hazardous Materials") on, under, or about the Premises, without Landlord's prior written consent (which consent shall not be unreasonably withheld as long as Tenant demonstrates and documents to Landlord's reasonable satisfaction (i) that such Hazardous Materials (A) are necessary or useful to Tenant's business; and (B) will be used, kept, and stored in compliance with all applicable laws relating to any Hazardous Materials so brought or used or kept in or about the Premises; and (ii) that Tenant will give all required notices concerning the presence in or on the Premises or the release of such Hazardous Materials from the Premises). Tenant may handle, store, use or dispose of products containing small quantities of Hazardous Materials, which products are of a type customarily found in offices and households (such as aerosol cans containing insecticides, toner for copies, paints, paint remover, and the like), provided that Tenant shall handle, store, use and dispose of any such Hazardous Materials in a safe and lawful manner and shall not allow such Hazardous Materials to contaminate the Premises or the environment.

(b)           Tenant further agrees that Tenant will not permit any substance to come into contact with groundwater under the Premises. Any such substance coming into contact with groundwater shall, regardless of its inherent hazardous characteristics, be considered a Hazardous Material for purposes of this Lease.

(c)           (i) Notwithstanding the provisions of Paragraph (a), Tenant may handle, store, and use Hazardous Materials, limited to the types, amounts, and use identified in the Hazardous Materials Schedule attached as Exhibit E hereto, so long as such products do not contain hydrocarbons or chlorinated solvents, and so long as such Hazardous Materials are handled, stored, and used on the following conditions: (A) prior to the handling, storage, or use of any of such Hazardous Materials, Tenant shall provide to Landlord a Spill Prevention, Control and Countermeasures Plan, as defined under applicable federal law, which plan is subject to Landlord's prior written approval; and (B) all Hazardous Materials shall be stored, used, and handled within secondary containment devices approved by Landlord, and Tenant shall, at Tenant's sole cost and expense, seal the concrete flooring in any area in which such Hazardous Materials are stored, used, or handled, using a sealant approved by Landlord. If no Hazardous Materials Schedule is attached to this Lease, then this Paragraph (c) shall be of no force and effect. Tenant hereby certifies to Landlord that the information provided by Tenant pursuant to this Paragraph (c) is true, correct, and complete. Tenant covenants to comply with the use restrictions shown on the attached Hazardous Materials Schedule. Tenant's business and operations, and more especially its handling, storage, use and disposal of Hazardous Materials shall at all times comply with all applicable laws pertaining to Hazardous Materials. Tenant shall secure and abide by all permits necessary for Tenant's operations on the Premises. Tenant shall give or post all notices required by all applicable laws pertaining to Hazardous Materials. If Tenant shall at any time fail to comply with this Paragraph (c), Tenant shall immediately notify Landlord in writing of such noncompliance.

 

(ii) Tenant shall provide Landlord with copies of any Material Safety Data Sheets (as required by the Occupational Safety and Health Act) relating to any Hazardous Materials to be used, kept, or stored at or on the Premises, at least 30 days prior to the first use, placement, or storage of such Hazardous Material on the Premises. Landlord shall have 10 days following delivery of such Material Safety Data Sheets to approve or forbid, in its sole discretion subject to the limitation contained in Paragraph (a) above, such use, placement, or storage of a Hazardous Material on the Premises.

(iii) Tenant shall not store hazardous wastes on the premises for more than 90 days; "hazardous waste" shall have the meaning set forth in the Resource Conservation and Recovery Act of 1976, as amended. Tenant shall not install any underground or above ground storage tanks on the Premises. Tenant shall not dispose of any Hazardous Material or solid waste on the Premises. In performing any alterations of the Premises permitted by this Lease, Tenant shall not install any Hazardous Material in the Premises without the specific prior written consent of Landlord.

(iv) Any increase in the premiums for necessary insurance on the Building which arises from Tenant's use and/or storage of Hazardous Materials shall be solely at Tenant's expense. Landlord shall provide Tenant with written notice of any proposed increase in Landlord's insurance premiums, including applicable documentation from the insurer relating to such increase in premiums, that Landlord claims are related to Tenant's use and/or storage of Hazardous Materials at the Premises. Tenant shall procure and maintain at its sole expense such additional insurance as may be necessary to comply with any requirement of any Federal, State or local governmental agency with jurisdiction.

(d)           If Landlord, in its sole discretion, believes that the Premises or the environment have become contaminated with Hazardous Materials or similar materials that must be removed under applicable environmental laws, Landlord, in addition to its other rights under this Lease, may enter upon the Premises, after providing Tenant with written notice, and obtain samples from the Premises, including without limitation the soil and groundwater under the Premises, for the purposes of analyzing the same to determine whether and to what extent the Premises or the environment have become so contaminated. Tenant may not perform any sampling, testing, or drilling to locate any Hazardous Materials on the Premises without Landlord's prior written consent; provided, however, Tenant shall have the right to take confirmatory samples of soil and groundwater tested by Landlord, and Landlord will cooperate with Tenant in coordinating the sampling schedules of the environmental consultants involved in such sampling. Tenant shall reimburse Landlord for the costs of any inspection, sampling and analysis that discloses contamination for which Tenant is liable under the terms of this Section 1.2.

(e)           Without limiting the above, Tenant shall reimburse, defend, indemnify and hold each and all of the Landlord Entities (as hereinafter defined) harmless from and against any and all claims, losses, liabilities, damages, costs and expenses, including without limitation, loss of rental income, loss due to business interruption, and reasonable attorneys' fees and costs, arising out of and directly related to the use, manufacture, storage, or disposal of Hazardous Materials by Tenant or the Tenant Entities on, under or about the Premises including, without limitation, the costs of any required or necessary investigation, repair, cleanup or detoxification and the preparation of any closure or other required plans in connection herewith, whether voluntary or compelled by governmental authority. The indemnity obligations of Tenant under this clause shall survive any termination of this Lease. At Landlord's option, Tenant shall perform any required or necessary investigation, repair, cleanup, or detoxification of the Premises. In such case, Landlord shall have the right, in its sole discretion, to approve all plans, consultants, and cleanup standards, such approval not to be unreasonably withheld by Landlord. Tenant shall provide Landlord on a timely basis with (i) copies of all documents, reports, and communications with governmental authorities relating to Tenant's obligations under this Section 1.2, and (ii) notice and an opportunity to attend all meetings with regulatory authorities. Tenant shall comply with all notice requirements and Landlord and Tenant agree to cooperate with governmental authorities seeking access to the Premises for purposes of sampling or inspection. No disturbance of Tenant's use of the Premises resulting from activities conducted pursuant to this Paragraph (e) shall constitute an actual or constructive eviction of Tenant from the Premises. In the event that such cleanup extends beyond the termination of this Lease, Tenant's obligation to pay rent (including additional rent and percentage rent, if any) shall continue until such cleanup is completed and any certificate of clearance or similar document has been delivered to Landlord; provided, however, that Tenant shall not be obligated to pay rent for any period of cleanup delay if such delay was caused solely by Landlord ("Landlord Delay"). Rent during such holdover period shall be at market rent; if the parties are unable to agree upon the amount of such market rent, then Landlord shall have the option of (A) increasing the rent for the period of such holdover based upon the increase in the cost-of-living from the third month preceding the commencement date to the third month preceding the start of the holdover period, using such indices and assumptions and calculations as Landlord in its sole reasonable judgement shall determine are necessary; or (B) having Landlord and Tenant each appoint a qualified MM appraiser doing business in the area; in turn, these two independent MAI appraisers shall appoint a third MAI appraiser and the majority shall decide upon the fair market rental for the Premises as of the expiration of the then current term. Landlord and Tenant shall equally share in the expense of this appraisal except that in the event the rent is found to be within fifteen percent of the original rate quoted by Landlord, then Tenant shall bear the full cost of all the appraisal process. In no event shall the rent be subject to determination or modification by any person, entity, court, or authority other than as set forth expressly herein, and in no event shall the rent for any holdover period be less than the rent due in the preceding period.

 

(f)           Notwithstanding anything to the contrary contained herein, Tenant shall have no liability to Landlord for (i) any Hazardous Materials which are located at the Premises prior to Tenant taking possession of the Premises and have not been placed at the Premises by Tenant, its agents, employees or contractors, or (ii) any Hazardous Materials which are placed or disposed of in or about the Premises by Landlord, its employees, agents, or contractors.

(g)           It shall not be unreasonable for Landlord to withhold its consent to any proposed assignment or sublease if (i) the proposed assignee's or sublessee's anticipated use of the Premises involves the generation, storage, use, treatment or disposal of Hazardous Materials; (ii) the proposed assignee or sublessee has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with Hazardous Materials contaminating a property if the contamination resulted from such assignee's or sublessee's actions or use of the property in question; or (iii) the proposed assignee or sublessee is subject to an enforcement order issued by any governmental authority with jurisdiction in connection with the use, disposal, or storage of Hazardous Materials.

(h)           Tenant's insurance, if any, insuring against claims of the type dealt with in this Section 1.2 shall be considered primary coverage for claims against the Building and the land on which the Building is located arising out of or under this Section 1.2.

(i)           In the event of (i) any transfer of Tenant's interest under this Lease; or (ii) the termination of this Lease, by lapse of time or otherwise, Tenant shall be responsible for compliance with any and all applicable federal, state or local laws concerning (A) the physical condition of the Premises, Building, or land on which the Building is located, to the extent that Tenant's operations have impacted the Premises, Building, or land on which the Building is located, resulting in violation of applicable federal, state or local laws, or (B) the presence of Hazardous Materials in or on the Premises, Building, or land on which the Building is located (for example, the New Jersey Environmental Cleanup Responsibility Act, the Illinois Responsible Property Transfer Act, or similar applicable state laws), including but not limited to any reporting or filing requirements imposed by such laws. Tenant's duty to pay rent shall continue until Tenant's obligations imposed by applicable environmental laws and regulations are satisfied in full and any certificate of clearance or similar document has been issued by the governmental authority with jurisdiction, excluding any period of Landlord Delay.

 

(j)           All consents given by Landlord pursuant to this Section 1.2 shall be in writing. If such consents are not given, then such consents will be deemed withheld.

1.3           Tenant and the Tenant Entities will be entitled to the non-exclusive use of the common areas of the Building as they exist from time to time during the Term, including the parking facilities, subject to Landlord's rules and regulations regarding such use. However, in no event will Tenant or the Tenant Entities park more vehicles in the parking facilities than Tenant's Proportionate Share of the total parking spaces available for common use. Tenant's Proportionate Share of the total parking spaces currently available for common use at the Building is thirty-two (32) parking spaces. In addition, Landlord shall allow Tenant to stripe, at Tenant's sole cost and expense, a portion of the loading area adjacent to the Premises, in the location shown on Exhibit F hereto, to provide approximately seventeen (17) additional automobile spaces for Tenant's exclusive use; Tenant shall also be entitled, upon Landlord's prior written approval of Tenant's plans and specifications therefor, to mark or otherwise designate such additional spaces for Tenant's exclusive use. The foregoing shall not be deemed to provide Tenant with an exclusive right to any parking spaces (except the additional striped spaces in Tenant's loading area) or any guaranty of the availability of any particular parking spaces or any specific number of parking spaces.

2.            TERM .

2.1           The Term of this Lease shall begin on the date ("Commencement Date") which shall be the later of the Scheduled Commencement Date as shown on the Reference Pages and the date that Landlord shall tender possession of the Premises to Tenant, and shall terminate on the date as shown on the Reference Pages ("Termination Date"), unless sooner terminated by the provisions of this Lease. Landlord shall tender possession of the Premises with all the work, if any, to be performed by Landlord pursuant to Exhibit B to this Lease substantially completed. The term "substantially completed", as used herein, shall mean that (a) the Leasehold Improvements have been completed except for minor punch list items which can be fully completed without material interference with Tenant's use of the Premises, and (b) such work has been sufficiently completed for the applicable governmental authority to issue a certificate of occupancy to Tenant for the Premises. Tenant shall deliver a punch list of items not completed within thirty (30) days after Landlord tenders possession of the Premises and Landlord agrees to proceed with due diligence to perform its obligations regarding such items. Tenant shall, at Landlord's request, execute and deliver a memorandum agreement provided by Landlord in the form of Exhibit C attached hereto, setting forth the actual Commencement Date, Termination Date and, if necessary, a revised rent schedule. Should Tenant fail to do so within thirty (30) days after Landlord's request, the information set forth in such memorandum provided by Landlord shall be conclusively presumed to be agreed and correct.

2.2           Tenant agrees that in the event of the inability of Landlord to deliver possession of the Premises on the Scheduled Commencement Date for any reason, Landlord shall not be liable for any damage resulting from such inability, but Tenant shall not be liable for any rent until the time when Landlord can, after notice to Tenant, deliver possession of the Premises to Tenant. No such failure to give possession on the Scheduled Commencement Date shall affect the other obligations of Tenant under this Lease, except that if Landlord is unable to deliver possession of the Premises within one hundred twenty (120) days after the Scheduled Commencement Date (other than as a result of strikes, shortages of materials, holdover tenancies or similar matters beyond the reasonable control of Landlord and Tenant is notified by Landlord in writing as to such delay), Tenant shall have the option to terminate this Lease unless said delay is as a result of: (a) Tenant's failure to agree to plans and specifications and/or construction cost estimates or bids; (b) Tenant's request for materials, finishes or installations other than Landlord's standard except those, if any, that Landlord shall have expressly agreed to furnish without extension of time agreed by Landlord; (c) Tenant's change in any plans or specifications; or, (d) performance or completion by a party employed by Tenant (each of the foregoing, a "Tenant Delay"). If any delay is the result of a Tenant Delay, the Commencement Date and the payment of rent under this Lease shall be accelerated by the number of days of such Tenant Delay.

 

2.3           In the event Landlord permits Tenant, or any agent, employee or contractor of Tenant, to enter, use or occupy the Premises prior to the Commencement Date, such entry, use or occupancy shall be subject to all the provisions of this Lease other than the payment of rent, including, without limitation, Tenant's compliance with the insurance requirements of Article 11. Said early possession shall not advance the Termination Date.

3.            RENT .

3.1           Tenant agrees to pay to Landlord the Annual Rent in effect from time to time by paying the Monthly Installment of Rent then in effect on or before the first day of each full calendar month during the Term, except that rent for the first full month for which rent is payable hereunder shall be paid upon the execution of this Lease. The Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of the Annual Rent in effect at such time. Rent for any period during the Term which is less than a full month shall be a prorated portion of the Monthly Installment of Rent based upon the number of days in such month. Said rent shall be paid to Landlord, without deduction or offset and without notice or demand, at the Rent Payment Address, as set forth on the Reference Pages, or to such other person or at such other place as Landlord may from time to time designate in writing. If an Event of Default occurs, Landlord may require by notice to Tenant that all subsequent rent payments be made by an automatic payment from Tenant's bank account to Landlord's account, without cost to Landlord. Tenant must implement such automatic payment system prior to the next scheduled rent payment or within ten (10) days after Landlord's notice, whichever is later. Unless specified in this Lease to the contrary, all amounts and sums payable by Tenant to Landlord pursuant to this Lease shall be deemed additional rent.

3.2           Tenant recognizes that late payment of any rent or other sum due under this Lease will result in administrative expense to Landlord, the extent of which additional expense is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if rent or any other sum is not paid within five (5) days after such rent or other sum becomes due and payable pursuant to this Lease, a late charge shall be imposed in an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b) six percent (6%) of the unpaid rent or other payment. The amount of the late charge to be paid by Tenant shall be reassessed and added to Tenant's obligation for each successive month until paid. The provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay rent or other payments on or before the date on which they are due, nor do the terms of this Section 3.2 in any way affect Landlord's remedies pursuant to Article 19 of this Lease in the event said rent or other payment is unpaid after date due.

4.            RENT ADJUSTMENTS .

4.1           For the purpose of this Article 4, the following terms are defined as follows:

4.1.1            Lease Year : Each fiscal year (as determined by Landlord from time to time) falling partly or wholly within the Term.

 

4.1.2            Expenses : All costs of operation, maintenance, repair, replacement and management of the Building (including the amount of any credits which Landlord may grant to particular tenants of the Building in lieu of providing any standard services or paying any standard costs described in this Section 4.1.2 for similar tenants), as determined in accordance with generally accepted accounting principles, including the following costs by way of illustration, but not limitation: water and sewer charges; insurance charges of or relating to all insurance policies and endorsements deemed by Landlord to be reasonably necessary or desirable and relating in any manner to the protection, preservation, or operation of the Building or any part thereof; utility costs, including, but not limited to, the cost of heat, light, power, steam, gas; waste disposal; the cost of janitorial services; the cost of security and alarm services (including any central station signaling system); costs of cleaning, repairing, replacing and maintaining the common areas, including parking and landscaping, window cleaning costs; labor costs; costs and expenses of managing the Building including management and/or administrative fees (which management fees shall not, for any calendar year during the initial Term of this Lease, exceed five percent (5%) of the gross receipts from the Building in such year); air conditioning maintenance costs; material costs; equipment costs including the cost of maintenance, repair and service agreements and rental and leasing costs; purchase costs of equipment; current rental and leasing costs of items which would be capital items if purchased; tool costs; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll taxes; accounting and legal fees; any sales, use or service taxes incurred in connection therewith. In addition, Landlord shall be entitled to recover, as additional rent (which, along with any other capital expenditures constituting Expenses, Landlord may either include in Expenses or cause to be billed to Tenant along with Expenses and Taxes but as a separate item), Tenant's Proportionate Share of: (i) an allocable portion of the cost of capital improvement items which are reasonably calculated to reduce operating expenses; (ii) the cost of fire sprinklers and suppression systems and other life safety systems; and (iii) other capital expenses which are required under any governmental laws, regulations or ordinances which were not applicable to the Building at the time it was constructed; but the costs described in this sentence shall be amortized over the reasonable life of such expenditures in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles, with interest on the unamortized amount at one percent (1%) in excess of the Wall Street Journal prime lending rate announced from time to time. Expenses shall not include the following:

(a)           original Building construction costs, including the cost of correcting defects in such construction, except that conditions resulting from ordinary wear and tear, use, or vandalism shall not be deemed defects for purposes of this exclusion;

(b)           marketing or advertising costs to solicit new tenants;

(c)           wages, salaries, or other compensation payable to any employee of Landlord above the grade of building manager or property manager;

(d)           repair, restoration, or maintenance costs occasioned by fire, windstorm, or other casualty or the exercise of the right of eminent domain, which are reimbursed by third parties (including insurers), exclusive of reasonable deductibles which shall be included in Expenses;

(e)           expenses in connection with services or benefits of a type that are not offered to Tenant, but which are offered to another tenant or occupant;

(f)           Landlord's general administrative overhead expenses and partnership or corporate accounting fees;

(g)           costs which are reimbursed by tenants of the Building (other than as part of their proportionate share of Expenses) and costs which are reimbursed by other third parties (including costs which are covered by a warranty, guarantee, or service contract);

(h)           payments of interest on long-term debt or amortization payments on any mortgage executed by Landlord covering the Building or rental payments under any ground or underlying leases (except to the extent the same may be made to pay or reimburse, or may be measured by, ad valorem taxes or insurance premiums);

(i)           costs of selling, syndicating, financing, mortgaging, or hypothecating any of Landlord's interest in the Building;

(j)           any interest or penalties due to late payment by Landlord of any Expenses;

(k)           depreciation or amortization of the Building or equipment in the Building except as provided herein,

(l)           except for the removal of reasonable quantities of Hazardous Materials used in the ordinary course of operation of a building, costs and disbursements relating to or arising from the handling, removal, treatment, or disposal of asbestos or other Hazardous Materials (as hereinafter defined) in the Building;

(m)           costs incurred in renovating or improving vacant space for tenants or prospective tenants of the Building;

(n)           any fines or penalties incurred due to violations by Landlord of any governmental rule or authority;

(o)           leasing commissions, attorneys' fees, costs, disbursements and other expenses incurred in connection with negotiations or disputes with tenants or leasing space to tenants or prospective tenants of the Building; or

(p)           the cost of any replacement of the entire roof and any maintenance, repair, or replacement of the structural portions of the foundation and exterior walls of the Building.

4.1.3            Taxes : Real estate taxes and any other taxes, charges and assessments which are levied with respect to the Building or the land appurtenant to the Building, or with respect to any improvements, fixtures and equipment or other property of Landlord, real or personal, located in the Building and used in connection with the operation of the Building and said land, any payments to any ground lessor in reimbursement of tax payments made by such lessor; all fees, expenses and costs incurred by Landlord in investigating, protesting, contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes to be paid by Landlord in any Lease Year; and all taxes of whatsoever nature that are imposed wholly or in part in substitution for, or in lieu of, any of the taxes, charges, and assessments included in this definition of Taxes. Taxes shall not include any estate or inheritance tax, federal net income tax or sales or use tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Building or any taxes to be paid by Tenant pursuant to Article 28. If, due to a change in a method of taxation, any tax shall be levied against Landlord wholly or in part in substitution for, or in lieu of, a tax otherwise recoverable under this Section 4.1.3, such other tax shall be deemed to be a Tax for the purposes of this Section 4.1.3 to the extent not reimbursable by Tenant to Landlord under Article 28 of this Lease. Landlord shall retain the sole right to participate in any proceedings to establish or contest the amount of Taxes to be paid in connection with the Building; provided, however, Landlord shall, in good faith, take all commercially reasonable action to minimize Taxes.

 

4.2           Tenant shall pay as additional rent for each Lease Year Tenant's Proportionate Share of Expenses and Taxes incurred for such Lease Year. Tenant shall remain obligated to pay Tenant's Proportionate Share of Expenses and Taxes for the two-month period during which no Monthly Installments of Rent are payable.

4.3           The annual determination of Expenses shall be made by Landlord and shall be binding upon Landlord and Tenant, subject to the provisions of this Section 4.3. During the Term, Tenant may review, at Tenant's sole cost and expense, the books and records supporting such determination in an office of Landlord, or Landlord's agent, during normal business hours, upon giving Landlord five (5) days advance written notice within sixty (60) days after receipt of such determination, but in no event more often than once in any one (1) year period, subject to execution of a confidentiality agreement acceptable to Landlord, and provided that if Tenant utilizes an independent accountant to perform such review it shall be one of regional standing which is reasonably acceptable to Landlord, is not compensated on a contingency basis and is also subject to such confidentiality agreement. If Tenant fails to object to Landlord's determination of Expenses within ninety (90) days after receipt, or if any such objection fails to state with specificity the reason for the objection, Tenant shall be deemed to have approved such determination and shall have no further right to object to or contest such determination. In the event that during all or any portion of any Lease Year or Base Year, the Building is not fully rented and occupied Landlord shall make an appropriate adjustment in occupancy-related Expenses for such year for the purpose of avoiding distortion of the amount of such Expenses to be attributed to Tenant by reason of variation in total occupancy of the Building, by employing consistent and sound accounting and management principles to determine Expenses that would have been paid or incurred by Landlord had the Building been at least ninety-five percent (95%) rented and occupied, and the amount so determined shall be deemed to have been Expenses for such Lease Year.

4.4           Prior to the actual determination thereof for a Lease Year, Landlord may from time to time estimate Tenant's liability for Expenses and/or Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion thereof. Landlord will give Tenant written notification of the amount of such estimate and Tenant agrees that it will pay, by increase of its Monthly Installments of Rent due in such Lease Year, additional rent in the amount of such estimate. Any such increased rate of Monthly Installments of Rent pursuant to this Section 4.4 shall remain in effect until further written notification to Tenant pursuant hereto.

4.5           When the above mentioned actual determination of Tenant's liability for Expenses and/or Taxes is made for any Lease Year and when Tenant is so notified in writing, then:

4.5.1           If the total additional rent Tenant actually paid pursuant to Section 4.4 on account of Expenses and/or Taxes for the Lease Year is less than Tenant's liability for Expenses and/or Taxes, then Tenant shall pay such deficiency to Landlord as additional rent in one lump sum within thirty (30) days of receipt of Landlord's bill therefor; and

4.5.2           If the total additional rent Tenant actually paid pursuant to Section 4.4 on account of Expenses and/or Taxes for the Lease Year is more than Tenant's liability for Expenses and/or Taxes, then Landlord shall credit the difference against the then next due payments to be made by Tenant under this Article 4, or, if the Lease has terminated, refund the difference in cash.

4.6           If the Commencement Date is other than January 1 or if the Termination Date is other than December 31, Tenant's liability for Expenses and Taxes for the Lease Year in which said Date occurs shall be prorated based upon a three hundred sixty-five (365) day year.

 

4.7           Notwithstanding anything contained herein or in this Lease to the contrary, it is understood and agreed that for purposes of calculating Tenant's Proportionate Share of Expenses (excluding Non-Controllable Expenses, as hereinafter defined) in any Lease Year in the initial Term of this Lease after calendar year 2008, the amount of Expenses (excluding Non-Controllable Expenses) shall be limited to the percentages of the actual amount of Expenses (excluding Non-Controllable Expenses) in calendar year 2008 set forth below:

As used herein, the term "Non-Controllable Expenses" shall mean insurance premiums, utility charges, management fees, governmentally mandated charges (including sales tax), and the cost for snow removal and security services. Tenant's liability for Non-Controllable Expenses and Taxes in any given Lease Year shall not be similarly limited, and therefore, Tenant shall remain liable for the full amount of Tenant's Proportionate Share of Non-Controllable Expenses and Taxes in any Lease Year.

5.            INTENTIONALLY DELETED .

6.            ALTERATIONS .

6.1           Except for those, if any, specifically provided for in Exhibit B to this Lease, Tenant shall not make or suffer to be made any alterations, additions, or improvements, including, but not limited to, the attachment of any fixtures or equipment in, on, or to the Premises or any part thereof or the making of any improvements as required by Article 7, without the prior written consent of Landlord. When applying for such consent, Tenant shall, if requested by Landlord, furnish complete plans and specifications for such alterations, additions and improvements. Landlord's consent shall not be unreasonably withheld with respect to alterations which (i) are not structural in nature, (ii) are not visible from the exterior of the Building, (iii) do not affect or require modification of the Building's electrical, mechanical, plumbing, HVAC or other systems, and (iv) in aggregate do not cost more than $5.00 per rentable square foot of that portion of the Premises affected by the alterations in question.

6.2           In the event Landlord consents to the making of any such alteration, addition or improvement by Tenant, the same shall be made by using either Landlord's contractor or a contractor reasonably approved by Landlord, in either event at Tenant's sole cost and expense. If Tenant shall employ any contractor other than Landlord's contractor and such other contractor or any subcontractor of such other contractor shall employ any non-union labor or supplier, Tenant shall be responsible for and hold Landlord harmless from any and all delays, damages and extra costs suffered by Landlord as a result of any dispute with any labor unions concerning the wage, hours, terms or conditions of the employment of any such labor. In any event Landlord may charge Tenant a construction management fee not to exceed three percent (3%) of the cost of such work to cover its overhead as it relates to such proposed work, plus third-party costs actually incurred by Landlord in connection with the proposed work and the design thereof, with all such amounts being due five (5) days after Landlord's demand.

 

6.3           All alterations, additions or improvements proposed by Tenant shall be constructed in accordance with all government laws, ordinances, rules and regulations, using Building standard materials where applicable, and Tenant shall, prior to construction, provide the additional insurance required under Article 11 in such case, and also all such assurances to Landlord as Landlord shall reasonably require to assure payment of the costs thereof, including but not limited to, notices of non-responsibility, waivers of lien, surety company performance bonds and funded construction escrows and to protect Landlord and the Building and appurtenant land against any loss from any mechanic's, materialmen's or other liens. Tenant shall pay in addition to any sums due pursuant to Article 4, any increase in real estate taxes attributable to any such alteration, addition or improvement for so long, during the Term, as such increase is ascertainable; at Landlord's election said sums shall be paid in the same way as sums due under Article 4. Landlord may, as a condition to its consent to any particular alterations or improvements, require Tenant to deposit with Landlord the amount reasonably estimated by Landlord as sufficient to cover the cost of removing such alterations or improvements and restoring the Premises, to the extent required under Section 26.2.

7.            REPAIR .

7.1           Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises, except as specified in Exhibit B if attached to this Lease and except that Landlord shall repair and maintain, in good order and repair, the structural portions of the roof, foundation and walls of the Building. Landlord shall additionally repair and maintain the parking, driveways, and sidewalk areas which comprise a part of the Building. The cost of Landlord's repair and maintenance obligations under this Section 7.1 will be included as Expenses under Article 4 of this Lease. Landlord agrees that the mechanical, electrical, plumbing, and heating, ventilating, and air conditioning systems serving the Premises shall be in good working condition on the date that Landlord delivers possession of the Premises to Tenant. By taking possession of the Premises, Tenant accepts them as being in good order, condition and repair and in the condition in which Landlord is obligated to deliver them, except as set forth in the punch list to be delivered pursuant to Section 2.1. It is hereby understood and agreed that no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant, except as specifically set forth in this Lease. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant.

7.2           Tenant shall at its own cost and expense keep and maintain all parts of the Premises and such portion of the Building and improvements as are within the exclusive control of Tenant in good condition, promptly making all necessary repairs and replacements, whether ordinary or extraordinary, with materials and workmanship of the same character, kind and quality as the original (including, but not limited to, repair and replacement of all fixtures installed by Tenant, water heaters serving the Premises, windows, glass and plate glass, doors, exterior stairs, skylights, any special office entries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems serving the Premises, electrical systems and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, and performance of regular removal of trash and debris). Tenant as part of its obligations hereunder shall keep the Premises in a clean and sanitary condition. Tenant will, as far as possible keep all such parts of the Premises from deterioration due to ordinary wear and from falling temporarily out of repair, and upon termination of this Lease in any way Tenant will yield up the Premises to Landlord in good condition and repair, loss by fire or other casualty excepted (but not excepting any damage to glass). Tenant shall, at its own cost and expense, repair any damage to the Premises or the Building resulting from and/or caused in whole or in part by the negligence or misconduct of Tenant, its agents, employees, contractors, invitees, or any other person entering upon the Premises as a result of Tenant's business activities or caused by Tenant's default hereunder.

 

7.3           Except as provided in Article 22 and except to the extent caused by Landlord's gross negligence or willful misconduct, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or to fixtures, appurtenances and equipment in the Building. Except to the extent, if any, prohibited by law, Ten