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EXHIBIT 10.5
LEASE
STAG II MIAMISBURG, LLC
AS LANDLORD,
AND
DAYTON SUPERIOR CORPORATION
AS TENANT
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TABLE OF CONTENTS
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Article
Page
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I Basic
Terms....................................................
1
II Lease of
Premises.............................................. 3
III Initial Construction
of Premises............................... 5
IV Annual Fixed
Rent.............................................. 5
V Additional
Rent................................................ 5
VI Maintenance, Use, and
Alterations of the Premises.............. 8
VII Insurance and
Indemnification.................................. 14
VIII Assignment and
Subletting...................................... 15
IX Default and
Remedies........................................... 17
X Casualty and
Condemnation...................................... 21
XI Landlord's
Financing........................................... 21
XII
Miscellaneous..................................................
23
XIII Special Provisions
............................................ 26
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ARTICLE I: BASIC TERMS
1.1 Reference
Subjects. The following terms used in this Lease shall have
the meanings set forth below.
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Date of Lease:
October __, 2005
Landlord:
STAG II Miamisburg, LLC, a Delaware limited
liability company
Tenant:
Dayton Superior Corporation, an Ohio corporation
Property:
The land known and numbered as 721 Richard Street,
Miamisburg, Ohio, more particularly described on
Exhibit A.
Premises:
The entire building or buildings at the Property
(the "Building"), containing approximately 156,581
rentable square feet, and all other improvements on
or above the surface of the Property.
Tenant's Percentage Share: 100%
Term Commencement Date: The date
of this Lease.
Rent Commencement Date: The date
of this Lease.
Term Expiration Date:
The last day of the twelfth (12th) Lease Year. The
first Lease Year of the Term shall commence on the
Term Commencement Date and end on the last day of
the month in which the first (1st) anniversary of
the Rent Commencement Date shall occur (unless the
Rent Commencement Date shall occur on the first day
of a month, in which case the first Lease Year
shall end on the day before the first (1st)
anniversary of the Rent Commencement Date).
Subsequent Lease Years shall commence on the day
after the last day of the first Lease Year or an
anniversary thereof, and shall end on an
anniversary of the last day of the first Lease
Year.
Permitted Uses:
Manufacturing, warehouse and distribution uses,
together with office uses ancillary to such uses.
Security Deposit:
$164,900.
Tenant's Guarantor:
None.
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Annual Fixed Rent:
See Exhibit B.
Additional Rent:
See Article V.
Broker(s)
None.
Exhibits
Schedule 9.10 Letter of Credit Requirements
A: Property
B: Annual Fixed
Rent
C: Rules and
Regulations
D. Insurance,
Casualty, and Condemnation
Provisions
E.
Subordination, Non-Disturbance and Attornment
Agreement
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ARTICLE II: LEASE OF PREMISES
2.1 Premises.
Landlord hereby leases the Premises to Tenant and Tenant
hereby leases the Premises from Landlord
for the Term, subject to and with the
benefit of the terms, covenants and
conditions of this Lease, and of rights,
agreements, easements and restrictions of
record applicable to the Property, all
of which Tenant shall perform and observe
insofar as the same are applicable to
the Premises. As appurtenant to the
Premises, Tenant shall have the right to the
exclusive use of the roof for
telecommunications equipment and all portions of
the Property at and above grade level, but
Tenant shall not have any right of
access, control over or other ability to
use any portion of the Property below
grade level.
2.2 Term.
(a) The term of
this Lease (the "Term") shall begin on the Term
Commencement Date and shall end on the Term
Expiration Date, subject to
extension as set forth below.
(b) Tenant shall
have the right to extend the Term for two periods of five
(5) years, on the terms and conditions set
forth below. To exercise the
extension option, Tenant shall notify
Landlord in writing at least twelve (12)
months prior to the then scheduled
expiration of the Term. Failure to timely
deliver such notice shall be deemed an
irrevocable election by Tenant not to
extend the Term, and Tenant shall have no
further right to extend the Term. If
Tenant timely delivers such notice, then
all of the terms and conditions of the
Lease in effect immediately prior to such
extension shall apply during the
extension period, except that Tenant shall
have no right to extend the Term
beyond the end of the second extension
period and the Annual Fixed Rent during
such extension period shall be the Fair
Market Rent therefor, determined as
provided below, but not less than the
Annual Fixed Rent applicable to the
Premises immediately before such extension.
If Tenant shall exercise the
extension option in accordance with this
Section, the provisions of this Section
shall be self-operative, but upon request
by either party after determination of
the Annual Fixed Rent for the extension
period the parties shall execute an
agreement specifying the Annual Fixed Rent
for the extension period and
acknowledging the extension of the
Term.
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Notwithstanding the foregoing, Tenant's
exercise of any option to extend the
Term shall be void, at Landlord's election,
if either at the time the option is
exercised or at the time the extension
period is to commence, (i) Tenant is in
default under the Lease, or (ii) there
exists a sublease or subleases of more
than 25% of the square footage of the
Building in the aggregate, or (iii) the
originally named Tenant hereunder has
assigned or transferred its interest in
this Lease (except for an assignment or
transfer that does not require
Landlord's consent under the terms of this
Lease).
(c) As used
herein, the "Fair Market Rent" shall mean the annual fair
market rent for the Premises, ascertained
for a term coterminous with the time
period for which the Fair Market Rent is to
be effective, under the terms of
this Lease, determined as though the
Premises were in the condition then
existing or in such better condition as
such space is required to be maintained
hereunder. Not later than ten (10) months
prior to the commencement of the
extension period, Landlord shall notify
Tenant in writing of Landlord's
determination of the Fair Market Rent.
Within thirty (30) days after receipt of
such notice, Tenant shall notify Landlord
whether Tenant accepts or disputes
Landlord's determination of Fair Market
Rent, which notice of dispute shall
include Tenant's determination of the Fair
Market Rent (the failure to timely
dispute being deemed Tenant's acceptance of
Landlord's determination).
(d) If Tenant so
disputes Landlord's determination, such dispute shall be
resolved in accordance with the following
procedure. Within thirty (30) days
after receipt of Tenant's notice disputing
Landlord's determination, Landlord
and Tenant shall mutually appoint as an
arbitrator a licensed real estate broker
with at least ten years experience as a
broker of comparable properties in the
area or if they cannot agree upon such
arbitrator, either party may apply to the
office of the American Arbitration
Association ("AAA") for appointment of such
an arbitrator. The arbitrator shall be
charged to determine the Fair Market Rent
in accordance with this Section, within
sixty (60) days after the arbitrator is
appointed, by selecting either of the final
estimates of the Fair Market Rent
provided by Landlord and Tenant at the
commencement of the hearing. The
arbitrator shall have no authority or
jurisdiction to make any other
determination of such amount. The
arbitration shall be conducted in accordance
with the commercial arbitration rules of
the AAA insofar as such rules are not
inconsistent with the provisions of this
Lease (in which case the provisions of
this Lease shall govern). The cost of the
arbitrator shall be borne equally by
the parties. If the AAA shall cease to
provide arbitration for commercial
disputes in Cleveland, Ohio or Cincinnati,
Ohio, the arbitrator shall be
appointed by any successor organization
providing substantially the same
services, and in the absence of such an
organization, by a court of competent
jurisdiction under the arbitration act of
the State of Ohio. For any extension
period during which the applicable Fair
Market Rent is in dispute hereunder,
Tenant shall make payment on account of
Annual Fixed Rent at the rate set forth
in Landlord's notice above, and the parties
shall adjust for over or
under-payments within thirty days after the
decision of the arbitrator is
announced.
ARTICLE III: DELIVERY OF PREMISES
3.1 Delivery of
Premises. The Premises are demised and leased subject to
the existing state of the title as of the
Term Commencement Date.
3.2 Existing
Conditions. Tenant acknowledges that Tenant or its affiliates
owned and occupied the Premises prior to
the Term Commencement Date and that it
has inspected the
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Premises and accepts the same in the
condition they are in on the Term
Commencement Date, it being expressly
agreed that neither Landlord nor any
person acting under Landlord has made or
implied any representations or
warranties concerning this Lease, the
Premises, or their condition or
suitability for Tenant's use. To the extent
permitted by applicable law, Tenant
waives any right or remedy otherwise
accruing to Tenant on account of the
condition or suitability of the Premises,
or title to the Premises, and Tenant
agrees that it takes the Premises "as-is,"
with all faults and without any such
representation or warranty, including any
implied warranties.
ARTICLE IV: RENT
4.1 Annual Fixed
Rent. Commencing on the Rent Commencement Date and on the
first day of each subsequent calendar month
during the Term, Tenant shall pay to
Landlord the Annual Fixed Rent set forth in
on Exhibit B hereto in lawful money
of the United States, in advance and
without offset, deduction, or prior demand.
The Annual Fixed Rent shall be payable at
Landlord's Address or at such other
place or to such other person as Landlord
may designate in writing from time to
time.
ARTICLE V: ADDITIONAL RENT
5.1 Additional
Rent. All sums payable by Tenant under this Lease other than
Annual Fixed Rent shall be deemed
"Additional Rent." The term "rent" shall mean
Annual Fixed Rent and Additional Rent.
Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then
due with the next monthly installment
of Annual Fixed Rent.
5.2 Real Estate
Taxes. Tenant covenants and agrees to pay when due,
directly to the relevant taxing authority,
as Additional Rent, all Taxes.
"Taxes" shall
mean all taxes, assessments, betterments, excises, user fees
and all other governmental charges and fees
of any kind or nature, or
impositions or agreed payments in lieu
thereof or voluntary payments made in
connection with the provision of
governmental services or improvements of
benefit to the Building or the Property
(including any so-called linkage, impact
or voluntary betterment payments), and all
penalties and interest thereon (if
due to Tenant's failure to make timely
payments on account of Taxes), assessed
or imposed against the Premises or the
property of which the Premises are a part
(including without limitation any personal
property taxes levied on such
property or on fixtures or equipment used
in connection therewith), or upon
Landlord by virtue of its ownership
thereof, other than a federal or state
income tax of general application, during
the Term of the Lease. If during the
Term the present system of ad valorem
taxation of property shall be changed so
that, in lieu of or in addition to the
whole or any part of such ad valorem tax,
there shall be assessed, levied or imposed
on such property or Premises or on
Landlord any kind or nature of federal,
state, county, municipal or other
governmental capital levy, income, sales,
franchise, excise or similar tax,
assessment, levy, charge or fee (as
distinct from the federal and state income
tax in effect on the Term Commencement
Date) measured by or based in whole or in
part upon Building valuation, mortgage
valuation, rents or any other incidents,
benefits or measures of real property or
real property operations and imposed on
owners of real estate generally, then any
and all of such taxes, assessments,
levies, charges and fees shall be included
within the term Taxes, but only to
the extent the same are applicable to the
Premises.
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Tenant may seek
a reduction in the assessed valuation (for tax purposes) of
the Property provided the same is done by
and at Tenant's sole cost and expense
and after written notice to Landlord, and
Landlord agrees that it shall
cooperate in good faith with Tenant's
reasonable requests in connection with any
such proceeding. Tenant may defer payment
of any contested Taxes; provided that
Tenant's deferral is in compliance with
applicable law permitting such deferral.
Tenant shall be entitled to all refunds
associated with Tenant's successful
prosecution of any such proceeding. If
required by applicable law, Landlord
shall join in any proceeding referred to in
this paragraph; provided, however,
Tenant shall indemnify and save Landlord
harmless from any costs and expenses
associated with such proceedings.
If Landlord
shall receive a refund of any Taxes paid by Tenant, Landlord
shall reimburse Tenant the amount of said
refund after deducting therefrom the
actual reasonable out of pocket costs and
expenses incurred in connection
therewith.
5.3
INTENTIONALLY OMITTED.
5.4 Utilities.
Tenant shall pay all charges and deposits for gas, water,
sewer, electricity, telecommunications, and
other energy, utilities and services
used or consumed on the Premises during the
Term. It is understood and agreed
that Landlord (i) shall be under no
obligation whatsoever to furnish any such
services to the Premises and (ii) shall not
be liable for (nor suffer any
reduction in any rent on account of) any
interruption or failure in the supply
of the same.
5.5 Personal
Property Taxes. Tenant shall pay when due, directly to the
relevant taxing authority, all taxes
charged against trade fixtures,
furnishings, equipment, inventory, or any
other personal property belonging to
Tenant. Tenant shall use its best efforts
to have its personal property taxed
separately from the Premises. If any of
Tenant's personal property shall be
taxed with the Premises, Tenant shall pay
Landlord the taxes for such personal
property within thirty days after Tenant
receives a written statement from
Landlord for such personal property
taxes.
5.6 Method of
Payment. Tenant agrees to pay the Annual Base Rent to
Landlord in advance in equal monthly
installments by the first day of each
calendar month during the Term. Tenant
shall make a ratable payment of Annual
Base Rent and Additional Rent (to the
extent applicable) for any period of less
than a month at the beginning or end of the
Term. All payments of Annual Base
Rent, and all payments of Additional Rent
and other sums due and payable to
Landlord, shall be paid in current U.S.
exchange by check drawn on a
Clearinghouse Bank at the address of
Landlord set forth in Section 12.1 or such
other place as Landlord may from time to
time direct (or if requested by
Landlord, by electronic fund transfer),
without demand, set-off or other
deduction.
5.7 Net Lease.
This Lease is an absolutely triple net lease to Landlord. It
is the intent of the parties hereto that
the Annual Fixed Rent payable under
this Lease shall be an absolutely net
return to Landlord and that Tenant shall
pay all costs and expenses relating to the
Premises except as otherwise
expressly set forth in this Lease. Without
limiting the generality of the
preceding sentence, Tenant shall at its
sole cost and expense (which expense
shall be deemed Additional Rent hereunder)
be responsible for payment of all
Taxes, all electricity, telecommunication
service, gas, water, sewer, telephone,
refuse disposal, and other charges for
utilities and services
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supplied to the Premises, insurance costs,
amounts due under any Title Document
(defined below) and all costs of cleaning,
maintaining and repairing the
Premises in accordance with the terms of
this Lease. Any amount or obligation
herein relating to the Premises that is not
expressly declared to be that of
Landlord shall be deemed to be an
obligation of Tenant to be performed by Tenant
at Tenant's expense and Tenant shall
indemnify Landlord against, and hold
Landlord harmless from, the same, and
Tenant's liability for the payment of any
of the same which shall become payable
during the Term is hereby expressly
provided to survive the Term. Annual Fixed
Rent, Additional Rent, and all other
sums payable hereunder by Tenant, shall be
paid without notice or demand, and
without set off, counterclaim, recoupment,
abatement, suspension, deduction, or
defense (other than payment) whatsoever, so
that this Lease shall yield net to
Landlord the Annual Fixed Rent under all
circumstances and conditions whether
now or hereinafter existing and whether or
not within the contemplation of the
parties. Except as otherwise expressly set
forth in this Lease with respect to
certain events of casualty or condemnation,
Tenant shall in no event have any
right to terminate this Lease. It is the
intention of the parties hereto that
the obligations of Tenant hereunder shall
be separate and independent covenants
and agreements, that the Annual Fixed Rent,
the Additional Rent, and all other
sums payable by Tenant hereunder shall
continue to be payable in all events, and
that the obligations of Tenant hereunder
shall continue unaffected, unless the
requirement to pay or perform the same
shall have been terminated pursuant to an
express provision of this Lease. As used
herein, the term "Title Documents"
means any and all easements, covenants,
conditions, and restrictions, industrial
park association agreements, and other
agreements, encumbrances, and
restrictions of record affecting all or
part of the Premises, as the same may
now exist, or as the same may hereafter be
created or amended without materially
expanding the obligations of Tenant without
Tenant's approval (which approval
shall not be unreasonably withheld), but
excluding any mortgage.
5.7 True Lease.
Landlord and Tenant agree that the parties intend this
Lease to constitute a lease and not a
financing arrangement. Each party shall
reflect the transaction represented hereby
in all applicable books, records and
reports (including income tax filings) in a
manner consistent with "true lease"
treatment rather than "financing"
treatment, subject to future modifications of
accounting or tax rules or guidelines and
subject to contrary determinations or
positions by governmental agencies or the
like.
ARTICLE VI: MAINTENANCE, USE, AND
ALTERATIONS OF PREMISES
6.1 Landlord's
Structural Repair Obligations. Except as set forth in
Exhibit D, Section II and Exhibit D,
Section V attached hereto, Landlord shall
have no obligation to repair or maintain
the Building or Premises. Tenant hereby
waives the benefit of any present or future
law that provides Tenant the right
to repair the Premises or Building at
Landlord's expense or to terminate this
Lease because of the condition of the
Building or the Premises. Notwithstanding
anything to the contrary in this paragraph,
Tenant shall be solely responsible
for the cost of (a) any repair or capital
replacement arising from an
overburdening of any building system or
component or any other act or omission
of Tenant, its employees, agents,
contractors, or invitees or from a failure by
Tenant to perform its maintenance and
repair obligations under this Lease, and
(b) any alterations, additions,
improvements, repairs, or replacements that are
performed by or on behalf of Tenant.
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6.2 Tenant's
Repair and Maintenance Obligations. Except as set forth in
Exhibit D Section II and Exhibit D, Section
V attached hereto, Tenant shall
clean, maintain, repair and secure the
Premises, all improvements and
appurtenances thereto, all access areas
thereof, and all utilities, facilities,
installations and equipment used in
connection therewith, and shall pay all
costs and expenses of so doing, keeping the
Premises in good order, repair and
condition, reasonable wear and tear, and
damage by casualty and taking (to the
extent provided in Article X only)
excepted. Without limiting the generality of
the foregoing, Tenant shall keep the
foundation of the Building, all exterior
walls, structural walls, the roof of the
Building, all interior walls, floor
surfaces and coverings, glass, windows,
doors, and partitions, all fixtures and
equipment, all interior utilities, pipes
and drains and other above-ground level
installations used in connection with the
Premises in such good order, repair
and condition, shall provide all cleaning,
painting and floor covering to the
Premises, and shall remove all refuse from
and provide its own janitorial
services for the Premises. Tenant shall
keep in good order, condition and repair
all building systems (including the
heating, ventilation, air conditioning,
plumbing, electrical, utility, and safety
systems). Tenant's maintenance
obligations shall also include, without
limitation, gardening and landscaping;
snow removal; maintenance of signs; rental
or lease payments paid by Tenant for
rented or leased personal property used in
the operation or maintenance of the
Premises; fees for required licenses and
permits required by Tenant; sweeping
and striping of pavement; general
maintenance; painting; lighting; and similar
items. If any portion of the Premises or
any system or equipment in the Premises
that Tenant shall be obligated to repair
cannot be fully repaired or restored,
Tenant shall promptly replace such portion
of the Premises or system or
equipment.
6.3 Use and
Compliance with Law. Tenant shall use the Premises only for the
Permitted Uses and only as permitted under
federal, state, and local laws,
regulations and orders applicable from time
to time, including without
limitation municipal by-laws, land use and
zoning laws, environmental laws and
regulations (including all laws and
regulations regulating the production, use,
and disposal of any pollutant or toxic or
hazardous material), and occupational
health and safety laws. Tenant shall
procure all approvals, licenses and permits
necessary therefor, in each case giving
Landlord true and complete copies of the
same and all applications therefor. Except
as set forth in Section 6.1, Tenant
shall promptly comply with all present and
future laws applicable to Tenant's
use of the Premises or Tenant's signs
thereon, foreseen or unforeseen, and
whether or not the same necessitate
structural or other extraordinary changes or
improvements to the Premises or interfere
with its use and enjoyment of the
Premises, and shall keep the Premises
equipped with adequate safety appliances
and comply with all requirements reasonable
in light of the use Tenant is making
of the Premises of insurance inspection or
rating bureaus having jurisdiction.
If Tenant's use of the Premises results in
any increase in the premium for any
insurance carried by Landlord, then upon
Landlord's notice to Tenant of such
increase Tenant shall pay the same to
Landlord upon demand as Additional Rent.
Tenant shall, in any event, indemnify and
save Landlord harmless from all loss,
claim, damage, cost or expense (including
reasonable attorneys' fees of counsel
of Landlord's choice against whom Tenant
makes no reasonable objection) on
account of Tenant's failure so to comply
with the obligations of this Section
(paying the same to Landlord upon demand as
Additional Rent). Except as set
forth in Section 6.1, Tenant shall bear the
sole risk of all present or future
laws affecting the Premises or
appurtenances thereto, and Landlord shall not be
liable for (nor suffer any reduction in any
rent on account of) any
interruption, impairment or prohibition
affecting the Premises or Tenant's use
thereof resulting from the enforcement of
laws. Tenant shall comply with the
rules and regulations for the Premises set
forth on Exhibit C hereto, as the
same may be reasonably amended from time to
time by
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Landlord (in accordance with standards
applicable to comparable properties) for
the operation, care and use of the Property
and appurtenant improvements and
areas in which Tenant is granted rights of
use by the terms of this Lease.
6.4 Nuisance;
Hazardous Materials. Tenant shall not, either with or without
negligence, injure, overload, deface,
damage or otherwise harm Landlord's
property, the Premises or any part or
component thereof; commit any nuisance;
permit the emission of any hazardous
materials or substances; allow the release
or other escape of any biologically or
chemically active or other hazardous
substances or materials so as to
impregnate, impair or in any manner affect,
even temporarily, any element or part of
Landlord's property or the Premises, or
allow the storage or use of such substances
or materials in any manner not
sanctioned by law or by commercially
reasonable and customary standards
prevailing in the industry for the storage
and use of such substances or
materials; nor shall Tenant bring onto the
Premises any such materials or
substances except to use in the ordinary
course of Tenant's business, and then
only in strict compliance with applicable
law; permit the occurrence of
objectionable noise or odors; or make,
allow or suffer any waste whatsoever to
Landlord's property or the Premises.
Without limitation, hazardous materials
shall include all substances described or
regulated in any federal, state, local
or administrative agency ordinance, law,
rule, regulation, order or requirement
relating to environmental conditions, human
health or hazardous substances,
including the Comprehensive Environmental
Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 et
seq), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. Section
6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section
1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Emergency
Planning and Community Right-To-Know
Act (42 U.S.C. Section 1101 et seq.), The
Endangered Species Act (16 U.S.C.
Section 1531 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601
et seq.), the Occupational Safety and
Health Act (29 U.S.C. Section 651 et seq.)
and the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801 et seq.),
and the regulations promulgated pursuant to
such laws, all as amended from time
to time, and all other laws governing
similar matters as they may be amended
from time to time. In addition, Tenant
shall execute affidavits, representations
and the like from time to time at
Landlord's request concerning Tenant's best
knowledge and belief regarding the presence
or absence of hazardous materials
and substances on the Premises. In all
events, Tenant shall indemnify, defend,
and hold harmless Landlord and its
mortgagees as provided in this Lease from any
claims resulting from any release of
hazardous materials or substances on the
Premises first occurring during the Term,
except to the extent caused by
Landlord or its agents or contractors or
caused by a migration onto or under the
Property from adjacent property. (At the
request of Landlord, Tenant will from
time to time confirm such indemnity to
mortgagees directly with such
mortgagees.)
The indemnities
under this Section shall survive any termination of the
Lease.
6.5 Landlord's
Right to Enter. Landlord and its agents or employees may
upon reasonable notice enter the Premises
during business hours (and in case of
emergency at any time) for the purpose of
performing repairs or replacements, or
exercising any of the rights reserved to
Landlord herein, or securing or
protecting Landlord's property or the
Premises, or removing any alterations or
additions not consented to by Landlord, and
similarly upon reasonable notice may
show the Premises to prospective purchasers
and lenders, and during the last
twelve months of the Term to prospective
tenants, and may keep affixed in
suitable places notices for letting (during
the last twelve (12) months of the
Term) and selling. Except in case of
emergency, Landlord shall be
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subject in entering the Premises to
reasonable security conditions, if any, set
forth by Tenant in writing to Landlord. If
Tenant so desires, a representative
of Tenant may accompany Landlord or its
agents in any entry onto the Premises
under this Lease.
6.6 Parking.
Tenant shall be entitled to use all parking areas on the
Property and within the Building without
charge. Handicapped spaces shall only
be used by those legally permitted to use
them.
6.7 Alterations,
Additions, and Improvements. Tenant shall not make any
installations, alterations, additions, or
improvements in or to the Premises,
including, without limitation, any
apertures in the walls, partitions, ceilings
or floors, without on each occasion
obtaining the prior written consent of
Landlord, which consent shall not be
unreasonably withheld or delayed, except
that only prior notice and a description of
and plans for the work (but no
approval) shall be required for any
interior work costing less than $50,000 in
the aggregate during any twelve-month
period and that does not require a permit
with respect to the building's structure or
mechanical, electrical, or other
building systems. Any such work so approved
by Landlord shall be performed only
in accordance with plans and specifications
therefor approved by Landlord.
Tenant shall not perform any work in or to
the Premises that would in Landlord's
reasonable judgment (i) in any manner
affect any structural component of the
Building (including, without limitation,
exterior walls, exterior windows, core
walls, columns, roofs, or floor slabs),
(ii) in any respect be incompatible with
the electrical or mechanical components or
systems of the Building, (iii) affect
space or areas around the Building
(including the exterior of the Building),
(iv) diminish the value of the Premises for
the Permitted Uses, or (v) require
any unusual expense to re-adapt the
Premises for the Permitted Uses. Tenant
shall procure at Tenant's sole expense all
necessary permits and licenses before
undertaking any work on the Property and
shall perform all such work in a good
and workmanlike manner employing materials
of good quality and so as to conform
with all applicable zoning, building, fire,
health and other codes, regulations,
ordinances and laws and with all applicable
insurance requirements. If any
notice of contract or lien is placed on the
Property arising from work performed
by or for Tenant, if requested by Landlord
for any work requiring Landlord's
approval, Tenant shall thereafter furnish
to Landlord prior to commencement of
any such work a bond or other security
acceptable to Landlord assuring that any
work by Tenant will be completed in
accordance with the approved plans and
specifications and that all subcontractors
will be paid. Tenant shall employ for
such work only contractors reasonably
approved by Landlord and shall require all
contractors employed by Tenant to carry
insurance in types and amounts
reasonably approved by Landlord (including
without limitation worker's
compensation insurance in accordance with
statutory requirements and commercial
general liability insurance covering such
contractors on or about the Premises
with a combined single limit not less than
$3,000,000) and shall submit
certificates evidencing such coverage to
Landlord prior to the commencement of
such work, subject to Section II of Exhibit
D in the case of casualty. Tenant
shall indemnify and hold harmless Landlord
from all injury, loss, claims or
damage to any person or property occasioned
by or arising out of such work.
Landlord may inspect the work of Tenant at
reasonable times in accordance with
Section 6.5 and give notice of observed
defects. Upon completion of any such
work, Tenant shall provide Landlord with
"as built" plans, copies of all
construction contracts and proof of payment
for all labor and materials.
6.8 Liens and
Encumbrances. Tenant shall not create or suffer, shall keep
Landlord's property, the Premises and
Tenant's leasehold free of, and shall
promptly remove and discharge,
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any lien, notice of contract, charge,
security interest, mortgage or other
encumbrance which arises for any reason,
voluntarily or involuntarily, as a
result of any act or omission by Tenant or
persons claiming by, through or under
Tenant, or any of their agents, employees
or independent contractors, including
without limitation liens which arise by
reason of labor or materials furnished
or claimed to have been furnished to Tenant
or for the Premises.
6.9 Condition
upon Termination. At the expiration or earlier termination of
this Lease, Tenant (and all persons
claiming by, through or under it) shall,
without the necessity of any notice,
surrender the Premises (including any
tenant work and all replacements thereof,
except such additions or alterations
constructed after the Term Commencement
Date as Landlord may direct to be
removed at the time of Landlord's approval
thereof, which shall be removed by
Tenant and the Premises restored to their
pre-existing condition) and all keys
to the Premises, remove all of its trade
fixtures and personal property not
bolted or otherwise attached to the
Premises (and such trade fixtures and other
property bolted or attached to the Premises
as Landlord may direct or, except as
set forth below, as Tenant may desire), and
all Tenant's signs wherever located,
in each case repairing damage to the
Premises which results in the course of
such removal and restoring the Premises to
a fully functional and tenantable
condition (including the filling of all
floor holes, the removal of all
disconnected wiring back to junction boxes
and the replacement of all damaged
ceiling tiles). Tenant shall yield up the
Premises broom-clean and in good
order, repair and condition, reasonable
wear and tear and damage by casualty and
taking (to the extent provided in Article X
only) excepted. Any property not so
removed within thirty (30) days after the
expiration or termination of the Lease
shall be deemed abandoned and may be
removed and disposed of by Landlord in such
manner as Landlord shall determine, and
Tenant shall pay to Landlord the
reasonable cost and expense incurred by it
in effecting such removal and
disposition and in making any required
repairs to the Premises. In no event,
however, shall Tenant remove any of the
following materials or equipment (which
shall be deemed Landlord's property),
without Landlord's prior written consent:
any power wiring or wiring panels; lighting
or lighting fixtures; doors,
windows, or wall coverings; drapes, blinds
or other window coverings; installed
carpets or other installed floor coverings;
any built-in heating or air
conditioning equipment; fencing or security
gates; or other similar building
operating equipment.
6.10 Tenant's
Expense. Tenant shall fulfill all of Tenant's obligations
under this Article VI at Tenant's sole
expense. If Tenant shall fail to
maintain, repair or replace the Premises as
required by this Article VI,
Landlord may, upon thirty (30) days' prior
notice to Tenant (except that no
notice shall be required in the case of an
emergency), enter the Premises in
accordance with Section 6.5 and perform
such maintenance or repair (including
replacement, as needed) on behalf of
Tenant. In such case, Tenant shall
reimburse Landlord for all costs reasonably
incurred in performing such
maintenance, repair or replacement,
together with an administrative charge of
fifteen percent, as Additional Rent,
immediately upon demand.
6.11
Interruptions. Landlord shall not be liable to Tenant in damages or
by
reduction of rent or otherwise by reason of
inconvenience or for loss of
business arising from Landlord or its
agents or employees entering the Premises
for any of the purposes authorized in this
Lease or for repairing, altering or
improving the Building in a manner
reasonable in light of the circumstances. In
case Landlord is prevented or delayed from
making any repairs or replacements or
furnishing any services or performing any
other covenant or duty to be performed
on Landlord's part by reason of any cause
reasonably beyond Landlord's control,
Landlord shall not be liable to Tenant
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therefor, nor shall the same give rise to a
claim in Tenant's favor that such
failure constitutes actual or constructive,
total or partial, eviction from the
Premises. Landlord reserves the right to
stop any service or utility system,
when necessary by reason of accident or
emergency, or until necessary repairs
have been completed; provided, however,
that in each instance of stoppage,
Landlord shall give Tenant such notice as
is practicable under the circumstances
of the expected duration of such stoppage
and will exercise reasonable diligence
to eliminate the cause thereof. Except in
case of emergency repairs Landlord
will give Tenant reasonable advance notice
of any contemplated stoppage and will
use reasonable efforts to avoid unnecessary
inconvenience to Tenant by reason
thereof.
ARTICLE VII: INSURANCE AND
INDEMNIFICATION
7.1 Insurance.
The provisions of this Lease regarding insurance and
indemnification are set forth in Exhibit D,
which is incorporated herein by
reference.
ARTICLE VIII: ASSIGNMENT AND SUBLETTING
8.1 Landlord's
Consent Required. Tenant shall not assign this Lease, or
sublet or license the Premises or any
portion thereof, or advertise the Premises
for assignment or subletting or permit the
occupancy of all or any portion of
the Premises by anybody other than Tenant
(each of the foregoing actions is
referred to as a "transfer") without
obtaining, on each occasion, the prior
consent of Landlord, subject to and in
accordance with this Article VIII. A
transfer shall include, without limitation,
any transfer of Tenant's interest in
this Lease by operation of law, merger or
consolidation of Tenant into any other
firm or corporation, the transfer or sale
of a controlling interest in Tenant
whether by sale of its capital stock or
otherwise or any liquidation of Tenant
or a substantial part of Tenant's assets.
Landlord's consent to a proposed
sublease shall not be unreasonably
withheld, it being understood that the
proposed sublease must comply with all
other provisions of this Lease
(including, without limitation, this
Section 8.1), must not alter Landlord's
rights under the Lease, and must not impose
any additional obligation on
Landlord.
Notwithstanding
the foregoing, the following transactions ("Excluded
Transactions") shall not require the
consent of Landlord provided that Landlord
shall receive prior notice thereof plus
reasonable evidence upon closing that
the transaction is in fact one of the
following (and provided further that the
proposed transfer complies with all other
provisions of this Lease, including,
without limitation, this Article VIII, does
not alter Landlord's rights under
the Lease, and does not impose any
additional obligation on Landlord):
(a) Any transfer
to an entity succeeding to the business and assets of
Tenant, whether by way of merger,
consolidation or otherwise; and
(b) Any transfer
to an entity controlling Tenant, directly or indirectly
controlled and beneficially owned by
Tenant, or under common control with
Tenant. For purposes of this clause (b),
control shall mean possession of more
than 50 percent ownership of the shares of
beneficial interest of the entity in
question together with the power to control
and manage the affairs thereof
either directly or by election of directors
and/or officers.
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<PAGE>
8.2 Terms.
Tenant shall not offer to make a transfer to any party which
would be of such type, character or
condition as to be inappropriate as a tenant
for a building comparable to the Building.
Tenant shall not offer to make or
make an assignment of any portion of the
Premises (other than for Excluded
Transactions) unless the aggregate rent
payable to Tenant under such assignment
equals or exceeds the then prevailing
market rate rent and other charges payable
for space comparable to the Premises.
8.3 Right of
Termination or Recapture. If Tenant proposes a transfer of the
Premises with an intended duration of more
than seven (7) years (other than for
Excluded Transactions or a transfer of a
division of Tenant that occupies the
entire Building which transfer involves the
entire Building), Tenant shall offer
to Landlord in writing the right to
terminate this Lease as to the space and
period in question as of the date specified
in the offer. If Landlord shall
elect in writing to accept the offer to
terminate within twenty (20) days after
receipt of notice of the offer, this Lease
shall so terminate as to the space
and period in question as of the date
specified in such offer, and all of the
terms and provisions of this Lease
governing termination shall apply. If
Landlord shall not so elect, Tenant shall
then comply with the provisions of
this Article VIII applicable to such
transfer.
8.4 Landlord's
Consent. Tenant's request for consent under this Article
VIII (and Tenant's notice of any transfer
not requiring Landlord's consent under
Section 8.1 above) shall set forth the
details of the proposed transfer,
including: (i) the name, business and
financial condition of the prospective
transferee, (ii) a true and complete copy
of the proposed instrument containing
all of the terms and conditions of such
transfer, (iii) a written agreement of
the assignee, subtenant or licensee, in
recordable form reasonably approved by
Landlord, agreeing with Landlord to perform
and observe all of the terms,
covenants, and conditions of this Lease,
and (iv) any other information Landlord
reasonably requested by Landlord prior to
or in response to such notice. Except
for any transfer not requiring Landlord's
consent under Section 8.1 above,
Landlord shall have the right to withhold
consent, reasonably exercised as to
any proposed sublease, or to grant consent,
based on the following factors: (i)
the business of the proposed assignee or
subtenant and the proposed use of the
Premises (if other than the Permitted Use);
(ii) the net worth, business
reputation, character, and financial
condition of the proposed assignee or
subtenant; (iii) Tenant's compliance with
all of its obligations under this
Lease within applicable notice and cure
periods; and (iv) such other factors as
Landlord may reasonably deem relevant.
Tenant shall pay to Landlord, as
Additional Rent, Landlord's reasonable
attorneys' fees in reviewing any transfer
contemplated by this Section, whether or
not Landlord consents to the same
(provided that the maximum amount of such
fees in connection with any single
proposed transfer shall be Two Thousand
Dollars [$2,000]).
8.5 Profits. If
Tenant does transfer with Landlord's consent (other than a
transfer of a division of Tenant that
occupies the entire Building which
transfer involves the entire Building under
which Landlord does not release
Tenant from its obligations under this
Lease pursuant to Section 8.6 below), and
if the consideration, rent, or other
charges payable to Tenant under such
transfer exceed the rent and other charges
to be paid hereunder (pro-rated based
on floor area in the case of a subletting,
license or other occupancy of less
than the entire floor area of the Premises
in question), then Tenant shall pay
to Landlord, as additional rent, after
deducting all reasonable out-of-pocket
expenses incurred in connection with such
transfer (including without
limitation, brokerage commissions, tenant
improvement costs, and legal fees)
fifty percent (50%)
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of the amount of such excess when and as
received. Without limiting the
generality of the foregoing, any lump-sum
payment or series of payments due
(including for the purchase of so-called
leasehold improvements) on account of
any transfer shall be deemed to be in
excess of rent and other charges in its or
their entirety.
8.6 No Release.
Notwithstanding any transfer of this Lease or any interest
therein (other than an Excluded Transaction
or, in Landlord's discretion, a
transfer of a division of Tenant that
occupies the entire Building which
transfer involves the entire Building),
Tenant's (and any Guarantor's) liability
to Landlord shall in all events remain
direct and primary. Any transferee of all
or a substantial part of Tenant's interest
in the Premises shall be deemed to
have agreed directly with Landlord to be
jointly and severally liable with
Tenant for the performance of all of
Tenant's covenants under this Lease; and
such assignee shall upon request execute
and deliver such instruments as
Landlord reasonably requests in
confirmation thereof (and agrees that its
failure to do so shall be subject to the
default provisions). Landlord may
collect rent and other charges from such
transferee (and upon notice such
transferee shall pay directly to Landlord)
and shall apply the net amount
collected to the rent and other charges
herein reserved, but no transfer shall
be deemed a waiver of the provisions of
this Section, or the acceptance of the
transferee as a tenant, or a release of
Tenant or any guarantor from direct and
primary liability for the performance of
all of the covenants of this Lease. The
consent by Landlord to any transfer shall
not relieve Tenant from the obligation
of obtaining the express consent of
Landlord to any modification of such
transfer or a further assignment,
subletting, license or occupancy, to the
extent required in Section 8.1; nor shall
Landlord's consent alter in any manner
whatsoever the terms of this Lease, to
which any transfer at all times shall be
subject and subordinate. The breach by
Tenant of any restriction on transfer in
this Section shall be a default for which
there is no cure period.
ARTICLE IX: DEFAULT AND REMEDIES
9.1 Events of
Default. (a) If Tenant fails to pay Annual Fixed Rent or any
Additional Rent or other sum or charge
hereunder within three (3) days after
written notice that the same is due; or (b)
if more than two notices of separate
defaults are properly given in any twelve
month period, or (c) (Intentionally
omitted), or (d) if any assignment shall be
made by Tenant (or any assignee,
subless
