EXHIBIT 10.1
LEASE AGREEMENT
965 PRAIRIE CENTER DRIVE
EDEN PRAIRIE, MN
This Lease is made and entered into
as of the Effective Date by and between 965 Partnership LLP , A
Minnesota Limited Liability Partnership , as Landlord, and Xata
Corporation, a Minnesota corporation, as Tenant.
DEFINITIONS
Except as otherwise specifically
defined in this Lease, the capitalized terms used in this Lease
have the meanings ascribed to them on Exhibit 1
.
BASIC TERMS
The following Basic Terms are
governed by the particular sections in this Lease pertaining to the
following information:
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1.
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Premises: |
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The entire building, consisting of
approximately 26,791 rentable square feet (the
“Building”), and the garage area and all other
improvements located at 965 Prairie Center Drive, Eden Prairie,
Minnesota 55345. The Premises are depicted on the Floor Plan
attached as Exhibit 2 and the site plan of the
Property is depicted on the Site Plan attached hereto as
Exhibit 2-A . |
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2.
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Term: |
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86 full calendar months
(Section 1.2.1). |
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3.
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Extension Option : |
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None. |
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4.
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Commencement Date: |
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The earlier of
(a) November 1, 2007 and (b) the date that Tenant
commences business operations within the Premises, so long as
Landlord delivers the Premises to Tenant by July 9, 2007. If
Landlord fails to deliver the Premises to Tenant by July 9,
2007, the Commencement Date shall be postponed one day for each day
of delay by Landlord in delivering the Premises after July 9,
2007. Tenant’s obligation to pay Rent shall not start until
two months after the Commencement Date. |
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5.
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Basic Rent: |
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Months |
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PSF |
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Annually |
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1-2
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$ |
00.00 |
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$ |
00.00 |
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3-12
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$ |
14.00 |
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$ |
375,074.00 |
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13-24
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$ |
14.42 |
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$ |
386,326.22 |
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25-36
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$ |
14.85 |
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$ |
397,846.35 |
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37-48
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$ |
15.30 |
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$ |
409,902.30 |
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49-60
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$ |
15.76 |
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$ |
422,226.16 |
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61-72
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$ |
16.23 |
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434,817.93 |
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73-86
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$ |
16.72 |
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447,945.52 |
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6.
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Tenant’s Share of Expenses
Percentage: |
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100% |
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7.
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Property Manager/Rent
Payment Address: |
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Bayport Properties |
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300 South Highway 169
Suite 120
St. Louis Park, MN 55426
Telephone: (952) 548-6202
Fax: (952) 548-6200 |
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8.
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Address of Landlord for
Notices: |
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Same as Property Manager/Rent Payment
Address |
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9.
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Address of Tenant for
Notices: |
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Xata Corporation
Attn: Mark Ties, CFO
965 Prairie Center Drive
Eden Prairie, MN 55345
Telephone: (___) _________
Fax: (___) _________ |
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10.
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Brokers: |
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Welsh Companies (Landlord’s
Broker).
Frauenshuh, Inc. (Tenant’s Broker).
(Section 18.11) |
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11.
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Security Deposit: |
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None |
ARTICLE 1
LEASE OF PREMISES AND LEASE TERM
1.1. Premises . In
consideration of the mutual covenants this Lease describes,
Landlord leases the Premises to Tenant and Tenant leases the
Premises from Landlord, subject to the terms, covenants and
conditions set forth in this Lease. The rentable area of the
Premises is the rentable area specified in the Basic Terms. Tenant
shall have the exclusive right to use the entire Property during
the Term and Landlord shall not (other than in connection with
Landlord’s maintenance obligations under this Lease) make any
changes, improvements or additions on or to the Property, except
for normal maintenance and building repairs, without Tenant’s
consent, which may be withheld in Tenant’s sole
discretion.
1.2. Term, Delivery and
Commencement .
1.2.1. Commencement and Expiration of Term . The Term of
this Lease is the period stated in the Basic Terms. The Term
commences on the Commencement Date and expires on the last day of
the last calendar month of the Term.
1.2.2. Tender of Possession. Landlord will use commercially
reasonable efforts to tender possession of the Premises to Tenant
on or before July 9, 2007, subject to Force Majeure and Tenant
Delay. If Landlord is unable to tender possession of the Premises
to Tenant on or before November 1, 2007 for any reason, including
Force Majuere, Tenant shall have the right to terminate this Lease
at any time thereafter by giving written notice to Landlord prior
to delivery of the Premises.
1.2.3. Early Access. Landlord hereby allows Tenant access to
the Premises upon lease signing and prior to the Commencement Date.
During this early access period, Tenant may complete the Tenant
Improvements and install its furniture, fixtures and equipment in
the Premises, and Tenant shall comply with and observe all terms
and conditions of this Lease (other than Tenant’s obligation
to pay Rent). Tenant shall not have exclusive access to, or control
of, the Premises during the early access period. Landlord reserves
to itself and its agents the right to access and control the
Premises during the early access period, so long as such access
does not materially or adversely interfere with Tenant’s
installation of the Tenant Improvements.
1.2.4. Termination Option. Tenant has a one time right to
terminate this Lease (the “ Early Termination Option
”) with such termination being effective at any point in time
after the last day of the sixty
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second
(62 th
) month of the Term (the “ Early Termination Date
”), by giving Landlord at least nine months prior written
notice (“ Tenant’s Early Termination Notice
”), provided that: (1) on or before the Early Termination
Date, Tenant has paid Landlord all amounts due and owing under the
Lease; and (2) Tenant pays to Landlord within ten days after
the delivery of Tenant’s Early Termination Notice, a
termination fee equal to the unamortized portion of the
Landlord’s leasing costs, equal to be $30.00 per square foot
for tenant improvements and $7.50 per square foot for leasing
commission charges (i.e. broker fees and costs), based on
amortizing such costs with interest thereon at the rate of 8% per
annum, and a termination penalty equal to two months’ gross
rent. Tenant’s right to exercise this Early Termination
Option is conditioned on: (a) there being no uncured Event of
Default at the time of exercise of the Early Termination Option or
on the Early Termination Date; and (b) Tenant not having
subleased or assigned its interest under the Lease (other than to
an Affiliate), as of the date of exercise of the Early Termination
Option or on the Early Termination Date. If this Early Termination
Option is timely exercised, Tenant will deliver possession of the
Premises to Landlord on the Early Termination Date in accordance
with the terms of this Lease and all other terms will apply as if
this Lease had expired according to its terms, including
Tenant’s Share of Expenses attributable to periods prior to
the Early Termination Date at such time as such obligation is
determined. If Tenant fails to timely give notice, Tenant will be
deemed to have waived its right to terminate pursuant to this
Section. This Early Termination Right is personal to Tenant (and
not to any assignee or subtenant, other than an Affiliate) and may
not be assigned, it being agreed such right is not appurtenant to
the Premises or this Lease; upon a Transfer of the Lease by Tenant
(other than to an Affiliate), this Section is null and void.
1.3. Quiet Enjoyment. Subject
to the terms of this Lease, Landlord covenants that if Tenant
timely, within all applicable cure periods, (a) pays all Rent
and other charges provided for herein, (b) performs all of its
obligations provided for herein, and (c) observes all of the
other provisions hereof, then Tenant shall at all times during the
Term peaceably and quietly have, hold and enjoy the Premises,
without interruption or disturbance by Landlord, or anyone claiming
through or under Landlord.
ARTICLE 2
RENT
2.1. Basic Rent. Tenant will
pay Basic Rent in monthly installments to Landlord, in advance,
without offset or deduction, except as expressly provided in this
Lease, commencing on the Commencement Date and continuing on the
first day of each and every calendar month after the Commencement
Date during the Term. Tenant will make all Basic Rent payments to
Property Manager at the address specified in the Basic Terms or at
such other place or in such other manner as Landlord may from time
to time designate in writing. Tenant will make all Basic Rent
payments without Landlord’s previous demand, invoice or
notice for payment. Landlord and Tenant will prorate, on a per diem
basis, Basic Rent for any partial month within the Term.
2.2. Additional Rent.
Article 3 of this Lease requires Tenant to pay certain
Additional Rent pursuant to estimates Landlord delivers to Tenant.
Tenant will make all payments of estimated Additional Rent in
accordance with Article 3 without deduction or offset, except
as expressly provided in this Lease, and without Landlord’s
previous demand, invoice or notice for payment. Tenant will pay all
other Additional Rent described in this Lease that is not estimated
under Article 3 within 30 days after receiving
Landlord’s invoice for such Additional Rent. Tenant will make
all Additional Rent payments to the same location and, except as
set forth in the preceding sentence, in the same manner as
Tenant’s payments of Basic Rent.
2.3. Delinquent Rental
Payments. If Tenant does not pay any installment of Basic Rent
or any Additional Rent within 5 Business Days after the date the
payment is due, Tenant will pay Landlord an additional amount equal
to the greater of (a) interest on the delinquent payment
calculated at the Maximum Rate from the date when the payment is
due through the date the payment is made, or (b) a late payment
charge equal to 5% of the amount of the delinquent payment.
Landlord’s right to such compensation for any such
delinquency is in addition to all of Landlord’s rights and
remedies under this Lease, at law or in equity. Notwithstanding the
foregoing, Tenant shall not be charged any late payment or interest
for the first late payment in any twelve month period during the
Term, unless Tenant fails to pay any outstanding amount due to
Landlord within 5 Business Days following notice from Landlord of
the amount due.
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2.4. Independent Obligations.
Notwithstanding any contrary term or provision of this Lease,
Tenant’s covenant and obligation to pay Rent is independent
from any of Landlord’s covenants, obligations, warranties or
representations in this Lease.
2.5. Abated Rent.
Notwithstanding anything to the contrary, Tenant may occupy the
Premises and shall be entitled to the full abatement of Basic Rent
and Additional Rent attributable to Tenant’s Share of
Expenses for a period commencing on the Commencement Date and
terminating two months from such date (the “ Abated Rent
Period ”; such amounts are referred to herein as “
Abated Rent”.
ARTICLE 3
PROPERTY TAXES AND OPERATING EXPENSES
3.1. Payment of Expenses.
Tenant will pay, as Additional Rent and in the manner this
Article 3 describes, Tenant’s Share of Expenses due and
payable during any calendar year of the Term. Landlord will prorate
Tenant’s Share of Expenses due and payable during the
calendar year in which the Lease commences or terminates as of the
Commencement Date or termination date, as applicable, on a per diem
basis based on the number of days of the Term within such calendar
year.
3.2. Estimation of Tenant’s
Share of Expenses. Landlord will deliver to Tenant a written
estimate of the following for each calendar year of the Term:
(a) Property Taxes, (b) Operating Expenses,
(c) Tenant’s Share of Expenses Percentage and
(d) the annual and monthly Additional Rent attributable to
Tenant’s Share of Expenses. Landlord estimates that the
Additional Rent attributable to Tenant’s Share of Expenses in
2007 will be approximately $9.60 per square foot.
3.3. Payment of Estimated
Tenant’s Share of Expenses. Tenant will pay the amount
Landlord estimates as Tenant’s Share of Expenses under
Section 3.2 for each calendar year of the Term in equal
monthly installments, in advance, on the first day of each month
during such calendar year. If Landlord has not delivered the
estimates to Tenant by the first day of January of the applicable
calendar year, Tenant will continue paying Tenant’s Share of
Expenses based on Landlord’s estimates for the previous
calendar year. When Tenant receives Landlord’s estimates for
the current calendar year, Tenant will pay the estimated amount
(less amounts Tenant paid to Landlord in accordance with the
immediately preceding sentence) in equal monthly installments over
the balance of such calendar year, with the number of installments
being equal to the number of full calendar months remaining in such
calendar year.
3.4. Re-Estimation of
Expenses. Landlord may re-estimate Expenses from time to time
during the Term, but not more often than once per calendar year. In
such event, Landlord will re-estimate the monthly Additional Rent
attributable to Tenant’s Share of Expenses to an amount
sufficient for Tenant to pay the re-estimated monthly amount over
the balance of the calendar year. Landlord will notify Tenant of
the re-estimate and Tenant will pay the re-estimated amount in the
manner provided in the last sentence of Section 3.3.
3.5. Confirmation of
Tenant’s Share of Expenses. Within 90 days after the
end of each calendar year within the Term, Landlord will determine
the actual amount of Expenses and Tenant’s Share of Expenses
for the expired calendar year and deliver to Tenant a written
statement of such amounts. If Tenant paid less than the actual
amount of Tenant’s Share of Expenses specified in the
statement, Tenant will pay the difference to Landlord as Additional
Rent in the manner Section 2.2 describes. If Tenant paid more
than the actual amount of Tenant’s Share of Expenses
specified in the statement, Landlord, at Landlord’s option,
will either (a) refund the excess amount to Tenant within
30 days, or (b) credit the excess amount against
Tenant’s next due monthly installment or installments of
estimated Additional Rent, provided that during the last year of
the Term, Landlord shall refund such excess as provided herein. If
Landlord is delayed in delivering such statement to Tenant, such
delay does not constitute Landlord’s waiver of
Landlord’s rights under this section or release Tenant from
any of its obligations hereunder. Tenant acknowledges that, for
purposes of accounting for Expenses, Landlord may close a
“calendar” year on December 20th of that year; if
Landlord actually does so, then Landlord’s determination of
the actual amount of Expenses for the following calendar year will
include any Expenses attributable to the period of December 21
st
through December 31 st of the previous
calendar year.
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3.6. Tenant’s Inspection
and Audit Rights. If (i) Tenant is not in default in the
performance of any of its obligations under this Lease beyond any
applicable cure period, and if (ii) Tenant disputes
Landlord’s determination of the actual amount of Expenses or
Tenant’s Share of Expenses for any calendar year, and if
(iii) Tenant delivers to Landlord written notice of the
dispute within 60 days after Landlord’s delivery of the
statement of such amount under Section 3.5, then Tenant at
Tenant’s sole cost and expense, upon prior written notice and
during regular business hours at a time and place reasonably
acceptable to Landlord (which may be the location where Landlord or
Property Manager maintains the applicable records), may cause a
certified public accountant reasonably acceptable to Landlord to
audit Landlord’s records relating to the disputed amounts.
Tenant’s objection to Landlord’s determination of
Expenses or Tenant’s Share of Expenses shall be deemed
withdrawn unless Tenant completes and delivers the audit to
Landlord within 90 days after the date Tenant delivers its
dispute notice to Landlord under this section. If the audit shows
that the amount Landlord charged Tenant for Tenant’s Share of
Expenses was greater than the amount this Article 3 obligates
Tenant to pay, then, unless Landlord reasonably contests the audit
by causing, within 30 days thereafter, a certified public
accountant to review the results of Tenant’s audit, Landlord
will refund the excess amount to Tenant within 10 days after
Landlord receives a copy of the audit report. If the audit shows
that the amount Landlord charged Tenant for Tenant’s Share of
Expenses was less than the amount this Article 3 obligates
Tenant to pay, Tenant will pay to Landlord within 10 days, as
Additional Rent, the difference between the amount Tenant paid and
the amount determined in the audit. Pending resolution of any audit
under this section, Tenant will continue to pay to Landlord the
estimated amounts of Tenant’s Share of Expenses in accordance
with Sections 3.3 and 3.4. Tenant must keep all information it
obtains in any audit strictly confidential and may only use such
information for the limited purpose this section describes and for
Tenant’s own account. If the results of any audit by Tenant
indicate that there was an overpayment of Expenses by Tenant that
exceed 10% of the amount claimed to be due from Tenant in
Landlord’s statement, Landlord shall reimburse Tenant for its
reasonable costs incurred on account of the audit.
3.7. INTENTIONALLY DELETED
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3.8. Landlord’s Right to
Contest Property Taxes. Landlord may in its reasonable
discretion contest the amount or validity, in whole or in part, of
any Property Taxes. Landlord may include in its computation of
Property Taxes the reasonable costs and expenses Landlord incurred
in connection with any such contest (including but not limited to
reasonable attorney’s fees), provided that such contest
results in a reduction of Property Taxes and Tenant receives the
benefit of such reduction. Tenant may not contest Property Taxes,
provided that Landlord agrees to contest Property Taxes upon
Tenant’s request. In the event that Tenant requests Landlord
to contest Property Taxes and there is no reduction of these
amounts, Tenant shall reimburse Landlord for said parties expenses
in such contest. Further, any cost savings to Tenant shall be net
of Landlords expenses in contesting the Property Taxes.
ARTICLE 4
USE
4.1. Permitted Use. Tenant
may use the Premises only for general office purposes, including
without limitation, displaying Tenant’s products, and not for
any other purpose. Tenant will not use the Property or knowingly
permit the Property to be used in violation of any Laws or in any
manner that would (a) cause injury or damage to the Property;
(b) cause substantial diminution in the value or usefulness of
all or any part of the Property (reasonable wear and tear
excepted); or (c) constitute waste or a public or private
nuisance. Tenant will obtain and maintain, at Tenant’s sole
cost and expense, all permits and approvals required under the Laws
for Tenant’s use of the Premises. Notwithstanding anything to
the contrary in this Lease, Landlord hereby agrees that Tenant may
park, display and/or store a Class 8 vehicle in or adjacent to
the truck bay in the Building.
4.2. Acceptance of Premises.
Except only as specifically set forth in this Lease (including the
last sentence of this Section 4.2), Tenant acknowledges that
neither Landlord nor any agent, contractor or employee of Landlord
have made any representation or warranty of any kind with respect
to the Premises, specifically including but not limited to any
representation or warranty of suitability or fitness of the
Premises for any particular purpose. Except only as specifically
set forth in this Lease (including the last sentence of this
Section 4.2), Tenant accepts the Premises in an “ AS
IS — WHERE IS ” condition. Notwithstanding the
foregoing, Landlord
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represents that to Landlord’s actual knowledge the roof of
the Building is free of leaks and the existing mechanical systems
serving the Premises (HVAC, electrical, lighting, water, plumbing,
sewer, sprinkler, fire alarm system) are in good working order. In
addition, within thirty (30) days after the mutual execution
of this Lease, Landlord shall, at its sole cost, replace all dead
grass on the Property, install trees and shrubs and adequately
landscape the Property in a manner similar to the landscaping of
other office buildings in the area. The foregoing costs incurred by
Landlord shall not be passed through as Operating Expenses under
this Lease. In addition, Landlord agrees to reseal and re-stripe
the parking areas on the Property prior to the Commencement Date,
the cost of which shall be Operating Expenses under this
Lease.
4.3. Laws. To the best of
Landlords knowledge, the Building complies with all applicable laws
and regulations. This Lease is subject and subordinate to all Laws.
Landlord agrees to deliver the Premises to Tenant in compliance
with all Laws. Landlord represents that it has not received any
legal notices providing that the Building is not in compliance with
applicable laws. The Building shall be delivered in its current
state and is subject to the Tenant Improvement described
herein.
4.4. Signs.
4.4.1. Signs Generally . Any and all permitted signs shall
comply with all Laws, and shall be installed and maintained at
Tenant’s sole expense. Landlord may immediately remove at
Tenant’s sole cost and expense any sign, advertisement,
graphics, or notice that violates this Section 4.4.
4.4.2. Building Monument Sign. Tenant shall have the
exclusive use during the Term to the Building’s existing sign
monument (the “ Building Monument ”). The exact
location and details of Tenant’s signage on the Building
Monument shall be subject to Landlord’s approval, not to be
unreasonably withheld or delayed, and shall be subject to the
Laws.
4.4.3. Building Exterior Sign. Tenant shall have the right
to install signage on the exterior of the Building (the “
Exterior Building Sign ”); provided, however, that
(i) the design, materials, size, color and location of the
Exterior Building Sign are subject to prior written approval by
Landlord, not to be unreasonably withheld, and (ii) the
Exterior Building Sign is installed and maintained at all times by
Tenant in compliance with the Laws. Tenant shall be solely
responsible for all costs and expenses associated with the Exterior
Building Sign, including without limitation all design,
construction, permitting, installation, and maintenance costs. On
or before the end of the Term, Tenant shall at its sole cost and
expense remove the Exterior Building Sign and repair the Building
affected thereby to the condition the Building was in at the time
the Exterior Building Sign was installed.
ARTICLE 5
HAZARDOUS MATERIALS
5.1. Compliance with Hazardous
Materials Laws. Tenant will not cause any Hazardous Material to
be brought upon, kept or used on the Property, in a manner or for a
purpose prohibited by or that could result in liability under any
Hazardous Materials Laws. Tenant, at its sole cost and expense,
will comply with all Hazardous Materials Laws and prudent industry
practice relating to the presence, treatment, storage,
transportation, disposal, release or management of Hazardous
Materials in, on, under or about the Property required for
Tenant’s use of the Premises and will notify Landlord of any
and all Hazardous Materials Tenant brings upon, keeps or uses on
the Property (other than small quantities of office cleaning or
other office supplies as are customarily used by a tenant in the
ordinary course in a general office facility, which Tenant may use
so long as Tenant complies with Hazardous Materials Laws). On or
before the expiration or earlier termination of this Lease, Tenant,
at its sole cost and expense, will completely remove from the
Property, in compliance with all Hazardous Materials Laws, all
Hazardous Materials Tenant causes to be present in, on, under or
about the Property. Tenant will not take any remedial action in
response to the presence of any Hazardous Materials in on, under or
about the Property, nor enter into any settlement agreement,
consent decree or other compromise with respect to any Claims
relating to or in any way connected with Hazardous Materials in,
on, under or about the Property, without first notifying Landlord
of Tenant’s intention to do so and affording Landlord
reasonable opportunity to investigate, appear, intervene and
otherwise assert and protect Landlord’s interest in the
Property.
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5.2. Notice of Actions.
Tenant will notify Landlord of any of the following actions
affecting Landlord, Tenant, or the Property that result from or in
any way relate to Tenant’s use of the Property immediately
after receiving notice of the same: (a) any enforcement,
clean-up, removal or other governmental or regulatory action
instituted, completed or threatened under any Hazardous Materials
Law; (b) any Claim made or threatened by any person relating
to damage, contribution, liability, cost recovery, compensation,
loss or injury resulting from or claimed to result from any
Hazardous Material; and (c) any reports made by any person,
including Tenant, to any environmental agency relating to any
Hazardous Material, including any complaints, notices, warnings or
asserted violations. Tenant will also deliver to Landlord, as
promptly as possible and in any event within 5 Business Days after
Tenant first receives or sends the same, copies of all Claims,
reports, complaints, notices, warnings or asserted violations
relating in any way to the Premises or Tenant’s use of the
Premises. Upon Landlord’s written request, Tenant will
promptly deliver to Landlord documentation reasonably acceptable to
Landlord reflecting the legal and proper disposal of all Hazardous
Materials removed or to be removed by Tenant from the Premises. To
the extent Tenant is responsible for removing any Hazardous
Materials, all such documentation will list Tenant or its agent as
a responsible party and will not attribute responsibility for any
such Hazardous Materials to Landlord or Property Manager.
5.3. Disclosure and Warning
Obligations. Tenant acknowledges and agrees that all reporting
and warning obligations required under Hazardous Materials Laws
resulting from or in any way relating to Tenant’s use of the
Premises or the Property are Tenant’s sole responsibility,
regardless whether the Hazardous Materials Laws permit or require
Landlord to report or warn.
5.4. Landlord
Indemnification. Landlord shall indemnify, defend and hold
harmless the Tenant Parties from and against all damages, costs,
losses, expenses (including, but not limited to, reasonable
attorneys’ fees and engineering fees) arising from or
attributable to the existence of (a) any mold or any Hazardous
Materials at the Property prior to the Commencement Date, except to
the extent caused by Tenant and (b) any mold or Hazardous
Materials disposed, released or otherwise caused by Landlord,
provided, however, in case any claim, action, suit or proceeding
shall be brought against Tenant and such matter is subject to
Landlord’s indemnification as provided above, Tenant shall
promptly notify Landlord of the same in time to avoid any prejudice
to Landlord and Landlord shall have the right to assume and control
the defense thereof with counsel of its own selection, and Landlord
shall have the right to control any remediation. To the best of
Landlord’s knowledge, Landlord warrants, represents and
covenants that as of the execution date of this Lease the Premises
do not presently contain any Hazardous Materials and are in
substantial compliance with all Hazardous Materials Laws. The
obligations of Landlord under this section shall survive the
expiration or earlier termination of this Lease.
5.5. Tenant Indemnification.
Tenant will release, indemnify, defend (with counsel reasonably
acceptable to Landlord), protect and hold harmless the Landlord
Parties from and against any and all Claims whatsoever arising or
resulting, in whole or in part, directly or indirectly, from the
presence, treatment, storage, transportation, disposal, release or
management of Hazardous Materials in, on, under, upon or from the
Property (including water tables and atmosphere) resulting from or
in any way related to Tenant’s use of the Premises or the
Property. Tenant’s obligations under this section include,
without limitation and whether foreseeable or unforeseeable:
(a) the costs of any required or necessary repair, clean-up,
detoxification or decontamination of the Property; (b) the
costs of implementing any closure, remediation or other required
action in connection therewith as stated above; (c) the value
of any loss of use and any diminution in value of the Property; and
(d) consultants’ fees, experts’ fees and response
costs. The obligations of Tenant under this section shall survive
the expiration or earlier termination of this Lease.
ARTICLE 6
SERVICES
6.1. Landlord’s
Obligations. Landlord will provide the following services, the
costs of which are Operating Expenses:
6.1.1. Janitorial Service. Landlord will provide janitorial
service in the Premises, in accordance with Landlord’s
schedule for the Building, including: (a) cleaning and trash
removal; (b) dusting and vacuuming; (c) maintaining
towels, tissue and other restroom supplies; (d) periodic
interior and exterior window
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washing
and cleaning; (e) periodic waxing of uncarpeted floors; and
(f) such other work as is customarily performed in connection
with nightly janitorial services in buildings similar in
construction, location, use and occupancy to the Building.
6.1.2. Electrical Energy; Lighting. Landlord will provide
electrical energy to the Premises for lighting and for operating
office machines for general office use. Said electrical energy will
not be sufficient for lighting in excess of 4 watts per square foot
installed or for any electrical equipment that singularly consumes
more than 1.0 kilowatts per hour at rated capacity or requires a
voltage other than 120 volts single phase. Tenant will not use any
equipment requiring electrical energy in excess of the above
standards without Landlord’s prior written consent, which
consent Landlord will not unreasonably withhold but may condition
on Tenant paying all costs of installing the equipment and
facilities necessary to furnish such excess energy and the
additional energy costs. Landlord will replace all lighting bulbs,
tubes, ballasts and starters within the Premises; with such
lighting costs being included in Operating Expenses.
6.1.3. Heating, Ventilation and Air Conditioning. During the
Term, Landlord will provide heating, ventilation and air
conditioning to the Premises sufficient to maintain comfortable
temperatures in the Premises. All costs for these services shall be
part of Additional Rent (Operating Expenses).
6.1.4. Water. Landlord will provide hot and cold water from
standard building outlets for restroom and drinking purposes.
6.1.5. Elevator Service. Landlord will provide elevator
service to be used by Tenant.
6.2. Tenant’s Obligations.
Except for expenses paid by Landlord and added to the Operating
Expenses, Tenant is solely responsible for paying directly to
the applicable utility companies, prior to delinquency, all unique
utilities (if any) applicable to the Premises or to Tenant. If
applicable, such amounts are not included in Operating Expenses.
Except as specifically provided in Sections 6.1, Tenant will
also obtain and pay for all other utilities and services Tenant
requires with respect to the Premises, including but not limited to
utility hook-up and connection charges.
6.3. Other Provisions Relating to
Services. Landlord is not required to provide any heat, air
conditioning, electricity or other service in excess of that
required by governmental guidelines or other Laws. No interruption
in or temporary stoppage of any of the utilities or other services
this Article 6 describes is to be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises,
nor does any such interruption or stoppage relieve Tenant from any
obligation this Lease describes, render Landlord liable for
damages, or entitle Tenant to any abatement of Rent; provided,
however, that if any such interruption or temporary stoppage is
primarily caused by a negligent act or omission of Landlord and
continues for more than 3 consecutive business days, then Rent
hereunder shall abate until such interruption or temporary stoppage
either ceases or is no longer primarily caused by a negligent act
or omission of Landlord.
6.4. Tenant Devices and
Equipment. Tenant will not connect any device or equipment to
the Building’s electrical or plumbing systems except through
the electrical and water outlets in the Premises that were
installed (or otherwise approved in writing) by Landlord. No
antenna, satellite dish, or other communications equipment shall be
allowed without Landlord’s prior written consent (which
consent shall not be unreasonably withheld). In the event Landlord
consents to Tenant’s installation of an antenna, satellite
dish, or other communications equipment on the Property (including
without limitation on the roof of the Building), then Landlord and
Tenant shall execute a Communications Equipment License in form
reasonably required by Landlord. Tenant acknowledges that the
installation of any such communications equipment shall be deemed
an “Alteration” subject to the terms and conditions of
Article 8 of this Lease.
Notwithstanding the foregoing, Tenant shall have the right to
install GPS Antennas on the roof of the Building (the “
Supplemental Equipment ”), without the execution of a
Communications Equipment License. The exterior placement of the
Supplemental Equipment shall be in a location mutually agreed to by
Landlord and Tenant. The Supplemental Equipment shall be installed,
operated and maintained in accordance with the Laws. Tenant shall
be responsible for all costs and expenses associated with
installing, maintaining, operating, repairing, and insuring the
Supplemental Equipment. If required by Landlord, Tenant shall
immediately remove the
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Supplemental Equipment upon expiration or earlier termination of
the Lease, and shall immediately repair all damage caused by such
removal. Tenant acknowledges that the installation of the
Supplemental Equipment shall be deemed an “Alteration”
subject to the terms and conditions of Article 8 of this
Lease.
Notwithstanding the foregoing, Tenant shall have the right to
install a security system to control access and movement within the
Premises (the “ Premises Security System ”). The
plans for the Premises Security System shall be subject to prior
written approval by Landlord, not to be unreasonably withheld or
delayed. If required by Landlord, Tenant shall immediately remove
the Premises Security System upon expiration or earlier termination
of the Lease, and shall immediately repair all damage caused by
such removal. Tenant shall provide Landlord and lawful authorities
with emergency access to the Premises and access for purposes of
performing janitorial services, repairs, and maintenance. Tenant
acknowledges that the installation of the Premises Security System
shall be deemed an “Alteration” subject to the terms
and conditions of Article 8 of this Lease.
ARTICLE 7
MAINTENANCE AND REPAIR
7.1. Landlord’s
Obligations. Except as otherwise provided in this Lease,
Landlord will repair and maintain the following in good order,
condition and repair (including any necessary replacements):
(a) all structural elements of the Property, including without
limitation, the foundation, exterior walls and roof of the
Building; (b) the electrical, mechanical, plumbing, heating
and air conditioning systems; (c) all parking areas, sidewalks
and driveways located on the Property and (d) the electrical,
mechanical, plumbing, heating and air conditioning systems serving
the Premises or Property. Except as otherwise provided in this
Lease, Landlord’s repair and maintenance costs under
subsections (a), (b), and (c) of this Section 7.1 are
Operating Expenses.
7.2. Tenant’s
Obligations.
7.2.1. Maintenance of Premises. Landlord is not required to
repair or maintain the Premises or the Property (or to make any
Alterations to the Premises or Property), except as otherwise
specifically provided in this Lease. Except as specifically set
forth in Section 7.1, Tenant is solely responsible for the
repair, maintenance, replacement, operation, condition and
management of the Premises. Except as specifically set forth in
Section 7.1, Tenant at its sole cost and expense will keep and
maintain the Premises (including without limitation all
non-structural interior portions; lighting systems; interior
surfaces of exterior walls; and interior moldings, partitions,
glass, doors and ceilings) in good order, condition and repair,
reasonable wear and tear and damage from condemnation and insured
casualties excepted. Tenant’s repairs will be at least equal
in quality and workmanship to the original work and Tenant will
make the repairs in accordance with all Laws. Tenant will keep the
Premises in a neat and sanitary condition and will not commit any
nuisance or waste in, on or about the Premises or the Property.
Tenant shall release, indemnify, protect and defend Landlord
against (with counsel reasonably acceptable to Landlord), and hold
Landlord harmless from, any Claims or damages resulting from any
penetrations or perforations of the roof or exterior walls of the
Building caused or allowed by Tenants (excepting any work performed
by Landlord or its agents or employees).
7.2.2. Alterations Required by Laws. If any governmental
authority requires any Alteration to the Building or the Premises
solely as a result of Tenant’s particular use of the Premises
(as opposed to general office use) or as a result of any Alteration
to the Premises made by or on behalf of Tenant, or if
Tenant’s particular use of the Premises subjects Landlord or
the Property to any obligation under any Laws, Tenant will pay the
cost of all such Alterations or the cost of compliance, as the case
may be. If any such Alterations are Structural Alterations,
Landlord will make the Structural Alterations; provided, however,
that Landlord may require Tenant to deposit with Landlord an amount
sufficient to pay the cost of the Structural Alterations
(including, without limitation, reasonable overhead and
administrative costs). If the Alterations are not Structural
Alterations, Tenant will make the Alterations at Tenant’s
sole cost and expense in accordance with Article 8.
ARTICLE 8
CHANGES AND ALTERATIONS
8.1. Landlord Approval .
Tenant will not make any Structural Alterations to the Premises.
Tenant will not make any other Alterations without Landlord’s
prior written consent, which consent Landlord shall not
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unreasonably withhold; provided, however, that Landlord may
condition its consent in its reasonable discretion. Notwithstanding
the foregoing, Tenant may make Alterations costing less than
$10,000 per year without Landlord’s consent, so long as the
Alterations are not Structural Alterations. Along with any request
for Landlord’s consent, Tenant will deliver to Landlord
complete plans and specifications for the Alterations, and will
identify any prospective contractors for the Alterations. If
Landlord approves the proposed Alterations, Tenant, before
commencing the Alterations or delivering (or accepting delivery of)
any materials to be used in connection with the Alterations, will
deliver to Landlord for Landlord’s reasonable approval proof
of insurance required by Section 8.2, copies of all necessary
permits and licenses, and such other information relating to the
Alterations as Landlord reasonably requests. Tenant will not
commence the Alterations before Landlord, in Landlord’s
reasonable discretion, approves the foregoing deliveries. Tenant
will construct all approved Alterations or cause all approved
Alterations to be constructed (a) promptly by a licensed and
properly bonded contractor, (b) in a good and workmanlike
manner, (c) in compliance with all Laws, (d) in
accordance with all orders, rules and regulations of the Board of
Fire Underwriters having jurisdiction over the Premises and any
other body exercising similar functions, and (e) in full
compliance with all of Landlord’s reasonable rules and
regulations applicable to third party contractors, subcontractors
and suppliers performing work at the Property.
8.2. Tenant’s
Responsibility for Cost and Insurance. Tenant will pay the cost
and expense of all Alterations, and for any painting, restoring or
repairing of the Premises or the Property in connection with the
Alterations. Prior to commencing the Alterations, Tenant will
deliver the following to Landlord in form and amount reasonably
satisfactory to Landlord: (a) builder’s “all
risk” insurance in an amount at least equal to the
replacement value of the Building (excluding the Land, foundation,
grading costs and excavation costs); and (b) evidence that
Tenant and each of Tenant’s contractors have in force
liability insurance insuring against construction related risks, in
at least the form, amounts and coverages required of Tenant under
Article 10. The insurance policies described in clauses
(a) and (b) of this section will name Landlord and
Property Manager (and, if requested by Landlord, Landlord’s
lender) as additional insureds.
8.3. Construction Obligations and
Ownership. Landlord may inspect construction of the
Alterations. Immediately after completing the Alterations, Tenant
will furnish Landlord with contractor affidavits, full and final
lien waivers and receipted bills covering all labor and materials
expended and used in connection with the Alterations. Tenant will
remove any Alterations Tenant constructs in violation of this
Article 8 within 10 days after Landlord’s written
request and in any event prior to the expiration or earlier
termination of this Lease. All Alterations Tenant makes or installs
(including all telephone, computer and other wiring and cabling
located within the walls of and outside the Premises, but excluding
Tenant’s movable trade fixtures, furniture and equipment)
become the property of Landlord upon installation, unless Landlord,
by giving written notice to Tenant at the time that Tenant requests
Landlord’s consent to such Alterations, requires Tenant to
remove the Alterations (provided that in no event shall Tenant have
any obligation to remove the Tenant Improvements). Tenant will
surrender the Alterations to Landlord upon the expiration or
earlier termination of this Lease at no cost to Landlord.
8.4. Liens. Tenant will keep
the Property free from any mechanics’, materialmens’,
designers’ or other liens arising out of any work performed,
materials furnished or obligations incurred by or for Tenant or any
person or entity claiming by, through or under Tenant. Tenant will
notify Landlord in writing at least 30 days prior to
commencing any Alterations in order to provide Landlord the
opportunity to record and post notices of non-responsibility or
such other protective notices available to Landlord under the Laws.
If any such liens are filed and Tenant, within 15 days after
such filing, does not release the same of record or provide
Landlord with a bond or other surety satisfactory to Landlord
protecting Landlord and the Property against such liens, Landlord
may, without waiving its rights and remedies based upon such breach
by Tenant and without releasing Tenant from any obligation under
this Lease, cause such liens to be released by any means Landlord
deems proper, including, but not limited to, paying the claim
giving rise to the lien or posting security to cause the discharge
of the lien. In such event, Tenant will reimburse Landlord, as
Additional Rent, for all amounts Landlord pays (including, without
limitation, reasonable attorneys’ fees and costs).
8.5. Indemnification. To the
fullest extent allowable under the Laws, Tenant will release,
indemnify, protect, defend (with counsel reasonably acceptable to
Landlord) and hold harmless the Landlord Parties and the Property
from and against any Claims in any manner relating to or arising
out of any Alterations or any other work
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performed, materials furnished or obligations incurred by or for
Tenant or any person or entity claiming by, through or under
Tenant.
ARTICLE 9
RIGHTS RESERVED BY LANDLORD
9.1. Landlord’s Entry.
Landlord and its authorized representatives may at all reasonable
times and upon reasonable notice to Tenant enter the Premises to:
(a) inspect the Premises; (b) show the Premises to
prospective purchasers, mortgagees and, during the last
9 months of the Term, tenants; (c) post notices of
non-responsibility or other protective notices available under the
Laws; and (d) exercise and perform Landlord’s rights and
obligations under this Lease. Landlord, in the event of any
emergency, may enter the Premises without notice to Tenant.
Landlord’s entry into the Premises is not to be construed as
a forcible or unlawful entry into, or detainer of, the Premises or
as an eviction of Tenant from all or any part of the Premises.
Tenant will also permit Landlord (or its designees) to erect,
install, use, maintain, replace and repair pipes, cables, conduits,
plumbing and vents, and telephone, electric and other wires or
other items, in, to and through the Premises if Landlord reasonably
determines that such activities are necessary for properly
operating and maintaining the Building, so long as the foregoing do
not materially or adversely affect Tenant’s operation of the
Premises.
9.2. Control of Property.
Landlord reserves all rights respecting the Property and Premises
not specifically granted to Tenant under this Lease, including,
without limitation, the right to: (a) change the name of the
Building, subject to Tenant’s approval, not to be
unreasonably withheld, provided that Tenant may withhold consent if
such change would affect Tenant’s building signage or
monument signage; (b) designate and reasonably approve all
types of signs (other than those expressly permitted under this
Lease), window coverings, internal lighting and other aspects of
the Premises and its contents that may be visible from the exterior
of the Premises retain and receive master keys or pass keys to the
Premises and all doors in the Premises. Notwithstanding the
foregoing, or the provision of any security-related services by
Landlord, Landlord is not responsible for the security of persons
or property in the Premises or otherwise on the Property, and
Landlord is not and will not be liable in any way whatsoever for
any breach of security not solely and directly caused by the
willful misconduct or gross negligence of Landlord, its agents or
employees.
9.3. Interference with
Tenant’s Business. With respect to any provision of this
Lease which entitles or requires Landlord to make improvements,
alterations or repairs to the Premises, Landlord agrees that such
work shall not materially interfere with Tenant’s use and
enjoyment of the Premises. Landlord shall endeavor to perform any
such work so as to minimize disruption to Tenant’s business
where reasonably possible.
ARTICLE 10
INSURANCE AND LIABILITY
10.1. Tenant’s Insurance
Obligations. Tenant, at all times during the Term and during
any early occupancy period, at Tenant’s sole cost and
expense, will maintain the insurance this Section 10.1
describes.
10.1.1. Liability Insurance. Tenant shall maintain
commercial general liability insurance (providing coverage at least
as broad as the current ISO form) with respect to the Premises and
Tenant’s activities in the Premises and upon and about the
Property, on an “occurrence” basis, with minimum limits
of $1,000,000 each occurrence and $3,000,000 general aggregate.
Such insurance must include the following specific coverage
provisions or endorsements: (a) broad form contractual
liability insurance insuring Tenant’s obligations under this
Lease; (b) naming Landlord and Property Manager as additional
insureds by an “Additional Insured — Managers or
Lessors of Premises” endorsement (or equivalent coverage or
endorsement); (c) waiving the insurer’s subrogation
rights against all Landlord Parties; (d) providing Landlord
with at least 10 Business Days prior notice of modification,
cancellation, non-renewal or expiration; and (e) expressly
stating that Tenant’s insurance will be provided on a primary
and non-contributory basis. If Tenant provides such liability
insurance under a blanket policy, the insurance must be made
specifically applicable to the Premises and this Lease on a
“per location” basis.
10.1.2. Other Insurance. Tenant shall maintain “all
risk” property insurance for Tenant’s personal property
and trade fixtures. Tenant shall also maintain such other insurance
as may be required by any
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Laws
(including without limitation any necessary worker’s
compensation insurance), or as may reasonably be required by
Landlord from time to time.
10.1.3. Miscellaneous Insurance Provisions. All of
Tenant’s insurance will be written by companies rated at
least “Best A-VII” and otherwise reasonably
satisfactory to Landlord. Tenant will deliver certificates of
insurance reasonably satisfactory to Landlord, (a) on or
before the Commencement Date (and prior to any earlier occupancy by
Tenant) and (b) not later than 10 Business Days prior to the
expiration of any current policy or certificate. If Landlord allows
Tenant to provide evidence of liability insurance by certificate,
then Tenant will deliver an ACORD Form 25 certificate and will
attach or cause to be attached to the certificate copies of any
endorsements this Section 10.1 requires. Tenant’s
insurance must permit releases of liability and provide for waiver
of subrogation as provided in Section 10.3. Tenant
acknowledges and agrees that Landlord’s establishment of
minimum insurance requirements is not a representation by Landlord
that such limits are sufficient and does not limit Tenant’s
liability under this Lease in any manner.
10.1.4. Tenant’s Failure to Insure. Notwithstanding
any contrary language in this Lease and any notice and cure rights
this Lease provides Tenant, if Tenant fails to provide Landlord
with evidence of insurance as required under this Section 10.1
within five days after notice from Landlord, then Landlord may
assume that Tenant is not maintaining the insurance
Section 10.1 requires Tenant to maintain and Landlord may (but
is not obligated to) without further demand upon Tenant or notice
to Tenant and without giving Tenant any cure right or waiving or
releasing Tenant from any obligation contained in this Lease,
obtain such insurance for Landlord’s benefit. In such event,
Tenant will pay to Landlord, as Additional Rent, all costs and
expenses
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