Exhibit
10-1
INDUSTRIAL
LEASE
THIS
LEASE (the "Lease") is executed this 30th day of January, 2008, by and between
_________ Investors, LLC, a Delaware limited liability company ("Landlord"), and
Sharps Compliance, Inc., a Delaware corporation ("Tenant").
ARTICLE 1 - LEASE OF
PREMISES
Section
1.01
.
Basic Lease Provisions and
Definitions
.
(a) Leased
Premises (shown outlined on
Exhibit
A
attached hereto): A portion of the building _______________(the
"Building"), located at _______Georgia, _________, consisting of 268,400
rentable square feet (inclusive of the Building).
(b) Rentable
Area: approximately 28,800 square feet.
(c) Tenant's
Proportionate Share: 10.73%.
(d) Minimum
Rent:
|
Commencement
Date - April 30, 2009
|
|
$
|
0.00
|
|
|
May
1, 2009 - December 31, 2009
|
|
$
|
91,776.00
|
|
|
January
1, 2010 - December 31, 2010
|
|
$
|
141,793.92
|
|
|
January
1, 2011 - December 31, 2011
|
|
$
|
146,047.74
|
|
|
January
1, 2012 - December 31, 2012
|
|
$
|
150,429.17
|
|
|
January
1, 2013 - December 31, 2013
|
|
$
|
154,942.04
|
|
|
January
1, 2014 - April 30, 2014
|
|
$
|
53,196.77
|
|
(e) Monthly
Rental Installments:
|
Commencement
Date - April 30, 2009
|
|
$
|
0.00
|
|
|
May
1, 2009 - December 31, 2009
|
|
$
|
11,472.00
|
|
|
January
1, 2010 - December 31, 2010
|
|
$
|
11,816.16
|
|
|
January
1, 2011 - December 31, 2011
|
|
$
|
12,170.64
|
|
|
January
1, 2012 - December 31, 2012
|
|
$
|
12,535.76
|
|
|
January
1, 2013 - December 31, 2013
|
|
$
|
12,911.84
|
|
|
January
1, 2014 - April 30, 2014
|
|
$
|
13,299.19
|
|
The above
is based upon an estimated Commencement Date of January 1, 2009 (“Target
Commencement Date”). The above schedule will be modified to reflect the actual
Commencement Date as determined under the terms of this Agreement, such that
Minimum Rent shall commence five (5) months after the actual Commencement Date
(although the Minimum Rent increases shall occur on each January 1 as set forth
in the above schedule). For example, if the actual Commencement Date
is December 15, 2008, then Minimum Rent shall commence on April 15, 2009, and if
the actual Commencement Date is January 15, 2009, then Minimum Rent shall
commence on May 15, 2009, but in either event, the Minimum Rent shall increase
on January 1, 2010 and each subsequent January 1 during the Lease Term in
accordance with the above schedule.
(f)
Commencement Date: The date of Substantial
Completion of the Tenant Improvements (as defined on
Exhibit B
).
(g)
Lease Term: Approximately five (5) years and
four (4) months.
(h)
Security
Deposit: $12,750.00
(i)
Broker(s): ______________________________________
(j)
Permitted Use: General office, warehousing,
and related purposes.
(k)
Address for notices and payments are
as follows:
|
|
|
|
|
|
|
With
Payments to:
|
|
|
|
|
|
Tenant
(prior to occupancy):
|
Sharps
Compliance, Inc..
|
|
|
9220
Kirby Drive, Suite 500
|
|
|
Houston,
Texas 77054
|
|
|
Attn: David
P. Tusa
|
|
|
|
|
Tenant
(following occupancy):
|
Sharps
Compliance, Inc..
|
|
|
9220
Kirby Drive, Suite 500
|
|
|
Houston,
Texas 77054
|
|
|
Attn: David
P. Tusa
|
EXHIBITS
Exhibit A
- Leased Premises
Exhibit B
- Tenant Improvements
Exhibit
B-1 – CD’s
Exhibit C
- Letter of Understanding
Exhibit D
- Tenant Operations Inquiry Form
Exhibit E
- Rules and Regulations
Exhibit F
- Rider
Exhibit G
- ROFO Space
Section
1.02
.
Lease of
Premises
. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the Leased Premises, under the terms and conditions herein,
together with a non-exclusive right, in common with others, to use the following
(collectively, the "Common Areas"): the areas of the Building and the underlying
land and improvements thereto that are designed for use in common by all tenants
of the Building and their respective employees, agents, customers, invitees, and
others.
ARTICLE 2 - TERM AND
POSSESSION
Section
2.01
.
Term
. The
Commencement Date and Lease Term shall be as set forth in
Sections 1.01(f)
and
1.01(g)
above.
Section
2.02
.
Construction of Tenant
Improvements
. Landlord shall construct and install all
leasehold improvements to the Leased Premises (collectively, the "Tenant
Improvements") in accordance with
Exhibits
B and B-1
attached hereto and made a part hereof.
Section
2.03
.
Surrender of the
Premises
. Upon the expiration or earlier termination of this
Lease, Tenant shall, at its sole cost and expense, immediately (a) surrender the
Leased Premises to Landlord in broom-clean condition and in good order,
condition, and repair, (b) remove from the Leased Premises (i) Tenant's Property
(as defined in
Section
8.01
below), (ii) all data and communications wiring and cabling
(including above ceiling, below raised floors, and behind walls), and (iii) any
alterations required to be removed pursuant to
Section 7.03
below,
and (c) repair any damage caused by any such removal and restore the Leased
Premises to the condition existing upon the Commencement Date, reasonable wear
and tear excepted. All of Tenant's Property that is not removed
within ten (10) days following Landlord's written demand therefor shall be
conclusively deemed to have been abandoned and Landlord shall be entitled to
dispose of such property at Tenant's cost without incurring any liability to
Tenant. This
Section 2.03
shall
survive the expiration or any earlier termination of this Lease.
Section
2.04
.
Holding
Over
. If Tenant retains possession of the Leased Premises
after the expiration or earlier termination of this Lease, Tenant shall be a
tenant at sufferance at one-hundred and fifty percent (150%) of the Monthly
Rental Installments and Annual Rental Adjustment (as hereinafter defined) for
the Leased Premises in effect upon the date of such expiration or earlier
termination, and otherwise upon the terms, covenants, and conditions herein
specified, so far as applicable. Acceptance by Landlord of rent after
such expiration or earlier termination shall not result in a renewal of this
Lease, nor shall such acceptance create a month-to-month tenancy. In
the event a month-to-month tenancy is created by operation of law, or by written
agreement of the parties, either party shall have the right to terminate such
month-to-month tenancy upon thirty (30) days' prior written notice to the other,
whether or not said notice is given on the rent paying date. This
Section 2.04
shall in no way constitute a consent by Landlord to any holding over by Tenant
upon the expiration or earlier termination of this Lease, nor limit Landlord's
remedies in such event.
ARTICLE 3 -
RENT
Section
3.01
.
Base
Rent
. Tenant shall pay to Landlord the Minimum Rent in the
Monthly Rental Installments in advance, without demand, abatement, deduction, or
offset, on the Commencement Date and on or before the first day of each and
every calendar month thereafter during the Lease Term; provided, however, upon
execution of this Lease, Tenant shall pay to Landlord the first full Monthly
Rental Installment and the first full monthly installment of the Annual Rental
Adjustment. The Monthly Rental Installments for partial calendar
months shall be prorated. Tenant shall be responsible for delivering
the Monthly Rental Installments to the payment address set forth in
Section 1.01(k)
above
in accordance with this
Section
3.01
.
Section
3.02
.
Annual Rental Adjustment
Definitions
.
(a) "
Annual Rental
Adjustment
" shall mean the amount of Tenant's Proportionate Share of
Operating Expenses, Real Estate Taxes and Insurance Premiums for a particular
calendar year. Tenant’s Proportionate Share of “Controllable”
Operating Expenses shall not be increased by more than 10% cumulatively during
any calendar year. For purposes of this Lease, “Controllable”
Operating Expenses shall mean any Operating Expense which is paid under a stated
rate contract (e.g., trash removal, pest control, window
washing). “Controllable” Operating Expenses shall not include (i)
expenses subject to change based on actual services provided (e.g., snow
removal, landscaping, utilities), (ii) Real Estate Taxes, and (iii) Insurance
Premiums.
(b) "
Tenant's Proportionate Share
of Operating Expenses, Real Estate Taxes and Insurance Premiums
" shall
mean an amount equal to (i) the product of Tenant's Proportionate Share times
the Operating Expenses, plus (ii) the product of Tenant's Proportionate Share
times the Real Estate Taxes, plus (iii) the product of Tenant's Proportionate
Share times the Insurance Premiums.
(c) "
Operating Expenses
"
shall mean the amount of all of Landlord's costs and expenses paid or incurred
in operating, repairing, replacing and maintaining the Park, the Building, and
the Common Areas in good condition and repair for a particular calendar year,
including by way of illustration and not limitation, the following: all
insurance deductibles; water, sewer, electrical, and other utility charges other
than the separately billed electrical and other charges paid by Tenant as
provided in this Lease (or other tenants in the Building); painting; stormwater
discharge fees; tools and supplies; repair costs; landscape maintenance costs;
access patrols; license, permit and inspection fees; management fees; market
rate administrative fees; supplies, costs, wages, and related employee benefits
payable for the management, maintenance, and operation of the Building;
maintenance, repair and replacement of the driveways, parking areas, curbs and
sidewalk areas (including snow and ice removal), landscaped areas, drainage
strips, sewer lines, exterior walls, foundation, structural frame, roof, gutters
and lighting; and maintenance and repair costs, dues, fees and assessments
incurred under any covenants or charged by any owners
association. The cost of any Operating Expenses that are capital in
nature shall be amortized over the useful life of the improvement (as reasonably
determined by Landlord), and only the amortized portion shall be included in
Operating Expenses.
Operating
Expenses shall exclude expenditures for which Landlord is actually reimbursed by
warranty.
(d) "
Real Estate Taxes
"
shall mean any form of real estate tax or assessment or service payments in lieu
thereof, and any license fee, commercial rental tax, improvement bond or other
similar charge or tax (other than inheritance, personal income or estate taxes)
imposed upon the Park, Building, or Common Areas, or against Landlord's business
of leasing the Building and Park, by any authority having the power to so charge
or tax, together with costs and expenses of contesting the validity or amount of
the Real Estate Taxes.
(e) "
Insurance Premiums
"
shall mean insurance premiums for insurance coverage on the Park, Building, or
Common Areas and shall include all fire and extended coverage insurance on the
Park and Building and all liability insurance coverage on the Common Areas of
the Park and Building, and the grounds, sidewalks, driveways and parking areas
related thereto, together with such other insurance coverages, including, but
not limited to, rent interruption insurance, as are from time to time obtained
by Landlord.
Section
3.03
.
Payment of Additional
Rent
.
(a) Any
amount required to be paid by Tenant hereunder (in addition to Minimum Rent) and
any charges or expenses incurred by Landlord on behalf of Tenant under the terms
of this Lease shall be considered "Additional Rent" payable in the same manner
and upon the same terms and conditions as the Minimum Rent reserved hereunder,
except as set forth herein to the contrary. Any failure on the part
of Tenant to pay such Additional Rent when and as the same shall become due
shall entitle Landlord to the remedies available to it for non-payment of
Minimum Rent.
(b) In
addition to the Minimum Rent specified in this Lease, commencing as of the
Commencement Date, Tenant shall pay to Landlord as Additional Rent for the
Leased Premises, in each calendar year or partial calendar year during the Lease
Term, an amount equal to the Annual Rental Adjustment for such calendar
year. Landlord shall estimate the Annual Rental Adjustment annually,
and written notice thereof shall be given to Tenant prior to the beginning of
each calendar year. Tenant shall pay to Landlord each month, at the
same time the Monthly Rental Installment is due, an amount equal to one-twelfth
(1/12) of the estimated Annual Rental Adjustment. Tenant shall be
responsible for delivering the Additional Rent to the payment address set forth
in
Section
1.01(k)
above in accordance with this
Section
3.03
. If Operating Expenses increase during a calendar year,
Landlord may increase the estimated Annual Rental Adjustment during such year by
giving Tenant written notice to that effect, and thereafter Tenant shall pay to
Landlord, in each of the remaining months of such year, an amount equal to the
amount of such increase in the estimated Annual Rental Adjustment divided by the
number of months remaining in such year. Within a reasonable time
after the end of each calendar year, Landlord shall prepare and deliver to
Tenant a statement showing the actual Annual Rental
Adjustment. Within thirty (30) days after receipt of the
aforementioned statement, Tenant shall pay to Landlord, or Landlord shall credit
against the next rent payment or payments due from Tenant, as the case may be,
the difference between the actual Annual Rental Adjustment for the preceding
calendar year and the estimated amount paid by Tenant during such
year. This
Section 3.03
shall
survive the expiration or any earlier termination of this Lease.
Section
3.04
.
Late
Charges
. Tenant acknowledges that Landlord shall incur certain
additional unanticipated administrative and legal costs and expenses if Tenant
fails to pay timely any payment required hereunder. Therefore, in
addition to the other remedies available to Landlord hereunder, if any payment
required to be paid by Tenant to Landlord hereunder shall become overdue, such
unpaid amount shall bear interest from the due date thereof to the date of
payment at the
lesser
of the prime rate of interest, as reported in the Wall Street Journal (the
"Prime Rate") plus six percent (6%) per annum and the maximum legal rate of
interest; provided, however, that with respect to the first late payment, if
any, each calendar year during the Lease Term, such interest shall not commence
to accrue until the expiration of five (5) days after written notice that the
applicable payment is past due.
ARTICLE 4 - SECURITY
DEPOSIT
Upon
execution and delivery of this Lease by Tenant, Tenant shall deposit one half
(½) of the Security Deposit with Landlord as security for the performance by
Tenant of all of Tenant's obligations contained in this Lease. Tenant
shall deposit the other one half (½) of the Security Deposit with Landlord on
the Commencement Date. In the event of a Default by Tenant, Landlord
may at its option apply all or any part of the Security Deposit to cure all or
any part of such Default; provided, however, that any such application by
Landlord shall not be or be deemed to be an election of remedies by Landlord or
considered or deemed to be liquidated damages. If so applied by
Landlord, Tenant agrees promptly, upon demand, to deposit such additional sum
with Landlord as may be required to maintain the full amount of the Security
Deposit. All sums held by Landlord pursuant to this
Article 4
shall be
without interest and may be commingled by Landlord. Promptly after
the end of the Lease Term, provided that there is then no uncured Default or any
repairs required to be made by Tenant pursuant to
Section 2.03
above or
Section 7.03
below, Landlord shall return the Security Deposit to Tenant.
ARTICLE 5 - OCCUPANCY AND
USE
Section
5.01
.
Use
. Tenant
shall use the Leased Premises for the Permitted Use and for no other purpose
without the prior written consent of Landlord.
Section
5.02
.
Covenants of Tenant
Regarding Use
.
(a) Tenant
shall (i) use and maintain the Leased Premises and conduct its business thereon
in a safe, careful, reputable, and lawful manner; (ii) comply with all covenants
that encumber the Building and all laws, rules, regulations, orders, ordinances,
directions and requirements of any governmental authority or agency, now in
force or which may hereafter be in force, including, without limitation, those
which shall impose upon Landlord or Tenant any duty with respect to or triggered
by a change in the use or occupation of, or any improvement or alteration to,
the Leased Premises; and (iii) comply with and obey all reasonable directions,
rules and regulations of Landlord, including without limitation the Building
Rules and Regulations attached hereto as
Exhibit
E
and made a part hereof, as may be modified from time to time by
Landlord on reasonable notice to Tenant.
(b) Tenant
shall not do or permit anything to be done in or about the Leased Premises that
will in any way cause a nuisance, obstruct or interfere with the rights of other
tenants or occupants of the Building or injure or annoy
them. Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Building of any of
Landlord's directions, rules and regulations, but agrees that any enforcement
thereof shall be done uniformly. Tenant shall not overload the floors
of the Leased Premises. All damage to the floor structure or
foundation of the Building due to improper positioning or storage of items or
materials shall be repaired by Landlord at the sole expense of Tenant, who shall
reimburse Landlord immediately therefor upon demand. Tenant shall not
use the Leased Premises, nor allow the Leased Premises to be used, for any
purpose or in any manner that would (i) invalidate any policy of insurance now
or hereafter carried by Landlord on the Building, or (ii) increase the rate of
premiums payable on any such insurance policy unless Tenant reimburses Landlord
for any increase in premium charged.
(c) Tenant
shall complete a Tenant Operations Inquiry Form in substantially the form of
Exhibit
D
attached hereto and made a part hereof.
Section
5.03
.
Landlord's Rights Regarding
Use
. Without limiting any of Landlord's rights specified
elsewhere in this Lease (a) Landlord shall have the right at any time, without
notice to Tenant, to control, change or otherwise alter the Common Areas in such
manner as it deems necessary or proper, and (b) Landlord, its agents, employees
and contractors and any mortgagee of the Building shall have the right to enter
any part of the Leased Premises at reasonable times upon twenty-four (24) hours
notice (except in the event of an emergency where no notice shall be required)
for the purposes of examining or inspecting the same (including, without
limitation, testing to confirm Tenant's compliance with this Lease), showing the
same to prospective purchasers, mortgagees, or tenants, and making such repairs,
alterations or improvements to the Leased Premises or the Building as Landlord
may deem necessary or desirable. Landlord shall incur no liability to
Tenant for such entry, nor shall such entry constitute an actual or constructive
eviction of Tenant or a termination of this Lease, or entitle Tenant to any
abatement of rent therefor.
ARTICLE 6 -
UTILITIES
Tenant
shall obtain in its own name and pay directly to the appropriate supplier the
cost of all utilities and services serving the Leased
Premises. However, if any services or utilities are jointly metered
with other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services (at rates that
would have been payable if such utilities and services had been directly billed
by the utilities or services providers) and Tenant shall pay such share to
Landlord within fifteen (15) days after receipt of Landlord's written
statement. Landlord shall not be liable in damages or otherwise for
any failure or interruption of any utility or other Building service and no such
failure or interruption shall entitle Tenant to terminate this Lease or withhold
sums due hereunder or constitute an actual or constructive eviction of
Tenant.
ARTICLE 7 - REPAIRS,
MAINTENANCE AND ALTERATIONS
Section
7.01
.
Repair and Maintenance of
Building
. Landlord shall make all necessary repairs,
replacements and maintenance to the roof, sprinkler systems, exterior walls,
foundation, structural frame of the Building, and the parking and landscaped
areas and other Common Areas. The cost of such repairs, replacements
and maintenance shall be included in Operating Expenses to the extent provided
in
Section
3.02
; provided however, to the extent any such repairs, replacements or
maintenance are required because of the negligence, misuse or Default of Tenant,
its employees, agents, contractors, customers or invitees, Landlord shall make
such repairs at Tenant's sole expense.
Section
7.02
.
Repair and Maintenance of
Leased Premises
. Tenant shall, at its own cost and expense,
maintain the Leased Premises in good condition, regularly servicing and promptly
making all repairs and replacements thereto, including but not limited to the
electrical systems, heating and air conditioning systems, plate glass, floors,
windows and doors, dock-doors, levelers, trash compactors, and plumbing
systems. Tenant shall obtain and maintain in effect throughout the
Lease Term a preventive maintenance contract on the heating, ventilating, and
air-conditioning systems and provide Landlord with a copy
thereof. The preventive maintenance contract shall meet or exceed
Landlord's standard maintenance criteria, and shall provide for the inspection
and maintenance of the heating, ventilating, and air conditioning system on at
least a semi-annual basis.
Section
7.03
.
Alterations
. Tenant
shall not permit alterations in or to the Leased Premises unless and until
Landlord has approved the plans therefor in writing. As a condition
of such approval, Landlord may require Tenant to remove the alterations and
restore the Leased Premises upon termination of this Lease; otherwise, all such
alterations shall at Landlord's option become a part of the realty and the
property of Landlord, and shall not be removed by Tenant. Tenant
shall ensure that all alterations shall be made in accordance with all
applicable laws, regulations, and building codes, in a good and workmanlike
manner and of quality equal to or better than the original construction of the
Building. No person shall be entitled to any lien derived through or
under Tenant for any labor or material furnished to the Leased Premises, and
nothing in this Lease shall be construed to constitute Landlord's consent to the
creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged of record
within thirty (30) days after filing. Tenant shall indemnify Landlord
from all costs, losses, expenses, and attorneys' fees in connection with any
construction or alteration and any related lien. Tenant agrees that
at Landlord's option, Landlord or a subsidiary or affiliate of Landlord, who
shall receive a fee as Landlord's construction manager or general contractor,
shall perform or cause to be performed all work on any alterations to the Leased
Premises.
ARTICLE 8 - INDEMNITY AND
INSURANCE
Section
8.01
.
Release
. All
of Tenant's trade fixtures, merchandise, inventory, and all other personal
property in or about the Leased Premises, the Building, or the Common Areas,
which is deemed to include the trade fixtures, merchandise, inventory, and
personal property of others located in or about the Leased Premises or Common
Areas at the invitation, direction, or acquiescence (express or implied) of
Tenant (all of which property shall be referred to herein, collectively, as
"Tenant's Property"), shall be and remain at Tenant's sole
risk. Landlord shall not be liable to Tenant or to any other person
for, and Tenant hereby releases Landlord from (a) any and all liability for
theft or damage to Tenant's Property, and (b) any and all liability for any
injury to Tenant or its employees, agents, contractors, guests and invitees in
or about the Leased Premises, the Building, or the Common Areas, except to the
extent of personal injury (but not property loss or damage) caused directly by
the gross negligence or willful misconduct of Landlord, its agents, employees,
or contractors. Nothing contained in this
Section 8.01
shall
limit (or be deemed to limit) the waivers contained in
Section 8.06
below. In the event of any conflict between the provisions of
Section 8.06
below
and this
Section
8.01
, the provisions of
Section 8.06
shall
prevail. This
Section 8.01
shall
survive the expiration or earlier termination of this Lease.
Section
8.02
.
Indemnification by
Tenant
. Tenant shall protect, defend, indemnify and hold
Landlord, its agents, employees and contractors harmless from and against any
and all claims, damages, demands, penalties, costs, liabilities, losses, and
expenses (including without limitation reasonable attorneys' fees and expenses
at the trial and appellate levels) to the extent (a) arising out of or relating
to any act, omission, gross negligence, or willful misconduct of Tenant or
Tenant's agents, employees, contractors, customers, or invitees in or about the
Leased Premises, the Building or the Common Areas, (b) arising out of or
relating to any of Tenant's Property, or (c) arising out of any other act or
occurrence within the Leased Premises, in all such cases except to the extent of
personal injury (but not property loss or damage) caused directly by the
negligence or willful misconduct of Landlord, its agents, employees or
contractors. Nothing contained in this
Section 8.02
shall
limit (or be deemed to limit) the waivers contained in
Section 8.06
below. In the event of any conflict between the provisions of
Section 8.06
below
and this
Section
8.02
, the provisions of
Section 8.06
shall
prevail. This
Section 8.02
shall
survive the expiration or earlier termination of this Lease.
Section
8.03
.
Indemnification by
Landlord
. Landlord shall protect, defend, indemnify and hold
Tenant, its agents, employees, and contractors harmless from and against any and
all claims, damages, demands, penalties, costs, liabilities, losses, and
expenses (including without limitation reasonable attorneys' fees and expenses
at the trial and appellate levels) to the extent arising out of or relating to
any act, omission, gross negligence or willful misconduct of Landlord or
Landlord's agents, employees or contractors. Nothing contained in
this
Section
8.03
shall limit (or be deemed to limit) the waivers contained in
Section 8.06
below. In the event of any conflict between the provisions of
Section 8.06
below
and this
Section
8.03
, the provisions of
Section 8.06
shall
prevail. This
Section 8.03
shall
survive the expiration or earlier termination of this Lease.
Section
8.04
.
Tenant's
Insurance
. Tenant shall purchase, at its own expense, and keep
in force at all times during the Lease Term the policies of insurance set forth
below (collectively, “Tenant’s Policies”). All Tenant’s Policies
shall (a) be issued by an insurance company with a Best’s rating of A or better
and otherwise reasonably acceptable to Landlord that is licensed to do business
in the state in which the Leased Premises is located; (b) provide that said
insurance shall not be canceled or materially modified unless 30 days’ prior
written notice shall have been given to Landlord; and (c) provide for
commercially reasonably deductible amounts (provided that if Landlord’s lender
has deductible requirements for the Building, then such deductibles shall be as
reasonably required by Landlord’s lender). The Tenant’s Policies
described in (i) and (ii) below shall (1) provide coverage on an occurrence
basis; (2) name Landlord (and its lender, if applicable) as additional insured;
(3) provide coverage, to the extent insurable, for the indemnity obligations of
Tenant under this Lease; (4) contain a separation of insured parties provision;
(5) be primary, not contributing with, and not in excess of, coverage that
Landlord may carry; and (6) provide coverage with no exclusion for a pollution
incident arising from a hostile fire. Certificates of Insurance for
Tenant’s Policies shall be delivered to Landlord prior to the Commencement Date
and renewals thereof shall be delivered to Landlord’s notice addresses at least
30 days prior to the applicable expiration date of each Tenant’s
Policy. In the event that Tenant fails, at any time or from time to
time, to comply with the requirements of the preceding sentence, Landlord may
(A) order such insurance and charge the cost thereof to Tenant, which amount
shall be payable by Tenant to Landlord upon demand, as Additional Rent or (B)
impose on Tenant, as Additional Rent, a monthly delinquency fee, for each month
during which Tenant fails to comply with the foregoing obligation, in an amount
equal to five percent (5%) of the Monthly Rental Installments then in
effect. Tenant shall give prompt notice to Landlord and Agent of any
bodily injury, death, personal injury, advertising injury or property damage
occurring in and about the Property.
Tenant shall purchase and maintain, throughout the Term,
Tenant’s Policies of: (i) commercial general or excess liability
insurance, including personal injury and property damage, in the amount of not
less than $2,000,000.00 per occurrence, and $5,000,000.00 annual general
aggregate; (ii) comprehensive automobile liability insurance covering Tenant
against any personal injuries or deaths of persons and property damage based
upon or arising out of the ownership, use, occupancy or maintenance of a motor
vehicle at the Premises and all areas appurtenant thereto in the amount of not
less than $1,000,000, combined single limit
; (iii
) commercial
property insurance covering Tenant’s P
roperty
(at its
full replacement cost)
; (iv
) workers’ compensation insurance per the applicable
state statutes covering all employees of Tenant; (v) business interruption
insurance with limits not less than an amount equal to two (2) years’ rent due
hereunder; and if Tenant handles, stores, or utilizes Hazardous Substances in
its business operations, (vi) pollution legal liability
insurance.
Section
8.05
.
Landlord's
Insurance
. During the Lease Term, Landlord shall maintain the
following types of insurance, in the amounts specified below (the cost of which
shall be included in Operating Expenses):
(a) a
commercial property insurance policy covering the Building (at its full
replacement cost), but excluding Tenant’s personal property; (b) commercial
general public liability insurance covering Landlord for claims arising out of
liability for bodily injury, death, personal injury, advertising injury, and
property damage occurring in and about the Park and/or Building and otherwise
resulting from any acts or omissions of Landlord, its agents, and employees; (c)
rent loss insurance; and (d) any other insurance coverage deemed appropriate by
Landlord or required by Landlord’s lender. All of the coverages
described in (a) through (d) shall be determined from time to time by Landlord,
in its sole discretion. All insurance maintained by Landlord shall be
in addition to and not in lieu of the insurance required to be maintained by the
Tenant.
Section
8.06
.
Waiver of
Subrogation
. Notwithstanding anything contained in this Lease
to the contrary, Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss of or damage to their respective
property, the Leased Premises, its contents, or other portions of the Building
or Common Areas arising from any risk which is required to be insured against by
Sections
8.04(a)(ii)
and
8.05(b)
above. The special form coverage insurance policies maintained by
Landlord and Tenant as provided in this Lease shall include an endorsement
containing an express waiver of any rights of subrogation by the insurance
company against Landlord and Tenant, as applicable.
ARTICLE 9 -
CASUALTY
In the
event of total or partial destruction of the Building or the Leased Premises by
fire or other casualty, Landlord agrees promptly to restore and repair same;
provided, however, Landlord's obligation hereunder with respect to the Leased
Premises shall be limited to the reconstruction of such of the leasehold
improvements as were originally required to be made by Landlord pursuant to
Section 2.02
above, if any. Rent shall proportionately abate during the time that
the Leased Premises or part thereof are unusable because of any such
damage. Notwithstanding the foregoing, if the Leased Premises are (a)
so destroyed that they cannot be repaired or rebuilt within one hundred eighty
(180) days from the casualty date; or (b) destroyed by a casualty that is not
covered by the insurance required hereunder or, if covered, such insurance
proceeds are not released by any mortgagee entitled thereto or are insufficient
to rebuild the Building and the Leased Premises; then, in case of a clause (a)
casualty, either Landlord or Tenant may, or, in the case of a clause (b)
casualty, then Landlord may, upon thirty (30) days' written notice to the other
party, terminate this Lease with respect to matters thereafter
accruing. Tenant waives any right under applicable laws inconsistent
with the terms of this paragraph.
ARTICLE 10 - EMINENT
DOMAIN
If all or
any substantial part of the Building or Common Areas shall be acquired by the
exercise of eminent domain, Landlord may terminate this Lease by giving written
notice to Tenant on or before the date possession thereof is so
taken. If all or any part of the Leased Premises shall be acquired by
the exercise of eminent domain so that the Leased Premises shall become
impractical for Tenant to use for the Permitted Use, Tenant may terminate this
Lease by giving written notice to Landlord as of the date possession thereof is
so taken. All damages awarded shall belong to Landlord; provided,
however, that Tenant may claim dislocation damages if such amount is not
subtracted from Landlord's award.
ARTICLE 11 - ASSIGNMENT AND
SUBLEASE
Section
11.01
.
Assignment and
Sublease
.
(a) Tenant
shall not assign this Lease or sublet the Leased Premises in whole or in part
without Landlord's prior written consent, which shall not be unreasonably
withheld (subject, however, to subsection (b) below and the other provisions
hereof). In the event of any assignment or subletting, Tenant shall
remain primarily liable hereunder, and any renewal, extension, expansion, rights
of first offer, rights of first refusal or other rights or options granted to
Tenant under this Lease shall be rendered void and of no further force or
effect. The acceptance of rent from any other person shall not be
deemed to be a waiver of any of the provisions of this Lease or to be a consent
to the assignment of this Lease or the subletting of the Leased
Premises. Any assignment or sublease consented to by Landlord shall
not relieve Tenant (or its assignee) from obtaining Landlord's consent to any
subsequent assignment or sublease.
(b) By
way of example and not limitation, Landlord shall be deemed to have reasonably
withheld consent to a proposed assignment or sublease if in Landlord's opinion
(i) the Leased Premises are or may be in any way adversely affected; (ii) the
business reputation of the proposed assignee or subtenant is unacceptable; (iii)
the financial worth of the proposed assignee or subtenant is insufficient to
meet the obligations hereunder, or (iv) the prospective assignee or subtenant is
a current tenant at the Park or is a bona-fide third-party prospective
tenant. Landlord further expressly reserves the right to refuse to
give its consent to any subletting if the proposed rent is publicly advertised
to be less than the then current rent for similar premises in the
Building. If Landlord refuses to give its consent to any proposed
assignment or subletting, Landlord may, at its option, within thirty (30) days
after receiving a request to consent, terminate this Lease by giving Tenant
thirty (30) days' prior written notice of such termination, whereupon each party
shall be released from all further obligations and liability hereunder, except
those which expressly survive the termination of this Lease.
(c) If
Tenant shall make any assignment or sublease, with Landlord's consent, for a
rental in excess of the rent payable under this Lease, Tenant shall pay to
Landlord fifty percent (50%) of any such excess rental upon
receipt. Tenant agrees to pay Landlord $500.00 upon demand by
Landlord for reasonable accounting and attorneys' fees incurred in conjunction
with the processing and documentation of any requested assignment, subletting or
any other hypothecation of this Lease or Tenant's interest in and to the Leased
Premises as consideration for Landlord's consent.
Section
11.02
.
Permitted
Transfer
. Notwithstanding anything to the contrary contained
in
Section
11.01
above, Tenant shall have the right, without Landlord's consent, but
upon not less than ten (10) days' prior notice to Landlord, to (a) sublet all or
part of the Leased Premises to any related corporation or other entity which
controls Tenant, is controlled by Tenant, or is under common control with
Tenant; (b) assign all or any part of this Lease to any related corporation or
other entity which controls Tenant, is controlled by Tenant, or is under common
control with Tenant, or to a successor entity into which or with which Tenant is
merged or consolidated or which acquires substantially all of Tenant's assets or
property; or (c) effectuate any public offering of Tenant's stock on the New
York Stock Exchange or in the NASDAQ over-the-counter market, provided that in
the event of a transfer pursuant to clause (b), the tangible net worth of
Tenant’s successor entity after any such transaction is not less than the
tangible net worth of Tenant as of the date hereof and provided further that
such successor entity assumes all of the obligations and liabilities of Tenant
(any such entity hereinafter referred to as a "Permitted
Transferee"). For the purpose of this
Article 11
(i)
"control" shall mean ownership of not less than fifty percent (50%) of all
voting stock or legal and equitable interest in such corporation or entity, and
(ii) "tangible net worth" shall mean the excess of the value of tangible assets
(i.e. assets excluding those which are intangible such as goodwill, patents, and
trademarks) over liabilities. Any such transfer shall not relieve
Tenant of its obligations under this Lease. Nothing in this paragraph
is intended to nor shall permit Tenant to transfer its interest under this Lease
as part of a fraud or subterfuge to intentionally avoid its obligations under
this Lease (for example, transferring its interest to a shell corporation that
subsequently files a bankruptcy), and any such transfer shall constitute a
Default hereunder. Any change in control of Tenant resulting from a
merger, consolidation, or a transfer of partnership or membership interests, a
stock transfer, or any sale of substantially all of the assets of Tenant that do
not meet the requirements of this
Section 11.02
shall
be deemed an assignment or transfer that requires Landlord's prior written
consent pursuant to
Section 11.01
above.
ARTICLE 12 - TRANSFERS BY
LANDLORD
Section
12.01
.
Sale of the
Building
. Landlord shall have the right to sell the Building
at any time during the Lease Term, subject only to the rights of Tenant
hereunder; and such sale shall operate to release Landlord from liability
hereunder after the date of such conveyance.
Section
12.02
.
Estoppel
Certificate
. Within ten (10) days following receipt of a
written request from Landlord, Tenant shall execute and deliver to Landlord,
without cost to Landlord, an estoppel certificate in such form as Landlord may
reasonably request certifying (a) that this Lease is in full force and effect
and unmodified or stating the nature of any modification, (b) the date to which
rent has been paid, (c) that there are not, to Tenant's knowledge, any uncured
Defaults, or specifying such Defaults if any are claimed, and (d) any other
matters or state of facts reasonably required respecting the
Lease. Such estoppel may be relied upon by Landlord and by any
purchaser or mortgagee of the Building.
Section
12.03
.
Subordination
. Landlord
shall have the right to subordinate this Lease to any mortgage, deed to secure
debt, ground lease, deed of trust, or other instrument in the nature thereof,
and any amendments or modifications thereto (collectively, a "Mortgage")
presently existing or hereafter encumbering the Building by so declaring in such
Mortgage. Within ten (10) days following receipt of a written request
from Landlord, Tenant shall execute and deliver to Landlord, without cost, any
instrument that Landlord deems reasonably necessary or desirable to confirm the
subordination of this Lease.
ARTICLE 13 - DEFAULT AND
REMEDY
Section
13.01
.
Default
. The
occurrence of any of the following shall be a "Default":
(a) Tenant
fails to pay any Monthly Rental Installments or Additional Rent within five (5)
days after the same is due.
(b) Tenant
fails to perform or observe any other term, condition, covenant, or obligation
required under this Lease for a period of thirty (30) days after written notice
thereof from Landlord; provided, however, that if the nature of Tenant's Default
is such that more than thirty (30) days are reasonably required to cure, then
Tenant shall have such additional time to cure such Default as is reasonably
necessary under the circumstances in question, provided that Tenant commences
such curative efforts as soon as is reasonably practical within said thirty (30)
day period and thereafter diligently completes the required action within a
reasonable time (not to exceed thirty [30] additional days).
(c) Tenant
shall vacate or abandon the Leased Premises, or fail to occupy the Leased
Premises or any substantial portion thereof for a period of thirty (30) days,
and same shall continue for five (5) days after written notice
thereof.
(d) Tenant
shall assign or sublet all or a portion of the Leased Premises in contravention
of the provisions of
Article 11
of this
Lease.
(e) All
or substantially all of Tenant's assets in the Leased Premises or Tenant's
interest in this Lease are attached or levied under execution (and Tenant does
not discharge the same within sixty [60] days thereafter); a petition in
bankruptcy, insolvency or for reorganization or arrangement is filed by or
against Tenant (and Tenant fails to secure a stay or discharge thereof within
sixty [60] days thereafter); Tenant is insolvent and unable to pay its debts as
they become due; Tenant makes a general assignment for the benefit of creditors;
Tenant takes the benefit of any insolvency action or law; the appointment of a
receiver or trustee in bankruptcy for Tenant or its assets if such receivership
has not been vacated or set aside within thirty (30) days thereafter; or,
dissolution or other termination of Tenant's corporate charter if Tenant is a
corporation.
In
addition to the Defaults described above, the parties agree that if Tenant
receives written notice of a violation of the performance of any (but not
necessarily the same) term or condition of this Lease three (3) or more times
during any twelve (12) month period, regardless of whether such violations are
ultimately cured, then such conduct shall, at Landlord's option, represent a
separate Default.
Section
13.02
.
Remedies
. Upon
the occurrence of any Default, Landlord shall have the following rights and
remedies, in addition to those stated elsewhere in this Lease and those allowed
by law or in equity, any one or more of which may be exercised without further
notice to Tenant:
(a) Landlord
may re-enter the Leased Premises and cure any Default of Tenant, and Tenant
shall reimburse Landlord as Additional Rent for any costs and expenses which
Landlord thereby incurs; and Landlord shall not be liable to Tenant for any loss
or damage which Tenant may sustain by reason of Landlord's action.
(b) Without
terminating this Lease, Landlord may terminate Tenant's right to possession of
the Leased Premises, and thereafter, neither Tenant nor any person claiming
under or through Tenant shall be entitled to possession of the Leased Premises,
Tenant shall immediately surrender the Leased Premises to Landlord, and Landlord
may re-enter the Leased Premises and dispossess Tenant and any other occupants
of the Leased Premises by any lawful means, and may remove their effects,
without prejudice to any other remedy that Landlord may have. Upon
termination of possession, Landlord may (i) re-let all or any part thereof for a
term different from that which would otherwise have constituted the balance of
the Lease Term and for rent and on terms and conditions different from those
contained herein, whereupon Tenant shall be immediately obligated to pay to
Landlord an amount equal to the present value (discounted at the Prime Rate) of
the difference between the rent provided for herein and that provided for in any
lease covering a subsequent re-letting of the Leased Premises, for the period
which would otherwise have constituted the balance of the Lease Term (the
"Accelerated Rent Difference"), or (ii) without re-letting, declare to be
immediately due and payable the difference between the present value (discounted
at the Prime Rate) of all rent which would have been due under this Lease for
the balance of the Lease Term to be immediately due and payable as liquidated
damages (the "Accelerated Rent") and the fair market rental value of the
Premises for the same period of time (the “Fair Market Rental”), as determined
by an appraiser selected by Landlord, based upon recently completed comparable
lease transactions in the Building, the Park, and the leasing submarket (the ___
___ ____ ____submarket) in which Premises is located (such difference being
referred to as the “Accelerated Fair Market Difference”). Upon
termination of possession, Tenant shall be obligated to pay to Landlord (A) the
Accelerated Rent Difference or the Accelerated Fair Market Difference, whichever
is applicable, (B) all loss or damage that Landlord may sustain by reason of
Tenant's Default ("Default Damages"), which shall include, without limitation,
expenses of preparing the Leased Premises for re-letting, demolition, repairs,
tenant finish improvements, brokers' commissions, and attorneys' fees, and (C)
all unpaid Minimum Rent and Additional Rent that accrued prior to the date of
termination of possession, plus any interest and late fees due hereunder (the
"Prior Obligations").
(c) Landlord
may terminate this Lease and declare the Accelerated Rent Difference or the
Accelerated Fair Market Difference, whichever is applicable, to be immediately
due and payable, whereupon Tenant shall be obligated to pay to Landlord (i) the
Accelerated Rent Difference or the Accelerated Fair Market Difference, whichever
is applicable, (ii) all of Landlord's Default Damages, and (iii) all Prior
Obligations. It is expressly agreed and understood that all of
Tenant's liabilities and obligations set forth in this subsection (c) shall
survive termination.
(d) Landlord
and Tenant acknowledge and agree that the payment of the Accelerated Rent
Difference or the Accelerated Fair Market Difference as set above shall not be
deemed a penalty or forfeiture, but merely shall constitute payment of
liquidated damages, it being understood that actual damages to Landlord are
extremely difficult, if not impossible, to ascertain. Neither the
filing of a dispossessory proceeding nor an eviction of personalty in the Leased
Premises shall be deemed to terminate the Lease.
(e) Landlord
may sue for injunctive relief or to recover damages for any loss resulting from
the Default.
Section
13.03
.
Landlord's Default and
Tenant's Remedies
. Landlord shall be in default if it fails to
perform any term, condition, covenant, or obligation required under this Lease
for a period of thirty (30) days after written notice thereof from Tenant to
Landlord; provided, however, that if the term, condition, covenant, or
obligation to be performed by Landlord is such that it cannot reasonably be
performed within thirty (30) days, such default shall be deemed to have been
cured if Landlord commences such performance within said thirty-day period and
thereafter diligently undertakes to complete the same. Upon the
occurrence of any such default, Tenant may sue for injunctive relief or to
recover damages for any loss directly resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset or abate any
sums due hereunder.
Section
13.04
.
Limitation of Landlord's
Liability
. IF LANDLORD SHALL FAIL TO PERFORM ANY TERM,
CONDITION, COVENANT, OR OBLIGATION REQUIRED TO BE PERFORMED BY IT UNDER THIS
LEASE, AND IF TENANT SHALL, AS A CONSEQUENCE THEREOF, RECOVER A MONEY JUDGMENT
AGAINST LANDLORD, TENANT AGREES THAT IT SHALL LOOK SOLELY TO LANDLORD'S RIGHT,
TITLE, AND INTEREST IN AND TO THE BUILDING, AND NOT TO ANY OWNER, PARTNER,
MEMBER, OR MANAGER IN OR OF LANDLORD, FOR THE COLLECTION OF SUCH JUDGMENT; AND
TENANT FURTHER AGREES THAT NO OTHER ASSETS OF LANDLORD SHALL BE SUBJECT TO LEVY,
EXECUTION, OR OTHER PROCESS FOR THE SATISFACTION OF TENANT'S
JUDGMENT.
Section
13.05
.
Nonwaiver of
Defaults
. Neither party's failure or delay in exercising any
of its rights or remedies or other provisions of this Lease shall constitute a
waiver thereof or affect its right thereafter to exercise or enforce such right
or remedy or other provision. No waiver of any default shall be
deemed to be a waiver of any other default. Landlord's receipt of
less than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and
satisfaction. No act or omission by Landlord or its employees or
agents during the Lease Term shall be deemed an acceptance of a surrender of the
Leased Premises, and no agreement to accept such a surrender shall be valid
unless in writing and signed by Landlord.
Section
13.06
.
Attorneys'
Fees
. If either party defaults in the performance or
observance of any of the terms, conditions, covenants, or obligations contained
in this Lease and the non-defaulting party obtains a judgment against the
defaulting party, then the defaulting party agrees to reimburse the
non-defaulting party for reasonable attorneys' fees incurred in connection
therewith. In addition, if a monetary Default shall occur and
Landlord engages outside counsel to exercise its remedies hereunder, and then
Tenant cures such monetary Default, Tenant shall pay to Landlord, on demand, all
expenses incurred by Landlord as a result thereof, including reasonable
attorneys' fees, court costs, and expenses.
ARTICLE 14 – Intentionally
deleted.
ARTICLE 15 - TENANT'S
RESPONSIBILITY REGARDING
ENVIRONMENTAL LAWS AND
HAZARDOUS SUBSTANCES
Section
15.01
.
Environmental
Definitions
.
(a) "Environmental
Laws" shall mean all present or future federal, state, and municipal laws,
ordinances, rules, and regulations applicable to the environmental and
ecological condition of the Leased Premises, and the rules and regulations of
the Federal Environmental Protection Agency and any other federal, state, or
municipal agency or governmental board or entity now or hereafter having
jurisdiction over the Leased Premises.
(b) "Hazardous
Substances" shall mean those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances," "solid
waste," or "infectious waste" under Environmental Laws and petroleum
products.
Section
15.02
.
Restrictions on
Tenant
. Tenant shall not cause or permit the use, generation,
release, manufacture, refining, production, processing, storage, or disposal of
any Hazardous Substances on, under or about the Leased Premises, or the
transportation to or from the Leased Premises of any Hazardous Substances,
except as necessary and appropriate for its Permitted Use in which case the use,
storage, or disposal of such Hazardous Substances shall be performed in
compliance with the Environmental Laws and the highest standards prevailing in
the industry.
Section
15.03
.
Notices, Affidavits,
Etc
. Tenant shall immediately (a) notify Landlord of
(i) any actual or alleged violation by Tenant, its employees, agents,
representatives, customers, invitees, or contractors of any Environmental Laws
on, under, or about the Leased Premises, or (ii) the presence or suspected
presence of any Hazardous Substances on, under, or about the Leased Premises,
and (b) deliver to Landlord any notice received by Tenant relating to
(a)(i) and (a)(ii) above from any source. Tenant shall execute
affidavits, representations, and the like within five (5) days of Landlord's
request therefor concerning Tenant's best knowledge and belief regarding the
presence of any Hazardous Substances on, under, or about the Leased
Premises.
Section
15.04
.
Tenant's
Indemnification
. Tenant shall indemnify Landlord and
Landlord's managing agent from any and all claims, losses, liabilities, costs,
expenses, and damages, including without limitation reasonable attorneys' fees,
costs of testing, and remediation costs, incurred by Landlord in connection with
any breach by Tenant of its obligations under this
Article
15
. The covenants and obligations under this
Article 15
shall
survive the expiration or earlier termination of this Lease.
Section
15.05
.
Existing
Conditions
. Notwithstanding anything contained in this
Article 15
to the
contrary, Tenant shall not have any liability to Landlord under this
Article 15
resulting
from any conditions existing, or events occurring, or any Hazardous Substances
existing or generated, at, in, on, under, or in connection with the Leased
Premises prior to the Commencement Date of this Lease (or any earlier access or
occupancy of the Leased Premises by, through, or under Tenant, including without
limitation access for construction purposes) except to the extent Tenant
exacerbates the same.
ARTICLE 16 -
MISCELLANEOUS
Section
16.01
.
Benefit of Landlord and
Tenant
. This Lease shall inure to the benefit of and be
binding upon Landlord and Tenant and their respective successors and
assigns.
Section
16.02
.
Governing
Law
. This Lease shall be governed in accordance with the laws
of the State where the Building is located.
Section
16.03
.
Force
Majeure
. Landlord and Tenant (except with respect to the
payment of any monetary obligation) shall be excused for the period of any delay
in the performance of any non-monetary obligation hereunder when such delay is
occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns, or strikes; shortages of materials, equipment,
labor, or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies.
Section
16.04
.
Examination of
Lease
. Submission of this instrument by Landlord to Tenant for
examination or signature does not constitute an offer by Landlord to lease the
Leased Premises. This Lease shall become effective, if at all, only
upon the execution by and delivery to both Landlord and
Tenant. Execution and delivery of this Lease by Tenant to Landlord
constitutes an offer to lease the Leased Premises on the terms contained
herein.
Section
16.05
.
Indemnification for Leasing
Commissions
. The parties hereby represent and warrant that the
only real estate brokers involved in the negotiation and execution of this Lease
are the Brokers and that no other party is entitled, as a result of the actions
of the respective party, to a commission or other fee resulting from the
execution of this Lease. Each party shall indemnify the other from
any and all liability for the breach of this representation and warranty on its
part and shall pay any compensation to any other broker or person who may be
entitled thereto. Landlord shall pay any commissions due Brokers
based on this Lease pursuant to separate agreements between Landlord and
Brokers.
Section
16.06
.
Notices
. Any
notice required or permitted to be given under this Lease or by law shall be
deemed to have been given if it is written and delivered in person or by
overnight courier or mailed by certified mail, postage prepaid, to the party who
is to receive such notice at the address specified in
Section
1.01(k)
. If sent by overnight courier, the notice shall be
deemed to have been given one (1) day after sending. If mailed
postage prepaid, the notice shall be deemed to have been given on the date that
is three (3) business days following mailing. Either party may change
its address by giving written notice thereof to the other party.
Section
16.07
.
Partial Invalidity; Complete
Agreement
. If any provision of this Lease shall be held to be
invalid, void or unenforceable, the remaining provisions shall remain in full
force and effect. This Lease represents the entire agreement between
Landlord and Tenant covering everything agreed upon or understood in this
transaction. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect between the
parties. No change or addition shall be made to this Lease except by
a written agreement executed by Landlord and Tenant.
Section
16.08
.
Financial
Information
. From time to time during the Lease Term, but not
more than twice per Operating Year, except in connection with prospective
purchasers or lenders, Tenant shall deliver to Landlord and Tenant shall cause
Guarantor to deliver to Landlord information and documentation describing and
concerning Tenant’s and Guarantor’s financial condition, and in form and
substance reasonably acceptable to Landlord, within ten (10) days following
Landlord’s written request therefor. Upon Landlord’s request, Tenant
shall provide and Tenant shall cause Guarantor to provide to Landlord the most
currently available audited financial statement of Tenant and of Guarantor; and
if no such audited financial statement is available, then Tenant shall instead
deliver to Landlord and Tenant shall cause Guarantor to deliver to Landlord its
most currently available balance sheet and income
statement. Furthermore, upon the delivery of any such financial
information from time to time during the Lease Term, Tenant and Guarantor each
shall be deemed to automatically represent and warrant to Landlord that the
financial information delivered to Landlord is true, accurate and complete, and
that there has been no adverse change in the financial condition of Tenant or
Guarantor, as the case may be, since the date of the then-applicable financial
information. Notwithstanding the foregoing, for so long as Tenant is
a publicly traded company on a recognized stock exchange that prepares public
financial statements, Landlord waives the above requirement that Tenant provide
Landlord with financial statements.
Section
16.09
.
Waiver of Jury
Trial
. THE LANDLORD AND THE TENANT, TO THE FULLEST EXTENT THAT
THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BROUGHT BY ANY PARTY TO THIS LEASE WITH RESPECT TO THIS LEASE, THE LEASED
PREMISES, OR ANY OTHER MATTER RELATED TO THIS LEASE OR THE LEASED
PREMISES.
Section
16.10
.
Representations and
Warranties
.
(a) Tenant
hereby represents and warrants that (i) Tenant is duly organized, validly
existing and in good standing (if applicable) in accordance with the laws of the
State under which it was organized; (ii) Tenant is authorized to do business in
the State where the Building is located; and (iii) the individual(s) executing
and delivering this Lease on behalf of Tenant has been properly authorized to do
so, and such execution and delivery shall bind Tenant to its
terms.
(b) Landlord
hereby represents and warrants that (i) Landlord is duly organized, validly
existing and in good standing (if applicable) in accordance with the laws of the
State under which it was organized; (ii) Landlord is authorized to do business
in the State where the Building is located; and (iii) the individual(s)
executing and delivering this Lease on behalf of Landlord has been properly
authorized to do so, and such execution and delivery shall bind Landlord to its
terms.
Section
16.11
.
Signage
. Tenant
may, at its own expense, erect a sign concerning the business of Tenant that
shall be in keeping with the decor and other signs on the Building and in the
Park. All signage (including the signage described in the preceding
sentence) in or about the Leased Premises shall be first approved by Landlord
and shall be in compliance with the any codes and recorded restrictions
applicable to the sign or the Building. The location, size and style
of all signs shall be approved by Landlord. Tenant agrees to maintain
any sign in good state of repair, and upon expiration of the Lease Term, Tenant
agrees to promptly remove such signs and repair any damage to the Leased
Premises.
Section
16.12
.
Parking
. Tenant
shall be entitled to the non-exclusive use of the parking spaces designated for
the Building by Landlord. Tenant agrees not to overburden the parking
facilities and agrees to cooperate with Landlord and other tenants in the use of
the parking facilities. Landlord reserves the right in its absolute
discretion to determine whether parking facilities are becoming crowded and, in
such event, to allocate parking spaces between Tenant and other tenants,
provided that Tenant shall be entitled to the non-exclusive use of at least
thirty-six (36) parking spaces. There will be no assigned parking
unless Landlord, in its sole discretion, deems such assigned parking
advisable. No vehicle may be repaired or serviced in the parking area
and any vehicle brought into the parking area by Tenant, or any of Tenant's
employees, contractors or invitees, and deemed abandoned by Landlord will be
towed and all costs thereof shall be borne by the Tenant. All
driveways, ingress and egress, and all parking spaces are for the joint use of
all tenants. There shall be no parking permitted on any of the
streets or roadways located within the Park. In addition, Tenant
agrees that its employees will not park in the spaces designated visitor
parking.
Section
16.13
.
Time
. Time
is of the essence of each term and provision of this Lease.
Section
16.14
.
Consent
. Where
the consent of a party is required, such consent will not be unreasonably
withheld.
Section
16.15
.
Usufruct
. Tenant's
interest in the Leased Premises is a usufruct, not subject to levy and sale, and
not assignable by Tenant except as expressly set forth herein.
(SIGNATURES
CONTAINED ON FOLLOWING PAGE)
IN
WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and
year first above written.
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LANDLORD:
INVESTORS,
LLC,
a
Delaware limited liability company
|
[SIGNATURES
CONTINUED ON THE FOLLOWING PAGE]
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TENANT:
|
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SHARPS
COMPLIANCE, INC.,
a
Texas corporation
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By:
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Name:
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Title:
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Exhibit
10.2
LEASE
AGREEMENT
(triple
net lease)
STATE
OF TEXAS
COUNTY
OF HARRIS
This
lease agreement ("Lease"), made and entered into as of the 30th day of January,
2009, by and between ____ _____ INDUSTRIAL, L.L.C., a Texas limited liability
company ("Landlord"), and SHARPS COMPLIANCE INC. OF TEXAS, a Texas corporation
("Tenant"), upon the following terms and conditions:
AGREEMENT
In
consideration of the rents reserved and the covenants and agreements herein
contained on the part of Tenant to be observed and performed, Landlord hereby
demises, lets and leases unto Tenant, and Tenant hereby rents from Landlord,
those certain premises consisting of a space containing an area of approximately
54,783 square feet (the "Leased Premises") shown on
Exhibit "A"
attached
hereto and constituting a part of the office/warehouse building, located
at________, which Building is located upon the lot, tract or parcel of land more
particularly described on
Exhibit "A-2"
attached hereto and made a part hereof for all purposes. If the
Building is in a development containing one or more other buildings, such
buildings together with all related site land, improvements, parking facilities,
common areas, driveways and landscaping, together with the Building shall be
referred to as the "Project".
Effective
as of the first day of the 11th Lease Month (hereinafter defined) (such date,
the "Mandatory Expansion Space Commencement Date"), Landlord shall lease to
Tenant, and Tenant shall lease from Landlord, that certain space containing
10,588 square feet (the "Mandatory Expansion Space") identified on
Exhibit "A-1"
attached hereto. Effective as of the Mandatory Expansion Space
Commencement Date, the term "Leased Premises" as used herein shall mean the
initial Leased Premises and the Mandatory Expansion Space, and the size of the
Leased Premises shall be 65,371 square feet. Notwithstanding the
foregoing, Tenant may take possession of the Mandatory Expansion Space on the
Commencement Date without accelerating the Mandatory Expansion Space
Commencement Date. Such possession of the Mandatory Expansion Space
shall be subject to all of the terms and conditions of the Lease, except that
Tenant shall not be required to pay Rent with respect to the period of time
prior to the Mandatory Expansion Space Commencement Date.
The
purpose of the site plans attached as
Exhibit "A"
and
Exhibit "A-1"
is
to show the approximate location of the Leased Premises (i.e., the initial
Leased Premises and the Mandatory Expansion Space). Landlord reserves
the right at any time to relocate, vary and adjust the size of the various
buildings, covenants, automobile parking areas, and other common areas as shown
on said site plan; provided that Landlord shall not relocate the Leased
Premises. The use and occupancy by Tenant of the Leased Premises
shall include the use, in common with others entitled thereto, of the common
service areas, pedestrian walks, automobile driveways and parking areas, all as
shown on the site plan attached hereto as
Exhibit
"A"
.
In
determining the number of square feet of area of the Leased Premises, Tenant
acknowledges that the Leased Premises includes the usable area, without
deduction for columns or projections, multiplied by a load factor to reflect a
share of certain areas, which may include mechanical and service rooms and
closets in the Building.
Prior to
the Commencement Date and subject to and in accordance with the terms set forth
in Section II of Addendum I attached to this Lease, Tenant may use the remaining
leasable area of the Building for (i) the storage of raw materials, finished
goods and equipment, and (ii) subject to compliance with all applicable laws,
light product assembly.
To have
and to hold the Leased Premises for a period of
sixty-three (63)
months
commencing on the later to occur of (a)
April 1, 2009 (the "Target Commencement Date") and (b) the date upon which the
Work (as defined in Exhibit "C" attached hereto) in the initial Leased Premises
has been substantially completed, as such date is determined pursuant to the
Work Letter Agreement attached hereto as Exhibit "C" (the later to occur of such
dates being defined as the "Commencement Date"). "Expiration Date"
shall mean the last day of the Lease term. Notwithstanding the
foregoing, if the Expiration Date, as determined herein, does not occur on the
last day of a calendar month, the Lease term and the last Lease Month thereof
shall be extended by the number of days necessary to cause the Expiration Date
to occur on the last day of the last calendar month of the Lease
term. Tenant shall pay Base Rent and additional Rent for such
additional days at the same rate payable for the portion of the last calendar
month immediately preceding such extension. "Lease Month" shall mean
a period of time commencing on the same numeric day as the Commencement Date and
ending on (but not including) the day in the next calendar month that is the
same numeric date as the Commencement Date.
Upon the
determination of the actual Commencement Date and the actual Expiration Date,
Landlord and Tenant shall execute a Memorandum of Acceptance of Leased Premises
("Memorandum of Acceptance") in substantially the form attached hereto as
Exhibit
"D"
. If Tenant occupies the initial Leased Premises without
executing a Memorandum of Acceptance, Tenant shall be deemed to have accepted
the initial Leased Premises for all purposes and the Commencement Date shall be
deemed to be the date set forth in the Memorandum of Acceptance delivered by
Landlord.
If Tenant occupies the
initial Leased Premises prior to the Commencement Date for any reason other than
construction of improvements therein, such occupancy shall be upon all of the
terms and conditions contained herein, including, without limitation, the
obligation to pay Rent, but shall not advance the Expiration Date, and Tenant
shall indemnify and hold Landlord harmless from any liability as a result of
Tenant's early occupancy of the Leased Premises
,
EVEN IF THE SAME RESULTS FROM THE
NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF LANDLORD OR
LANDLORD'S EMPLOYEES, AGENTS OR CONTRACTORS
. Tenant shall have the option to renew the
Lease term as set forth in Section I of Addendum I attached to this
Lease.
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3.
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Acceptance
of Leased Premises
|
Tenant
acknowledges that Landlord has not made any representations or warranty with
respect to the condition or quality of the Leased Premises or the
Building. Tenant has inspected and accepts the Leased Premises and
the Building in their present "AS IS" condition as suitable for the purpose for
which the Leased Premises are leased. Taking of possession by Tenant
shall be deemed conclusively to establish that the Leased Premises, the Building
and the Common Areas (hereinafter defined) are in good and satisfactory
condition as of when possession was taken. Tenant further
acknowledges that no representations as to the repair of the Leased Premises or
Building nor promises to alter, remodel or improve the Leased Premises or
Building have been made by Landlord, unless such are expressly set forth in this
Lease. After the Commencement Date Tenant shall, upon demand, execute
and deliver to Landlord a letter of acceptance of delivery of the Leased
Premises.
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4.
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Base
Rent and Security Deposit
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(a)
Base
Rent
. With respect to the initial Leased Premises, Tenant
agrees to pay to Landlord as base rent (the "Base Rent") the following amounts
during the periods set forth below:
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Period
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Annual Base Rent
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Monthly Installment
of Base Rent
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Lease
Months 1 – 3
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$
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0.00
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$
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0.00
|
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Lease
Months 4 – 15
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$
|
249,810.48
|
|
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$
|
20,817.54
|
|
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Lease
Months 16 – 37
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$
|
256,384.44
|
|
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$
|
21,365.37
|
|
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Lease
Months 38 – 63
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$
|
262,958.40
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$
|
21,913.20
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In
addition to the Base Rent payable with respect to the initial Leased Premises,
with respect to the Mandatory Expansion Space, Tenant agrees to pay to Landlord
as Base Rent the following amounts during the periods set forth
below:
|
Period
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Annual Base Rent
|
|
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Monthly Installment
of Base Rent
|
|
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Mandatory
Expansion Space Commencement Date – Lease Month 15
|
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$
|
48,281.28
|
|
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$
|
4,023.44
|
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Lease
Months 16 – 37
|
|
$
|
49,551.84
|
|
|
$
|
4,129.32
|
|
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Lease
Months 38 – 63
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$
|
50,822.40
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$
|
4,235.20
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Base Rent
shall for the Leased Premises shall be paid in advance, without demand,
deduction or set off, for the entire term hereof. A monthly
installment of $27,528.46 (representing Base Rent for Lease Month 4 for the
initial Leased Premises together with Tenant's Pro Rata Share of Building Costs
for the first Lease Month with respect to the initial Leased Premises) shall be
due and payable on the date hereof and the remaining installments of Base Rent
shall be due and payable on or before the first day of each calendar month
succeeding the Commencement Date during the hereby demised term, except that the
rental payment for any fractional calendar month at the commencement or end of
the Lease period shall be prorated.
(b)
Security
Deposit
. In addition, Tenant agrees to deposit with Landlord
on the date hereof the sum of $34,156.35 (the "Security Deposit"), which sum
shall be held by Landlord, without obligation for interest, as security for the
performance of Tenant's covenants and obligations under this Lease, it being
expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of Tenant's
default. Landlord shall not be required to keep the Security Deposit
separate from its other accounts and no trust relationship is created with
respect to the Security Deposit. Upon the occurrence of any event of
default by Tenant, Landlord may, from time to time, without prejudice to any
other remedy provided herein or provided by law, use such Security Deposit to
the extent necessary to make good any arrears of rent or other payments due
Landlord hereunder, and any other damage, injury, expense or liability caused by
such event of default; and Tenant shall pay to Landlord on demand the amount so
applied in order to restore the Security Deposit to its original
amount. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by Landlord to
Tenant within sixty (60) days after Tenant's obligations under this Lease have
been fulfilled, and Tenant has provided Landlord with Tenant's forwarding
address.
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5.
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Tenant's
Pro Rata Share of Building Costs
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Subject to all of the provisions of
this Lease relevant hereto, Tenant promises and agrees to pay, as additional
rent hereunder and as provided herein, at the office of the Landlord or at such
other place designated by Landlord, without any prior demand therefor and
without any deduction or set-off throughout the term of this Lease, Tenant's Pro
Rata Share (hereinafter defined) of certain Project expenditures made by
Landlord, as follows:
(1)
Real Estate Taxes, as defined in Paragraph 6;
(2)
Common Area Maintenance Costs, as defined in Paragraph 7; and
(3)
Building Insurance Costs, as defined in Paragraph 8.
"Tenant's
Pro Rata Share" as used in this Lease shall be obtained by multiplying the
expense in question by a fraction, the numerator of which shall be the rentable
square footage area of the Leased Premises and the denominator of which shall be
the rentable square footage area of the Building. If a particular
expense is incurred or charged to more than one building in the Project rather
than solely to the Building, then, for the purposes of calculating Tenant's Pro
Rata Share with respect to the Building, such multi-building expense shall be
allocated to the Building by multiplying the expense in question by a fraction,
the numerator of which shall be the rentable square footage of the Building and
the denominator of which shall be the rentable square footage area of the
buildings for which the expense was incurred or otherwise allocated to, with the
resulting number being used to calculate Tenant's Pro Rata Share as to the
Leased Premises. The amounts due from Tenant as Tenant's Pro Rata
Share of Real Estate Taxes, Common Area Maintenance Costs and Building Insurance
Costs (sometimes herein collectively called "Building Costs") shall be estimated
by Landlord for each calendar year and paid by Tenant in equal installments of
one-twelfth (1/12) of such estimated amount, monthly in advance, upon the first
day of each calendar month provided, however, if the term shall commence upon a
day other than the first day of the calendar month, Tenant shall pay upon the
commencement date of this Lease a portion of Tenant's Pro Rata Share of Building
Costs calculated on a per diem basis with respect to the fractional month
preceding the commencement of the first full calendar month of the term of this
Lease. Said amounts shall be adjusted between Landlord and Tenant
annually and at the expiration or earlier termination of this Lease as set forth
below. The term "Rent" shall mean Base Rent, Tenant's Pro Rata Share
of Real Estate Taxes, Common Area Maintenance Costs and Building Insurance Costs
and all other sums payable by Tenant to Landlord hereunder.
Tenant will pay Landlord the sum of the
following per month, in advance, payable at the same time and place as the Base
Rent is payable
,
as
estimated charges for Tenant's Pro Rata Share of Real Estate Taxes, Common Area
Maintenance Costs and Building Insurance Costs with respect to the initial
Leased Premises:
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(1)
Real Estate Taxes
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$
|
4,245.68
|
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(2)
Common Area Maintenance Costs
|
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$
|
2,008.71
|
|
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(3)
Building Insurance Costs
|
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$
|
456.53
|
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Total:
|
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$
|
6,710.92
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Effective as of the Mandatory Expansion
Space Commencement Date, in addition to the estimated charges for Tenant's Pro
Rata Share of Real Estate Taxes, Common Area Maintenance Costs and Building
Insurance Costs with respect to the initial Leased Premises, Tenant will pay
Landlord the sum of the following per month, in advance, payable at the same
time and place as the Base Rent is payable
,
as estimated charges for
Tenant's Pro Rata Share of Real Estate Taxes, Common Area Maintenance Costs and
Building Insurance Costs with respect to the Mandatory Expansion
Space:
|
(1)
Real Estate Taxes
|
|
$
|
820.57
|
|
|
(4)
Common Area Maintenance Costs
|
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$
|
388.23
|
|
|
(5)
Building Insurance Costs
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$
|
88.23
|
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Total:
|
|
$
|
1,297.03
|
|
The
estimated charges as set out above are subject to changes from time to time
throughout the Lease term.
(a)
Definitions
. For
purposes of this Lease, the following definitions shall apply:
(1) "Tax
Year" means the calendar and/or fiscal year basis upon which taxes and/or
special assessments are assessed upon the Project throughout the term of this
Lease.
(2) "Real
Estate Taxes" means (a) all real estate taxes and assessments on the Project,
the Building or the Leased Premises, and taxes and assessments levied in
substitution or supplementation in whole or in part of such taxes, (b) all
personal property taxes for the Building’s personal property, including license
expenses, (c) all taxes imposed on services of Landlord’s agents and employees,
(d) all sales, use, franchise, or other tax now or hereafter imposed by any
governmental authority upon Rent received by Landlord or on revenue of Landlord
from the Project, excluding state and federal income taxes, (e) all other taxes,
fees or assessments now or hereafter levied by any governmental authority on the
Project, the Building or its contents or on the operation and use thereof
(except as relate to specific tenants), and (f) all costs and fees incurred in
connection with seeking reductions in or refunds in Taxes including, without
limitation, any costs incurred by Landlord to challenge the tax valuation of the
Building, but excluding income taxes, estate or death, and succession
taxes.
(b)
Landlord's
Payment
. Subject to the limitations, conditions and agreements
contained in this Paragraph, Landlord shall pay annually, all Real Estate
Taxes.
(c)
Annual
Adjustment
. On or before one hundred eighty (180) days after
the end of each Tax Year during the term of this Lease, Landlord shall render a
statement showing the actual Real Estate Taxes for the applicable Tax Year and
the total of Tenant's estimated payments of Tenant's Pro Rata Share of Real
Estate Taxes paid during the preceding Tax Year, and the balance, if any, then
due from Tenant. Real Estate Taxes for a fractional year, if any,
shall be prorated. Landlord's failure to provide the statements shall
not relieve Tenant of any liability hereunder. Within ten (10) days
after the receipt of Landlord's statement showing the total amount paid in
advance by Tenant and the actual Real Estate Taxes paid or to be paid by
Landlord, there shall be an adjustment between Landlord and Tenant. Tenant shall
pay to Landlord on demand the difference between the amount paid by Tenant and
the actual amount due. If the total amount paid by Tenant hereunder
for any such calendar year shall exceed such actual amount due from Tenant for
such calendar year, the excess shall be credited by Landlord against any amounts
then due and owing by Tenant to Landlord, and any remaining net surplus shall
then be refunded by Landlord to Tenant.
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7.
|
Common
Area Maintenance
|
(a)
Landlord's Maintenance
Obligation
. Landlord agrees to maintain and repair throughout
the term hereof the Common Areas and facilities of the Project, including,
without limitation, the automobile entrances, exits, driveways, parking areas,
pedestrian walks, landscaped areas, lighting facilities, service areas and
Project signs not otherwise the responsibility of Tenant as set out in this
Lease (said areas hereinafter called the "Common Areas"). Landlord's maintenance
and repairs shall include all repairs and replacements and the supplies and
materials therefor, which consistent with industry standards for space
comparable to the Leased Premises in the Project and other projects comparable
to the Project in the vicinity of the Project, are necessary to preserve the
utility of the Common Area and facilities in the condition same were in at the
time of completion, reasonable wear and tear only excepted.
(b)
Common Area Maintenance
Costs
. As used herein, the term "Common Area Maintenance
Costs" shall mean all costs and expenses of every kind paid or incurred during
the term of this Lease in connection with the operation and upkeep of the Common
Areas and facilities within the Project, and where necessary, the cost of
replacing any of said common facilities and the cost of policing and protecting
same. In addition to the foregoing, the Common Area Maintenance Costs
may include a reserve fund of ten percent (10%) of the aggregate Common Area
Maintenance Costs, which reserve fund will be put into an escrow account and
accrue interest until such time as a major repair such as resurfacing the
parking lot or major concrete drive replacement, where it shall be applied
against such cost. Also, in addition to the foregoing, the Common
Area Maintenance Costs shall include but not limited to, maintenance and repair
costs, management fees (not to exceed 3% of Landlord's gross revenue from the
Project), wages and fringe benefits payable to employees of Landlord whose
duties are connected with the operation and maintenance of the Project and
Common Areas, all services, supplies, repairs, replacements or other expenses
for maintaining and operating the Building. Common Area Maintenance
Costs shall not include Real Estate Taxes or Building Insurance
Costs.
(c)
Annual
Adjustment
. On or before one hundred eighty (180) days after
the end of each calendar year during the term of this Lease, Landlord shall
render a statement showing the actual Common Area Maintenance Costs for the
applicable calendar year and the total of Tenant's estimated payments of
Tenant's Pro Rata Share of Common Area Maintenance Costs paid during the
preceding calendar year, and the balance, if any, then due from
Tenant. Common Area Maintenance Costs for a fractional year, if any,
shall be prorated. Within ten (10) days after the receipt of
Landlord's statement showing the total amount paid in advance by Tenant and the
total Common Area Maintenance Costs paid or to be paid by Landlord, there shall
be an adjustment between Landlord and Tenant. Tenant shall pay to Landlord on
demand the difference between the amount paid by Tenant and the actual amount
due. If the total amount paid by Tenant hereunder for any such
calendar year shall exceed such actual amount due from Tenant for such calendar
year, the excess shall be credited by Landlord against any amounts then due and
owing by Tenant to Landlord and any remaining net surplus shall then be refunded
by Landlord to Tenant. Landlord's failure to provide the statements
shall not relieve Tenant of any liability hereunder.
(a)
Tenant's Liability and
Property Insurance
. Effective as of the earlier of:
(1) the date Tenant enters or occupies the Leased Premises; or (2) the
Commencement Date, and continuing throughout the term, Tenant shall maintain the
following insurance policies: (A) commercial general liability insurance on
the most current ISO Form CG 00 01 or equivalent in amounts of $1,000,000 per
occurrence and $3,000,000 in the aggregate,
which shall apply on a per
location basis
and which shall afford, at the minimum, the following
limits: (i) products/completed operations aggregate limit of $1,000,000, (ii)
personal and advertising injury liability limit of $1,000,000, (iii) fire damage
legal liability limit of $100,000, and (iv) medical payments limit of $5,000;
or, following the expiration of the initial term, such other amounts as Landlord
may from time to time reasonably require (and, if the use and occupancy of the
Leased Premises include any activity or matter that is or may be excluded from
coverage under a commercial general liability policy [e.g., the sale, service or
consumption of alcoholic beverages], Tenant shall obtain such endorsements to
the commercial general liability policy or otherwise obtain insurance to insure
all liability arising from such activity or matter [including liquor liability,
if applicable] in such amounts as Landlord may reasonably require), insuring
Tenant, Landlord and Landlord’s property management company against all
liability for occurrences on or about the Leased Premises and acts of Tenant or
any assignees claiming by, through, or under Tenant or any subtenants claiming
by, through, or under Tenant and any of their respective agents, contractors,
employees, and invitees (collectively, "Tenant Parties") on or about the
Project, without modification to the separation of insureds provision, and
(without implying any consent by Landlord to the installation thereof) the
installation, operation, maintenance, repair or removal of Tenant’s Off-Premises
Equipment, with an additional insured endorsement in form CG 20 26 11 85; (B)
Business Automobile Liability covering any owned, non-owned, leased, rented or
borrowed vehicles of Tenant with limits no less than $1,000,000 per occurrence;
(C) causes of loss – special form property insurance on ISO Form CP 10 30 or
equivalent covering the full replacement cost on an agreed value basis of all
Alterations and improvements and betterments in the Leased Premises, extending
to Landlord and Landlord’s mortgagee as insureds as their interests may appear,
and containing ordinance or law coverage; (D) causes of loss – special form
property insurance on ISO Form CP 10 30 or equivalent covering the full
replacement cost on an agreed value basis of all furniture, trade fixtures and
personal property (including property of Tenant or others) in the Leased
Premises or otherwise placed in the Project by or on behalf of Tenant or any
Tenant Parties (including Tenant’s Off-Premises Equipment) it being understood
that no lack or inadequacy of insurance by Tenant shall in any event make
Landlord subject to any claim by virtue of any theft of or loss or damage to any
uninsured or inadequately insured property; (E) contractual liability
insurance sufficient to cover Tenant’s indemnity obligations hereunder (but only
if such contractual liability insurance is not already included in Tenant’s
commercial general liability insurance policy); (F) workers' compensation
insurance in amounts not less than statutorily required, and Employers’
Liability insurance with limits of not less than $1,000,000;
(G) intentionally omitted; (H) in the event Tenant performs any alterations
or repairs in, on, or to the Leased Premises, Builder’s Risk Insurance on an All
Risk basis (including collapse) on a completed value (non-reporting) form, or by
endorsement including such coverage pursuant to Paragraph 8(a)(2)(C)
hereinabove, for full replacement value covering all work incorporated in the
Building and all materials and equipment in or about the Leased Premises; and
(I) such other insurance or any changes or endorsements to the insurance
required herein, including increased limits of coverage, as Landlord, or any
mortgagee or lessor of Landlord, may reasonably require from time to
time. Tenant’s insurance shall provide primary coverage to Landlord,
Landlord's mortgagee, and any other additional insureds and shall not require
contribution by any insurance maintained by such parties, when any policy issued
to such parties provides duplicate or similar coverage, and in such circumstance
such policy will be excess over Tenant’s policy. Tenant shall furnish
to Landlord certificates of such insurance, with an additional insured
endorsement in form CG 20 26 11 85, and such other evidence satisfactory to
Landlord of the maintenance of all insurance coverages required hereunder at
least ten (10) days prior to the earlier of the Commencement Date or the date
Tenant enters or occupies the Leased Premises, and at least fifteen (15) days
prior to each renewal of said insurance, and Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord at least
thirty (30) days before cancellation or a material change of any such insurance
policies. All such insurance policies shall be in form, and issued by
companies with a Best’s rating of A:VII or better, reasonably satisfactory to
Landlord. Landlord must give its prior written approval to all
deductibles and self-insured retentions under Tenant's policies. No insurance
policy will contain endorsements that restrict, limit, or exclude coverage in a
manner that is inconsistent with the requirements set forth in this Paragraph
8(a). If Tenant fails to comply with the foregoing insurance
requirements or to deliver to Landlord the certificates or evidence of coverage
required herein, Landlord, in addition to any other remedy available pursuant to
this Lease or otherwise, may, but shall not be obligated to, obtain such
insurance and Tenant shall pay to Landlord on demand the premium costs thereof,
plus an administrative fee of fifteen percent (15%) of such cost. It
is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Tenant for its acts or
omissions as provided in this Lease.
(b)
Landlord's Liability
Insurance
. Landlord agrees to maintain in force during the
term of this Lease a policy or policies of commercial general liability
insurance, including property damage, written by one or more responsible
insurance companies approved by Landlord and licensed to do business in Texas
insuring Landlord against loss of life, bodily injury and/or property damage
with respect to the Common Areas of the Project and the operation of the
Project, in which the limit of public liability shall be not less than
$3,000,000 single limit bodily injury and in which the limit of property damage
liability shall be not less than $100,000. In addition, Landlord may
maintain in force such umbrella policy or policies of general liability
insurance as Landlord, in its sole discretion, may deem
appropriate.
(c)
Landlord's Property
Insurance
. Landlord agrees to procure and keep in effect
during the term of this Lease, a policy or policies of causes of loss – special
form property insurance covering the Building and other improvements in the
Project, or separate fire rating division as determined by the State Board of
Insurance which includes the Leased Premises, and business income/rental value
insurance, written by an insurance company authorized to do business within the
State of Texas, and in an amount equal to not less than eighty percent (80%) of
the replacement cost of the premises covered. Such insurance shall
provide protection against losses so insured against for the benefit of Landlord
and any first mortgagee of Landlord, subject to the terms and provisions of this
Lease and any first mortgage; provided, however, that all proceeds payable by
any insurance company under such policy or policies shall be payable to such
mortgagee, if any, and shall be applied in accordance with the terms of such
mortgage; or, if there is no mortgage, the full amount of such proceeds shall be
payable to Landlord, and Tenant shall not be entitled to, and shall have no
interest in, such proceeds or any part thereof. Such policy or
policies shall contain a provision or endorsement with respect to mutual waiver
of right of subrogation.
(d)
Building Insurance
Costs
. As used herein, the term "Building Insurance Costs"
shall mean the actual premium costs of commercial general liability, property
insurance, business income/rental value insurance, and other insurance
maintained by Landlord with respect to the Project, including without
limitation, terrorism insurance, and any deductible incurred in any
loss.
(e)
Annual Adjustment
. On
or before one hundred eighty (180) days after the end of each calendar year
during the term of this Lease, Landlord shall furnish Tenant a statement showing
the actual Building Insurance Costs paid by Landlord during the preceding
calendar year and the total of Tenant's estimated payments of Tenant's Pro Rata
Share of Building Insurance Costs paid during the preceding calendar year, and
the balance, if any, then due from Tenant. Landlord's failure to
provide the statement shall not relieve Tenant of any liability
hereunder. Within ten (10) days after the receipt of Landlord's
statement showing the total amount paid in advance by Tenant and the actual
Building Insurance Costs paid or to be paid by Landlord, there shall be an
adjustment between Landlord and Tenant. Tenant shall pay to Landlord
on demand the difference between the amount paid by Tenant and the actual amount
due. If the total amount paid by Tenant hereunder for any such calendar year
shall exceed such actual amount due from Tenant for such calendar year, the
excess shall be credited by Landlord against any amounts then due and owing by
Tenant to Landlord and any remaining net surplus shall then be refunded by
Landlord to Tenant.
(f)
Mutual Waiver of
Subrogation
. Notwithstanding anything to the contrary set
forth herein, neither Landlord nor Tenant shall be liable (by way of subrogation
or otherwise) to the other party (or to any insurance company insuring the other
party) for any loss or damage to any of the property of Landlord or Tenant, as
the case may be, with respect to their respective property, the Building, the
Project or the Leased Premises or any addition or improvements thereto, or any
contents therein, to the extent covered by insurance carried or required to be
carried by a party hereto
EVEN
THOUGH SUCH LOSS MIGHT HAVE BEEN OCCASIONED BY THE NEGLIGENCE OR WILLFUL ACTS OR
OMISSIONS OF THE LANDLORD OR TENANT OR THEIR RESPECTIVE EMPLOYEES, AGENTS,
CONTRACTORS OR INVITEES.
Landlord and Tenant shall give each
insurance company which issues policies of insurance, with respect to the items
covered by this waiver, written notice of the terms of this mutual waiver, and
shall have such insurance policies properly endorsed, if necessary, to prevent
the invalidation of any of the coverage provided by such insurance policies by
reason of such mutual waiver. For the purpose of the foregoing
waiver, the amount of any deductible applicable to any loss or damage shall be
deemed covered by, and recoverable by the insured under the insurance policy to
which such deductible relates.
The
Leased Premises shall be used only for the purpose of receiving, storing,
shipping and selling (other than retail) products, materials and merchandise
made and/or distributed by Tenant and assembly of raw materials to form
completed products made and/or distributed by Tenant, and for such other lawful
purposes as may be incidental thereto. Outside storage, including,
without limitation, trucks and other vehicles, is prohibited without Landlord's
prior written consent. Tenant shall at its own costs and expense
obtain any and all licenses and permits necessary for any use of the Leased
Premises. Tenant shall comply with all governmental orders and
directives for the correction, prevention and abatement of nuisances in or upon,
or connected with, the Leased Premises all at Tenant's sole
expense. Tenant shall not permit any objectionable or unpleasant
odors, smoke, dust, gas, noise or vibrations to emanate from the Leased
Premises, nor take any other action which would constitute a nuisance or would
disturb or endanger any other tenants of the Building or Project or unreasonably
interfere with the use of their respective premises. Without
Landlord's prior written consent, Tenant shall not receive, store or otherwise
handle any product, material or merchandise which is explosive or highly
inflammable. Tenant will not permit the Leased Premises to be used
for any purpose or in any manner (including, without limitation, any method of
storage) which would render the insurance thereon void or the insurance risk
more hazardous or cause the State Board of Insurance or other insurance
authority to disallow any sprinkler credits. Tenant shall faithfully
observe and comply with the rules and regulations attached to this Lease as
Exhibit "B"
, as
well as all modifications thereof and additions thereto as are from time to time
promulgated by Landlord.
Landlord
shall, subject to inclusion in Common Area Maintenance Costs, maintain only the
roof, foundation, the structural soundness of the exterior walls of the
Building, and the sprinkler loop serving the Leased Premises in good repair,
reasonable wear and tear excepted. Tenant shall repair and pay for
any damage caused by Tenant, or Tenant's employees agents or invitee, or caused
by Tenant's default hereunder. The term "walls" as used herein shall
not include windows, glass or plate glass, doors, special storefronts or office
entries. Tenant shall immediately give Landlord written notice of
defect or need for repairs, after which Landlord shall have reasonable
opportunity to repair same or cure such defect. Landlord's liability
with respect to any defects, repairs or maintenance for which Landlord is
responsible under any of the provisions of this Lease shall be limited to the
cost of such repairs or maintenance or the curing of such defect.
Further,
Landlord shall maintain and repair, subject to inclusion in Common Area
Maintenance Costs, the Common Areas of the Project, including, the parking
areas, driveways, landscaping, and exterior utility lines. However,
if Tenant or any other particular tenant of the Building can be clearly
identified as being responsible for obstructions or stoppage of the common
sanitary sewage line, then Tenant, if Tenant is responsible, or such other
responsible tenant, shall pay the entire cost thereof, upon demand, as
additional rent.
(a) Tenant
shall at its own cost and expense keep and maintain all parts of the Leased
Premises (except those for which Landlord is expressly responsible under the
terms of this Lease) in good condition, promptly making all necessary repairs
and replacements, including but not limited to, windows, glass, plate glass
doors, any special office entry, interior walls and finish work, floors and
floor covering, downspout, gutters, heating and air conditioning systems,
lighting, electrical systems, dock boards, truck doors, door bumpers, paving,
plumbing lines, equipment, and fixtures, termite and pest extermination, regular
removal of trash and debris, keeping the whole of the Leased Premises in a clean
and sanitary condition.
(b) Tenant
shall not damage any demising wall or disturb the integrity and support provided
by any demising wall and shall, at its sole cost and expense, promptly repair
any damage or injury to any demising wall caused by Tenant or its employees,
agents or invitee.
(c) Tenant
and its employees, customers and licensees shall have the non-exclusive right to
use the parking areas, if any, as may be designated by Landlord in writing,
subject to such reasonable rules and regulations as Landlord may from time to
time prescribe and subject to rights of ingress and egress of other
tenants. Landlord shall not be responsible for enforcing Tenant's
parking rights against any third parties. Tenant shall be entitled to
use the ten (10) parking spaces shown on
Exhibit "F"
attached
hereto
.
(d) Tenant
shall, at its own cost and expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor for servicing all hot
water, heating and air conditioning systems and equipment within or exclusively
serving the Leased Premises. The maintenance contractor and the
contract must be approved by Landlord. The service contract must
include all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective (and a copy thereof
delivered to Landlord) within thirty (30) days of the date Tenant takes
possession of the Leased Premises and provide for service not less than a
quarterly basis. Within ten (10) days after receipt of a request from
Landlord, Tenant shall deliver to Landlord copies of all maintenance or service
reports performed in connection with or pursuant to such maintenance/service
contract.
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12.
|
Tenant
Improvements and Alterations
|
Tenant
shall not make any alterations, additions or improvements to the Leased Premises
(including but not limited to roof and wall penetrations) or the Building
without the prior written consent of Landlord. All Tenant
alterations, additions and/or improvements shall comply with insurance
requirements and with all applicable laws, ordinances, and regulations,
including without limitation, the provisions of Tex. Rev. Civ. Stat. Ann. art.
9102 and the provisions of the Americans With Disabilities Act of 1990, 42
U.S.C. §§12101-12213 (collectively, the "Disability
Acts"). Additionally, all Tenant alterations, additions and/or
improvements shall be in accordance with specifications approved by
Landlord. All Tenant alterations, additions and/or improvements shall
be constructed in a good and workmanlike manner. All plans and
specifications for Tenant's alterations, additions and/or improvements shall be
submitted to Landlord for Landlord's written approval. Tenant agrees
that Landlord may monitor all phases of Tenant's construction. Tenant
shall reimburse Landlord for Landlord's reasonable expenses for reviewing plans
and documents and in monitoring construction. Landlord's review of
plans and monitoring construction shall be solely for Landlord's own benefit and
shall impose no duty or obligation on Landlord to confirm that the plans and
specifications and/or construction comply with applicable laws, codes, rules, or
regulations. At Landlord's request, Tenant shall obtain payment and
performance bonds approved by Landlord, for any Tenant construction which bonds
shall be delivered to Landlord prior to commencement of
construction. Upon completion of Tenant's construction, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who performed work along with final lien waivers from such
contractors and subcontractors. Tenant may, without the consent of
Landlord, but at its own cost and expense and in a good workmanlike manner,
erect such shelves, bins, machinery, and trade fixtures as it may deem
advisable, without altering the basic character of the Building or improvements
and without overloading or damaging such Building or improvements, and in each
case complying with all applicable governmental laws, ordinances, regulations
and other requirements. All alterations, additions, improvements and
partitions erected by Tenant shall be and remain the property of Tenant during
the term of this Lease, and Tenant shall, unless Landlord otherwise elects as
hereinafter provided, remove all alterations, additions, improvements and
partitions erected by Tenant and restore the Leased Premises to its original
condition by the date of termination of this Lease or upon earlier vacating of
the Leased Premises; provided, however, that if Landlord so elects prior to
termination of this Lease or upon earlier vacating of the Leased Premises, such
alterations, additions, improvements and partitions shall become the
property of Landlord as of the date of termination of this Lease or upon earlier
vacating of the Leased Premises and shall be delivered up to the Landlord with
the Leased Premises. All shelves, bins, machinery and trade fixtures
installed by Tenant may be removed by Tenant prior to the termination of this
Lease, after written notice to Landlord of Tenant's intentions, and shall be
removed by the date of termination of this Lease or upon earlier vacating of the
Leased Premises. Any removal by Tenant shall be accomplished in a
good workmanlike manner so as not to damage the primary structure or structural
qualities of the buildings and other improvements situated on the Leased
Premises.
(a) Tenant
shall have the right to install signs upon the Leased Premises only when first
approved in writing by Landlord and subject to any applicable governmental laws,
ordinances, regulations, Landlord's or other architectural controls, and other
requirements. Tenant shall maintain all signs upon the Leased
Premises in good condition. Tenant shall remove all such signs by the
termination of this Lease. Such installations and removals shall be
made in such manner as to avoid injury or defacement of the Building and other
improvements, and Tenant shall repair any injury or defacement, including,
without limitation, discoloration, caused by such installation and/or
removal.
(b) Notwithstanding
the foregoing and so long as (i) Tenant is not in default under the terms of the
Lease beyond the expiration of any applicable notice and cure periods; (ii)
Tenant is in occupancy of the Leased Premises; and (iii) Tenant has not assigned
the Lease or sublet any part of the Leased Premises, Tenant shall have the
right, at Tenant's expense, to install a corporate identification sign on the
Building above the entry to the Leased Premises __________(the "Building Sign");
provided that (i) Tenant obtains all necessary approvals from any governmental
authorities having jurisdiction over Tenant, the Project, or the Building Sign),
(ii) the Building Sign conforms to all applicable laws, rules and regulations of
any governmental authorities having jurisdiction over the Building Sign or the
Project and all restrictive covenants applicable to the Project, and (iii) the
Building Sign conforms to the signage specifications for the Project, and (iv)
Tenant obtains Landlord's written consent to any proposed signage and lettering
prior to its fabrication and installation. To obtain Landlord's
consent, Tenant shall submit design drawings to Landlord showing the type and
sizes of all lettering; the colors, finishes and types of materials
used. Tenant shall pay all costs associated with the Building Sign,
including without limitation, installation expenses, maintenance and repair
costs, utilities and insurance. Tenant agrees that, subject to
inclusion in Common Area Maintenance Costs, Landlord shall have the right, after
notice to Tenant, to temporarily remove and replace the Building Sign in
connection with and during the course of any repairs, changes, alterations,
modifications, renovations or additions to the Building. Tenant shall
maintain the Building Sign in good condition. Upon expiration or
earlier termination of the Lease, Tenant shall, at its sole cost and expense,
remove the Building Sign and repair all damage caused by such
removal. If during the term of this Lease (and any extensions
thereof) (a) Tenant is in default under the terms of the Lease after the
expiration of applicable cure periods; or (b) Tenant vacates the Leased Premises
for a period of ninety (90) or more consecutive days; or (c) Tenant assigns the
Lease or subleases any part of the Leased Premises, then Tenant's rights granted
herein with respect to the Building Sign will terminate and Landlord may remove
the Building Sign at Tenant's sole cost and expense.
Landlord
and Landlord's agents and representatives shall have the right to enter and
inspect the Leased Premises and Building at any reasonable time during business
hours, for the purpose of ascertaining the condition of the Leased Premises or
in order to made such repairs as may be required or permitted to be made by
Landlord under the terms of this Lease. During the period that is
nine (9) months prior to the end of the term hereof, Landlord and Landlord's
agents and representatives shall have the right to enter the Leased Premises at
any reasonable time during business hours for the purpose of showing the Leased
Premises and shall have the right to erect on the Leased Premises a suitable
sign indicating the Leased Premises are available. Tenant shall give
written notice to Landlord at least thirty (30) days prior to vacating the
Leased Premises and shall arrange to meet with Landlord for a joint inspection
of the Leased Premises prior to vacating. In the event of Tenant's
failure to give such notice or arrange to meet with Landlord for a joint
inspection of the Leased Premises prior to vacating, Landlord's inspection at or
after Tenant's vacating the Leased Premises shall be conclusively deemed correct
for purposes of determining Tenant's responsibility for repairs and
restoration.
Landlord
agrees to provide water, electricity and telephone service connections to the
Building. Tenant shall pay to bring such utilities to the Leased
Premises and for all water, gas, heat, light, power, telephone, sewer, sprinkler
charges and other utilities and services used on or from the Leased Premises,
together with any taxes, penalties, surcharges or the like pertaining thereto
and any maintenance changes for utilities, as well as shall furnish all electric
light bulbs and tubes. If any such services are not separately
metered to Tenant, Tenant shall pay Tenant's reasonable proportion, as
determined by Landlord, of all charges jointly metered with other
premises. Tenant's use of electrical services shall not exceed in
voltage, rated capacity, or overall load Tenant's Pro Rata Share of electricity
for the Building. In the event Tenant shall request that it be
allowed to consume electrical services in excess of Tenant's Pro Rata Share of
electricity for the Building, Tenant shall be responsible for all costs and
expenses in connection with obtaining additional power capacity, including the
cost of all equipment and connection and distribution
charges. Landlord shall in no event be liable for any interruption or
failure of utility services on the Leased Premises.
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16.
|
Assignment
and Subletting
|
(a) Tenant
will not assign this Lease, or allow same to be assigned by operation of law or
otherwise, or sublet the Leased Premises or any part thereof without the prior
written consent of Landlord, which consent to an assignment (other than a
collateral assignment) or sublease shall not be unreasonably
withheld. Without limitation, it is agreed that Landlord's consent
shall not be considered unreasonably withheld if: (1) the proposed transferee's
use of the Leased Premises is more hazardous that Tenant's with reference to the
risk of fire or other hazards; (2) the proposed transferee's occupancy will
result in additional environmental risk for the Project; or (3) the transferee
is an occupant of the Project. Notwithstanding any permitted
assignment or subletting, Tenant shall at all times remain directly, primarily
and fully responsible and liable for the payment of the rent herein specified
and for compliance with all of its other obligations under the terms, provisions
and covenants of this Lease. If the Leased Premises or any part
thereof are then assigned or sublet, Landlord, in addition to any other remedies
herein provided or provided by law, may at its option collect directly from such
assignee or subtenant all rents becoming due to Tenant under such assignment or
sublease and apply such rent against any sums due to Landlord from Tenant
hereunder, and no such collection shall be construed to constitute a novation or
a release of Tenant from the further performance of Tenant's obligations
hereunder. For purpose of this Lease a transfer of more than fifty percent (50%)
of the beneficial interest in Tenant or of the control of Tenant (if Tenant is a
partnership, corporation, limited liability, company, trust, or other type of
business, organization or entity) shall constitute an assignment of this
Lease. Any attempted assignment or sublease in violation of this
Paragraph 16, shall, exercisable in Landlord's sole and absolute discretion, be
void. Consent by Landlord to one or more proposed assignments or
subleases shall not operate as a waiver of Landlord's rights to approve any
subsequent assignment or sublease.
(b) If
Tenant requests Landlord's consent to a proposed assignment or sublease, Tenant
shall submit to Landlord (i) financial statements for the proposed transferee,
(ii) a copy of the proposed assignment or sublease, and (iii) such other
information as Landlord may reasonably request. After Landlord's
receipt of the required information and documentation, Landlord shall either:
(1) consent or reasonably refuse consent to the proposed assignment or sublease
in writing; (2) in the event of a proposed assignment of this Lease, terminate
this Lease as set forth in section (c) below; and (3) in the event of a proposed
subletting, terminate this Lease with respect to the portion of the Leased
Premises which Tenant proposes to sublease as set forth in section (c)
below. Tenant shall reimburse Landlord for its actual reasonable
costs and expenses (including, without limitation, reasonable attorney's fees)
incurred by Landlord in connection with Landlord's review of such proposed
assignment or sublease or Permitted Transfer.
(c) Landlord
shall have the option, in the event of any proposed assignment or subletting, to
cancel this Lease as of the date the subletting or assignment described in
Tenant's notice is to be effective. The option shall be exercised, if
at all,
by
Landlord's giving Tenant written notice thereof within twenty (20) days
following Landlord's receipt of Tenant's written request. Upon
cancellation, Tenant shall pay to Landlord all costs or charges which are the
responsibility of Tenant hereunder through the date of cancellation, and Tenant
shall, at Tenant's own cost and expense, discharge in full any outstanding
commission obligation on the part of Landlord with respect to this
Lease. Further, upon any such cancellation Landlord and Tenant shall
have no further obligations or liabilities to each other under this Lease,
except with respect to obligations or liabilities which accrue hereunder as of
the cancellation date in the same manner as if such cancellation date were the
date originally fixed for the expiration of the term hereof. Without
limitation, Landlord may lease the Leased Premises to the prospective subtenant
or assignee, without liability to the Tenant. Landlord's failure to
exercise any right hereunder shall not waive Landlord's right as to any
subsequent proposed sublease or assignment, nor shall any such failure be deemed
to constitute Landlord's right as to any subsequent proposed sublease or
assignment, nor shall any such failure be deemed to constitute Landlord's
approval of the proposed sublease or assignment.
(d) Notwithstanding
the foregoing, Tenant may assign its entire interest under this Lease or sublet
the Leased Premises to any successor to Tenant by purchase, merger,
consolidation or reorganization (collectively referred to as "Permitted
Transfer") without the consent of Landlord, provided: (1) Tenant is not in
default under this Lease; (2) if such proposed transferee is a successor to
Tenant by purchase, said proposed transferee shall acquire all or substantially
all of the stock or assets of Tenant's business or, if such proposed transferee
is a successor to Tenant by merger, consolidation or reorganization, the
continuing or surviving entity shall own all or substantially all of the assets
of Tenant; (3) such proposed transferee shall have a net worth which is at
least equal to the greater of Tenant's net worth at the date of this Lease or
Tenant's net worth as of the day prior to the proposed purchase, merger,
consolidation or reorganization as evidenced to Landlord's reasonable
satisfaction; and (4) Tenant shall give Landlord written notice at least
thirty (30) days prior to the effective date of the proposed purchase, merger,
consolidation or reorganization.
(e) Tenant
shall pay to Landlord fifty percent (50%) of all cash and other consideration
which Tenant receives as a result of any assignment or sublease, after deducting
all actual out-of-pocket third party expenses paid by Tenant in connection with
such assignment or sublease, that is in excess of the rent payable to Landlord
hereunder for the portion of the Leased Premises and Lease term covered by the
assignment or sublease within ten (10) days following receipt thereof by
Tenant.
(f) Landlord
shall have the right to transfer and assign, in whole or in part, any of its
rights under this Lease, and in the Building or Project referred to herein; and
to the extent that such assignee assumes Landlord's obligations hereunder,
Landlord shall by virtue of such assignment be released from such
obligation.
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17.
|
Fire
and Casualty Damage
|
(a) If
the Building should be damaged or destroyed by fire, tornado or other casualty,
Tenant shall give immediate written notice thereof to Landlord.
(b) If
the Building should be totally destroyed by fire, tornado or other casualty, or
if it should be so damaged, thereby that rebuilding or repairs cannot in
Landlord's estimation be completed within two hundred (200) days after the date
upon which Landlord is notified by Tenant of such damage, this Lease shall
terminate and the Rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.
(c) If
the Building should be damaged by any peril covered by the insurance to be
provided by Landlord under this Lease, but only to such extent that rebuilding
or repairs can in Landlord's estimation be completed within two hundred (200)
days after the date upon which Landlord is notified by Tenant of such damage,
this Lease shall not terminate, and Landlord shall at its sole costs and expense
thereupon proceed with reasonable diligence to rebuild and repair the Building
to substantially the condition in which it existed prior to such damage, except
that Landlord shall not be required to rebuild, repair or replace any part of
the partitions, fixtures, additions and other improvements which may have been
placed in, on or about the Leased Premises by Tenant. If the Leased
Premises are untenantable, the Rent owed by Tenant shall not be abated but shall
be reduced to such extent as may be fair and reasonable under all of the
circumstances. In the event that Landlord shall fail to complete such
repairs and rebuilding within two hundred (200) days after the date upon which
Landlord is notified by Tenant of such damage, Tenant may at its option
terminate this Lease by delivering written notice of termination to Landlord
within ten (10) days after expiration of such two hundred (200) day period as
Tenant's exclusive remedy, whereupon all rights and obligations hereunder shall
cease and terminate. Failure by Tenant to timely terminate this Lease
as set forth in the preceding sentence shall be deemed a waiver by Tenant of its
right to do so.
(d) Notwithstanding
anything herein to the contrary, in the event the holder of any indebtedness
secured by a mortgage or deed of trust covering the Leased Premises requires
that the insurance proceeds be applied to such indebtedness, then Landlord shall
have the right to terminate this Lease by delivering written notice of
termination to Tenant within fifteen (15) days after such requirement is made by
any such holder, whereupon all rights and obligations hereunder shall cease and
terminate.
(a) If
the whole or any substantial part of the Leased Premises should be taken from
any public or quasi-public use under governmental law, ordinance or regulation,
or by right of eminent domain, or by private purchase in lieu thereof and the
taking would prevent or materially interfere with the use of the Leased Premises
for the purposes for which they are being used, this Lease shall terminate and
the Rent shall be abated during the unexpired portion of this Lease, effective
when the physical taking of the Leased Premises shall occur.
(b) If
part of the Leased Premises shall be taken for any public or quasi-public use
under any governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this Lease is not terminated
as provided in the subparagraph above, this Lease shall not terminate but the
Rent payable hereunder during the unexpired portion of this Lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances.
(c) In
the event of any such taking or private purchase in lieu thereof, all
compensation awarded for any such taking or condemnation, or sale proceeds in
lieu thereof, shall be the property of Landlord, and Tenant shall have no claim
thereto, the same being hereby expressly waived by Tenant, except for any
portions of such award or proceeds which are specifically allocated by the
condemning or purchasing party for the taking of or damage to trade fixtures of
Tenant, which Tenant specifically reserves to itself.
Tenant
agrees that at the termination of this Lease by lapse of time or otherwise, to
yield up immediate possession to Landlord. If Tenant holds over after
the expiration or termination of this Lease, unless the parties hereto otherwise
agree in writing on the terms of such holding over, occupancy of the Leased
Premises subsequent to such termination or expiration shall be that of a tenancy
at sufferance and in no event for month-to-month or
year-to-year. During the holdover, all of the other terms and
provisions of this Lease shall be applicable during that period, except that
Tenant shall pay Landlord from time to time upon demand, as Rent for the period
of any holdover, an amount equal to one hundred fifty percent (150%) of the Rent
in effect on the termination date, computed on a monthly basis for each month of
the holdover period (without proration for partial months). No
holding over by Tenant, whether with or without consent of Landlord, shall
operate to extend this Lease except as otherwise expressly
provided. The preceding provisions of this paragraph shall not be
construed as Landlord's consent for Tenant to holdover.
Landlord
covenants that it now has, or will acquire before Tenant takes possession of the
Leased Premises, good title to the Leased Premises, free and clear of all liens
and encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental regulations
relating to the use of such property, and easements, restrictions and other
conditions of record. In the event this Lease is a sublease, then
Tenant agrees to take the Leased Premises subject to the provisions of the prior
leases. Landlord represents and warrants that it has full right and
authority to enter into this Lease and that Tenant, upon paying the rentals
herein set forth and performing its other covenants and agreements herein set
forth, shall peaceably and quietly have, hold and enjoy the Leased Premises for
the term hereof without hindrance or molestation from Landlord, subject to the
terms and provisions of this Lease.
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21.
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Tenant's
Events of Default
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The
following events shall be deemed to be events of default by Tenant under this
Lease:
(a) Tenant
shall fail to pay any installment of the Rent herein reserved when due
(including, without limitation, any payment with respect to Tenant's Pro Rata
Share of Building Costs hereunder when due), or any other payment or
reimbursement to Landlord required herein when, due, and such failure shall
continue for a period of five (5) days from the date such payment was
due.
(b) Tenant
shall become insolvent, or shall make a transfer in fraud of creditors, or shall
make an assignment for the benefit of creditors.
(c) Tenant
shall be adjudged bankrupt or insolvent in proceedings filed against
Tenant.
(d) A
receiver or trustee shall be appointed for all or substantially all of the
assets of Tenant.
(e) Tenant
shall desert or vacate any substantial portion of the Leased
Premises.
(f) Tenant
shall fail to comply with any term, provision or covenant of this Lease (other
than the foregoing in this Paragraph), and shall not cure such failure within
thirty (30) days after written notice thereof to Tenant.
(g) If
the term of any lease, other than this Lease, heretofore or hereafter made by
Tenant for any space in the Building or any other building owned by Landlord, if
applicable, shall be terminated or terminable after the making of this Lease
because of any default by Tenant under such other lease.
Upon the
occurrence of any such events of default described in Paragraph 21 hereof,
Landlord shall have the option to pursue any one or more of the following
remedies without any notice or demand whatsoever:
(a) Terminate
this Lease, or terminate Tenant's rights to possession of the Leased Premises
under this Lease (but not the Lease, itself), and in either event Landlord shall
have the right to immediate possession of the Leased Premises and may reenter
the Leased Premises, change the locks and remove all persons and property there
from using all force necessary for this purpose without being guilty in any
manner of trespass or otherwise; and any and all damages to Tenant, or persons
holding under Tenant, by reason of such re-entry are hereby expressly waived;
and any such termination or re-entry on the part of Landlord shall be without
prejudice to any remedy available to Landlord for arrears of Rent, breach of
contract, damages or otherwise, nor shall the termination of this Lease or of
Tenant's rights of possession under this Lease by Landlord acting under this
subparagraph be deemed in any manner to relieve Tenant from the obligation to
pay the Rent and all other amounts due or to become due as provided in this
Lease for and during the entire unexpired portion then remaining of the Lease
term. In the event of termination of this Lease or of Tenant's rights
of possession under this Lease by Landlord as provided in this subparagraph,
Landlord shall have the further right to relet the Leased Premises upon such
terms, conditions and covenants as are deemed proper by Landlord for the account
of Tenant as set forth below, and in such event, Tenant shall pay to Landlord
all costs of renovating and altering the Leased Premises for a new tenant or
tenants in addition to all brokerage and/or legal fees incurred in connection
therewith. Landlord shall credit Tenant only for such amounts as are
actually received from such reletting during the then remaining Lease
term. Alternatively, at the election of Landlord, Tenant covenants
and agrees to pay as damages to Landlord, upon any such termination by Landlord
of this Lease or of Tenant's rights of possession under this Lease, such sum as
at the time of such termination equals the amount of the excess, if any, of the
then present value of all the Rent which would have been due and payable
hereunder during the remainder of the full Lease term (had Tenant kept and
performed all agreements and covenants of Tenant set forth in this Lease) over
and above the then present rental value of the Leased Premises for said
remainder of the Lease term. For purposes of present value
calculations, Landlord and Tenant stipulate and agree to a discount rate of six
percent (6%) per annum.
(b) Without
terminating this Lease, to enter upon the Leased Premises and without being
guilty in any manner of trespass or otherwise and without liability for any
damage to Tenant or persons holding under Tenant by reason of such re-entry, all
of which are hereby expressly waived, and to do or perform whatever Tenant is
obligated hereunder to do or perform under the terms of this Lease; and Tenant
shall reimburse Landlord on demand for any expenses or other sums which Landlord
may incur or expend plus fifteen percent (15% ) thereof to cover Landlord's
overhead and administrative cost, pursuant to this subparagraph, and
Landlord shall not be liable for any damages resulting to Tenant from such
action, whether caused by the negligence of Landlord or otherwise; provided,
however, nothing in this subparagraph shall be deemed an obligation or
undertaking by Landlord to remedy any such defaults of Tenant.
(c) Without
waiving such event of default, apply all or any part of the Security Deposit to
cure the event of default or to any damages suffered as a result of the event of
default to the extent of the amount of damages suffered. Tenant shall
reimburse Landlord for the amount of such depletion of the Security Deposit on
demand.
(d) In
addition to any of the remedies noted above or hereinafter, Landlord is entitled
and authorized to enter upon and take possession of the Leased Premises and
remove any property that may be found within the Leased
Premises. Landlord shall have the right to change any and all locks
and other security devices restricting access to the Leased
Premises. Landlord shall have no obligation to provide Tenant a key
to new locks installed in the Leased Premises or grant Tenant access to the
Leased Premises. Tenant shall not be entitled to recover possession
of the Leased Premises, terminate this Lease, or recover any actual, incidental,
consequential, punitive, statutory or other damages or award of attorneys' fees,
by reason of Landlord's alteration or change of any lock or other security
device and the resulting exclusion from the Leased Premises of the Tenant or
Tenant's agents, servants, employees, customers, licensees, invitees or any
other persons from the Leased Premises. Such lock-out should not be deemed to be
a termination of this Lease unless Landlord gives a written notice of
termination to Tenant. It is agreed that if Tenant abandons or
vacates the Leased Premises, Landlord may take such steps as Landlord deems
necessary, appropriate, or desirable to protect the Leased Premises and the
property therein from deterioration, including but not limited to, the lock-out
of Tenant as described herein. To the extent permitted by law, Tenant
hereby waives: (i) any notices of Landlord's intent to re-enter or re-take
possession of the Leased Premises; (ii) any notice provided by
statute or otherwise of such re-entry or repossession or changing of locks;
(iii) any claim or cause of action, whether based on trespass, conversion, or
otherwise, against Landlord or Landlord's agents, employees, officers, or
contractors for any damages caused by the alteration of any locks or re-entry or
repossession by Landlord, whether or not caused by the negligence of Landlord or
otherwise; and (iv) any right of redemption, re-entry, or repossession of Tenant
and any notice of legal proceeding for re-entry, including actions for forcible
detainer and entry.
All
property of Tenant removed from the Leased Premises by Landlord pursuant to any
provision of this Lease or applicable law may be handled, removed or stored by
Landlord at the cost and expense of Tenant, and Landlord shall not be
responsible in any event for the value, preservation or safekeeping
thereof. Tenant shall pay Landlord for all expenses incurred by
Landlord with respect to such removal and storage so long as the same is in
Landlord's possession or under Landlord's control. All such property
not removed from the Leased Premises or retaken from storage by Tenant within
thirty (30) days after the end of the Lease term or the termination of Tenant’s
right to possession of the Leased Premises, however terminated, at Landlord's
option, shall be conclusively deemed to have been conveyed by Tenant to Landlord
as by bill of sale without further payment or credit by Landlord to
Tenant.
In the
event Tenant fails to pay any installment of Rent or any reimbursement,
additional rent, or any other payment hereunder as and when such payment is due,
to help defray the additional cost to Landlord for processing such late payments
Tenant shall pay to Landlord on demand a late charge in an amount equal to five
percent (5%) of such installment, reimbursement, additional rent or any other
payment and the failure to pay such late charge within ten (10) days after
demand therefor shall be an event of default hereunder. The provision
for such late charge shall be in addition to all of Landlord's other rights and
remedies hereunder or at law and shall not be construed as liquidated damages or
as limiting Landlord's remedies in any manner.
Pursuit
of any of the forgoing remedies shall not preclude pursuit of any of the other
remedies herein provided or any other remedies provided by law, nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of any
Rent due to Landlord hereunder or of any damages accruing to Landlord by reason
of the violation of any of the terms, provisions and covenants herein
contained. No act or thing done by the Landlord or its agents during
the term hereby granted shall be deemed a termination of this Lease or an
acceptance of the surrender of the Leased Premises, and no agreement to
terminate this Lease or accept a surrender of the Leased Premises shall be valid
unless in writing signed by Landlord. No waiver by Landlord of any violation or
breach of any of the terms, provisions and covenants herein contained shall
constitute a waiver by Landlord of any of its rights with respect to any future
violation or breach thereof. Landlord's acceptance of the payment of Rent or
other payments hereunder after the occurrence of an event of default shall not
be construed as a waiver of such default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord to enforce one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default or of Landlord's right to
enforce any such remedies with respect to such default or any subsequent
default. If, on account of any breach or default by Tenant in
Tenant's obligations under the terms and conditions of this Lease, it shall
become necessary or appropriate for Landlord to employ or consult with any
attorney concerning or to enforce or defend any of Landlord's rights or remedies
hereunder, Tenant agrees to pay any reasonable attorney's fees so
incurred.
All sums
due and owing by Tenant to Landlord under this Lease shall bear interest from
the date due until paid at the lesser of (a) the maximum non-usurious rate
permitted by law or (b) the greater of (i) two percent (2%) above the "prime
rate" per annum of JPMorgan Chase Bank, N.A. or its successor in effect on said
due date or (ii) twelve percent (12%) per annum. In either case, such
interest to be compounded daily; provided, however, in no event shall the rate
of interests hereunder exceed the maximum non-usurious rate of interest
(hereinafter called the "Maximum Rate") permitted by the applicable laws of the
State of Texas or the United States of America, whichever shall permit the
higher non-usurious rate, and as to which Tenant could not successfully assert a
claim or defense of usury. To the extent that the Maximum Rate is
determined by reference to the laws of the State of Texas, the Maximum Rate
shall be the indicated rate ceiling (as defined and described in Credit Title of
the Texas Finance Code, as amended at the applicable time in
effect).
In
addition to any statutory lien for Rent in Landlord's favor, Landlord shall have
and Tenant hereby grants to Landlord a continuing security interest for all
rentals and other sums of money becoming due hereunder from Tenant, upon all
goods, wares, equipment, fixtures, furniture, inventory, accounts, contract
rights, receivables, chattel paper and other personal property of Tenant
situated on the Leased Premises, and such property shall not be removed there
from without the consent of Landlord until all arrearage in Rent as well as any
and all other sums of money then due to Landlord hereunder shall first have been
paid and discharged. In the event of a default under this Lease,
Landlord shall have, in addition to any other remedies provided herein or by
law, all rights and remedies under the Texas Business and Commerce Code,
including without limitation the right to sell the property described in this
paragraph at public or private sale upon ten (10) days notice to
Tenant. Tenant hereby authorizes Landlord to file financing
statement(s) in form sufficient to perfect the security interest granted
hereunder. Landlord shall have all the rights and remedies of a
secured party under the Texas Business and Commerce Code and this lien and
security interest may be foreclosed by process of law. The
requirement of reasonable notice prior to any sale under Article 9 of the Texas
Business and Commerce Code shall be met if such notice is given in the manner
prescribed herein at least ten (10) days before the day of sale. Any
sale made pursuant to the provisions of this Paragraph shall be deemed to have
been a public sale conducted in a commercially reasonable manner if held in the
Leased Premises after the time, place and method of sale and a general
description of the types of property to be sold have been advertised for ten
(10) consecutive days prior to the date of sale in a daily newspaper published
in the county in Texas where the Building is located.
Any statutory
lien for Rent is not hereby waived, the express contractual lien herein granted
being in addition and supplementary thereto.
This Lease and all rights of Tenant
hereunder are subject and subordinate (i) to any mortgage or deed of trust,
blanket or otherwise, which does now or may hereafter affect the Building (and
which may also affect other properties) and (ii) to any and all increases,
renewals, modifications, consolidations, replacements and extensions of any such
mortgage or deed of trust. This provision is hereby declared by
Landlord and Tenant to be self-operative and no further instruments shall be
required to effect such subordination of this Lease. Tenant shall,
however, upon demand at any time or times execute, acknowledge and deliver to
Landlord any and all instruments and certificates that may be necessary or
proper to more effectively subordinate this Lease and all rights of Tenant
hereunder to any such mortgage or deed of trust or to confirm or evidence such
subordination. In the event Tenant shall fail or neglect to execute,
acknowledge and deliver any subordination agreement or certificate, Landlord in
addition to any other remedies it may have, as the agent and attorney in fact of
Tenant, execute, acknowledge and deliver the same and Tenant hereby irrevocably
nominates, constitutes and appoints Landlord Tenant's proper and legal agent and
attorney in fact for such purposes. Such power of attorney shall not
terminate on disability of the principal. Tenant covenants and
agrees, in the event any proceedings are brought for the foreclosure of any such
mortgage or deed of trust, or if the Building is sold to any purchaser, to
attorn to and recognize such purchaser as the Landlord under this
Lease. Tenant expressly recognizes and agrees that the holder of any
mortgage or deed of trust or any of their successors or assigns or any other
holder of such instrument may sell the Project or the Building in the manner
provided for by law in such instrument; and further, such sale may be made
subject to this Lease. In the event of the enforcement by the grantee
under any such mortgage or deed of trust of the remedies provided for by law or
by such mortgage or deed of trust, Tenant will, upon request of any person or
party succeeding to the interest of said lessor or grantee, as a result of such
enforcement, automatically become Tenant of such successor in interest without
change in the terms or provisions of this Lease; provided, however, that such
successor in interest shall not be bound by (i) any payment of rent for more
than one month in advance except prepayments in the nature of security for the
performance by Tenant of its obligations under this Lease, (ii) any assignment,
subletting, amendment or modification of this Lease made without the written
consent of such lessor or grantee or such successor in interest if such lessor,
grantee or successor in interest is a grantee of a mortgage or beneficiary of a
deed of trust in the real property records where the Property is located on the
date of this Lease, or had previously notified Tenant in writing of its interest
or (iii) any offsets against or liabilities of Landlord, except to the extent
they accrue after such lessor, grantee or successor in interest obtains
possession of the Property. Notwithstanding anything contained in
this Lease to the contrary, in the event of any default by Landlord in
performing its covenants or obligations hereunder which would give Tenant the
right to terminate this Lease, Tenant shall not exercise such right unless and
until (i) Tenant gives written notice of such default (which notice shall
specify the exact nature of said default) to any holder(s) of any mortgage or
deed of trust where such holder is a grantee of a mortgage or beneficiary of a
deed of trust in the real property records where the Property is located on the
date of this Lease, or who has heretofore notified Tenant in writing of its
interest and the address to which notices are to be sent, and (ii) said
holder(s) fail to cure said default within thirty (30) days (or such longer
period of time as may be reasonably necessary) after the expiration of
Landlord's cure period under this Lease. The provisions of Paragraph 27 below
shall govern the manner and effective date of any notice to be given by Tenant
to any such parties. Tenant agrees to execute and deliver at any time
and from time to time, upon the request of Landlord or of any holder(s) of any
of the indebtedness or other obligations secured by any of the mortgages or
deeds of trust be necessary or appropriate in any such foreclosure proceeding or
otherwise to evidence such attornment. Tenant hereby irrevocably
appoints Landlord and the holders of the indebtedness or other obligations
secured by the aforesaid mortgages and/or deeds of trust jointly and severally
the agent and attorney shall not terminate on disability of the
principal. Tenant further waives the provisions of any statute or
rule of law, now or hereafter in effect, which may give or purport to give
Tenant any right or election to terminate or otherwise adversely affect this
Lease and the obligation of Tenant hereunder in the event any such foreclosure
proceedings is brought or trustee's sale occurs and agrees that this Lease shall
not be affected in any way whatsoever by any such foreclosure proceeding or
trustee's sale unless the holder(s) of the indebtedness or other obligations
secured by said mortgages and/or deeds of trust shall declare
otherwise.
Landlord
shall only be deemed to be in default on the terms of this Lease in the event
Landlord shall violate, neglect, or fail to observe, keep or perform any
covenant or agreement which is not observed, kept, or performed by Landlord
within thirty (30) days after the receipt by Landlord of Tenant's written notice
of such breach which notice shall specifically set out the
breach. Landlord shall not be considered in default so long as
Landlord commences to cure the breach in a diligent and prudent manner and is
allowed such additional time as reasonably necessary to correct the
breach. Notwithstanding any provisions to the contrary contained in
this Lease, no personal liability of any kind or character whatsoever shall
attach or at any time hereafter attach under any conditions to Landlord or any
subsidiary, affiliate or partner of Landlord or their respective officers,
directors, shareholders, or employees for payments of any amounts due under this
Lease or for the performance of any obligation under this Lease. The
exclusive remedy of Tenant for failure of Landlord to perform any of its
obligations under this Lease shall be an action for damages against Landlord, it
being understood that in no event shall a judgment for any deficiency or
monetary claim be sought, obtained or enforced against Landlord or any
subsidiary, affiliate or partner of Landlord or their respective officers,
directors, shareholders or employees and such judgment shall be satisfied solely
against the interest of Landlord in the Leased Premises. In no event
shall Landlord be liable for any consequential, special, punitive or exemplary
damages.
TENANT
HEREBY WAIVES ITS STATUTORY LIEN UNDER SECTION 91.004 OF THE TEXAS PROPERTY
CODE.
Tenant
shall have no authority, express or implied, to create or place any lien or
encumbrance of any kind or nature whatsoever upon, or in any manner to bind, the
interest of Landlord in the Leased Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs, and each such claim shall affect and each such lien shall attach to, if
it all, only the leasehold interest granted to Tenant by this
instrument. Tenant covenants and agrees that it will pay or cause to
be paid all sums legally due and payable by it on account of any labor performed
or materials furnished in connection with any work performed on the Leased
Premises on which any lien is or can be validly and legally asserted against its
leasehold interest in the Leased Premises or the improvements thereon and that
it will indemnify, defend and save and hold Landlord harmless from any and all
loss, cost or expense based on or arising out of asserted claims or liens
against the leasehold estate or against the right, title and interest of the
Landlord in the Leased Premises or under the terms of this Lease. In
the event any such lien is attached to the Leased Premises, the Building, or the
Project, Tenant shall discharge the same of record (by bonding or otherwise)
within ten (10) days after receiving notice thereof. Tenant’s failure
to comply with the provisions of the foregoing sentence shall be deemed an event
of default under Paragraph 22 hereof entitling Landlord to exercise all of its
remedies therefor without the requirement of any additional notice or cure
period. If Tenant fails to discharge such lien of record with such ten (10) day
period, then in addition to any other right or remedy of Landlord, Landlord may,
but shall not be obligated to, discharge the same. Any amount paid by
Landlord for any of the aforesaid purposes including, but not limited to,
reasonable attorneys’ fees, shall be paid by Tenant to Landlord promptly on
demand as additional Rent.
Each
provision of this instrument or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to the sending, mailing or
delivery of any notice or the making of any payment by Landlord to Tenant or
with reference to the sending, mailing or delivery of any notice or the making
of any payment by Tenant to Landlord shall be deemed to be complied with when
and if the following steps are taken:
(a) All
Rent and other payments required to be made by Tenant to Landlord hereunder
shall be payable to Landlord c/o ______, Texas ___,
Attention: Property Manager, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance
herewith. Tenant's obligation to pay Rent and any other amounts to
Landlord under the terms of this Lease shall not be deemed satisfied until such
Rent and other amounts have been actually received by Landlord.
(b) All
payments required to be made by Landlord to Tenant hereunder shall be payable to
Tenant at the address hereinbelow set forth, or at such other address within the
continental United States as Tenant may specify from time to time by written
notice delivered in accordance herewith.
(c) Any
notice or document required or permitted to be delivered hereunder shall be
deemed to be delivered whether actually received or not, when deposited in the
United States Mail, postage prepaid, Certified or Registered Mail, or on the
next business day following deposit with a nationally recognized overnight
delivery service, addressed to the parties hereto at the respective addresses
set out below, or at such other address as they have heretofore specified by
written notice delivered in accordance herewith:
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Landlord
:
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Tenant
:
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____
___ Industrial, L.L.C.
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Sharps
Compliance Inc. of Texas
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_____________________
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9220
Kirby Drive, Suite 500
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_____________________
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Houston,
Texas 77054
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_____________________
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Attention:
Chief Financial Officer
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_____________________
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Phone:
713-660-3514
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Fax:
713-838-0508
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If and
when included within the term "Landlord", as used in this instrument, there are
more than one person, firm or corporation, all shall jointly arrange among
themselves for their joint execution of such a notice specifying some individual
at some specific address for their receipt of notices and payments to Landlord;
if and when included within the term "Tenant" as used in this instrument, there
are more than one person, firm or corporation, all shall jointly arrange among
themselves for their joint execution of such a notice specifying some individual
at some specific address within the continental United States for the receipt of
notices and payments to Tenant. All parties included within the terms
"Landlord" and "Tenant", respectively, shall be bound by notices given in
accordance with the provisions of this paragraph to the same effect as if each
had received such notice.
28. Miscellaneous
(a) Words
of any gender used in this Lease shall be held and construed to include any
other gender, and words in the singular number shall be held to include the
plural, unless the context otherwise requires.
(b) The
terms, provisions and covenants and conditions contained in this Lease shall
apply to, inure to the benefit of, and be binding upon, the parties hereto and
upon their respective heirs, legal representatives, successors and permitted
assigns, except as otherwise herein expressly provided. Each party
agrees to furnish to the other, promptly upon demand, a corporate resolution,
proof of due authorization by partners, or other appropriate documentation
evidencing the due authorization of such party to enter into this
Lease.
(c) The
captions inserted in this Lease are for convenience only and in no way define,
limit or otherwise describe the scope or intent of this Lease, or any provision
hereof, or in any way affect the interpretation of this Lease.
(d) Tenant
agrees from time to time within ten (10) days after request of Landlord to
deliver to Landlord, or Landlord's designee, an estoppel certificate stating
that this Lease is in full force and effect, the date to which Rent has been
paid, the unexpired term of this Lease and such other matters pertaining to this
Lease as may be requested by Landlord. It is understood and agreed
that Tenant's obligation to furnish such estoppel certificates in a timely
fashion is a material inducement for Landlord's execution of this
Lease.
(e) This
Lease may not be altered, changed or amended except by an instrument in writing
signed by both parties hereto.
(f) All
obligations of Tenant hereunder not fully performed as of the expiration or
earlier termination of the term of this Lease shall survive the expiration or
earlier termination of the term hereof, including, without limitation, all
payments obligations with respect to Real Estate Taxes, Common Area Maintenance
Costs and Building Insurance Costs, all obligations concerning the condition of
the Leased Premises and all indemnity obligations hereunder. Upon the
expiration or earlier termination of the term hereof, and prior to Tenant
vacating the Leased Premises, Tenant shall pay to Landlord any amount reasonably
estimated by Landlord as necessary to put the Leased Premises, including without
limitation all heating and air conditioning systems and equipment therein, in
good condition and working order. Tenant shall also, prior to
vacating the Leased Premises, pay to Landlord the amount, as estimated by
Landlord, of Tenant's obligation hereunder for Tenant's pro rata share of
Building Costs for the year in which the Lease expires or
terminates. All such amounts shall be used and held by Landlord for
payment of such obligations of Tenant hereunder, with Tenant being liable for
any additional costs therefor upon demand by Landlord, or with any excess to be
returned to Tenant after all such obligations have been determined and
satisfied, as the case may be. Any Security Deposit held by Landlord
shall be credited against the amount payable by Tenant under this
Paragraph.
(g) If
any clause or provision of this Lease is illegal, invalid or unenforceable under
present or future laws effective during the term of this Lease, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby, and it is also the intention of the parties
to this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added as a part of this Lease
contract a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
(h) Because
the Leased Premises are on the open market and are presently being shown, this
Lease shall be treated as an offer with the Leased Premises being subject to
prior lease and such offer to withdrawal or non-acceptance by Landlord or to
other use of the Leased Premises without notice, and this Lease shall not be
valid or binding unless and until accepted by Landlord in writing.
(i) All
references in this Lease to the "date hereof" or similar references shall be
deemed to refer to the last date, in point of time, on which all parties hereto
have executed this Lease.
(j) It
is expressly stipulated and agreed that none of the obligations to be undertaken
by Landlord hereunder shall constitute any form of warranty, express or implied,
all such obligations being contractual covenants of
performance. Without limiting the generality of the foregoing,
THERE IS NO WARRANTY AS TO
SUITABILITY, HABITABILITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE
GIVEN IN CONNECTION WITH THIS LEASE.
(k)
TENANT HEREBY WAIVES
ALL RIGHTS TO PROTEST THE APPRAISED VALUE OF THE PROJECT OR APPEAL THE SAME AND
ALL RIGHTS TO RECEIVE NOTICES OF REAPPRAISALS SET FORTH IN SECTIONS 41.413 AND
42.015 OF THE TEXAS TAX CODE
(l)
TENANT HEREBY WAIVES ALL ITS RIGHTS
UNDER THE TEXAS DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION
17.41 ET. SEQ. OF THE TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF TENANT'S OWN SELECTION, TENANT VOLUNTARILY
CONSENTS TO THIS WAIVER.
(m) Landlord
and Tenant agree that each provision of this Lease for determining charges,
amounts and additional rent payments by Tenant (including without limitation,
Paragraph 5 of this Lease) is commercially reasonable, and as to each such
charge or amount, constitutes a "method by which the charge is to be computed"
for purposes of Section 93.012 (Assessment of Charges) of the Texas Property
Code, as such section now exists or as it may be hereafter amended or
succeeded.
(n) Tenant
acknowledges that it has provided Landlord with its financial statement(s) as a
primary inducement to Landlord's agreement to lease the Leased Premises to
Tenant, and that Landlord has relied on the accuracy of said financial
statement(s) in entering into this Lease. Tenant represents and
warrants that the information contained in said financial statement(s) is true,
complete and correct in all material aspects, and agrees that the foregoing
representations shall be a precondition to this Lease. At the request
of Landlord, Tenant shall, not later than ninety (90) days following the close
of each fiscal year of Tenant during the term of this Lease, furnish to Landlord
a balance sheet of Tenant as of the end of such fiscal year and a statement of
income and expense for the year then ended, together with an opinion of an
independent certified public accountant satisfactory to Landlord or, at the
election of Landlord, a certificate of the chief financial officer, owner or
partner of Tenant to the effect that the financial statements have been prepared
in conformity with generally accepted accounting principles consistently applied
and which fairly present the financial condition and results of operations of
Tenant as of and for the periods covered.
(o) This
Lease has been negotiated through the agency of
_____________________. Tenant warrants and represents to Landlord
that no broker other than Tenant's Broker was involved with the leasing of the
Leased Premises or the negotiation of this Lease on behalf of Tenant or is
entitled to any commission in connection herewith by, through or under
Tenant. Tenant agrees to indemnify and hold Landlord harmless against
any other claims (including court costs and attorneys fees) for commissions by
any broker other than Tenant's Broker claiming by, through or under Tenant or
Tenant's Broker. Landlord warrants and represents to Tenant that no
brokers other than Landlord's Broker was involved with the leasing of the Leased
Premises or the negotiation of this Lease on behalf of Landlord is entitled to
any commission in connection herewith by, through or under
Landlord. Landlord agrees to indemnify and hold Tenant harmless
against any other claims (including court costs and attorneys fees) for
commissions by any broker other than Landlord's Broker claiming by, through or
under Landlord or Landlord's Broker.
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29.
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Exhibits
and Attachment
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All
Exhibits, attachments, riders and addenda referred to in this Lease are
incorporated in this Lease and made a part hereof for all intents and
purposes.
Landlord
shall not be liable to Tenant or Tenant's employees, agents, patrons or
visitors, or to any other person whomsoever, for any injury to person or damage
to property on or about the Leased Premises and/or Building, resulting from
and/or caused in part or whole by the negligence or misconduct of Tenant, its
agents, servants or employees, or of any other person entering upon the Leased
Premises, or caused by the Building or buildings and improvements located on the
Leased Premises becoming out of repair, or caused by leakage of gas, oil, water
or steam or by electricity emanating from the Leased
Premises.
IN
THOSE REGARDS, TENANT HEREBY COVENANTS AND AGREES THAT IT WILL AT ALL TIMES
INDEMNIFY AND HOLD SAFE AND HARMLESS LANDLORD (INCLUDING WITHOUT LIMITATION THE
TRUSTEE AND BENEFICIARIES IF LANDLORD IS A TRUST), LANDLORD'S AGENTS AND
EMPLOYEES FROM ANY LOSS, LIABILITY, CLAIMS, SUITS, COSTS, EXPENSES, INCLUDING
WITHOUT LIMITATION ATTORNEY'S FEES AND DAMAGES, BOTH REAL AND ALLEGED, ARISING
OUT OF ANY SUCH DAMAGE OR INJURY FROM THE OCCUPANCY OR USE OF THE LEASED
PREMISES BY TENANT, INCLUDING, WITHOUT LIMITATION, TENANT'S CUSTOMERS, INVITEES,
AGENTS, CONTRACTORS, EMPLOYEES, SERVANTS, SUBTENANTS, ASSIGNEES, LICENSEES OR
CONCESSIONAIRES OR BY ANY PERSON OR PERSONS HOLDING THERE UNDER, OR
BY REASON OF THE USE OR MISUSE OF THE PARKING AREA OR ANY PART THEREOF AND/OR
FOR ANY CLAIMS THAT MAY ARISE IN CONNECTION WITH THE NEGLIGENCE OR WILLFUL
MISCONDUCT OF TENANT OR ANY OF TENANT'S EMPLOYEES, AGENTS, CONTRACTORS,
INVITEES, SERVANTS, SUBTENANTS, ASSIGNEES, LICENSEES OR CONCESSIONAIRES; EXCEPT
INJURY TO PERSONS OR DAMAGE TO THE BUILDING, THE SOLE CAUSE OF WHICH IS THE
NEGLIGENCE OF LANDLORD OR THE FAILURE OF LANDLORD TO REPAIR ANY PART OF THE
BUILDING WHICH LANDLORD IS OBLIGATED TO REPAIR AND MAINTAIN HEREUNDER WITHIN A
REASONABLE TIME AFTER THE RECEIPT OF WRITTEN NOTICE FROM TENANT OF NEEDED
REPAIRS. THIS INDEMNITY IS IN ADDITION TO THE INDEMNITY SET FORTH
BELOW.
(a) Tenant
shall not, without Landlord's prior written consent, cause or permit any
Hazardous Materials (hereinafter defined) to be stored, used or disposed of in
or about the Leased Premises or Project by Tenant, its agents, employees,
contractors or invitees, nor shall the use which Tenant makes of the Leased
Premises result in any Hazardous Materials Contamination (hereinafter
defined). For purposes of this Lease, the following terms shall have
the meanings herein specified:
(1)
"Hazardous Materials" shall mean (i) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976 (42 U.S.C.A. §§6901 et seq.), as
amended from time to time, and regulations promulgated thereunder ("RCRA"); (ii)
any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C.A. §§9601 et seq.),
as amended from time to time, and regulations promulgated thereunder ("CERCLA");
(iii) any hazardous substances as defined by the Texas Commission on
Environmental Quality ("TCEQ"); (iv) asbestos, polychlorinated biphenyls or
other substances specifically regulated under the Toxic Substances Control Act
(15 U.S.C. §§2601 et seq.), as amended from time to time, and regulations
promulgated thereunder ("TSCA"); (v) pesticides specifically regulated under the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.A. §§135 et seq.),
as amended from time to time, and regulations promulgated thereunder ("FIFRA");
(vi) storage tanks, whether or not underground and whether empty, filled or
partially filled with any substance; (vii) the presence of oil, petroleum
products, and their by-products; (viii) any substance the presence of which in
or about the Property is prohibited by any governmental authority or which is
hereafter classified by any governmental authority as a hazardous or toxic
waste, material, substance or similar phraseology; and (ix) any other substance
which by any governmental authority requires special handling or notification of
any governmental authority in its collection, storage, treatment, or
disposal.
(2)
"Hazardous Materials Contamination" shall mean the spillage, leakage, emission
or disposal of Hazardous Materials (whether presently existing or hereafter
occurring) in or about the buildings, facilities, soil, groundwater, air or
other elements in or about the Property or any other property as a result of
Hazardous Materials at any time emanating from the Leased Premises.
(b)
Notwithstanding the foregoing, Tenant shall be permitted to store, use and
dispose of deminimis amounts of Hazardous Materials which are incidental to
Tenant's business so long as such amounts does not increase the Landlord's
insurance or change the occupancy class of the Building. Such
Hazardous Materials and all containers therefor, shall be stored, used and
disposed of in a manner that complies with all federal, state and local laws or
regulations applicable to such Hazardous Materials. Tenant shall be
liable for all costs and expenses related to the storage, use and disposal of
such deminimis amounts of Hazardous Materials incidental to Tenant's business
and shall indemnify, defend and hold Landlord harmless from any claims or
liabilities relating thereto.
(c)
At the commencement of each "Lease Year" (the term "Lease Year" as used in this
Lease shall mean any twelve (12) month period beginning with the Commencement
Date and each twelve (12) month period beginning on any anniversary date
thereof), Tenant shall disclose to Landlord the names and approximate amounts of
all Hazardous Materials which Tenant intends to store, use or dispose of in or
about the Leased Premises in the coming Lease Year. In addition, at
the commencement of each Lease Year (beginning with the second Lease Year),
Tenant shall disclose to Landlord the names and amounts of all Hazardous
Materials that to Tenant's knowledge were actually stored, used or disposed of
in or about the Leased Premises, if such materials were not previously
identified to Landlord at the commencement of the previous Lease
Years.
(d)
Tenant shall give written notice to Landlord immediately upon Tenant's acquiring
knowledge of the presence of any Hazardous Materials in or about the Leased
Premises (subject to the provisions of paragraph b. hereof) or of any Hazardous
Materials Contamination with a full description thereof. Landlord
shall have the right, but not the obligation, without in any way limiting
Landlord's other rights and remedies under the Lease, to enter onto the Leased
Premises or to take such other actions as it deems necessary or advisable to
cleanup, remove, resolve or minimize the impact of, or otherwise deal with, any
Hazardous Materials or Hazardous Materials Contamination on the Project
following receipt of any notice from any person or entity asserting the
existence of any Hazardous Materials or Hazardous Materials Contamination
pertaining to the Leased Premises or any part of the Project which, if true,
could result in an order, suit, imposition of a lien on the Project, or other
action and/or which, in Landlord's sole opinion, could jeopardize Landlord's
security under the Lease.
(e)
TENANT HEREBY AGREES THAT
TENANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD, ITS AGENTS AND
EMPLOYEES FROM AND AGAINST ANY CLAIMS, DEMANDS, PENALTIES, FINES, LIABILITIES,
SETTLEMENTS, DAMAGES, COSTS OR EXPENSES (INCLUDING WITHOUT LIMITATION,
ATTORNEYS' AND CONSULTANTS' FEES, COURT COSTS AND LITIGATION EXPENSES) OF
WHATEVER KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, ARISING OUT
OF OR IN ANY WAY RELATED TO (A) THE PRESENCE, DISPOSAL, RELEASE OR THREATENED
RELEASE AND SUBSEQUENT REMEDIATION OF ANY HAZARDOUS MATERIALS OR ANY HAZARDOUS
MATERIALS CONTAMINATION FROM THE LEASED PREMISES (OTHER THAN HAZARDOUS MATERIALS
INTRODUCED BY LANDLORD); (B) ANY PERSONAL INJURY (INCLUDING WRONGFUL DEATH) OR
PROPERTY DAMAGE (REAL OR PERSONAL) ARISING OUT OF OR RELATED TO SUCH HAZARDOUS
MATERIALS OR HAZARDOUS MATERIALS CONTAMINATION FROM THE LEASED PREMISES; OR (C)
HAZARDOUS MATERIALS ON THE PROJECT INTRODUCED BY OR CAUSED BY TENANT
OR ANY OF TENANT'S
EMPLOYEES, AGENTS, CONTRACTORS, INVITEES, SERVANTS, SUBTENANTS, ASSIGNEES,
LICENSEES OR CONCESSIONAIRES
. THE PROVISIONS OF THIS
PARAGRAPH (e) SHALL BE IN ADDITION TO ANY OTHER OBLIGATIONS AND LIABILITIES
TENANT MAY HAVE TO LANDLORD AT LAW OR IN EQUITY AND SHALL SURVIVE THE EXPIRATION
OF THIS LEASE OR THE TERMINATION THEREOF.
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32.
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Mitigation
of Damages
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(a)
General Duty to
Mitigate
. Both Landlord and Tenant shall each use commercially
reasonable efforts to mitigate any damages resulting from a default of the other
party under this Lease.
(b)
Landlord's Duty to
Mitigate Damages
. Landlord's obligation to mitigate damages
after a default by Tenant under this Lease shall be satisfied in full if
Landlord undertakes to lease the Leased Premises to another tenant (a
"Substitute Tenant") in accordance with the following criteria:
(i)
Landlord shall have no obligation to solicit or entertain negotiations
with any other prospective tenants for the Leased Premises until Landlord
obtains full and complete possession of the Leased Premises including, without
limitation, the final and unappealable legal right to relet the Leased Premises
free of any claim of Tenant.
(ii)
Landlord shall not be obligated to offer the Leased Premises to a
prospective tenant when other premises in the Project suitable for that
prospective tenant's use are (or soon will be) available.
(iii)
Landlord shall not be obligated to lease the Leased Premises to a Substitute
Tenant for a rental less than the current fair market rental then prevailing for
similar office space in comparable office/warehouse buildings in the same market
area as the Project, nor shall Landlord be obligated to enter into a new lease
under other terms and conditions that are unacceptable to Landlord under
Landlord's then current leasing policies for comparable space in the
Project.
(iv)
Landlord shall not be obligated to enter into a lease with any proposed
tenant whose use would:
a. Violate
any restriction, covenant, or requirement contained in the lease of another
tenant of the Project;
b. Adversely
affect the reputation of the Project; or
c. Be
incompatible with the operation of the Project as a first-class office/warehouse
building.
(v)
Landlord shall not be obligated to enter into a lease with any proposed
Substitute Tenant, which does not have, in Landlord's reasonable opinion,
sufficient financial resources or operating experience to operate the Leased
Premises in a first-class manner.
(vi)
Landlord shall not be required to expend any amount of money to alter, remodel,
or otherwise make the Leased Premises suitable for uses by a proposed Substitute
Tenant unless:
a. Tenant
pays any such sum to Landlord in advance of Landlord's execution of a Substitute
Lease with such Substitute Tenant (which payment shall not be in lieu of any
damages or other sums to which Landlord may be entitled as a result of Tenant's
default under this Lease); or
b. Landlord,
in Landlord's sole discretion, determines that any such expenditure is
financially justified in connection with entering into any such Substitute
Lease.
(c)
Effect of
Releasing
. Upon compliance with the above criteria regarding
the releasing of the Leased Premises after a default by Tenant, Landlord shall
be deemed to have fully satisfied Landlord's obligation to mitigate damages
under this Lease and under any law or judicial ruling in effect on the date of
this Lease or at the time of Tenant's default, and Tenant waives and releases,
to the fullest extent legally permissible, any right to assert in any action by
Landlord to enforce the terms of this Lease, any defense, counterclaim, or
rights of set off or recoupment respecting the mitigation of damages by
Landlord, unless and to the extent Landlord maliciously or in bad faith fails to
act in accordance with the requirements of this Paragraph 32.
(d)
Tenant's
Rights
. Tenant's right to seek damages from Landlord as a
result of a default by Landlord under this Lease, shall be conditioned on Tenant
taking all actions reasonably required, under the circumstances, to minimize any
loss or damage to Tenant's property or business, or to any of Tenant's officers,
employees, agents, invitees, or other third parties that may be caused by any
such default of Landlord.
Intentionally omitted.
It is
agreed and understood that mold spores are present essentially everywhere.
Tenant acknowledges and understands that mold can grow in most any moist
location including within the Leased Premises. Landlord places the
burden on Tenant to properly prevent moisture in the Leased Premises, and on
good housekeeping and ventilation practices. Tenant acknowledges the necessity
of housekeeping, ventilation, and moisture control (especially in kitchens,
bathrooms, beneath cabinets and around outside walls) for mold prevention. In
signing this Lease, Tenant has first inspected the aforementioned Leased
Premises, and certifies that Tenant has not observed mold, mildew or moisture
within the Leased Premises. Tenant agrees to immediately notify Landlord if
Tenant observes mold/mildew and/or moisture conditions (from any source,
including leaks), and allow Landlord to evaluate and make recommendations and/or
take appropriate corrective action. Tenant relieves Landlord from any liability
for any personal injury or damages to property caused by or associated with
moisture or the growth of or occurrence of mold or mildew on or in the Leased
Premises.
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35.
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Tenant
Representation
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Tenant represents and warrants to,
and covenants with, Landlord that neither Tenant nor any of its respective
constituent owners or affiliates currently are, or shall be at any time during
the Term hereof, in violation of any laws relating to terrorism or money
laundering (collectively, the "Anti-Terrorism Laws"), including without
limitation Executive Order No. 13224 on Terrorist Financing, effective September
24, 2001 and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (the "Executive
Order") and/or the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56) (the "USA Patriot Act"). Tenant covenants with Landlord that neither
Tenant nor any of its respective constituent owners or affiliates is or shall be
during the Term hereof a "Prohibited Person," which is defined as
follows: (A) a person or entity that is listed in the Annex to, or is
otherwise subject to, the provisions of the Executive Order; (B) a person or
entity owned or controlled by, or acting for or on behalf of, any person or
entity that is listed in the Annex to, or is otherwise subject to the provisions
of, the Executive Order; (C) a person or entity with whom Landlord is prohibited
from dealing with or otherwise engaging in any transaction by any Anti-Terrorism
Law, including without limitation the Executive Order and the USA Patriot Act;
(D) a person or entity who commits, threatens or conspires to commit or support
"terrorism" as defined in Section 3(d) of the Executive Order; (E) a person or
entity that is named as a "specially designated national and blocked person" on
the then-most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement
website or other replacement official publication of such list; and (F) a person
or entity who is affiliated with a person or entity listed in items (A) through
(E), above. At any time and from time-to-time during the Term, Tenant
shall deliver to Landlord, within ten (10) days after receipt of a written
request therefor, a written certification or such other evidence reasonably
acceptable to Landlord evidencing and confirming Tenant's compliance with this
Paragraph 35.
THE PARTIES EXECUTING this Lease
represent and warrant that each such party possesses all lawful rights and
authority to enter into this Lease; that there are no judgments, decrees, or
outstanding orders of any court prohibiting the execution of this Lease; and
that all required approvals, consents and resolutions necessary to effectuate
the terms and provisions of this Lease have been obtained. Submission
by Landlord of this instrument to Tenant for examination or signature does not
constitute a reservation of or option for lease. This Lease will be
effective as a lease or otherwise only upon execution by and delivery of this
Lease by Landlord and Tenant and delivery to Landlord of a Continuing Lease
Guaranty in the form attached hereto as
Exhibit "E"
, executed
on behalf of Sharps Compliance Corp., a Delaware corporation (the
"Guaranty").
[Signature
Page Follows.]
Executed
in multiple counterparts, each of which shall have the full force and effect of
any original, on the latter of the dates indicated below.
LANDLORD
:
____ ___ INDUSTRIAL, L.L.C.
, a
Texas limited liability company
TENANT:
SHARPS
COMPLIANCE INC. OF TEXAS,
a Texas
corporation