Exhibit 10.4
SINGLE-TENANT LEASE
This
Lease is made as of the 26th day of October, 2005, by and between
First Industrial Development Services, Inc., a Maryland corporation
(“Landlord”) and Applied Films Corporation, a Colorado
corporation (“Tenant”).
W I T N E S S E T H
1 . Basic
Provisions: In addition to other terms which are defined
elsewhere in this Lease or any Exhibits, the terms defined in the
following subsections of this Section 1 shall have the meaning set
forth in such subsection whenever used in this Lease.
1.1
Building: 126,384 square foot building located on the real
property commonly known by the street address of 9586 I-25 Frontage
Road, Longmont, Colorado 80504.
1.2
Premises: Approximately 126,384 square feet of space which
is the entire Building and all of the real property on which it is
located, including all improvements therein or to be provided by
Landlord under the terms of this Lease, commonly known by the
street address of 9586 I-25 Frontage Road, Longmont, Colorado
80504, as outlined on Exhibit A attached hereto. In addition
to Tenant’s rights to use and occupy the Premises as
hereinafter specified, Tenant shall have non-exclusive rights to
the Common Areas (as defined in Section 2.4 below) as hereinafter
specified, but shall not have any rights to the roof, exterior
walls or utility raceways of the Building or to any other buildings
in the Building Complex.
1.3
Building Complex: The Premises and the Building, the Common
Areas (as defined below), the land upon which they are located,
along with all other buildings and improvements thereon depicted on
Exhibit B attached hereto and made a part hereof.
1.4
Parking : All unreserved vehicle parking spaces in the
Building Complex.
1.5
Term: Five (5) years and six (6) months (“Primary
Lease Term”) commencing on the date of acquisition of the
Building by Landlord (“Commencement Date”), anticipated
to be November 18, 2005, and ending a full five (5) years and six
(6) months thereafter (“Expiration Date”), anticipated
to be May 17, 2011.
1.6
Estimated Delivery Date : November 18, 2005.
1.7
Base Rent:
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Lease
Year
|
PSF/NNN
|
Monthly
Rent
|
Annual Rent
|
Monthly Mgmt.
Fee
|
|
Months
1-12
|
|
$6
|
.35
|
$66,878
|
.20
|
$802,538
|
.40
|
$1,337
|
.56
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Months
13-24
|
|
$6
|
.48
|
$68,247
|
.36
|
$818,968
|
.32
|
$1,364
|
.95
|
|
Months
25-36
|
|
$6
|
.61
|
$69,616
|
.52
|
$835,398
|
.24
|
$1,392
|
.33
|
|
Months
37-48
|
|
$6
|
.74
|
$70,985
|
.68
|
$851,828
|
.16
|
$1,419
|
.71
|
|
Months
49-60
|
|
$6
|
.87
|
$72,354
|
.84
|
$868,258
|
.08
|
$1,447
|
.10
|
|
Months
61-66
|
|
$7
|
.01
|
$73,829
|
.32
|
$885,951
|
.84
|
$1,476
|
.59
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Upon the earlier to occur of: (i)
the Commencement Date and (ii) November 18, 2005, Tenant shall pay
$68,215.76 as Base Rent and Monthly Management Fee for the first
month’s Rent; provided, however, if the Commencement Date is
not the first of the month, then said amount shall be prorated. For
the Primary Lease Term Base Rent and the Monthly Management Fee
shall be payable on the first day of each month.
1.8
Rentable Area: Approximately 126,384 square feet which is
all rentable space available for lease in the Building Complex.
Unless otherwise provided herein, any square footage set forth in
this Lease or that may have been used in calculating this Rent
and/or Common Area Operating Expenses is an approximation which
Landlord and Tenant agree is reasonable and the Base Rent and
Tenant’s Share based thereon are not subject to revision
whether or not the actual square footage is more or less.
Notwithstanding the foregoing, if there is: (i) alteration to the
Premises or the Building or Building Complex after the Commencement
Date; or (ii) any change in the designated Rentable Area of the
Building Complex, then Landlord shall have the exclusive discretion
to recalculate Tenant’s Share by substituting the revised
approximate Rentable Area of the Premises and/or the Building
Complex in the calculation described above. Any change in the
approximate Rentable Area of the Premises or recalculated by
Landlord shall be effective, for purposes of calculating
Tenant’s Share as of the first day of the next calendar month
after such change.
1.9
Tenant's Share of Common Area Operating Expenses : 100%
(calculated by dividing 126,384 by 126,384).
1.10
Security Deposit : $50,000.00.
1.11
Permitted Use : General office, manufacturing, assembly,
production and warehouse use.
1.12
Guarantor . The obligations of the Tenant under this Lease
are to be guaranteed by none.
2 . Premises, Parking
and Common Areas.
2.1
Grant. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, the Premises, for the Primary Lease Term, at
the rent and upon all of the terms, covenants and conditions set
forth in this Lease.
2.2
Landlord Delivery. Landlord shall deliver the Premises to
Tenant on the Commencement Date in its current “AS IS”
condition with no representations or warranties whatsoever. EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE, LANDLORD HEREBY
DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY THAT
THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED PURPOSE OR
USE, WHICH DISCLAIMER IS HEREBY ACKNOWLEDGED BY TENANT. THE TAKING
OF POSSESSION BY TENANT SHALL BE CONCLUSIVE EVIDENCE THAT TENANT:
(i) ACCEPTS THE PREMISES, THE BUILDING AND LEASEHOLD IMPROVEMENTS
AS SUITABLE FOR THE PURPOSES FOR WHICH THE PREMISES WERE LEASED;
(ii) ACCEPTS THE PREMISES AND PROJECT AS BEING IN GOOD AND
SATISFACTORY CONDITION; (iii) WAIVES ANY DEFECTS IN THE PREMISES
AND ITS APPURTENANCES EXISTING NOW OR IN THE FUTURE; AND (iv)
WAIVES ALL CLAIMS BASED ON ANY IMPLIED WARRANTY OF SUITABILITY OR
HABITABILITY.
2.3
Acceptance of Premises. Tenant hereby acknowledges: (a) that
it has been advised to satisfy itself with respect to the condition
of the Premises including, but not limited to, the electrical and
fire sprinkler systems, security, environmental aspects, and
compliance with the Americans with Disabilities Act and applicable
zoning, municipal, county, state and federal laws, ordinances and
regulations and any covenants or restrictions of record
(collectively, “Applicable Laws”) and the present and
future suitability of the Premises for Tenant’s intended use;
(b) that Tenant has made such investigation as it deems necessary
with reference to such matters, is satisfied with reference
thereto, and assumes all responsibility therefore as the same
relate to Tenant’s occupancy of the Premises and/or the terms
of this Lease; and (c) that neither Landlord, nor any of
Landlord’s agents, has made any oral or written
representations or warranties with respect to said matters other
than as set forth in this Lease. If Landlord has agreed to complete
finish work in the Premises, such work shall be completed in
accordance with Exhibit C attached hereto and made a part
hereof (the “Work Agreement”), and such work may be
referred to herein as “Landlord’s Work”. Except
as set forth expressly in the Work Agreement, Landlord shall have
no obligation for completion of remodeling of the Premises and
shall Tenant accept the Premises in its “ AS IS”
condition.
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2.4
Common Areas. The term “Common Areas” is defined
as all areas and facilities outside the Premises and within the
exterior boundary line of the Building Complex that are provided
and designated by the Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and other tenants of the
Building Complex and their respective employees, suppliers,
shippers, customers, contractors and invitees, including parking
areas, utility rooms, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped
areas. Landlord hereby grants to Tenant, for the benefit of Tenant
and its employees, suppliers, shippers, contractors, customers and
invitees, during the Primary Lease Term the non-exclusive right to
use, in common with others entitled to such use, the Common Areas
as they exist from time to time, subject to any rights, powers, and
privileges reserved by Landlord under the terms hereof or under the
terms of any rules and regulations or restrictions governing the
use of the Building Complex. Under no circumstances shall the right
therein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior
written consent of Landlord or Landlord’s designated agent,
which consent may be revoked at any time. In the event that any
unauthorized storage shall occur, then Landlord shall have the
right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the
cost to Tenant, which cost shall be immediately payable upon demand
by Landlord. Landlord or such other person(s) as Landlord may
appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to
establish, modify, amend and enforce reasonable rules and
regulations with respect thereto. Landlord shall have the right, in
Landlord’s sole discretion, from time to time: (i) to make
changes to the Common Areas, including, without limitation, changes
in the location, size, shape and number of driveways, entrances,
parking spaces, parking areas, loading and unloading areas,
ingress, egress, direction of traffic, landscaped areas and
walkways; (ii) to close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises
remains available; (iii) to designate other land outside the
boundaries of the Building Complex to be a part of the Common
Areas; (iv) to add additional building and improvements to the
Common Areas; (v) to use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Building
Complex, or any portion thereof; and (vi) to do and perform such
other acts and make such other changes in, to or with respect to
the Common Areas and Building Complex as Landlord may, in the
exercise of sound business judgment deem to be
appropriate.
2.5
Parking. Tenant shall be entitled to use the number of
unreserved parking spaces specified in Section 1.4 on those
portions of the Common Areas designated from time to time by
Landlord for parking. Tenant shall not use more parking spaces than
said number. Said parking spaces shall be used for parking by
vehicles no larger than full-size passenger automobiles or pick-up
trucks, herein called “Permitted Size Vehicles.”
Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Landlord in the Rules and
Regulations issued by Landlord. Tenant shall not permit or allow
any vehicles that belong to or are controlled by Tenant or
Tenant’s employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Landlord for such activities. If
Tenant permits or allows use of the prohibited areas, then Landlord
shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.
3.
Term.
3.1
Term . The Commencement Date, Expiration Date and Primary
Lease Term of this Lease are as specified in Section
1.5.
3.2
Delivery Date. If a Delivery Date is specified in Section
1.6 and if Tenant totally or partially occupies the Premises after
the Delivery Date but prior to the Commencement Date, the
obligation to pay Base Rent shall be abated for the period of such
early occupancy. All other terms of this Lease, however (including
but not limited to the obligations to pay Tenant’s Share of
Common Area Operating Expenses and to carry the insurance required
in the Lease) shall be in effect during such period.
3.3
Delay in Possession. If for any reason Landlord cannot
deliver possession of the Premises to Tenant by the Estimated
Delivery Date, if one is specified in Section 1.6, or if no
Delivery Date is specified, by the Commencement Date, Landlord
shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease, or the obligations of
Tenant hereunder, or extend the Primary Lease Term hereof; but in
such case, Tenant shall not, except as otherwise provided herein,
be obligated to pay Base Rent or perform any other obligation of
Tenant under the terms of this Lease until Landlord delivers
possession of the Premises to Tenant. The delay of said date shall
be in full satisfaction of any claims Tenant might otherwise have
as a result of such delay. In order to place in writing the exact
Commencement Date and Expiration Date of the Lease, the parties
agree to execute a supplemental agreement to become a part hereof
setting forth such dates as determined under the provisions of this
Section 3.3.
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3.4
Lease Year. “Lease Year” as used in this Lease
shall be defined as each twelve (12) month period beginning with
the Commencement Date or any anniversary thereof and ending on the
immediately preceding day one year later.
4 .
Rent.
4.1
Base Rent . Tenant shall pay Base Rent and other rent or
charges, as the same may be adjusted from time to time, to Landlord
in lawful money of the United States, without offset or deduction
on or before the day on which it is due under the terms of this
Lease. Base Rent and all other rent and charges for the period
during the term hereof which is for less than one full month shall
be prorated based upon the actual number of days of the month
involved. Payment of Base Rent and other charges shall be made to
Landlord at its address stated herein or to such other persons or
at such other addresses as Landlord may from time to time designate
in writing to Tenant.
4.2
Property Taxes, Insurance and Management Fees . Tenant shall
pay to Landlord during the term hereof, in addition to the Base
Rent, Tenant’s Share (as specified in Section 1.9) of all
Property Taxes, Insurance and Management Fees, as hereinafter
defined, during each calendar year of the Primary Lease Term, in
accordance with the following provisions:
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(a)
“Property Taxes, Insurance and Management Fees” are
defined, for purposes of this Lease, as the insurance premiums and
Real Property Taxes paid for by Landlord and to be reimbursed by
Tenant pursuant to Sections 9 and 11 hereof (collectively, the
“Property Taxes and Insurance”), and a property
management fee equal to the amounts set forth in Section
1.7.
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(b)
Tenant’s Share of Property Taxes and Insurance shall be
payable by Tenant within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Tenant by Landlord.
Management Fees shall be paid monthly, in advance, in accordance
with the table set forth in Section 1.7. At Landlord’s
option, however, an amount may be estimated by Landlord from time
to time of Tenant’s Share of annual Property Taxes and
Insurance and the same shall be payable monthly, as Landlord shall
designate, during each calendar year on the same day as the Base
Rent is due hereunder. If during any particular calendar year,
there is a change in the information on which Landlord based the
estimate upon which Tenant is then making its estimated Property
Tax, and Insurance payments so that such estimate furnished to
Tenant is no longer accurate, Landlord shall be permitted to revise
such estimate from time to time (but no more than twice in any
calendar year) by notifying Tenant and there shall be such
adjustments made in the monthly amount of Tenant’s Share on
the first day of the month following the serving of such statement
to Tenant. Landlord shall deliver to Tenant after the expiration of
each calendar year a reasonably detailed statement showing
Tenant’s Share of the actual Property Taxes and Insurance
incurred during the preceding year. If Tenant’s payments
under this Section 4.2(b) during said preceding calendar year
exceed Tenant’s Share as indicated on said statement, Tenant
shall be credited the amount of such overpayment against
Tenant’s Share of Property Taxes and Insurance next becoming
due. If Tenant’s payments under this Section 4.2(b) during
said preceding year were less than Tenant’s Share as
indicated on said statement, Tenant shall pay to Landlord the
amount of the deficiency within thirty (30) days after delivery by
Landlord to Tenant of said statement. Landlord’s failure to
deliver statement of Tenant’s share within one hundred and
twenty (120) days shall not relieve Tenant of the obligation to pay
sums otherwise due. Tenant’s obligation to pay Tenant’s
Share of Property Taxes, Insurance and Management Fees shall
survive the expiration or termination of the Lease or the early
termination of Tenant’s right to occupy the
Premises.
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(c)
Tenant shall have the right to review Landlord’s books and
records relating to Property Taxes, Insurance and Management Fees.
Tenant shall conduct such review at its own expense and shall
perform such review in a manner that does not unreasonably
interfere with the conduct of Landlord’s business. In the
event that such review reveals that Tenant’s Share of
Property Taxes, Insurance and Management Fees has been overstated,
Landlord shall promptly reimburse to Tenant the amount of such
overpayment within ten (10) days after notice thereof from Tenant
to Landlord. In addition, if any such review reveals that
Tenant’s Share of Property Taxes, Insurance and Management
Fees were misstated by three percent (3%) or more, Landlord shall
reimburse Tenant for the cost of Tenant’s review within ten
(10) days after receipt of written demand from Tenant.
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5. Security
Deposit. Upon the earlier to occur of: (i) the Commencement
Date and (ii) November 18, 2005, Tenant shall deposit with Landlord
the Security Deposit set forth in Section 1.10 as security for
Tenant’s faithful performance of Tenant’s obligations
under this Lease. Upon the occurrence of an Event of Default,
Landlord may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Landlord or to
reimburse or compensate Landlord for any liability, cost, expense,
loss or damage (including attorneys’ fees) which Landlord may
suffer or incur by reason thereof. If Landlord uses or applies all
or any portion of said Security Deposit, Tenant shall within ten
(10) days after written request therefore deposit monies with
Landlord sufficient to restore said Security Deposit to the full
amount required by this Lease. Landlord shall not be required to
keep all or any part of the Security Deposit separate from its
general accounts. Landlord shall, within sixty (60) days after the
expiration of the Primary Lease Term hereof and after Tenant has
vacated the Premises, return to Tenant (or, at Landlord’s
option, to the last assignee, if any, of Tenant’s interest
herein), that portion of the Security Deposit not used by Landlord
to return the Premises to its original condition (normal wear and
tear excluded) at the termination of Lease , or
applied by Landlord. No part of the Security Deposit shall be
considered to be held in trust, to bear interest or other increment
for its use, or to be prepayment for any monies to be paid by
Tenant under this Lease. At Landlord’s election, Landlord may
elect to have the Security Deposit held by Landlord’s manager
in a separate security deposit, trust, trustee or escrow account
established and maintained by such manager with respect to certain
security deposits of tenants within the Building Complex. Unless
Tenant is so notified, (i) Landlord will hold the Security Deposit
and be responsible for its return; and (ii) Tenant may request
return of the Security Deposit by giving Landlord written notice in
accordance with the provisions of the Lease, and Landlord’s
manager, if any, agrees that in the event of a dispute over the
ownership of the Security Deposit, the manager will not wrongfully
withhold Landlord’s true name and current mailing address
from Tenant. Landlord may deliver the funds deposited herein by
Tenant to the purchaser of Landlord’s interest in the
Premises in the event such interest be sold, provide Tenant the
name and address of the transferee and thereupon, Landlord shall be
discharged from further liability with respect to such deposit. If
the claims of Landlord exceed said Security Deposit, Tenant shall
remain liable for the balance of such claims.
6.
Use .
6.1
Permitted Use .
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(a)
Tenant shall use and occupy the Premises only for the Permitted Use
set forth in Section 1.11 and for no other purpose. Tenant shall
not use or permit the use of the Premises in a manner that is
unlawful, creates waste or a nuisance, or that disturbs owners
and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.
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(b)
Landlord hereby agrees to not unreasonably withhold or delay its
consent to any written request by Tenant, Tenant’s assignees
or subtenants, and by prospective assignees and subtenants of
Tenant, its assignees and subtenants, for a modification of said
Permitted Use so long as the same will not impair the structural
integrity of the improvements on the Premises or in the Building or
the mechanical or electrical systems therein does not conflict with
uses by other tenants, is not significantly more burdensome to the
Premises or the Building and the improvements thereon, and is
otherwise permissible pursuant to this Section 6. If Landlord
elects to withhold such consent, Landlord shall within five (5)
business days after such request give a written notification of
same, which notice shall include an explanation of Landlord’s
reasonable objections to the change in use.
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7.
Hazardous Substances
.
7.1
Consent. The term “Hazardous Substance” as used
in this Lease shall mean any product, substance, chemical, material
or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill,
release or effect, either by itself or in combination with other
materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of
Landlord to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substance shall
include, but not be limited to hydrocarbons, petroleum gasoline,
crude oil or any products or by-products thereof. Tenant shall not
engage in any activity in or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances
without the express prior written consent of Landlord and
compliance in a timely manner (at Tenant’s sole cost and
expense) with all Applicable Requirements (as defined in Section
7.4). “Reportable Use” shall mean (i) the installation
or use of any above or below ground storage tank; (ii) the
generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with
respect to which a report, notice, registration or business plan is
required to be filed with, any governmental authority; and (iii)
the presence in, on or about the Premises of a Hazardous Substance
with respect to which any Applicable Laws require that a notice be
given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Tenant may, without
Landlord’s prior consent but upon notice to Landlord and in
compliance with all Applicable Requirements, use any ordinary and
customary materials reasonably required to be used by Tenant in the
normal course of the Permitted Use, so long as such use is not a
Reportable Use and does not expose the Premises or neighboring
properties to any meaningful risk of contamination or damage or
expose Landlord to any liability therefor. In addition, Landlord
may (but without any obligation to do so) condition its consent to
any Reportable Use of any Hazardous Substance by Tenant upon
Tenant’s giving Landlord such additional assurances as
Landlord, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against
damage, contamination or injury and/or liability therefor including
but not limited to the installation (and, at Landlord’s
option, removal on or before Lease expiration or earlier
termination or the early termination of Tenant’s right to
occupy the Premises) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or
the deposit of an additional Security Deposit under Section
5.
7.2
Duty to Inform Landlord. If Tenant knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located
in, on, under or about the Premises or the Building, other than as
previously consented to by Landlord, Tenant shall immediately give
Landlord written notice thereof, together with a copy of any
statement, report, notice, registration, application, permit,
business plan, license, claim, action, or proceeding given to, or
received from, any governmental authority or private party
concerning the presence, spill, release, discharge of, or exposure
to, such Hazardous Substance including but not limited to all such
documents as may be involved in any Reportable Use involving the
Premises. Tenant shall not cause or knowingly permit any Hazardous
Substance to be spilled or released in, on, under or about the
Premises (including, without limitation, through the plumbing or
sanitary sewer system).
7.3
Indemnification. Tenant shall indemnify, protect, defend and
hold Landlord, its managers, members, officers, directors, agents,
employees, lenders and ground Landlord, if any, and the Premises,
harmless from and against any and all damages, liabilities,
judgments, costs, claims, liens, expenses, penalties, loss of
permits and reasonable attorneys’ and consultants’ fees
arising out of or involving any Hazardous Substance brought onto
the Premises by or for Tenant or by anyone under Tenant’s
control. Tenant’s obligations under this Section 7.3 shall
include, but not be limited to, the effects of any contamination or
injury to any person, property or the environment created or
suffered by Tenant, and the cost of investigation (including
reasonable consultants’ and attorneys’ fees and
testing), removal, remediation, restoration and/or abatement
thereof, or of any contamination therein involved, and shall
survive the expiration or earlier termination of this Lease or the
early termination of Tenant’s right to occupy the Premises.
No termination, cancellation or release agreement entered into by
Landlord and Tenant shall release Tenant from its obligations under
this Lease with respect to Hazardous Substances, unless
specifically so agreed by Landlord in writing at the time of such
agreement. The indemnification set forth above shall survive the
expiration or termination of this Lease or the early termination of
Tenant’s right to occupy the Premises.
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7.4
Tenant’s Compliance with Requirements. Tenant shall at
Tenant’s sole cost and expense, fully, diligently and in a
timely manner, comply with all “Applicable
Requirements,” which term is used in this Lease to mean all
laws, rules, regulations, ordinances, directives, covenants,
easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau,
relating to Tenant’s use of the Premises (including but not
limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises,
including soil and groundwater conditions; and (iii) the use,
generation, manufacture, production, installation, maintenance,
removal, transportation, storage, spill, or release of any
Hazardous Substance), now in effect or which may hereafter come
into effect. Tenant shall immediately upon receipt, notify Landlord
in writing (with copies of any documents involved) of any
threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving failure by Tenant or the Premises
to comply with any Applicable Requirements.
7.5
Inspection. Landlord, Landlord’s agents, employees,
contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Premises
(“Lenders”) shall have the right to enter the Premises
at any time in the case of an emergency, and otherwise at
reasonable times and upon at least twenty-four (48) hours advance
notice, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Tenant with this Lease and all
Applicable Requirements, and Landlord shall be entitled to employ
experts and/or consultants in connection therewith to advise
Landlord with respect to Tenant’s activities, including but
not limited to Tenant’s installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Substance on
or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a
Default of this Lease by Tenant or a violation of Applicable
Requirements or a contamination, caused or materially contributed
to by Tenant, is found to exist or to be imminent, or unless the
inspection is requested or ordered by a governmental authority as
the result of any such existing or imminent violation or
contamination. In such case, Tenant shall upon request reimburse
Landlord or Landlord’s Lender, as the case may be, for the
costs and expenses of such inspections.
8 . Maintenance,
Repairs, Utility Installations, Trade Fixtures and
Alterations.
8.1
By Tenant.
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(a)
Subject to the provisions of Sections 10 and 15, Tenant shall, at
Tenant’s sole cost and expense and at all times, keep the
Premises and Building Complex and every part thereof in good order,
condition and repair (whether or not such portion of the Premises
requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Tenant, and whether or not the
need for such repairs occurs as a result of Tenant’s use, any
prior use, the elements or the age of such portion of the
Premises), including, without limiting the generality of the
foregoing, all equipment or facilities specifically serving the
Premises; whether or not the equipment or facilities are located
within the Premises, such as such as plumbing, heating, air
conditioning and ventilating system, electrical lighting
facilities, boilers, fired or unfired pressure vessels, fire hose
connections if within the Premises, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows,
doors serving the Premises, including overhead doors, dock bumpers,
dock pads, dock levelers, plate glass, skylights, landscaping,
parking lots, snowplowing, walkways and fire systems. Tenant, in
keeping the Premises and Building Complex in good order, condition
and repair, shall exercise and perform good maintenance practices.
Tenant’s obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and Building
Complex and all improvements thereon or a part thereof in good
order, condition and state of repair. Tenant shall be responsible
for trash removal.
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(b)
Tenant shall, at Tenant’s sole cost and expense, procure and
maintain a contract, with copies to Landlord, customary form and
substance for and with a contractor specializing and experienced in
the inspection, maintenance and service of the heating, air
conditioning and ventilation system for the Premises. However,
Landlord reserves the right, upon notice to Tenant, to procure and
maintain the preventative maintenance contract for the heating, air
conditioning and ventilating systems, and if Landlord so elects,
Tenant shall reimburse Landlord, upon demand, for the cost
thereof.
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(c)
If Tenant fails to perform Tenant’s obligations under this
Section 8.1, Landlord may enter upon the Premises after twenty (20)
days prior written notice to Tenant (except in the case of an
emergency, in which case no notice shall be required), perform such
obligations on Tenant’s behalf, and put the Premises in good
order, condition and repair.
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8.2
By Landlord . Intentionally left blank.
8.3
Utility Installations, Trade Fixtures,
Alterations.
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(a)
Definitions, Consent Required . The term “Utility
Installations” is used in this Lease to refer to all air
lines, power panels, electrical distribution, security, fire
protection systems, communications systems, lighting fixtures,
heating, ventilating and air conditioning equipment, plumbing, and
fencing in, on, or about the Premises. The term “Trade
Fixtures” shall mean Tenant’s machinery and equipment
which can be removed without doing material damage to the Premises.
The term “Alterations” shall mean any modification of
the improvements on the Premises which are provided by Landlord
under the terms of this Lease, other than Utility Installations or
Trade Fixtures. “Tenant-Owned Alterations and/or Utility
Installations” are defined as Alterations and/or Utility
Installations made by Tenant that are not yet owned by Landlord
pursuant to Section 8.4(a). Tenant shall not make nor cause to be
made any Alterations or Utility Installations in, on, under or
about the Premises without Landlord’s prior written consent.
Tenant may, however, make non-structural Utility Installations to
the interior of the Premises (excluding the roof) without
Landlord’s consent but upon notice to Landlord, so long as
they are not visible from the outside of the Premises, do not
involve puncturing, relocating or removing the roof or any existing
walls or changing or interfering with the fire sprinkler or fire
detection systems and the cumulative cost thereof during the term
of this Lease as extended does not exceed Two Thousand Five Hundred
Dollars ($2,500.00.)
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(b)
Consent. Any Alterations or Utility Installations that
Tenant shall desire to make and which require the consent of the
Landlord shall be presented to Landlord in written form with
detailed plans. All consents given by Landlord, whether by virtue
of Section 8.3(a) or by subsequent specific consent, shall be
deemed conditioned upon: (i) Tenant acquiring all applicable
permits required by governmental authorities; (ii) the furnishing
of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to
Landlord prior to commencement of the work thereon; and (iii) the
compliance by Tenant with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility
Installations by Tenant during the Primary Lease Term shall be done
in a good and workmanlike manner, with good and sufficient
materials, and be in compliance with all Applicable Requirements.
Tenant shall promptly upon completion thereof furnish Landlord with
as-built plans and specifications therefor. Landlord may, (but
without obligation to do so) condition its consent to any requested
Alteration or Utility Installation that costs Two Thousand Five
Hundred Dollars ($2,500.00) or more upon Tenant providing Landlord
with a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such Alteration or Utility
Installation.
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(c)
Lien Protection. Tenant shall pay when due all claims for
labor or materials furnished or alleged to have been furnished to
or for Tenant at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien
against the Premises or any interest therein. Tenant shall give
Landlord not less than ten (10) days’ notice prior to the
commencement of any work in, on, or about the Premises, and
Landlord shall have the right to post notices of non-responsibility
in or on the Premises as provided by law. If Tenant shall, in good
faith, contest the validity of any such lien, claim or demand, then
Tenant shall, at its sole expense, defend and protect itself,
Landlord and the Premises against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof against the Landlord or the
Premises. If Landlord shall require, Tenant shall furnish to
Landlord a surety bond satisfactory to Landlord in an amount equal
to one and one-half times the amount of such contested lien, claim
or demand, indemnifying Landlord against liability for the same, as
required by law for the holding of the Premises free from the
effect of such lien or claim. In addition, Landlord may require
Tenant to pay Landlord’s attorneys’ fees and costs in
participating in such action if Landlord shall decide it is to its
best interest to do so.
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8.4
Ownership, Removal, Surrender, and Restoration.
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(a)
Ownership. Subject to Landlord’s right to require
their removal and to cause Tenant to become the owner thereof as
hereinafter provided in this Section 8.4, all Alterations and
Utility Installations made to the Premises by Tenant shall be the
property of and owned by Tenant, but considered a part of the
Premises. Landlord may, at any time and at its option, elect in
writing to Tenant to be the owner of all or any specified part of
the Tenant-Owned Alterations and Utility Installations. Unless
otherwise instructed per Section 8.4(b) hereof, all Tenant-Owned
Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease or the early termination of
Tenant’s right to occupy the Premises, become the property of
Landlord and remain upon the Premises and be surrendered with the
Premises by Tenant.
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(b)
Removal. Unless otherwise agreed in writing, and except for
any Tenant-Owned Alterations or Utility Installations which are
part of the Premises as of the Commencement Date, Landlord may
require that any or all Tenant-Owned Alterations or Utility
Installations be removed by the expiration or earlier termination
of this Lease or at the early termination of Tenant’s right
to occupy the Premises, notwithstanding that their installation may
have been consented to by Landlord. Landlord may require the
removal at any time of all or any part of any Alterations or
Utility Installations made without the required consent of
Landlord.
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(c)
Surrender/Restoration. Subject to the provisions of Sections
of 8.2, 8.4(b), 10 and 15, Tenant shall surrender the Premises by
the end of the last day of the Primary Lease Term or any earlier
termination date, clean and free of debris and in good operating
order, condition and state of repair, ordinary wear and tear
excepted per the requirements of Exhibit D attached hereto
and incorporated herein by reference. Ordinary wear and tear shall
not include any damage or deterioration that would have been
prevented by good maintenance practice or by Tenant performing all
of its obligations under this Lease. Except as otherwise agreed or
specified herein, the Premises, as surrendered, shall include the
Alterations and Utility Installations. The obligation of Tenant
shall include the repair of any damage occasioned by the
installation, maintenance or removal of Tenant’s Trade
Fixtures, furnishings, equipment, and Tenant-Owned Alterations and
Utility Installations, as well as the removal of any storage tank
installed by or for Tenant, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by
Tenant, all as may then be required by Applicable Requirements
and/or good practice. Tenant’s Trade Fixtures shall remain
the property of Tenant and shall be removed by Tenant subject to
its obligation to repair and restore the Premises per this Lease.
Any Trade Fixtures, Alterations and/or Utility Installations not
removed upon the expiration of this Lease or upon the early
termination of Tenant’s right to occupy the Premises shall be
deemed abandoned and may be disposed of by Landlord, as Landlord
may determine appropriate, without further notice to Tenant. Tenant
shall pay Landlord all expenses incurred in connection with such
items including, but not limited to, the costs of repairing any
damage to the Premises caused by removal of such items.
Tenant’s obligation hereunder shall survive the expiration or
other termination of the Lease or the early termination of
Tenant’s right to occupy the Premises.
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9.
Insurance; Indemnity
.
9.1
Payment of Premiums . The cost of the premiums for the
insurance policies maintained by Landlord under this Section 9
shall be a Common Area Operating Expense pursuant to Section 4.2
hereof. Premiums for policy periods commencing prior to, or
extending beyond, the term of this Lease shall be prorated to
coincide with the corresponding Commencement Date or Expiration
Date.
9.2
Liability Insurance.
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(a)
Carried by Tenant. Tenant shall obtain and keep in force
during the Primary Lease Term a Commercial General Liability policy
of insurance protecting Tenant, Landlord and any Lender(s) whose
names have been provided to Tenant in writing (as additional
insureds) against claims for bodily injury, personal injury and
property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than
Three Million Dollars ($3,000,000) per occurrence with an
“Additional Insured-Managers or Landlords of Premises”
endorsement and contain the “Amendment at the Pollution
Exclusion” endorsement for damage caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed
under this Lease as an “insured contract” for the
performance of Tenant’s indemnity obligations under this
Lease. The limits of said insurance required by this Lease or as
carried by Tenant shall not, however, limit the liability of Tenant
nor relieve Tenant of any obligation hereunder. All insurance to be
carried by Tenant shall be primary to and not contributory with any
similar insurance carried by Landlord, whose insurance shall be
considered excess insurance only. In addition, Tenant shall
maintain workers’ compensation insurance as is required by
state law.
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(b)
Carried By Landlord. Subject to reimbursement of premiums as
described in Section 9.1, Landlord shall also maintain liability
insurance described in Section 9.2(a) above, in addition to and not
in lieu of, the insurance required to be maintained by Tenant.
Tenant shall not be named as an additional insured
therein.
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9.3
Property Insurance. Subject to reimbursement of premiums as
described in Section 9.1, Landlord shall maintain property damage
insurance on such portions of the Building Complex from time to
time which Landlord has the obligation to maintain and repair under
this Lease, above foundation walls, insuring against loss or damage
by fire or other casualty covered by a so-called “special
form” policy, in such amounts, and from companies and on such
terms and conditions as Landlord reasonably deems appropriate from
time to time. Tenant-Owned Alterations and Utility Installations,
Trade Fixtures and Tenant’s personal property shall be
insured by Tenant pursuant to Section 9.4. Landlord may also obtain
and keep in force during the Primary Lease Term a policy or
policies in the name of Landlord, with loss payable to Landlord and
any Lender(s), insuring the loss of the full rental and other
charges payable by all tenants of the Building to Landlord for one
year (including all Real Property Taxes, insurance costs, all
Common Area Operating Expenses and any scheduled rental increases).
Tenant shall pay for any increase in the premiums for the property
insurance of the Building and for the Common Areas or other
buildings in the Building Complex if said increase is caused by
Tenant’s acts, omissions, use or occupancy of the
Premises.
9.4
Tenant’s Property Insurance. Subject to the
requirements of Section 9.5, Tenant at its cost shall either by
separate policy or, at Landlord’s option, by endorsement to a
policy already carried, maintain insurance coverage on all of
Tenant’s personal property, Trade Fixtures and Tenant Owned
Alterations and Utility Installations in, on, or about the Premises
similar in coverage to that carried by Landlord as the insuring
party under Section 9.3. Such insurance shall be full
replacement cost coverage. The proceeds from any such
insurance shall be used by Tenant for the replacement of personal
property and the restoration of Trade Fixtures and Tenant Owned
Alterations and Utility Installations. Upon request from
Landlord, Tenant shall provide Landlord with written evidence that
such insurance is in force. Tenant shall not do or permit to
be done anything which shall invalidate the insurance policies
referred to in this Section 9. Tenant shall cause to be
delivered to Landlord, within seven (7) days after the earlier of
the Delivery Date or the Commencement Date evidence of the
existence and amounts of, the insurance required under Section
9.2(a) and 9.4. No such policy shall be cancelable or subject
to modification except after thirty (30) days’ prior written
notice to Landlord. Tenant shall at least thirty (30) days
prior to the expiration of such policies, furnish Landlord with
evidence of renewals or “insurance binders” evidencing
renewal thereof, or Landlord may order such insurance and charge
the cost thereof to Tenant, which amount shall be payable by Tenant
to Landlord upon demand.
9.5
Waiver. Tenant and Landlord each hereby release and relieve
the other, and waive their entire right to recover damages (whether
in contract or in tort) against the other, for loss or damage to
their property or for any business interruption arising out of or
incident to the perils to the extent such loss or damage or
business interruption is coverable by a standard or special form
policy regardless of whether such insurance is carried or not, or
if so carried, payable to or protects Landlord or Tenant or both.
The effect of such releases and waivers of the right to recover
damages shall not be limited by the amount of insurance carried or
required, or by any deductibles applicable thereto. Landlord and
Tenant agree to have their respective insurance companies issuing
property damage insurance waive any right to subrogation that such
companies may have against Landlord or Tenant, as the case may be,
so long as the insurance is not invalidated thereby.
9.6
Indemnity . Except for Landlord's willful misconduct or
gross negligence, Tenant shall indemnify, protect, defend and hold
harmless the Premises, Landlord and its agents, employees,
Landlord’s master or ground Landlord, members, partners and
Lenders, from and against any and all claims, loss of rents and/or
damages, costs, liens, judgments, penalties, loss of permits,
attorneys’ and consultants’ fees, expenses and/or
liabilities arising out of, involving, or in connection with, the
occupancy of the Premises by Tenant, the conduct of Tenant’s
business, any act, omission or neglect of Tenant, its agents,
contractors, employees or invitees, and out of any Default or
breach by Tenant in the performance in a timely manner of any
obligation on Tenant’s part to be performed under this Lease.
The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein,
and whether or not (in the case of claims made against Landlord)
litigated and/or reduced to judgment. In case any action or
proceeding be brought against Landlord by reason of any of the
foregoing matters, Tenant upon notice from Landlord shall defend
the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord and Landlord shall cooperate with Tenant
in such defense. Landlord need not have first paid any such claim
in order to be so indemnified. The provisions of this Section shall
survive the expiration or termination of this Lease or the early
termination of Tenant’s right to occupy the
Premises.
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9.7
Exemption of Landlord from Liability. Except for matters
arising from Landlord’s willful misconduct or gross
negligence, Landlord shall not be liable for injury or damage to
the person or goods, wares, merchandise or other property of
Tenant, Tenant’s employees, contractors, invitees, customers,
or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity,
gas, water or rain or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions
arising upon the Premises or upon other portions of the Building of
which the Premises are a part, from other sources or places, and
regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Landlord shall
not be liable for any damages arising from any act or neglect of
any other tenant of Landlord nor from the failure by Landlord to
enforce the provisions of any other lease in the Building Complex.
Notwithstanding Landlord’s negligence or breach of this
Lease, Landlord shall under no circumstances be liable for injury
to Tenant’s business or for any loss of income or profit
therefrom, or for any consequential damages of Tenant.
Notwithstanding anything to the contrary contained herein,
Landlord’s liability under this Lease shall be limited to its
interest in the Building Complex.
10.
Damage or Destruction
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10.1
Total Damage. If the Premises or the Building shall be so
damaged by fire or other casualty as to render the Premises wholly
untenantable and if such damage shall be so great that a competent
architect, in good standing, selected by Landlord shall certify in
writing to Landlord and Tenant withi
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