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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
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Commission file number 0-28454
ANDRX CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 65-0366879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4001 SOUTHWEST 47TH AVENUE 33314
FORT LAUDERDALE, FL (Zip Code)
(Address of Principal Executive Offices)
954-584-0300
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
YES [X] NO [ ]
As of November 2, 1998, 15,097,100 shares of the Registrant's only
class of common stock were issued and outstanding.
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1
<PAGE>
ANDRX CORPORATION
INDEX TO THE FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PAGE NUMBER
-----------
INDEX TO FORM 10-Q 2
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets
as of September 30, 1998 (Unaudited) and
December 31, 1997 3
Consolidated Statements of Operations - (Unaudited)
for the three and nine months ended
September 30, 1998 and 1997 4
Consolidated Statements of Cash Flows - (Unaudited)
for the nine months ended
September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements - (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES 24
2
<PAGE>
ANDRX CORPORATION
PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ANDRX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------- --------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 6,669 $ 6,625
Investments available-for-sale 9,466 18,918
Accounts receivable, net of allowances of $2,211(unaudited) and
$1,589 as of September 30, 1998 and December 31, 1997, respectively 29,940 22,632
Inventories 32,859 25,901
Investment in and due from joint venture, net 371 416
Prepaid and other current assets 711 636
-------- --------
Total current assets 80,016 75,128
Property, plant and equipment, net 17,928 15,403
Other assets 413 314
-------- --------
Total assets $ 98,357 $ 90,845
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 20,995 $ 24,299
Accrued liabilities 8,351 5,147
Bank loan 3,933 538
-------- --------
Total current liabilities 33,279 29,984
-------- --------
Commitments and contingencies
Shareholders' equity
Convertible preferred stock; $0.001 par value, 1,000,000 shares authorized;
none issued and outstanding as of September 30, 1998
(unaudited) and December 31, 1997 -- --
Common stock; $0.001 par value, 25,000,000 shares authorized;
15,076,000 (unaudited) and 14,856,700 shares issued and
outstanding as of September 30, 1998 and December 31, 1997, respectively 15 15
Additional paid-in capital 85,011 82,954
Accumulated deficit (19,959) (22,145)
Unrealized gain on investments available-for-sale 11 37
-------- --------
Total shareholders' equity 65,078 60,861
-------- --------
Total liabilities and shareholders' equity $ 98,357 $ 90,845
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
ANDRX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- -------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Distributed products, net $ 55,312 $ 42,573 $ 156,247 $ 105,794
Manufactured products, net 2,731 -- 8,020 --
Stipulation fees 9,130 -- 9,130 --
Licensing 93 88 519 88
------------ ------------ ------------ ------------
Total revenues 67,266 42,661 173,916 105,882
------------ ------------ ------------ ------------
Operating expenses
Cost of distributed products 46,888 36,502 132,707 90,048
Manufacturing costs 1,502 522 3,808 994
(including idle facility costs)
Selling, general and administrative 8,321 4,915 20,796 13,094
Research and development 4,996 3,031 12,176 6,761
Equity in losses of joint venture 228 498 914 1,261
Software development and administration 935 393 2,171 969
------------ ------------ ------------ ------------
Total operating expenses 62,870 45,861 172,572 113,127
------------ ------------ ------------ ------------
Income (loss) from operations 4,396 (3,200) 1,344 (7,245)
Other income (expense)
Gain on sale of CyBear, Inc. shares 500 -- 500 --
Interest income 230 442 754 1,165
Interest expense (174) (107) (322) (449)
------------ ------------ ------------ ------------
Income (loss) before income taxes 4,952 (2,865) 2,276 (6,529)
Income taxes 90 -- 90 --
------------ ------------ ------------ ------------
Net income (loss) $ 4,862 $ (2,865) $ 2,186 $ (6,529)
============ ============ ============ ============
Basic net income (loss) per share $ 0.32 $ (0.19) $ 0.15 $ (0.47)
============ ============ ============ ============
Diluted net income (loss) per share $ 0.31 $ (0.19) $ 0.14 $ (0.47)
============ ============ ============ ============
Basic weighted average shares of common
stock outstanding 15,064,800 14,736,300 14,991,100 14,006,200
============ ============ ============ ============
Diluted weighted average shares of common
stock outstanding 15,912,900 14,736,300 15,890,600 14,006,200
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
ANDRX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 2,186 $ (6,529)
Adjustments to reconcile net income (loss) to
net cash used in operating activities
Depreciation and amortization 2,214 1,400
Provision for accounts receivable, net 622 163
Gain on sale of CyBear, Inc. shares (500) --
Options granted to consultants 150 --
Equity in losses of joint venture 914 1,261
Contributions to joint venture (1,200) (1,200)
Increase in accounts receivable (7,930) (8,625)
(Increase) decrease in due from joint venture, net 331 (22)
Increase in inventories (6,958) (12,048)
Increase in prepaid and other current assets (75) (408)
(Increase) decrease in other assets (99) 13
Increase (decrease) in accounts payable and accrued liabilities (100) 14,247
-------- --------
Net cash used in operating activities (10,445) (11,748)
-------- --------
Cash flows from investing activities
Maturity of investments available-for-sale 9,426 895
Purchase of property, plant and equipment (4,739) (6,695)
-------- --------
Net cash provided by (used in) investing activities 4,687 (5,800)
-------- --------
Cash flows from financing activities
Net borrowings (repayments) under bank loan 3,395 (5,696)
Proceeds from issuance of shares of common stock, net -- 21,343
Proceeds from exercises of stock options and warrants 1,907 3,524
Proceeds from sale of CyBear, Inc. shares 500 --
-------- --------
Net cash provided by financing activities 5,802 19,171
-------- --------
Net increase in cash and cash equivalents 44 1,623
Cash and cash equivalents, beginning of period 6,625 3,427
-------- --------
Cash and cash equivalents, end of period $ 6,669 $ 5,050
======== ========
Supplemental disclosure of cash paid during the period for:
Interest $ 322 $ 449
======== ========
Income taxes $ -- $ --
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
1. GENERAL
In the opinion of management, the accompanying unaudited consolidated
financial statements have been prepared by Andrx Corporation ("Andrx" or the
"Company") pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations. However, management believes that the disclosures
contained herein are adequate to make the information presented not misleading.
The unaudited consolidated financial statements reflect, in the opinion of
management, all material adjustments (which include only normal recurring
adjustments) necessary to present fairly the Company's financial position and
results of operations. The results of operations for the three and nine months
ended September 30, 1998 and the cash flows for the nine months ended September
30, 1998, are not necessarily indicative of the results of operations or cash
flows which may be expected for the remainder of 1998. The unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes for the year ended December
31, 1997, included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
2. COMPREHENSIVE INCOME (LOSS)
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income", effective January
1, 1998. SFAS No. 130, establishes standards for reporting and presentation of
comprehensive income or loss and its components in financial statements. The
components of the Company's comprehensive income (loss) are as follows (in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income (loss) $ 4,862 $(2,865) $ 2,186 $(6,529)
Unrealized gain (loss) on investments
available-for-sale 6 45 (26) 19
------- ------- ------- -------
Comprehensive income (loss) $ 4,868 $(2,820) $ 2,160 $(6,510)
======= ======= ======= =======
</TABLE>
6
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
3. JOINT VENTURE
In September 1998, upon receiving U.S. Food and Drug Administration
("FDA") approval, ANCIRC Pharmaceuticals ("ANCIRC"), the Company's 50/50 joint
venture with Watson Pharmaceuticals, Inc., launched its first product, a
bioequivalent version of Trental/registered trademark/. Condensed unaudited
balance sheets and statements of operations information for ANCIRC are as
follows (in thousands):
<TABLE>
<CAPTION>
BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 313 $ 416
Accounts receivable, net 118 --
Inventories 180 312
Laboratory equipment, net 196 237
------- -------
Total assets $ 807 $ 965
======= =======
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Current liabilities $ 320 $ 1,050
Partners' equity (deficit) 487 (85)
------- -------
Total liabilities and partners' equity (deficit) $ 807 $ 965
======= =======
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
1998 1997 1998 1997
------- ------ ------- -------
<S> <C> <C> <C> <C>
Product sales, net $ 118 $ -- $ 118 $ --
======= ====== ======= =======
Gross profit $ 71 $ -- $ 71 $ --
======= ====== ======= =======
Research and development expenses $ 531 $ 999 $ 1,909 $ 2,546
======= ====== ======= =======
Net loss $ (457) $ (995) $(1,828) $(2,522)
======= ====== ======= =======
</TABLE>
7
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
As of September 30, 1998 and December 31, 1997, Andrx Pharmaceuticals,
Inc. ("Andrx Pharmaceuticals"), the Company's wholly owned subsidiary engaged in
the development, manufacture and sale of bioequivalent pharmaceuticals, was due
$245,000 and $458,000, respectively, from ANCIRC for research and development
services rendered. Anda Generics, Inc. ("Anda Generics"), the Company's wholly
owned subsidiary engaged in pharmaceutical distribution, is the distributor of
ANCIRC's products. Anda Generics recovers selling, marketing and administrative
costs from its sales of ANCIRC's products to customers. As of September 30,
1998, Anda Generics owed ANCIRC $118,000 for purchases of ANCIRC's products.
Amounts due to or from ANCIRC are included in "Investment in and due from joint
venture, net" in the accompanying consolidated balance sheets. The Company is
committed to the funding of ANCIRC's future operations.
4. CYBEAR, INC.
In July 1998, CyBear, Inc. ("CyBear"), the Company's subsidiary engaged
in the development of Internet based software applications for healthcare
providers, entered into a merger agreement with 1997 Corp. 1997 Corp. is a
"blank check" company that has a registration statement on file with the SEC to
seek a business combination with an operating entity. The merger is expected to
be consummated in November 1998. Upon consummation of the merger, CyBear will
become a wholly owned subsidiary of 1997 Corp., the current shareholders of
CyBear will own approximately 98% of the outstanding shares of common stock of
1997 Corp. and 1997 Corp. will change its name to CyBear.
In September 1998, the Company recognized $500,000 in gain on the sale
of CyBear shares of common stock to CyBear's new Chairman. Such sale was at
$3.00 a share or approximately a $40 million valuation for CyBear.
5. INCOME TAXES
For the three and nine months ended September 30, 1998, the Company
provided $90,000 for federal alternative minimum income taxes. For the 1998
periods, the Company was not required to provide for federal or state income
taxes due to its net operating loss carryforwards. For the 1997 periods, the
Company was not required to provide for income or alternative minimum income
taxes due to its net losses. Under the provisions of SFAS No. 109, "Accounting
for Income Taxes", the Company has provided a valuation allowance to reserve
against 100% of its net operating loss carryforwards.
8
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
6. EARNINGS (LOSS) PER SHARE
For the profitable three and nine months ended September 30, 1998,
diluted net income per share is based on the weighted average shares of common
stock outstanding including common stock equivalents. For the three and nine
months ended September 30, 1997 diluted net loss per share is based on the
weighted average shares of common stock outstanding. As the 1997 periods were
unprofitable, all common stock equivalents were excluded from the
calculation of diluted net loss per share since the effect was antidilutive.
The components of the diluted weighted average shares of common stock
outstanding, are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic weighted average shares
of common stock outstanding 15,064,800 14,736,300 14,991,100 14,006,200
Impact of warrants after application
of the treasury method 308,800 -- 338,400 --
Impact of options after application
of the treasury method 539,300 -- 561,100 --
---------- ---------- ---------- ----------
Diluted weighted average shares of
common stock outstanding 15,912,900 14,736,300 15,890,600 14,006,200
========== ========== ========== ==========
</TABLE>
7. STIPULATION FEES
Andrx is party to a Stipulation and Agreement (the "Stipulation") with
Hoechst Marion Roussel, Inc. and Carderm Capital L.P. (collectively, "HMRI")
arising out of a patent infringement claim brought against the Company by HMRI
(the "HMRI Litigation") relating to the Company's bioequivalent version of
Cardizem/registered trademark/ CD. Andrx and HMRI entered into the Stipulation
in partial settlement of the HMRI Litigation in order to reduce the risks that
both parties face as the case is litigated to its conclusion. Andrx agreed to
maintain the status quo in connection with the marketing of its product and to
dismiss certain claims against HMRI. HMRI agreed to compensate Andrx for any
lost profits, which are stipulated to be $100 million per year, if Andrx
ultimately prevails in the HMRI Litigation. HMRI also agreed to make
non-refundable quarterly payments of $10 million to Andrx, beginning upon Andrx'
receipt of final FDA
9
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
approval for its bioequivalent version of Cardizem/registered trademark/ CD and
continuing until either the HMRI Litigation is resolved or certain other events
occur. Such quarterly payments are to be credited against the payments of the
stipulated lost profits if Andrx prevails in the HMRI Litigation. In July 1998,
the Company received both final FDA marketing approval for its bioequivalent
version of Cardizem/registered trademark/ CD and its first quarterly payment for
$9.1 million (prorated from July 9, 1998). In October 1998, the Company received
the $10 million quarterly payment for the 1998 fourth quarter.
The Company and Chih-Ming J. Chen, Ph.D., its Co-Chairman and Chief
Scientific Officer, a principal shareholder and director, are parties to a
royalty agreement originally dated February 26, 1993(and thereafter amended),
pursuant to which Dr. Chen was entitled to a royalty on any net operating
revenues derived by Andrx from the sale of its generic version of
Cardizem/registered trademark/ CD. In August 1998, the Company amended that
royalty agreement to account for the various contingencies presented by the
Stipulation. Royalties paid to Dr. Chen of $304,000 for the three months ended
September 30, 1998 were based on 3.33% of the Stipulation fees. Such royalty
expense is included in "Selling, General and Administrative Expenses" in the
accompanying consolidated statements of operations.
8. CONTINGENCIES
(a) In May 1998, Astra Aktiebolag, Aktiebolaget Hassle, Astra Merck
Enterprises Inc. and Astra Merck Inc. (collectively, "Astra") filed suit against
Andrx Pharmaceuticals claiming patent infringement because of an Abbreviated New
Drug Application ("ANDA") filed by Andrx Pharmaceuticals with the FDA for
Prilosec/registered trademark/ (omeprazole). In June 1998, Andrx Pharmaceuticals
responded to this claim by denying infringement, raising various affirmative
defenses and by filing certain counterclaims against Astra. In July 1998, Astra
filed a motion to strike or dismiss Andrx Pharmaceuticals' affirmative defenses
and counterclaims predicated on the invalidity or unenforceability of the
subject patents and in November 1998, the court dismissed this motion. In
October 1998, Andrx Pharmaceuticals filed two motions for summary judgment
regarding four of the seven patents in controversy. While Andrx Pharmaceuticals
believes its ANDA does not provide any basis for the alleged claim of
infringement, the ultimate resolution of this matter is not currently known and
may delay or prevent Andrx Pharmaceuticals from obtaining FDA approval to market
this ANDA product.
(b) In October 1998, Biovail Corporation International, Biovail
Laboratories Inc. and Galephar Puerto Rico, Inc. (collectively, "Biovail") filed
suit against Andrx Pharmaceuticals claiming patent infringement because of an
ANDA filed by Andrx Pharmaceuticals with the FDA for Tiazac/registered
trademark/ (diltiazem hydrochloride). Biovail seeks an injunction enjoining
Andrx Pharmaceuticals from further infringing the subject patent and an order
directing that the effective date of any FDA approval of Andrx Pharmaceuticals'
proposed generic version of
10
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
Tiazac/registered trademark/ be no earlier that the expiration date of the
subject patent. While Andrx Pharmaceuticals believes its ANDA does not provide
any basis for the alleged claim of infringement, the ultimate resolution of this
matter is not currently known and may delay or prevent Andrx Pharmaceuticals
from obtaining FDA approval to market this ANDA product.
(c) In October 1998, Elan Corporation, PLC ("Elan") filed suit against
Andrx Pharmaceuticals claiming patent infringement because of an ANDA filed by
Andrx Pharmaceuticals with the FDA for Naprelan/registered trademark/ (naproxen
sodium). Elan seeks a judgment enjoining Andrx Pharmaceuticals from further
infringing the subject patent and ordering that the effective date of any FDA
approval of Andrx Pharmaceuticals' proposed generics version of
Naprelan/registered trademark/ be no earlier than the expiration date of the
patent. While Andrx Pharmaceuticals believes its ANDA does not provide any basis
for the alleged claim of infringement, the ultimate resolution of this matter is
not currently known and may delay or prevent Andrx Pharmaceuticals from
obtaining FDA approval to market this ANDA product.
Claims of the nature referred to in (a), (b) and (c) above and Note 7,
are made by pharmaceutical companies in connection with the Company's filing of
ANDAs with the FDA which claim either that the Andrx product does not infringe
such other companies' patents or that such patents are invalid. The Company
evaluates the probability of patent infringement litigation with respect to each
of its ANDA submissions on a case by case basis. Although the Company believes
it has adequately provided for these matters based on the current available
information, the Company may incur additional litigation and other costs in
future years which may be material to the Company's results of operations and
financial position.
(d) In March 1998, Andrx received a letter from counsel for Medix
Resources, Inc. ("Medix") and its subsidiary Cymedix Lynx Corporation
("Cymedix") alleging the theft and unlawful appropriation by CyBear, Andrx and
certain directors, officers and employees of CyBear and Andrx, of certain
computer medical software and Internet medical communications technology
allegedly owned by Cymedix. The letter demands treble damages totaling $396.6
million pursuant to the civil theft provisions of Florida law, and also alleges
claims under Florida's Racketeer Influenced and Corrupt Organization Act and
certain other provisions of federal and state law. CyBear and Andrx believe that
Medix' and Cymedix' accusations and threatened claims have no basis in
substantial fact or legal support and in March 1998, filed a complaint against
Medix and Cymedix for libel and slander arising from the improper public
dissemination of the contents of the aforesaid demand letter with respect to
each of the matters set forth in that letter. CyBear and Andrx intend to
vigorously prosecute their complaints, which seek damages, costs, interest and
attorneys' fees. In June 1998, Medix, on behalf of Cymedix, filed a complaint
against CyBear, Andrx and certain directors, officers and employees of CyBear
and Andrx alleging the theft and unlawful appropriation of Cymedix' computer
medical software for remote online healthcare providers and Internet medical
communications technology allegedly owned by Cymedix. Medix is seeking treble
damages totaling $396.0 million. CyBear
11
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
and Andrx believe that Medix' suit has no basis in substantial fact or legal
support and is without merit, and intend to vigorously defend against these
claims.
(e) In January 1998, Andrx Pharmaceuticals filed a complaint for an
injunction and declaratory judgment against the FDA, Faulding, Inc., Biovail and
later, Mylan Pharmaceuticals, Inc. ("Mylan"), seeking, inter alia, an order
directing the FDA to provide the Company with a 180 day period of marketing
exclusivity for its bioequivalent formulations of Dilacor XR/registered
trademark/ and Cardizem/registered trademark/ CD. In April 1998 the Company
prevailed in its claims against the FDA and Mylan with respect to its Dilacor
XR/registered trademark/ product. In May 1998, Biovail filed a counterclaim
against Andrx Pharmaceuticals for alleged violations of Sections 1 and 2 of the
Sherman Antitrust Act and a declaratory judgment as to federal law as well as
for alleged violations of state common law of unfair competition, tortious
interference with prospective advantage and tortious interference with contract.
Biovail seeks injunctive relief and treble the amount of its proved actual
damages in an unspecified amount, plus interest, with respect to its federal law
claims, and actual and punitive damages in unspecified amounts, plus interest,
with respect to its common law claims. The Company believes that Biovail's
claims have no merit and, in July 1998, filed a motion to dismiss the
counterclaim upon the ground that it fails to state a claim upon which relief
can be granted. That motion is still pending.
Meanwhile, Andrx Pharmaceuticals and the FDA have filed a joint motion
for voluntary dismissal of the FDA from this lawsuit without prejudice on the
ground that the Guidance for Industry issued by the FDA in July 1998 granted
Andrx Pharmaceuticals the relief it seeks in the pending action. Biovail has
filed an objection to the voluntary dismissal and the joint motion is under
consideration by the court.
(f) Putative class actions have been filed against Andrx
Pharmaceuticals in Alabama, California, Illinois, Michigan and Wisconsin. The
suits in Alabama and California were filed in August 1998, the suits in Michigan
and Wisconsin were filed in September 1998, the Illinois suit was filed in
October 1998. In all five suits Hoechst Aktiengesellschaft and Hoechst Marion
Roussel, Inc. (collectively "Hoechst") have been named as co-defendants. The
complaint in each action alleges that Andrx Pharmaceuticals and Hoechst, by way
of the Stipulation described in Note 7, have engaged in alleged state antitrust
and other statutory and common law violations which allegedly have given Hoechst
and Andrx Pharmaceuticals a near monopoly in the U.S. market for
Cardizem/registered trademark/ CD and a generic version of that pharmaceutical
product. According to the complaints, the monopoly possessed by the defendants
enable Hoechst to perpetuate its ability to fix the price of Cardizem/registered
trademark/ CD at an artificially high price, free from generic competition, with
the result that direct purchasers (such as pharmacies), as well as indirect
purchasers (such as medical patients who have been issued prescriptions for
Cardizem/registered trademark/ CD) are forced to overpay for the drug. Each
complaint seeks compensatory damages on behalf of each class member in an
unspecified amount and, in some cases, treble damages, as well as costs and
counsel fees, disgorgement, injunctive relief and other remedies. Andrx
Pharmaceuticals believes that these five actions have no merit and intends to
mount a vigorous defense against each action.
(g) In October 1998, the Company was advised that the U.S. Federal
Trade Commission
12
<PAGE>
ANDRX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 1998
(UNAUDITED)
("FTC") is conducting an investigation to determine whether Andrx, HMRI or any
other persons have engaged in unfair methods of competition. The Company is
cooperating with the FTC's investigation which the Company believes relates to
the Stipulation with HMRI.
From time to time, the Company may be involved in litigation, claims
and other disputes arising out of its operations in the normal course of
business. Except for the matters disclosed above or in the Company's Form 10-K
for the year ended December 31, 1997, the Company believes that is not currently
a party to any other legal proceeding, the adverse outcome of which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Company's business, operating results and
financial condition.
The litigation process is inherently uncertain and it is possible that
the resolution of any of the matters disclosed above may adversely affect the
Company. Except as noted above, the Company believes there have been no material
developments in any legal matters since the Company's Form 10-K for the year
ended December 31, 1997.
13
<PAGE>
ANDRX CORPORATION
PART I
FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ANDRX CORPORATION AND SUBSIDIARIES ("ANDRX" OR THE "COMPANY") CAUTIONS
READERS THAT CERTAIN IMPORTANT FACTORS MAY AFFECT THE COMPANY'S ACTUAL RESULTS
AND COULD CAUSE SUCH RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING
STATEMENTS WHICH MAY BE DEEMED TO HAVE BEEN MADE IN THIS REPORT OR WHICH ARE
OTHERWISE MADE BY OR ON BEHALF OF THE COMPANY. FOR THIS PURPOSE, ANY STATEMENTS
CONTAINED IN THIS REPORT THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE
DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE," "ANTICIPATE,"
"INTEND," "COULD," "WOULD," "ESTIMATE," OR "CONTINUE" OR THE NEGATIVE OTHER
VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. FACTORS WHICH MAY AFFECT THE COMPANY'S RESULTS
INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS AND UNCERTAINTIES ASSOCIATED WITH A
DRUG DELIVERY COMPANY WHICH HAS ONLY RECENTLY COMMERCIALIZED ITS FIRST PRODUCT,
INCLUDING, BUT NOT LIMITED TO, A HISTORY OF NET LOSSES, RELATIVELY UNPROVEN
TECHNOLOGIES, LIMITED MANUFACTURING EXPERIENCE, CURRENT AND POTENTIAL
COMPETITORS WITH SIGNIFICANT TECHNICAL AND MARKETING RESOURCES AND DEPENDENCE ON
COLLABORATIVE PARTNERS AND ON KEY PERSONNEL. ADDITIONALLY, THE COMPANY IS
SUBJECT TO THE RISKS AND UNCERTAINTIES ASSOCIATED WITH ALL DRUG DELIVERY AND
PHARMACEUTICAL DISTRIBUTION COMPANIES, INCLUDING, BUT NOT LIMITED TO, COMPLIANCE
WITH GOVERNMENT REGULATIONS AND THE POSSIBILITY OF PATENT INFRINGEMENT
LITIGATION. THE COMPANY IS ALSO SUBJECT TO OTHER RISKS DETAILED HEREIN OR
DETAILED FROM TIME TO TIME IN THIS REPORT AND THE COMPANY'S OTHER FILINGS WITH
THE SECURITIES AND EXCHANGE COMMISSION.
INTRODUCTION
Andrx was organized in August 1992 and in November 1992 commenced
marketing and distributing generic pharmaceuticals manufactured by third
parties. In February 1993, the Company began to engage in the development of
bioequivalent versions of controlled-release pharmaceuticals utilizing its
proprietary drug delivery technologies. During 1996 the Company commenced its
efforts to develop brand name controlled-released products and Internet based
software applications for healthcare providers. Through October 9, 1997, the
Company's distribution operations had generated substantially all of its
revenues. On October 10, 1997, the U.S. Food and Drug Administration ("FDA")
granted final approval of the Abbreviated New Drug Application ("ANDA") for the
Company's bioequivalent version of Dilacor XR/registered trademark/, its first
manufactured product, which the Company immediately launched.
Andrx is party to a Stipulation and Agreement (the "Stipulation") with
Hoechst Marion Roussel, Inc. and Carderm Capital L.P. (collectively "HMRI")
arising out of a patent infringement claim brought against the Company by HMRI
(the "HMRI Litigation") relating to the Company's bioequivalent version of
Cardizem/registered trademark/ CD. Andrx and HMRI entered into the Stipulation
in partial settlement of the HMRI Litigation in order to reduce the risks that
both
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parties face as the case is litigated to its conclusion. Andrx agreed to
maintain the status quo in connection with the marketing of its product and to
dismiss certain claims against HMRI. HMRI agreed to compensate Andrx for any
lost profits, which are stipulated to be $100 million per year, if Andrx
ultimately prevails in the HMRI Litigation. HMRI also agreed to make
non-refundable quarterly payments of $10 million to Andrx, beginning upon Andrx'
receipt of final FDA approval for its bioequivalent version of
Cardizem/registered trademark/ CD and continuing until the HMRI Litigation is
resolved or certain other events occur. Such quarterly payments are to be
credited against the payments of the stipulated lost profits if Andrx prevails
in the HMRI Litigation. In July 1998, the Company received both final FDA
marketing approval for its bioequivalent version of Cardizem/registered
trademark/ CD and its first quarterly payment for $9.1 million (prorated from
July 9, 1998). On October 1, 1998, the Company received the $10 million
quarterly payment for the 1998 fourth quarter.
The Company is a 50% partner in ANCIRC Pharmaceuticals ("ANCIRC"), a
joint venture with Watson Pharmaceuticals, Inc. ("Watson"), for the development
of up to eight controlled-release pharmaceutical products. Capital contributions
to, distributions from, and net income or losses generated by ANCIRC are
allocated equally between the Company and Watson. In September 1998, upon
receiving FDA approval, ANCIRC launched its first product, a generic version of
Trental/registered trademark/.
The Company is also party to domestic and international development
and licensing agreements for additional controlled-release bioequivalent and
brand products.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 ("1998 QUARTER"), AS COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1997 ("1997 QUARTER").
For the 1998 Quarter, Andrx reported net income of $4.9 million or
$0.31 per diluted weighted average share of common stock outstanding as compared
to a net loss of $2.9 million or $0.19 per diluted weighted average share of
common stock outstanding for the 1997 Quarter. Although the Company continued to
increase its research and development spending, it became profitable in the 1998
Quarter for the first time as a result of fees generated by the Company pursuant
to the Stipulation, the continued growth in profitability of the Company's
distribution operation, profits realized from the sale of the Company's first
manufactured product and a gain on the sale of shares of CyBear, Inc.
("CyBear"), the Company's subsidiary engaged in the development of Internet
based software applications for healthcare providers.
Total revenues increased by 57.7% to $67.3 million for the 1998 Quarter
as compared to $42.7 million for the 1997 Quarter.
Net sales from distributed products were $55.3 million for the 1998
Quarter, an increase of $12.7 million or 29.9%, as compared to $42.6 million for
the 1997 Quarter. The increase in net sales from distributed products reflects
an increase in sales to customers, as well as an increase in the number of
customers.
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Net sales from manufactured products were $2.7 million for the 1998
Quarter. There were no comparable sales of manufactured products in the 1997
Quarter, as the Company launched its first manufactured product, a bioequivalent
version of Dilacor XR/trademark/ in October 1997.
Following the FDA's final approval of the Company's ANDA for
Cardizem/registered trademark/ CD on July 9, 1998, Andrx received its first $10
million quarterly payment due under the Stipulation. The Stipulation fees for
the 1998 Quarter were $9.1 million, prorated from July 9, 1998.
Licensing revenues of $93,000 were generated in the 1998 Quarter.
Gross profits from net sales of distributed products were $8.4 million
or 15.2% in the 1998 Quarter, as compared to $6.1 million or 14.3% in the 1997
Quarter. The Company expects that continuing competition and pricing pressures
within the generic pharmaceutical industry may reduce the Company's gross profit
percentage on net sales from distributed products in future periods.
Manufacturing costs for the 1998 Quarter of $1.5 million consist of
costs of manufactured products as well as idle manufacturing facility costs.
Manufacturing costs for the 1997 Quarter of $522,000 consist solely of idle
manufacturing facility costs, as the Company did not launch its first
manufactured product until October 1997. While the Company commenced its
commercial-scale manufacturing operation during 1997, the manufacturing facility
was not fully utilized for its commercial manufacturing operations during the
1998 Quarter and the 1997 Quarter. As the Company increases its production of
saleable products in future periods, manufacturing costs will be absorbed as
a component of the cost of inventory.
Selling, general and administrative expenses were $8.3 million or 12.4%
of total revenues for the 1998 Quarter, as compared to $4.9 million or 11.5% of
total revenues for the 1997 Quarter. The increase in selling, general and
administrative expenses was primarily due to an increase in the activities
necessary to support the increase in net sales from both distributed products
and the Company's first manufactured product and includes a royalty to the
Company's Co-Chairman and Chief Scientific Officer, who is also a principal
shareholder and director, payable with respect to the Stipulation fees.
Research and development expenses were $5.0 million in the 1998
Quarter, as compared to $3.0 million for the 1997 Quarter. The increase in
research and development expenses of $2.0 million or 64.8% reflects the progress
and expansion of the Company's development activities in its bioequivalent
(ANDA) and brand name (NDA) programs, including legal costs related to patent
infringement claims associated with the Company's ANDA filings.
The Company's equity in losses of ANCIRC was $228,000 in the 1998
Quarter, as compared to $498,000 for the 1997 Quarter. In September 1998, upon
receiving FDA approval, ANCIRC launched its first product, a generic version of
Trental/registered trademark/. This product was formulated by Andrx, is being
manufactured by Watson and is being marketed by Andrx.
In the 1998 Quarter, the Company incurred $935,000 of software
development and administration costs as compared to $393,000 in the 1997
Quarter. The increase in software
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development and administration costs primarily relates to the progress in the
development of CyBear's Internet based software application for healthcare
providers and the establishment of the related administrative infrastructure.
In the 1998 Quarter, Andrx recognized $500,000 in gain on the sale of
CyBear shares of common stock to CyBear's new Chairman. Such sale was at $3.00 a
share or approximately a $40 million valuation for CyBear.
Interest income was $230,000 in the 1998 Quarter, as compared to
$442,000 in the 1997 Quarter. The decrease in interest income is the result of
the lower average level of cash, cash equivalents and investments
available-for-sale maintained during the 1998 Quarter as compared to the 1997
Quarter. The Company invests in short-term investment grade interest bearing
securities.
Interest expense increased to $174,000 in the 1998 Quarter from
$107,000 in the 1997 Quarter. The increase in interest expense was primarily the
result of a higher average level of borrowings under the Company's bank loan
during the 1998 Quarter as compared to the 1997 Quarter. Such borrowings are
utilized to fund the Company's distribution operations.
In the 1998 Quarter, the Company provided $90,000 for federal
alternative minimum income taxes. For the 1998 Quarter, the Company was not
required to provide for federal or state income taxes due to its net operating
loss carryforwards. For the 1997 Quarter, the Company was not required to
provide for income or alternative minimum income taxes due to its net losses.
Under the provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes", the Company has provided a valuation allowance to
reserve against 100% of its net operating loss carryforwards.
The diluted weighted average shares of common stock outstanding were
15.9 million in the 1998 Quarter as compared to 14.7 million for the 1997
Quarter. Such increase resulted primarily from the inclusion of stock
equivalents in the profitable 1998 Quarter.
NINE MONTHS ENDED SEPTEMBER 30, 1998 ("1998 PERIOD"), AS COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 1997("1997 PERIOD").
For the 1998 Period, Andrx reported net income of $2.2 million or $0.14
per diluted weighted average share of common stock outstanding as compared to a
net loss of $6.5 million or $0.47 per diluted weighted average share of common
stock outstanding for 1997 Period. Although the Company continued to increase
its research and development spending, it became profitable in the 1998 Period
for the first time as a result of fees generated by the Company pursuant to the
Stipulation, the continued growth in profitability of the Company's distribution
operation, profits realized from the sale of the Company's first manufactured
product and a gain on the sale of shares of CyBear.
Total revenues increased by 64.3% to $173.9 million for the 1998 Period
as compared to $105.9 for the 1997 Period.
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Net sales from distributed products were $156.2 million for the 1998
Period, an increase of $50.5 million or 47.7%, as compared to $105.8 million for
the 1997 Period. The increase in net sales from distributed products reflects an
increase in sales to customers, as well as an increase in the number of
customers.
Net sales from manufactured products were $8.0 million for the 1998
Period. There were no comparable sales from manufactured products in the 1997
Period.
Following the FDA's final approval of the Company's ANDA for
Cardizem/registered trademark/ CD on July 9, 1998, Andrx received its first $10
million quarterly payment due under its status quo Stipulation with HMRI. The
stipulation fees for the 1998 Period were $9.1 million.
Licensing revenues were $519,000 in the 1998 Period, as compared to
$88,000 in the 1997 Period.
Gross profits from net sales of distributed products were $23.5 million
or 15.1% in the 1998 Period, as compared to $15.7 million or 14.9% in the 1997
Period.
Manufacturing costs for the 1998 Period of $3.8 million consist of
costs of manufactured products as well as idle manufacturing facility costs.
Manufacturing costs for the 1997 Period of $994,000 consist solely of idle
manufacturing facility costs, as the Company did not launch its first
manufactured product until October 1997.
Selling, general and administrative expenses were $20.8 million or
12.0% of total revenues for the 1998 Period, as compared to $13.1 million or
12.4% of total revenues for the 1997 Period. The increase in selling, general
and administrative expenses was primarily due to an increase in the activities
necessary to support the increase in net sales from both distributed products
and the Company's first manufactured product and includes a royalty to the
Company's Co-Chairman and Chief Scientific Officer, who is also a principal
shareholder and director, with respect to the Stipulation fees.
Research and development expenses were $12.2 million in the 1998
Period, as compared to $6.8 million in the 1997 Period. The increase in research
and development expenses of $5.4 million or 80.1% reflects the progress and
expansion of the Company's development activities for its bioequivalent (ANDA)
and brand name (NDA) programs, including legal costs related to patent
infringement claims associated with the Company's ANDA filings.
The Company's equity in losses of ANCIRC was $914,000 in the 1998
Period, as compared to $1.3 million in the 1997 Period. In September 1998, upon
receiving FDA approval, ANCIRC launched its first product, a generic version of
Trental/registered trademark/.
In the 1998 Period, the Company incurred $2.2 million of software
development and administration costs as compared to $969,000 in the 1997 Period.
The increase in software development and administration costs primarily relates
to the progress in the development of CyBear's Internet based software
application for healthcare providers and the establishment of the related
administrative infrastructure.
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In the 1998 Period, Andrx recognized $500,000 in gain on the sale of
CyBear shares of common stock to CyBear's new Chairman.
Interest income was $754,000 in the 1998 Period, as compared to $1.2
million in the 1997 Period. The decrease in interest income is the result of the
lower average level of cash, cash equivalents and investments available-for-sale
maintained during the 1998 Period, as compared to the 1997 Period.
Interest expense decreased to $322,000 in the 1998 Period from $449,000
in the 1997 Period. The decrease in interest expense was primarily the result of
a lower average level of borrowings under the Company's bank loan during the
1998 Period, as compared to the 1997 Period.
In the 1998 Period, the Company provided $90,000 for federal
alternative minimum income taxes. For the 1998 Period, the Company was not
required to provide for federal or state income taxes due to its net operating
loss carryforwards. In the 1997 Period, the Company was not required to provide
for income or alternative minimum income taxes due to its net losses.
The diluted weighted average shares of common stock outstanding were
15.9 million in the 1998 Period as compared to 14.0 million in the 1997 Period.
Such increase resulted primarily from the inclusion of stock equivalents in the
profitable 1998 Period.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998, Andrx had $16.1 million in cash, cash
equivalents and investments available-for-sale and $46.7 million of working
capital.
Net cash used in operating activities for the 1998 Period was $10.4
million, as compared to $11.7 million for the 1997 Period. In the 1998 Period
and the 1997 Period, the net cash used in operating activities was primarily
used to fund research and development efforts and increases in inventories and
accounts receivable. In the 1997 Period, such increases were offset by an
increase in accounts payable and accrued liabilities. The increase in
inventories in the 1998 Period include purchases of inventories for distribution
in anticipation of potential price increases by the generic drug manufacturers.
Net cash provided by investing activities was $4.7 million in the 1998
Period, as compared to net cash used in investing activities of $5.8 million in
the 1997 Period. In the 1998 Period, $9.4 million of investments
available-for-sale matured and the Company purchased $4.7 million of property,
plant and equipment. In the 1997 Period, $895,000 of investments
available-for-sale matured and the Company purchased $6.7 million of property,
plant and equipment. In the 1998 Period, the capital expenditures were primarily
for the purchase of approximately 15 acres of land. In the 1997 Period, the
capital expenditures were primarily for the procurement of manufacturing
equipment.
Net cash provided by financing activities was $5.8 million in the 1998
Period, as compared to $19.2 million in the 1997 Period. Net cash provided by
financing activities in the 1998 Period consisted of net borrowings of $3.4
million under the Company's bank loan, $1.9
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million in proceeds from the issuance of shares of common stock upon the
exercises of stock options and warrants and $500,000 in proceeds from the gain
on the sale of shares of CyBear. Net cash provided by financing activities for
the 1997 Period, consisted of $21.3 million from the issuance of shares of
common stock in private placement transactions, $3.5 million in proceeds from
the issuance of shares of common stock upon the exercises of stock options and
warrants offset by $5.7 million of net repayments on the Company's bank loan.
The Company had an outstanding short-term borrowing balance under its
distribution subsidiary's bank loan of $3.9 million as of September 30, 1998, as
compared to $538,000 as of December 31, 1997. Such increase relates to the
financing of additional inventory for distribution. Borrowings under the bank
loan are secured by all of the assets of that operation, and are subject to a
borrowing base related to the value of that operation's accounts receivable and
inventories. The bank loan agreement requires compliance by the Company with
certain covenants including the maintenance of minimum working capital and net
worth levels by the distribution subsidiary. In April 1998, the Company amended
its bank loan whereby the total available borrowings were increased from $10.0
million to $30.0 million and, if the Company maintains certain levels of an
average outstanding balance, the interest rate may be decreased from the present
rate of prime (8.5% as of September 30, 1998) plus 0.5%.
In the 1998 Period, the Company purchased approximately 15 acres of
land on which it intends to construct a facility for its research and
development, manufacturing and corporate activities. The Company intends to
evaluate and possibly obtain external financing for such construction. The
Company has also leased two new premises which it intends to utilize for its
distribution, and software development and administration activities.
YEAR 2000
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. The Company's
computer equipment and software and devices with embedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or a miscalculation, causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
The Company has undertaken various initiatives intended to ensure that
its computer equipment and software will function properly with respect to dates
in the Year 2000 and thereafter. For this purpose, the term "computer equipment
and software" includes systems that are commonly thought of as IT systems,
including accounting, data processing, telephone/PBX systems, hand-held
terminals, scanning equipment, and other miscellaneous systems, as well as
systems that are not commonly thought of as IT systems, such as alarm systems,
fax machines, or other miscellaneous systems. Both IT and non-IT systems may
contain embedded technology and complicate the Company's Year 2000
identification, assessment, remediation, and testing efforts. Based upon its
identification and assessment efforts to date, the Company believes that certain
of the computer equipment and software it currently uses will require
replacement or modification. As such, when in the ordinary course of replacing
computer equipment and software, the Company will attempt to obtain
replacements that are Year 2000 compliant. Utilizing both internal and external
resources to identify and assess needed Year 2000 remediation, the Company
anticipates that its
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Year 2000 identification, assessment, remediation and testing efforts, which
began in the first quarter 1998, are expected to be completed by third quarter
1999, and that such efforts will be completed prior to any currently anticipated
impact on its computer equipment and software. The Company estimates that as of
November 2, 1998, it had completed approximately 30% of the initiatives that it
believes will be necessary to fully address potential Year 2000 issues relating
to its computer equipment and software. The projects comprising the remaining
70% of the initiatives are in process and expected to be completed on or about
the third quarter 1999.
The Company has also mailed letters to its significant vendors,
customers and service providers to determine the extent to which interfaces with
such entities are vulnerable to Year 2000 issues and whether the products and
services purchased from or by such entities are Year 2000 compliant. As of
November 2, 1998 the Company had received responses from approximately 18% of
such third parties, and 46% of the Companies that have responded have provided
written assurance that they expect to address all their significant Year 2000
issues on a timely basis. A follow-up mailing to significant vendors and service
providers that did not initially respond, or whose responses were deemed
unsatisfactory by the Company, will be conducted in January 1999.
The Company believes that the cost of its Year 2000 identification,
assessment, remediation and testing efforts, as well as currently anticipated
costs to be incurred by the Company with respect to Year 2000 issues of third
parties, will not exceed $1 million and will be funded from current existing
financial resources. As of November 2, 1998 the Company had incurred costs of
approximately $200,000 related to its Year 2000 identification, assessment,
remediation and testing efforts. These $200,000 in costs were for analysis,
repair or replacement of existing software, upgrades of existing software, or
evaluation of information received from significant vendors, service providers,
or customers. Other non-Year 2000 efforts have not been materially delayed and
Year 2000 issues will not pose significant operational problems for the Company.
However, if all Year 2000 issues are not properly identified, or assessment,
remediation and testing are not effected timely with respect to Year 2000
problems that are identified, there can be no assurance that the Year 2000 issue
will not materially adversely impact the Company's results of operations or
adversely affect the Company's relationships with customers, vendors, or others.
Additionally, there can be no assurance that the Year 2000 issues of other
entities will not have a material adverse impact on the Company's systems or
results of operations.
The Company has not yet begun, a comprehensive analysis of the
operational problems and costs (including loss of revenues) that would be
reasonably likely to result from the failure by the Company and certain third
parties to complete efforts necessary to achieve Year 2000 compliance on a
timely basis. A contingency plan has not been developed for dealing with the
most reasonably likely worst case scenario, and such scenario has not yet been
clearly identified. The Company currently plans to complete such analysis and
contingency planning by December 31, 1999.
The costs of the Company's Year 2000 identification, assessment,
remediation and testing efforts and the dates on which the Company believes it
will complete such efforts are based upon management's best estimates, which
were derived using numerous assumptions regarding future events, including the
continued availability of certain resources, third-party remediation plans, and
other factors. There can be no assurance that these estimates will prove to be
accurate, and actual results could differ materially from those currently
anticipated. Specific factors that could cause such material differences
include, but are not limited to, the availability and cost of personnel
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trained in Year 2000 issues, the ability to identify, assess, remediate and test
all relevant computer codes and embedded technology, and similar uncertainties.
In addition, variability of definitions of "compliance with Year 2000" and the
myriad of different products and services, and combinations thereof, sold by the
Company may lead to claims whose impact on the Company is not currently
estimable. No assurance can be given that the aggregate cost of defending and
resolving such claims, if any, will not materially adversely affect the
Company's results of operations.
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ANDRX CORPORATION
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 8 to the "Notes to Consolidated Financial Statements" included in PART
I, Item 1 of this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.34 Amendment to Royalty Agreement between the Registrant and
Chih-Ming J. Chen.
10.35 Lease Agreement relating to premises located at 500 Blue Lake Drive,
Boca Raton, Florida
10.36 Lease Agreement relating to premises located at 2915 Weston Road,
Weston, Florida
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
None
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ANDRX CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
By /s/ ALAN P. COHEN
-------------------------------------------------
Alan P. Cohen
Co-Chairman and Chief Executive Officer
(Principal Executive Officer)
By /s/ ANGELO C. MALAHIAS
-------------------------------------------------
Angelo C. Malahias
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
November 16, 1998
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
10.34 Amendment to Royalty Agreement between the Registrant and
Chih-Ming J. Chen.
10.35 Lease Agreement relating to premises located at 500 Blue Lake Drive,
Boca Raton, Florida
10.36 Lease Agreement relating to premises located at 2915 Weston Road,
Weston, Florida
27.1 Financial Data Schedule
EXHIBIT 10.34
August 12, 1998
Dr. Chih-Ming J. Chen
10680 SW 40 Manor
Davie, FL 33328
Dear Dr. Chen:
This shall confirm our discussions regarding the February 26, 1993
Royalty Agreement between you and Andrx Corporation, as amended on March 17,
1994 (the "Royalty Agreement"):
1. Under Section 3(a) of the Royalty Agreement, both as originally
drafted and as amended, you are entitled to receive a royalty from Andrx with
respect to:
3.33% of the Net Operating Revenues derived by Andrx FROM THE SALE OF
DILTIAZEM CD. For purposes of the foregoing `Net Operating Revenues'
shall be determined by deducting from Andrx' gross revenues any
discounts, returns allowances and freight expenses actually incurred by
Andrx." (emphasis added --- March 17, 1994 language).
"33.33% of the `Net Profits', as defined below, realized FROM THE SALE
OF DILTIAZEM CD. `Net Profits' shall be determined by deducting from
the gross revenues realized by Andrx FROM THE SALE OF DILTIAZEM CD ..."
(emphasis added -- February 26, 1993 language).
2. Under the September 24, 1997 Stipulation and Agreement with Hoechst
Marion Roussel, Inc. ("HMR"), Andrx will begin receiving quarterly payments from
HMR of $10 million upon obtaining FDA marketing approval for Cardizem CD (the
"Interim Payments"). While the Interim Payments from HMR are non-refundable,
Andrx will be required to pay a substantial patent licensing fee and royalty if
HMR were to prevail in the patent infringement litigation.
3. As the Royalty Agreement specifically conditions your royalty to
amounts received by Andrx from the sale of Diltiazem CD, the Royalty Agreement
does not obligate Andrx to pay a royalty to you on the Interim Payments.
However, in the event Andrx prevails in its litigation with HMR, the Interim
Payments will be supplemented by an additional payment from HMR, in an amount
that Andrx and HMR intended would
<PAGE>
make the total amount received by Andrx equal to "the profits that Andrx would
have realized from the sale of [Diltiazem CD]" (the "Supplemental Payment").
4. As the term Net Operating Revenues in the Royalty Agreement includes
only specified deductions from revenue (discounts, returns allowances and
freight expenses actually incurred by Andrx) and does not include any catch-all
terms such as "other similar deductions", the Royalty Agreement does not allow
Andrx to deduct the license fee and royalty payable to HMR in the event the
court were to conclude that the Andrx product infringes upon HMR's patents with
respect to Diltiazem CD.
5. To deal with these issues, Andrx and you have agreed to the
following:
a. Within 10 days of receiving Interim Payments, the Supplemental
Payment or any other revenues with respect to Diltiazem CD, Andrx
shall pay to you 3.33% of the gross amount Andrx receives from the
HMR payments and 3.33% of the Net Operating Revenues (as the
definition of such term is modified below) that Andrx receives from
the sale or licensing of Diltiazem CD, both prior to and after the
litigation with HMR is concluded;
b. In the event HMR prevails in its litigation with Andrx and Andrx
licenses the HMR patents, your royalty shall be based on the Net
Operating Revenues derived by Andrx after payment of the licensing
fee and royalty paid or payable to Andrx by HMR. Accordingly, you
will not receive any additional royalty payments from Andrx until
Andrx has fully recouped your 3.33% share of the licensing fee and
royalty attributable to any Interim Payments for which you received
a 3.33% payment.
c. In the event HMR prevails in its litigation with Andrx and Andrx
decides not to obtain a license for the patents, you will retain
any amounts you received pursuant to Section 5(a) above.
6. The terms of this Agreement shall constitute the entire
understanding between you and Andrx with respect to the computation of royalties
with respect to Diltiazem CD under the Royalty Agreement. Any rights, claims or
privileges (but not obligations) under this Agreement may be waived at any time
by either you or Andrx; provided, however, that no waiver is to be implied from
any omission to act. No waiver on one occasion shall be deemed to be a waiver in
any other circumstance. This Agreement and the Royalty Agreement may only be
further modified or amended by a written agreement signed by you and by Andrx.
7. This Agreement shall be governed in accordance with Florida law and
any action taken to interpret or enforce it shall be conducted in any court with
proper jurisdiction in Broward County, Florida.
<PAGE>
If the foregoing terms and conditions are acceptable, please indicate
your acceptance by executing and dating a copy of this Agreement and returning
that executed copy to us. However, because you are an officer and director of
Andrx, we must have this letter agreement approved by the outside members of our
Board of directors. Accordingly, this Agreement will not be binding upon either
Andrx or you unless a majority of those outside directors approve this
Agreement, by adding their signatures below as well.
Sincerely,
/S/ Alan P. Cohen
------------------
Alan P. Cohen
Chairman and CEO
AGREED TO AND ACCEPTED ON
THIS 14 DAY OF JULY, 1998:
/S/ CHIH-MING CHEN
- ------------------------------
Chih-Ming Chen
OUTSIDE DIRECTOR APPROVAL:
/S/ ELAIN BLOOM
- ------------------------------
Elaine Bloom on 7/ 17 /98
/S/ IRWIN C. GERSON
- ------------------------------
Irwin C. Gerson on 7/ /98
/S/ MICHAEL A. SCHWARTZ
- ------------------------------
Michael A. Schwartz on 7/ /98
/S/ MELVIN SHAROKY, MD
- ------------------------------
Melvin Sharoky on 7/ /98
EXHIBIT 10.35
Standard Lease
between
Blue Lake, Ltd.
and
Cybear, Inc., a Florida corporation
Dated August __,1998
<PAGE>
INDEX TO
BLUE LAKE CORPORATE CENTER
STANDARD LEASE
LEASE PAGE NO.
--------
1. PREMISES; BUILDING; AND COMMON AREAS...............................1
2. LEASE TERM; LEASE DATE.............................................2
3. RENT...............................................................3
4. SECURITY DEPOSIT...................................................6
5. USE................................................................6
6. ACCEPTANCE OF PREMISES; LANDLORD'S WORK............................6
7. PARKING............................................................7
8. BUILDING SERVICES.................................................7
9. SECURITY...........................................................9
10. REPAIRS, MAINTENANCE AND UTILITIES.................................9
11. TENANT'S ALTERATIONS..............................................10
12. LANDLORD'S ADDITIONS AND ALTERATIONS..............................11
13. ASSIGNMENT AND SUBLETTING.........................................11
14. TENANT'S INSURANCE COVERAGE.....................................13
15. LANDLORD'S INSURANCE COVERAGE.....................................14
16. WAIVER OF RIGHT OF RECOVERY.......................................14
17. DAMAGE OR DESTRUCTION BY CASUALTY.................................14
18. CONDEMNATION AND EMINENT DOMAIN...................................15
19. LIMITATION OF LANDLORD'S LIABILITY; INDEMNIFICATION...............15
20. RELOCATION OF TENANT..............................................16
21. COMPLIANCE WITH LAWS AND PROCEDURES...............................16
22. RIGHT OF ENTRY....................................................17
23. DEFAULT...........................................................17
24. LANDLORD'S REMEDIES FOR TENANT'S DEFAULT..........................18
25. LANDLORD'S RIGHT TO PERFORM FOR TENANT'S ACCOUNT..................19
26. LIENS.............................................................20
27. NOTICES...........................................................20
28. MORTGAGE ESTOPPEL CERTIFICATE; SUBORDINATION......................20
29. ATTORNMENT AND MORTGAGEE'S REQUEST................................21
30. TRANSFER BY LANDLORD..............................................22
31. SURRENDER OF PREMISES; HOLDING OVER...............................22
<PAGE>
32. NO WAIVER, CUMULATIVE REMEDIES....................................22
33. WAIVER............................................................22
34. CONSENTS AND APPROVALS............................................23
35. RULES AND REGULATIONS.............................................23
36. SUCCESSORS AND ASSIGNS............................................23
37. QUIET ENJOYMENT...................................................23
38. ENTIRE AGREEMENT..................................................23
39. HAZARDOUS MATERIALS...............................................23
40. BANKRUPTCY PROVISIONS.............................................25
41. FIRE PREVENTION SYSTEMS...........................................26
42. SPECIAL EVENTS....................................................27
43. MISCELLANEOUS.....................................................27
44. DELIVERY OF GUARANTY..............................................29
45. CONFIDENTIALITY...................................................29
46. SIGNAGE CRITERIA..................................................29
47. CARPOOLING, MASS TRANSIT AND TRAFFIC CONTROL......................29
48. LEASE CONTINGENCIES...............................................29
49. ASSOCIATION.......................................................29
50. VENDING MACHINES..................................................30
51. FOOD SERVICE......................................................30
52. AUDITORIUM/CONFERENCE CENTER .....................................30
53. TELECOMMUNICATIONS................................................30
54. INCENTIVE PROGRAMS................................................31
55. SAVING PROVISION..................................................31
56. SATELLITE DISH....................................................31
<PAGE>
BASIC LEASE INFORMATION RIDER
BLUE LAKE CORPORATE CENTER
STANDARD LEASE
<TABLE>
<S> <C>
PREAMBLE Date of Lease: August ___ 1998 ("Lease Commencement Date")
PREAMBLE Landlord: BLUE LAKE, LTD., a Florida limited partnership.
PREAMBLE Tenant: CYBEAR, INC. a Florida corporation, authorized to do business in the State of
Florida
SECTION 1 Premises: A portion of the second floor of 5000 Blue Lake Drive, as shown on Exhibit "A"
of Blue Lake Corporate Center, Boca Raton, Florida, being hereby designated as: Suite
200. The office building campus (as shown on Exhibit "F") including parking spaces,
driveways, walkways, drainage systems, utility systems, greenspace areas and other
elements of the "Blue Lake Corporate Center" are hereinafter collectively referred to as the
"Building."
SECTION 1 Net Rentable Area of Premises: [18,400] square feet which is stipulated and agreed by the
parties (based on [16,000] square feet of usable area and a fifteen (15%) add-on factor);
provided, however, that within ten (10) days after substantial completion of the
Improvements to the Premises, either Landlord or Tenant shall be entitled to have the
Premises measured in accordance with BOMA Standards (ANSI Z65.1-1996). Following
such measurement, if it is determined that in fact the Premises contain more or less than
the Rentable Area set forth above, Base Rent, Tenant's Share, and any other provision
which is based on the amount of square footage leased by Tenant shall be ratably modified.
The Rentable Area of the Premises includes restrooms, electrical and mechanical rooms
over which the Tenant is herein granted exclusive control and dominion which are
themselves deemed part of the Premises, except that Landlord shall maintain such
restrooms, electrical and mechanical rooms which are shared among tenants.
SECTION 2 Rent Commencement Date: The earlier to occur of (i) the "Completion Date" as defined
in the Work Letter, notwithstanding that any Tenant finish work, special fixtures or
equipment or decorative treatment has not been performed by Tenant or (ii) the date that
Tenant first uses the Premises or any portion thereof for any purpose permitted under this
Lease, but in no event shall the Rent Commencement Date occur later than January 1,
1999.
SECTION 2 Tenant Access for Improvements Prior to Commencement Date: Upon the execution of
this Lease and all addenda hereto, and the delivery by Tenant to Landlord of the
appropriate insurance certificates reflecting Tenant's securing of all insurance required by
Tenant hereunder and following the recordation of a Notice of Commencement prepared
and recorded in accordance Florida Statute 713.10 and Landlord's reasonable approval of
Tenant's construction contract for the purpose of confirming the inclusion of a lien
prohibition provision in accordance with Section 26 of this Lease, Tenant and Tenant's
contractor and sub-contractors shall be provided reasonable access to the Premises at all
reasonable times in order to make improvements to the Premises. All work will be defined
in the Work Letter attached hereto as Exhibit "B".
SECTION 2 Expiration Date: Five (5) years after Rent Commencement Date.
SECTION 2 Lease Term: From the Rent Commencement Date plus Five (5) years after the Rent
Commencement Date, unless sooner terminated pursuant to any provision hereof;
provided, however, that if the Rent Commencement Date is a date other than the first day
of a calendar month, said Term shall extend for said number of days at said in addition to
the remainder of the calender month following the Rent Commencement Date.
SECTION 2 Renewal Term(s): One Renewal Term of Five (5) years; at Market Rate Rent.
SECTION 3 Base Rent: Tenant agrees to pay to Landlord as Rent for the Premises, in advance without
demand, deduction or set off (except as otherwise may be specifically provided in the
Lease), from and after the Rent Commencement Date and throughout the term, the Annual
Base Rent in the amounts as indicated in the following Schedule of Base Rent in equal
monthly installments, plus applicable sales tax.
</TABLE>
PAGE I
----------
BLUE LAKE STANDARD LEASE
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF BASE RENT
PERIOD PER SQUARE FOOT ANNUAL BASE RENT MONTHLY BASE RENT
------ --------------- ---------------- -----------------
<S> <C> <C> <C>
Months 1-12: $12.50 $230,000 $19,167.17
Months 13-24: $12.88 $236,992 $19,749.33
Months 25-36: $13.27 $244,168 $20,347.33
Months 37-48: $13.67 $251,528 $20,960.67
Months 49-60: $14.08 $259,072 $21,589.33
</TABLE>
Each monthly installment in accordance with the above Schedule shall be due and
payable on or before the first day of each calendar month succeeding the Rent
Commencement Date, except that the rental payment for any fractional calendar
month commencing on the Rent Commencement Date of the Lease shall be prorated.
<TABLE>
<S> <C>
SECTION 3: Base Year for Overhead Rent: Calendar year 1999.
Estimated per square foot Overhead Rent in Base Year $4.50
SECTION 3 Cap on "Controllable Operating Expenses" (as defined): eight (8.0%) percent applied non-
cumulatively.
SECTION 3 Tenant's Share: 1.039%. Landlord and Tenant acknowledge that Tenant's Share has been
obtained by taking the Net Rentable Area of the Premises and dividing such number by [1,770,600]
square feet, being the rentable area contained in the Building as determined by Landlord, and
multiplying such quotient by 100. In the event Tenant's Share is changed during a calendar year
by reason of a change in the Net Rentable Area of the Premises, Tenant's Share shall thereafter
mean the result obtained by dividing the new Net Rentable Area of the Premises by [1,770,600]
and multiplying such quotient by 100.
SECTION 4 Security Deposit Received: $ N/A
Date Received: ___________________________
Prepaid First Month's Rent $ N/A (including Florida sales tax)
Date Received: __________________________
Prepared First Month's Overhead Rent: $ N/A (including Florida sales tax)
Date Received: ___________________________ ______
Prepaid Last Month's Rent $ N/A (including Florida sales tax)
Date Received: _______________________
Prepaid Last Month's Overhead Rent: $ N/A (including Florida sales tax)
Date Received: _______________________________
Deposit for Energy Management: $ N/A
Date Received: _________________________________
Deposit for Electric Utilities: $ N/A
Date Received: ________________________________
Guarantor: Andrx Corporation, a Florida corporation
4001 S. W. 47th Avenue, Suite 201
Fort Lauderdale, Florida 33314
Attention: Scott Lodin, Esq.
SECTION 5 Use of Premises: Corporate offices, including software
development, internet related sales and service (but not
retail sales), and the supporting use of conference and
computer facilities, employee breakroom and related
non-commercial facilities for employee use only.
</TABLE>
PAGE II
----------
BLUE LAKE STANDARD LEASE
<PAGE>
<TABLE>
<S> <C>
Tenant's Address for Notices Prior to Commencement Date:
Cybear, Inc.
c/o Andrx Corporation
400 S. W. 47th Avenue, Suite 201
Fort Lauderdale, Florida 33314
Attention: Scott Lodin, Esq.
Tenant's Address for Notices After Commencement Date:
Tenant
The Premises; Attention: Mr. Todd MacLeod
with a copy to Tenant's pre-Commencement Date Address
Landlord's Address for Notices:
Blue Lake, Ltd.
5000 Blue Lake Drive, Suite 100
Boca Raton, Florida 33432
Attention: Michael D. Masanoff, Executive Vice President
With copies of default notices only to:
Sachs, Sax & Klein, P.A.
Suite 4150
301 Yamato Road
Boca Raton, Florida 33431
Atttention: Michael S. Greene, Esq.
SECTION 8 Standby Electrical Generator System Subscription Fee: $500,000.00; pursuant to Rider
attached hereto as Exhibit "G"
SECTION 15 Amount of General Comprehensive Liability Insurance: $1,000,000.00 per occurrence -
$3,000,000.00 in the aggregate.
WORK LETTER:
PARAGRAPH 3G. Landlord's Contribution: $ 15.00 per usable square foot
PARAGRAPH 6. Tenant's Construction Agent: __________________________
Tenant may, from time to time, identify a substituted
Tenant's Construction Agent from a list of persons
pre-approved by Landlord to act as a Tenant's
Construction Agent for the Building, or such other
person as requested by Tenant having experience in
construction of the type and nature of the
undertaking pursuant to the Work Letter, and who
shall be reasonably acceptable to Landlord.
</TABLE>
Certain of the information relating to the Lease, including
many of the principal economic terms, are set forth in the foregoing Basic Lease
Information Rider (the "BLI Rider"). The BLI Rider and the Lease are, by this
reference, hereby incorporated into one another. In the event of any direct
conflict between the terms of the BLI Rider and the terms of the Lease, the BLI
Rider shall control. Where the Lease simply supplements the BLI Rider and does
not conflict directly therewith, the Lease shall control.
IN WITNESS WHEREOF, Landlord and Tenant have signed this
BLI Rider as of this ____ day of August, 1998 .
WITNESSES: "TENANT"
CYBEAR, INC., a Florida corporation
- --------------------------------------
- --------------------------------------
(As to Tenant) By:______________________________
Name:____________________________
Title:___________________________
(SEAL)
WITNESSES: "LANDLORD"
PAGE III
----------
BLUE LAKE STANDARD LEASE
<PAGE>
______________________________ BLUE LAKE, LTD., a Florida limited partnership
______________________________ By: Blue Lake, Inc., a Florida corporation, its
(As to Landlord ) general partner
By:_______________________________________
Authorized Agent
BLUE LAKE CORPORATE CENTER
STANDARD LEASE
THIS LEASE ("Lease") is made as of the _____ day of August, 1998, by
and between BLUE LAKE, LTD., a Florida limited partnership ("Landlord") and
CYBEAR, INC., a Florida corporation, authorized to do business in the State of
Florida ("Tenant").
W I T N E S S E T H:
1. PREMISES; BUILDING; AND COMMON AREAS.
A. PREMISES; BUILDING; AND COMMON AREAS. Landlord leases to
Tenant and Tenant leases from Landlord the Premises described in the Basic Lease
Information Rider (the "BLI Rider") attached to the front of this Lease and
incorporated into this Lease by this reference, and as more particularly
outlined on the floor plan attached hereto as Exhibit "A" and by this reference
incorporated herein ("Premises"). The parties hereby agree that the Premises
contain the number of Net Rentable Area set forth in the BLI Rider. The Premises
constitute a portion of the office building campus, including parking spaces,
driveways, walkways, drainage systems, utility systems, greenspace areas, and
other elements of the Blue Lake Corporate Center (collectively the "Building").
In addition to the Premises, Tenant has the right to use, in common with others,
the lobby, public entrances, public stairways, public areas and public elevators
of the Building (the "Common Areas"). The Common Areas serving the Building will
at all times be subject to Landlord's exclusive control and management in
accordance with the terms and provisions of this Lease. In addition, the Tenant
shall be entitled to use during the term of this Lease, up to four thousand
square feet of raised flooring located in the Building and identified by
Landlord as available for the Premises. Such raised flooring shall be accepted
by the Tenant in its "as is, where is, with all faults" condition and Tenant
shall be solely responsible for removing the flooring from its current location
and installing such in the Premises. Tenant shall return the flooring to the
Landlord at the expiration or earlier termination of this Lease, in its current
condition, reasonable wear and tear excepted.
B. RIGHT OF FIRST REFUSAL. Provided that no default beyond any
applicable notice and cure periods shall have occurred under this Lease, the
Landlord grants to the Tenant a right of first refusal, exercisable from the
date hereof and continuing through one (1) year prior to the expiration of the
term of this Lease, unless Tenant, prior to such one (1) year, elects to renew
the term hereof as provided in Paragraph 2B hereof, inclusive, to lease the
Expansion Premises as described on Exhibit "A-1" attached hereto and made a part
hereof upon the terms herein provided (the "Right of First Refusal Term"). If
during the Right of First Refusal Term the Landlord shall receive a BONA-FIDE
third-party offer to lease all or a portion of the Expansion Premises ("Third
Party Offer"), then Landlord shall advise Tenant, in writing, of Landlord's
intention to accept such Third Party Offer and shall furnish to Tenant all of
the basic terms and conditions of such Third Party Offer (the "Landlord's
Notice"). Tenant shall thereafter have the option, within ten (10) days
following Tenant's receipt of Landlord's Notice, to exercise its Right of First
Refusal to lease not less than all of the entire Expansion Premises
(notwithstanding a Third Party Offer for the lease of less than all of the
Expansion Premises) by giving notice of its election to exercise its Right of
First Refusal in writing to Landlord (the "Tenant's Acceptance"). If Tenant
timely exercises the right of first refusal, Landlord and Tenant shall, within
five (5) business days thereafter, enter into an amendment to this Lease
affirming the covenants and conditions contained in this Lease, except that the
amendment, with respect to the Expansion Premises shall contain the applicable
business terms and conditions as contained in the Third Party Offer. If Tenant
waives or fails to exercise its right of first refusal, the Landlord may then
lease all or such portion of the Expansion Premises to any other party,
including the third party offerer on the same terms and conditions set forth in
the Landlord's notice and the Right of First Refusal shall thereafter be
terminated on a self-effectuating basis and be of no further force or effect
until the third party lease expires (after all elected renewal terms thereof)
Notwithstanding the immediately preceding sentence, Landlord may, additionally,
request the Tenant to execute a written certification of the lapse and
termination of the Right of First Refusal as herein contained.
C. NO RESERVATION. Nothing herein shall constitute a
reservation or other rights in or to the Expansion Premises or shall impose an
obligation on the Landlord to abstain from marketing the
PAGE 1
----------
BLUE LAKE STANDARD LEASE
<PAGE>
Expansion Premises for lease to third parties, subject to this right of first
refusal.
2. LEASE TERM; LEASE DATE
A. GENERAL. The lease term ("Lease Term") is for the period of
time set forth in the BLI Rider, commencing on the Lease Commencement Date set
forth in the BLI Rider ("Commencement Date") and ending on the Lease expiration
date set forth in the BLI Rider ("Expiration Date"). Tenant's obligation to pay
all rent, including Base Rent, Overhead Rent and Additional Rent, (collectively,
"Rent"), as such terms are hereafter defined, will commence on the Rent
Commencement Date. Tenant shall observe and perform all of its obligations under
this Lease (except its obligations to conduct business), from the earlier to
occur of the date that the Premises are delivered to Tenant for the purpose of
commencement of the Tenant's improvements to the Premises or the date Tenant
otherwise takes possession of the Premises (until the Commencement Date) in the
same manner as though the Lease Term began when the Premises were so delivered
to Tenant. Except as specifically provided in the BLI Rider, under no
circumstances, however, may Tenant enter into possession of the Premises prior
to the earlier to occur of the date that the Premises are delivered to Tenant
for the purpose of commencement of Tenant's improvements to the Premises or the
Commencement Date without the express written consent of Landlord and subject to
any reasonable terms of the consent. Tenant shall not be required to pay Rent
(as such term is hereinafter defined) for any period prior to the Rent
Commencement Date or as otherwise stated in the BLI. However, Tenant shall pay
for all utilities and services consumed by or on behalf of Tenant prior to the
Rent Commencement Date for construction, fixturing and move-in. Upon Landlord's
request, Tenant shall execute a "Rent Commencement/Expiration Certification
Rider" in the form attached hereto and made a part hereof as Exhibit "I".
B. RENEWAL OPTION. Landlord grants to Tenant an option (the
"Option") to extend the term of this Lease for one (1) additional period of five
(5) years (the "Renewal Term") under the terms set forth below. Tenant shall not
be entitled to exercise the Option unless each of the following conditions shall
be fully satisfied at the time of its exercise: (i) the Lease shall be in full
force and effect; (ii) the Tenant originally named in this Lease, or its
permitted assignees, shall be in possession of the entire Premises; and (iii)
Tenant shall not then be in default under any of the material terms, provisions,
covenants or conditions of the Lease beyond any applicable notice and cure
periods. In order to exercise the Option, Tenant must first give written request
to Landlord, not less than twelve (12) months prior to the Expiration Date of
the Initial Lease Term for delivery of Landlord's determination of Market Rent,
as defined below. Base Rent for each Renewal Term shall be equal to the Market
Rent, as determined in accordance with this section ("Market Rent"). Within
thirty (30) days following its receipt of Tenant's request, Landlord shall
advise Tenant of Market Rent for each year of the respective Renewal Term.
Market Rent (including escalations for successive years of the Renewal Term)
shall be determined by Landlord in its reasonable judgment. Landlord's
determination of the Market Rent shall be based, as Landlord reasonably deems
appropriate, upon then current and projected rents for space in the Building,
adjusted for any special conditions applicable to such space and leases, for
location, length of term, amount of space and other factors Landlord deems
relevant in computing rents for space in the Building, including adjustments for
anticipated inflation. Tenant may exercise its option by notifying Landlord,
within 30 days from the date on which Tenant was first advised by Landlord of
its determination of Market Rent, that Tenant has elected to exercise the Option
at the Market Rent determined by Landlord or proceed as provided below. If
Tenant exercises the Option as provided, the Expiration Date of the Lease shall
be extended for the length of the Renewal Term and Base Rent shall be adjusted
to Market Rent. If Tenant shall fail to timely exercise the Option as provided,
Tenant shall be deemed to have waived its right to exercise the Option and to
occupy the Premises beyond the initial Term of the Lease or beyond any
previously exercised Renewal Term of this Lease. The Base Year for the Renewal
Term shall be the first Lease year of the Renewal Term. Upon a determination of
Base Rent for the First Lease Year of the Renewal Term, Landlord and Tenant
shall agree on a Base Rent schedule, in the same format set forth in the BLI
Rider for the Initial Lease Term, for the balance of the Renewal Term, based
upon the hereinabove prescribed formula. Landlord's determination shall be
based, as Landlord reasonably deems appropriate, upon then current and projected
rents for space in the Building, adjusted for any special conditions applicable
to such space and leases, for location, length of term, amount of space and
other factors Landlord deems relevant in computing rents for space in the
Building, including adjustments for anticipated inflation. Any agreement of
Landlord and Tenant regarding the amount of Market Rent shall be in writing
signed by them within thirty (30) days after the date Tenant was first advised
by Landlord of its initial determination of Market Rent, in which event Tenant
shall be deemed to have exercised the Option. If Landlord and Tenant are unable
to agree upon Market Rent in writing within such thirty (30) day period, Tenant
may nevertheless exercise its option by notifying Landlord, within 30 days from
the date on which Tenant was first advised by Landlord of its initial
determination of Market Rent, that Tenant has elected to exercise the Option at
the Market Rent determined by Landlord subject to a reservation of Tenant's
right to arbitrate Landlord's determination of Market Rent in accordance with
this Section. If Tenant exercises the Option as provided, the termination date
of the Lease shall be extended for a period of five (5) years and Base Rent
shall be adjusted to Market Rent. If Tenant shall fail to timely exercise the
Option as provided, Tenant shall be deemed to have waived its right to exercise
the Option and to occupy the Premises beyond the initial term of the Lease. If
the parties cannot agree in writing on Market Rent and Tenant timely exercises
the Option,
PAGE 2
----------
BLUE LAKE STANDARD LEASE
<PAGE>
then within thirty (30) days after Tenant's exercise of the Option, Tenant and
Landlord shall each select a licensed real estate appraiser with at least ten
(10) years substantial commercial leasing expertise particularly in the this
area of Palm Beach County, Florida and notify the other party of such selection,
and the selected appraisers shall in turn select a similar third appraiser who
will determine Market Rent. If the appraisers are unable to agree on a third
appraiser within sixty (60) days after Tenant's exercise of the Option, Market
Rent shall be determined by suit for declaratory relief. The cost of the third
appraiser and any court costs shall be shared equally by the parties. If either
party fails to timely select a appraiser and notify the other party of such
selection, the other party's timely selected appraiser shall unilaterally
determine Market Rent. If Tenant elects to exercise the Option subject to its
reservation to contest Market Rent, Tenant shall nonetheless on the commencement
of the Renewal Term begin paying Base Rent at the Market Rate determined by
Landlord. If Market Rent is ultimately determined to be other than the amount
initially determined by Landlord, the next due payment or payments of Rent shall
be appropriately adjusted to reflect such overpayment or underpayment
retroactive to commencement of the Renewal Term.]
3. RENT
A. BASE RENT. Beginning on the Rent Commencement Date, and
continuing during the Lease Term, Tenant will pay to Landlord in lawful United
States Currency as the base rent for the Premises ("Base Rent") the amounts set
forth in the BLI Rider, with same being payable without demand, setoff or
deduction except as otherwise specifically provided in this Lease, in advance,
on or before the first day of each month, in equal monthly installments of the
amounts set forth in the BLI Rider, plus applicable sales and other such taxes
as are now or later enacted. All payments of Base Rent, Overhead Rent, (and
Security Deposits if subsequently applicable during the Lease Term), and any
other sums due from Tenant under this Lease shall be made by wire transfer to
such account as may be designated (or re-designated from time to time) by
Landlord's written notice. Such Rent shall be immediately payable to Landlord
upon written demand and any failure to so pay, subject to the grace provisions
set forth in Section 3, shall constitute an Event of Default.
B. OVERHEAD RENT Beginning on the Rent Commencement Date,
Tenant shall pay Tenant's Share, as defined in the BLI Rider, of (i) the total
amount of the annual Operating Expenses (as hereafter defined) and (ii) the
total amount of Taxes (as hereafter defined). As used herein, "Overhead Rent"
means the total of Tenant's allocated Share of Operating Expenses and Taxes.
B.1. "CAP" ON CONTROLLABLE
OPERATING EXPENSES. Notwithstanding the foregoing, in no event shall the
Tenant's share of the Controllable Operating Expenses be increased by more than
eight (8%) percent, on a non-cumulative basis, from that charged to the Tenant,
as part of Overhead Rent, for the immediately preceding calendar year. Increases
in Operating Expenses that are not deemed "controllable" as defined hereunder
shall not be limited by the foregoing sentence. Controllable Operating Expenses
do not include (i) Taxes, (ii) utility charges and fees (including, but not
limited to, water, sewer, electrical, telephone, chilled water and ventilation
and air-conditioning charges, cable communications and the like), (iii) premiums
for any increases in insurance contracted for by Landlord to the extent that any
such increases shall be a commercially reasonable judgment by Landlord, and in
conformance with responsible management customary for a Building of the size,
nature and character of the Building; (iv) minimum wage changes, and (v) costs
resulting from changes in law, to the extent however that any such cost is
incurred as to an item which is otherwise chargeable as an Operating Expense and
is not otherwise an exclusion from Operating Expenses.
B.2. ESTIMATES OF OVERHEAD
RENT. Prior to each subsequent calendar year, beginning with the calendar year
immediately following the Base Year, Landlord shall, in advance, reasonably
estimate for each such calendar year the total amount of the Overhead Rent.
One-twelfth (1/12) of the estimated Overhead Rent shall be payable monthly,
along with the monthly payment of the Base Rent.
B.3. RECONCILIATION STATEMENT.
It is estimated that on or before March 31 following a calendar year for which
Overhead Rent is payable hereunder, Landlord shall provide Tenant with a
reconciliation statement showing the amount of the actual components of Overhead
Rent for the immediately previous calendar year only. Notwithstanding the
provisions of the immediately preceding sentence, should Landlord fail to
provide Tenant with a reconciliation statement by June 30 for the immediately
preceding calendar year, Tenant shall have no further liability for any
additional payment to Landlord that would otherwise be reflected and required in
the said reconciliation statement for the preceding year. If the reconciliation
statement reflects an underpayment in either component of Overhead Rent,
Landlord shall also deliver to Tenant an invoice which Tenant shall pay within
thirty (30) days following receipt of such invoice. If the reconciliation
statement reflects an overpayment in either component of Overhead Rent, Tenant
shall be entitled to either, at Landlord's option, to a credit against the next
month's payment of Rent together with a refund check from Landlord for the
balance of such overpayment or a refund check from the Landlord for the entire
amount of such overpayment If the Lease has expired, the overpayment shall be
refunded. In no event shall the Base Rent under this Lease be reduced by virtue
of this Section. As used in this paragraph 3., the following terms shall have
the following meanings:
(1) The term "Operating
Expenses" shall mean (i) any and all reasonable costs of ownership, management,
operation, repair and maintenance of the Building, including, without
limitation, wages, salaries, professionals' fees, taxes,
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BLUE LAKE STANDARD LEASE
<PAGE>
insurance, benefits and other payroll burdens of all employees, Building
Management fee, Common Area janitorial, maintenance, guard and other services,
building management office rent or rental value, power, fuel, water, waste
disposal, chilled water and hearing, ventilating and air conditioning charges,
stand-by electric generator system maintenance, upkeep, monitoring and refueling
charges, landscaping care, lighting, garbage removal, window cleaning, system
maintenance, parking area care, fees and assessments paid to or on behalf of the
"Association" (as later defined herein), and any and all other utilities not
separately metered for the Premises or a portion thereof, materials, supplies,
maintenance, repairs, insurance applicable to the Building and Landlord's
personal property and depreciation on personal property, and (ii) the cost
(amortized over such reasonable period as Landlord shall determine together with
interest at the rate of twelve percent (12%) per annum on the unamortized
balance) of any capital improvements made to the Building by Landlord after the
date of this Lease that reduce in a commercially reasonable manner Operating
Expenses or made to the Building by Landlord after the date of this Lease that
are required under any governmental law or regulation; provided, however, that
Operating Expenses shall not include real property taxes, depreciation on the
Building, costs of tenants' improvements, marketing or advertising costs for the
rental or sale of the Building, costs of electricity or other utilities
separately metered for other tenant's spaces, executive or managerial salaries
or benefits above the level of management, consulting fees not related to
operation, management or repairs, market study fees, capital repairs or
replacements (except as provided above), real estate broker's commissions, costs
of repairs covered and paid by insurance (subject to deductibles paid by
Landlord), fines or penalties for Landlord's failure to pay taxes and
assessments before such became delinquent, or any other obligation on time,
points, fees and interest charges, principal payments or any other payments of
any kind related to Landlord's financing or refinancing of the Building as a
whole, transaction costs directly incurred in a sale or transfer of the
Building, expenses resulting from defective construction work performed by
Landlord, the initial acquisition and installation costs of the stand-by
electrical generator and related systems, interest and capital items other than
those referred to in subsection (ii) above. Landlord shall maintain accounting
books and records in accordance with sound accounting principles. Landlord
hereby agrees to deduct each calendar year from the amount of the Operating
Expenses the total amount of any and all sums, amounts or charges paid by Tenant
or other tenants of the Building directly to Landlord or its agent for specific
tenant requested services or specific utility charges, if applicable.
Notwithstanding anything to the contrary in the definition of
"Operating Expenses", Operating Expenses shall, also, not include any of the
following:
(a) Legal fees, accounting fees or other expenses related to
the defense of Landlord's title to or interest in the Premises or the Building.
(b) Payment of debt service on loans secured by a mortgage or
lien encumbering the Building or any portion or interest of or in the Building.
(c) All costs and expenses which have been paid by Landlord
and reimbursed directly to Landlord by third-parties, including other tenants in
the Building, rather than through Operating Expenses.
(d) Legal fees and disbursements
incurred for negotiation of leases or enforcement of
leases.
(e) Rent and additional rent payable under a ground lease or
any other superior lease encumbering the Building.
(f) Costs for which Landlord is compensated by insurance
proceeds or for which Landlord would have been compensated by insurance proceeds
had Landlord carried the insurance required by this Lease.
(g) Any fee or expenditure paid to an entity related to
Landlord materially in excess of the amount which would be paid in an arms
length transaction for materials or services of comparable quality (but only to
the extent of such excess).
(h) All costs and expenses, including fines, penalties and
legal fees) incurred due to a violation caused by Landlord in connection with
any new improvements constructed by Landlord within or as part of the Building.
(i) Salaries or fringe benefits of full-time personnel of
Landlord for any time periods performing for properties other than the Building.
(j) Any bad debt loss, rent loss, or reserves for bad debts or
rent loss.
(k) Costs incurred by Landlord for repairs or replacements to
the extent that Landlord is actually reimbursed under warranties or guaranties.
(l) Any compensation paid to clerks, attendants, or other
persons in any potential commercial parking garage constructed to support the
Building for which separate parking fees or charges will be made to tenants.
(m) The cost of installing and maintaining any specialty
facility, such as a dining facility, athletic or recreational club, or luncheon
club if such facility is exclusive to any single tenant of the Building.
(n) Costs for sculptures, paintings, and other objects of art
located within or outside of the Building, other than the cost of maintaining
such sculptures, paintings and objects.
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BLUE LAKE STANDARD LEASE
<PAGE>
(2) The term "Taxes" shall mean the amount actually
incurred by Landlord (exclusive of any penalties, interest or late fees) of all
impositions, taxes, assessments (special or otherwise), water and sewer
assessments and other governmental liens or charges of any and every kind,
nature and sort whatsoever, ordinary and extraordinary, foreseen and unforeseen,
and substitutes therefor, including all taxes whatsoever (except for taxes for
the following categories which shall be excluded from the definition of Taxes:
any inheritance, estate, succession, transfer or gift taxes imposed upon
Landlord or any income taxes specifically payable by Landlord as a separate
tax-paying entity without regard to Landlord's income source as arising from or
out of the Building and/or the land on which it is located) attributable in any
manner to the Building, the land on which the Building is located and the
approximately 350 acre portion of the property surrounding the building, shown
on Exhibit "F" hereto (but excluding the assessed value of any new building(s)
and the land allocated to such new building(s) constructed on such campus), or
the rents (however the term may be defined) receivable therefrom, or any part
thereof, or any use thereon, or any facility located therein or used in
conjunction therewith or any charge or other amount required to be paid to any
governmental authority. For purposes hereof, until such time as a separate tax
folio is established for the Building and the approximate 350 acre campus, the
taxes on the Building and other improvements shall be determined from the
assessment line-item therefor and the taxes on the approximate 350 acres campus
shall be determined by comparison to the assessment for unimproved land located
in the Arvida Park of Commerce located in Boca Raton, Florida. The term "Taxes"
does not include income, excess profits, estate inheritance, succession,
transfer of capital tax assessments on Landlord or on Rent.
Tenant hereby agrees that the Overhead Rent from time to time computed
by Landlord shall be final and binding for all purposes of this Lease unless,
within ninety (90) days after Landlord provides Tenant with written notice of
the amount thereof, Tenant provides Landlord with written notice (i) disputing
the mathematical accuracy of such amount or whether such is a proper Operating
Expense under this Lease (the "Disputed Amount"), and (ii) designating an
attorney or accountant, reasonably acceptable to Landlord, and appointed by
Tenant, at its sole cost and expense, to review the mathematical accuracy of the
Disputed Amount, or whether such is a proper Operating Expense under this Lease
with Landlord and/or its designated representatives Tenant shall within thirty
(30) days of invoice, pay all of Landlord's reasonable costs and expenses in
connection with such review, including reasonable attorneys' fees and
accountants' fees, unless as a result thereof the Disputed Amount is
demonstrated to reflect a mathematical error in excess of three and one-half
percent (3.5%) of the amount actually due from Tenant. If such error is in
excess of three and one-half percent (3.5%), Landlord shall pay, within thirty
(30) days of invoice, Tenant's reasonable costs and expenses in connection with
such review, including reasonable attorneys' fees and accounting fees. Landlord
hereby agrees, in the event it receives such notice from Tenant, to cooperate in
promptly completing such review and promptly refunding any portion of the
Disputed Amount which exceeds the amount actually due from Tenant. Such an audit
shall be at Tenant's expense, at any time within ninety (90) days after
Landlord's annual statement is delivered to Tenant for such calendar year,
provided, that Tenant shall give Landlord not less than fifteen (15) days prior
written notice of any such audit and sign a confidential non-disclosure
agreement prior to the audit reasonably acceptable to Tenant and subject to any
qualifications expressly provided in this Lease. Notwithstanding the foregoing,
in no event shall Tenant have the right to dispute or audit Overhead Rent to the
extent that such Overhead Rent is less than $4.50 per square foot of Rentable
Area.
C. LATE CHARGE. Tenant covenants and agrees to pay a late
charge in the amount of Five (5.0%) percent of any payment of Base Rent and
Overhead Rent not received by Landlord within three (3) days from written notice
from Landlord and within ten (10) days from written notice from Landlord for all
other payments due hereunder. Tenant shall also pay Landlord interest at a rate
equal to twelve percent (12%) per annum accruing on any Rent(s) outstanding
beyond such three (3) day period or ten (10) day period, as applicable. Tenant
shall pay Landlord any such late charge(s) or interest within five (5) days
after Landlord notifies Tenant of same.
D. DEFINITION OF RENT. The term "Rent" shall refer
collectively to Base Rent, Overhead Rent and Additional Rent. The term
"Additional Rent" is sometimes used herein to refer to any and all other sums
payable by Tenant hereunder, including, but not limited to, parking charges and
sums payable on account of default by Tenant. All Rent shall be paid by Tenant
without offset, demand or other credit except as otherwise specifically provided
herein, and shall be payable only in lawful money of the United States of
America which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment. All sums payable by Tenant hereunder by check
shall be obtained against a financial institution located in the United States
of America. The Rent shall be paid by Tenant at the Building management office
located in the Building or elsewhere as designated by Landlord in writing to
Tenant. Any Rent payable for a portion of a month shall be prorated based upon
the number of days in the applicable calendar month.
E. RENT TAXES. In addition to Base Rent and Overhead Rent,
Tenant shall and hereby agrees to pay to Landlord each month a sum equal to any
sales tax, tax on rentals and any other similar charges now existing or
hereafter imposed, based upon the privilege of leasing the space leased
hereunder or based upon the amount of rent collected therefor.
F. COMMENCEMENT OTHER THAN FIRST DAY. If the
Commencement Date occurs on any
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BLUE LAKE STANDARD LEASE
<PAGE>
day other than the first day of the month, or the Lease Term ends on a date
other than the last day of a calendar month, Tenant shall occupy the Premises
under the terms of this Lease and the pro rata portion of the Rent shall be paid
by Tenant; provided, however, that in such an event the Commencement Date, for
the purposes of this Lease, shall be deemed to be the first day of the month
immediately following the month in which possession is given.
G. OVERHEAD RENT AFTER EXPIRATION DATE. Overhead Rent for the
final months of this Lease is due and payable even though it may not be
calculated until subsequent to the Expiration Date of the Lease.
4. SECURITY DEPOSIT.
A. SECURITY DEPOSIT. [Intentionally
Omitted.]
B. SECURITY INTEREST. Landlord waives any statutory and common
law liens for rent, except as any tenant improvements installed or constructed
in the Premises, which waiver shall be automatic and self-executing.
Notwithstanding the foregoing, Landlord agrees to execute such reasonable
documents requested by Tenant to evidence such waiver set forth herein.
5. USE
A. GENERAL. Tenant will use and occupy the Premises solely
specific uses set forth in the BLI Rider and for no other use whatsoever. Tenant
shall, at its own cost and expense, obtain any and all licenses and permits
necessary for such use. Tenant acknowledges that its type of business, as above
specified, is a material consideration for Landlord's execution of this Lease.
Tenant will not commit waste upon the Premises nor suffer or permit the Premises
or any part of them to be used in any manner, or suffer or permit anything to be
done in or brought into or kept in the Premises or the Building, which would:
(i) violate any law or requirement of public authorities, (ii) cause injury to
the Building or any part thereof, (iii) annoy or offend other tenants or their
patrons or interfere with the normal operations of HVAC, plumbing or other
mechanical or electrical systems of the Building or the elevators installed
therein, (iv) constitute a public or private nuisance, or (v) alter the
appearance of the exterior of the Building or of any portion of the interior
other than the Premises pursuant to the provisions of this Lease. Tenant agrees
and acknowledges that Tenant shall be responsible for obtaining, and for any and
all costs of obtaining, any special amendments to the certificate of occupancy
for the Premises and/or the Building and any other governmental permits,
authorizations or consents required solely on account of Tenant's use of the
Premises.
B. PROHIBITED USES. Notwithstanding anything to the contrary
in this Lease or the BLI Rider, including but not limited to, the "Use of
Premises" Section of the BLI Rider, Tenant hereby covenants and agrees that
Tenant's business is not and shall not be, and that Tenant shall not use the
Premises or any part thereof, or permit the Premises or any part thereof to be
used without Landlord's prior written consent, [(i) for the business of
photographic, multilith or multigraph reproductions or offset printing; (ii) for
a retail banking, trust company, depository, guarantee or safe deposit business
open to the general public, or indoor automated teller machines, (iii) as a
savings bank, a savings and loan company open to the general public, (iv) for
the sale to the general public of travelers checks, money orders, drafts,
foreign exchange or letters of credit or for the receipt of money for
transmission, (v) as a stock broker's or dealer's office or for the underwriting
or sale of securities open to the general public, (vi) as a restaurant,
cafeteria, bar, or an establishment for the sale of confectionery, soda,
beverages, sandwiches, ice cream or baked goods or for the preparation,
dispensing or consumption of food or beverages in any manner whatsoever, (vii)
as a news or cigar stand, (viii) as an employment agency, labor union office,
physician's or dentist's office, dance or music studio, school (except for the
training of employees and clients of Tenant), (ix) as a barber shop or beauty
salon, (x) for the business of (a) operating a shared office facility, that is,
a business which subleases space and/or offers centralized services to
subtenants or customers on a shared basis, such as secretarial, receptionist,
telephone, etc., or (b) for a fee to persons inside or outside of the Building,
providing as a service word processing, secretarial, video conferencing,
conference services, telephone answering, receptionist or mail receipt services,
(xi) for any services or uses to the general public to be conducted on the
Premises, (xii) amateur recreational uses or movie theaters, (xiii) retail
sales, including but not limited to drug stores or florists, or (xiv)
warehousing, showroom and wholesale uses. Nothing in this Section shall preclude
Tenant from using any part of the Premises for photographic, multilith or
multigraph reproductions to the extent that such uses are incidental to Tenant's
own business or activities.
6. ACCEPTANCE OF PREMISES; LANDLORD'S WORK
Taking possession of the Premises by Tenant shall be
conclusive evidence that the Premises were in good and satisfactory condition
when possession was so taken subject to latent defects and Landlord's
maintenance and repair obligations provided in this Lease. Unless expressly
stated herein to the contrary, Landlord has no obligation to repair, improve, or
add to the Premises subsequent to Tenant's taking possession thereof and Tenant
shall, at its sole cost and expense and in compliance with the provisions of
this Lease, be responsible for any changes, alterations, replacements or
repairs, maintenance and decorations to the Premises. Except as may be
specifically provided in this Lease, Tenant shall not be required to make
alterations to the structural or base building improvements of the Building.
Neither Landlord nor Landlord's agents have made any representations or promises
with respect to the physical condition of the Building or the Premises,
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BLUE LAKE STANDARD LEASE
<PAGE>
or any other matter or thing affecting or relating to Premises except as herein
expressly set forth, and no rights, easements or licenses are acquired by Tenant
by implication or otherwise, except as expressly set forth in the provisions of
this Lease. Notwithstanding the foregoing, Landlord represents and warrants to
Tenant that it has not received any notice that the Building is currently in
violation of any laws, regulations or ordinances. Any existing ceiling system
and demountable partitions are to remain in the Premises at the time of the
delivery of the Premises and may be utilized by Tenant without charge.
Improvements, if any, to be made to the Premises by Tenant shall be made in
accordance with the Work Letter. Landlord's published list of pre-approved
general contractors and architects for The Blue Lake Corporate Center, as may be
amended from time to time by Landlord at its sole option (except if Landlord has
already approved a general contractor or architect), shall have the exclusive
right to bid for Tenant's construction contracts. Improvements, if any, to be
made to the Premises by Landlord are specifically set forth in the Work Letter
and there are no others. All leasehold improvements (as distinguished from trade
fixtures and apparatus) installed in the Premises at any time, whether by or on
behalf of Tenant or by or on behalf of Landlord, shall not be removed from the
Premises at any time, unless such removal is consented to in advance by
Landlord; and at the expiration of this Lease (either on the Expiration Date or
upon such earlier termination as provided in this Lease), all such leasehold
improvements shall be deemed to be part of the Premises, shall not be removed by
Tenant when it vacates the Premises, and title thereto shall vest solely in
Landlord without payment of any nature to Tenant. All trade fixtures and
apparatus (as distinguished from leasehold improvements) owned by Tenant and
installed in the Premises shall remain the property of Tenant and shall be
removable at any time, including upon the expiration of the Term; provided that
Tenant shall repair any damage to the Premises caused by the removal of said
trade fixtures and apparatus and shall restore the Premises to substantially the
same condition as existed prior to the installation of said trade fixtures and
apparatus. The taking of possession by Tenant (or any permitted assignee or
subtenant of Tenant) of all or any portion of the Premises for the conduct of
business will be deemed conclusive evidence that Tenant has found the Premises,
and all of their fixtures and equipment, acceptable, subject to latent defects
and Landlord's maintenance and repair obligations provided in this Lease.
7. PARKING
A. RESERVATIONS. Landlord has and reserves the right to
reasonably alter the methods used to control parking and the right to reasonably
establish such controls and rules and regulations (such as parking stickers to
be affixed to vehicles) regarding parking that Landlord may deem desirable.
Without liability, Landlord will have the right to tow or otherwise remove
vehicles improperly parked, blocking ingress or egress lanes, or violating
parking rules, at the expense of the offending tenant and/or owner of the
vehicle.
B. CONDITIONS. Tenant's right to use, and its right to permit
its principals and guests to use, the parking facilities pursuant to this Lease
are subject to the following conditions: (i) Landlord reserves the right to
reasonably reduce the number of spaces in the parking area by not more than ten
percent (10%) of the then number of parking area spaces in the parking area
and/or reasonably change access thereto so long as such does not materially
reduce the number of parking spaces within reasonable proximity to the Premises;
and none of the foregoing shall entitle Tenant to any claim against Landlord or
to any abatement of Rent (or any part thereof); (ii) Landlord has no obligation
to provide a parking lot attendant and Landlord shall have no liability on
account of any loss or damage to any vehicle or the contents thereof except to
the extent caused by the negligence or willful misconduct of Landlord, or its
agents, employees or contractors, Tenant hereby agreeing to bear the risk of
loss for same; (iii) Tenant, its agents, employees and invitees, shall park
their automobiles and other vehicles only where and as reasonably designated
from time to time by Landlord within the parking area so long as such remain in
reasonable proximity to the Premises; and (iv) if and when so requested by
Landlord, Tenant shall furnish Landlord with the license numbers of any vehicles
of Tenant, its agents and employees.
8. BUILDING SERVICES
A. GENERAL. In general, the services set forth below will be
provided by Landlord or Landlord's licensee or an independent contractor
contracted for by Landlord at a service level set, defined and regulated
consistent with office buildings of similar quality to and in the same immediate
geographic area as the Building. During the Lease Term, the regular business
hours ("Business Hours") of the Building (including the auditorium and
cafeteria) will be 7:00 a.m. to 7:00 p.m., Monday through Saturday, except
holidays generally recognized by state and federal governments or as may be
shortened in accordance with applicable policies or regulations adopted by any
utility company servicing the Building or government. During periods other than
Business Hours chilled water will be available from Landlord or its energy
manager on prior request on an as-available basis at the per-ton-pricing from
time-to-time then in effect, except if such chilled water is separately metered
to the Premises, in which event Tenant shall pay the costs of such chilled water
as provided in below. Landlord reserves the right to increase the Business
Hours. The Building will be accessible to Tenant, its subtenants, agents,
servants, employees, contractors, invitees or licensees (collectively, "Tenant's
Agents") twenty-four hours per day, seven days per week except in the case of
temporary closure due to emergencies, repairs, casualty, governmental or
quasi-governmental requirements or as Landlord reasonably deems necessary in
order to prevent damage or injury to person or property. Landlord shall use
reasonable efforts not to materially disturb or interfere with Tenant's business
or Tenant's use of the Premises in connection with any such entry.
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BLUE LAKE STANDARD LEASE
<PAGE>
(1) ELECTRICITY:
(a) Landlord is the exclusive
vendee of electrical utility services for the Project. There shall be installed,
at Landlord's expense, in conformance with the Work Letter, separate electric
metering for the Premises. Tenant shall pay all applicable security deposits
required to secure electrical services as provided in the BLI Rider. Landlord
shall be solely responsible for the expenses of all sub-metering for all other
utility services to the Premises, to the extent such may be reasonably
sub-metered. In the event that sub-metering is not available until completion of
all demising work for the Premises prior to the Rent Commencement Date electric
power will be available through the auspices of the Landlord or its utility
vendor for the purpose of lighting and general office equipment use in amounts
consistent with Building Standard Electric Capacities. Landlord reserves the
right after business hours during non-Business Hours to turn off all unnecessary
lighting in the unoccupied areas of the Building to minimize the energy
consumption of the Building. Tenant will not, without written consent of
Landlord connect with electric current except through existing electrical
outlets in the Premises, any major apparatus or major device for the purpose of
using electric current, except for Tenant's ability to add a supplemental
package air-conditioning unit as provided in this Section 8.
(2) STAND-BY ELECTRIC GENERATOR RIDER. Tenant may participate
in the stand-by electric generator service program available to the Building by
executing the stand-by electric generator subscription rider attached hereto and
made a part hereof as Exhibit "G".
(3) AIR-CONDITIONING SERVICES:
Landlord agrees that either Landlord or its designated utility manager
(the "Utility Manager") shall provide, air-conditioning services to the Premises
which air-conditioning services (including chilled water) shall be separately
metered to the Premises and billed directly by either Landlord or the Utility
Manager directly to Tenant. During Business Hours, air conditioning consistent
with comparable buildings in the Boca Raton area shall be supplied to the
Premises for the purposes of comfort control in the Premises during regular
business hours consistent with comparable office buildings in the Boca Raton
area. Landlord and Tenant agree that Landlord's air-conditioning system is not
designed to cool machinery and equipment. Tenant shall not re-direct, or in any
manner modify, the air-conditioning duct distribution to accommodate Tenant's
build-out unless any such modifications are first approved in writing by the
Landlord, which modifications shall be designed only by an engineer pre-approved
by the Landlord. If Tenant requires additional air-conditioning services for
comfort control during Business Hours, (i.e., in excess of Building Standard) or
during non-Business Hours Landlord shall, in response to Tenant's request for
any such additional air-conditioning service accommodate Tenant subject to
availability at the then prescribed per-ton hour basis which service shall be
billed to Tenant as Additional Rent. At the time of the execution of this Lease,
the per-ton hour charge for additional air-conditioning services is $.24. This
rate may be subject to change during the Lease Term as evaluated and determined
by FPL Services, the Utility Manager or a similar service. At Landlord's option,
Landlord may secure air-conditioning controls (thermostats) in lockable metal
boxes to regulate the efficiency and use of the system. The Landlord may, at its
option, contract with FPL Services, or such other provider of chilled-water
distribution system sources as the Landlord may reasonably elect.
(4) WATER AND SEWER:
Landlord agrees to provide municipally supplied cold water and
sewer services to the Common Areas for lavatory purposes.
(5) ELEVATOR SERVICE:
Subject to events of force majeure, Tenant shall have
passenger elevator access to the Premises twenty-four (24) hours per day, seven
days per week; however, access for deliveries and use of freight elevators are
subject to Landlord's reasonable rules and regulations.
(6) WINDOW WASHING:
Landlord will provide exterior window washing with reasonable
frequency.
B. INTERRUPTION OF SERVICES. Tenant understands and agrees
that Landlord does not warrant that any of the services referred to above, or
any other services which Landlord may supply, will be free from interruption.
Tenant acknowledges that any one or more of such services may be suspended by
reason of accident or repairs, alterations or improvements necessary to be made,
or by strikes or lockouts, or by reason of operation of law, or other causes
beyond the control of Landlord. No such interruption or discontinuance of
service will be deemed an eviction or a disturbance of Tenant's use and
possession of the Premises or any part thereof, or render Landlord liable to
Tenant for damages or abatement of Rent or relieve Tenant from the
responsibility of performing any of Tenant's obligations under this Lease.
However, to the extent that electrical service is interrupted for more than five
(5) consecutive business days due to the negligence or wilful act of the
Landlord, its agents, employees or contractors, and such interruption prevents
the Tenant from occupying the Premises for its business operations and Tenant
does not occupy the Premises for the duration of such interruption, Rent shall
abate to the extent that such interruption continues beyond the five (5)
consecutive business day period.
C. FIBER OPTICS. Tenant may contract with BellSouth, which has
been provided access through the underlying property by Landlord for
telecommunication service wiring and installation and which has been designated
by the Landlord as the vendor of choice at the Blue Lake Building, for
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BLUE LAKE STANDARD LEASE
<PAGE>
voice and data telecommunication wiring and services, and installing any
telecommunication products and, specifically, dual access points for Tenant's
fiber optic lines, at Tenant's sole expense. To the extent that such
installation requires the digging of a trench through the Property in order to
gain dual access points, the Tenant shall provide the Landlord with plans and
schematics for the referenced installation which plans and schematics shall be
subject to the reasonable satisfaction of the Landlord and which installation
shall be further subject to the approval, as necessary, of the City of Boca
Raton or other agencies having jurisdiction thereon.
D. UTILITY DEREGULATION: Landlord has advised Tenant that presently,
Florida Power & Light ("Electric Service Provider") is the utility company
selected by Landlord to provide utility service for the Building.
Notwithstanding the foregoing, if permitted by law, Landlord shall have the
right at any time and from time to time during the Lease Term to either contract
for service from a different company or companies providing electric service (a
such company shall hereinafter be referred to as an "Alternate Service
Provider") or continue to contract for service from the Electric Service
Provider. Tenant shall cooperate with Landlord, the Electric Service Provider
and any Alternate Service Provider at all times and, as reasonably necessary,
shall allow Landlord, Electric Service Provider, and any Alternate Service
Provider reasonable access to the Building's electric lines, feeders, risers,
wiring and any other machinery within the Premises. Landlord shall be in no way
liable or responsible for any loss, damage or expense that Tenant may sustain or
incur by reason of change, failure, interference, disruption or defect in the
supply or character of the electric energy furnished to the Premises (except to
the extent caused by the negligence or willful misconduct of Landlord, its
agents, employees or contractors), or if the quantity or character of the
electric energy supplied by the Electric Service Provider or any Alternate
Service Provider is no longer available or suitable for Tenant's requirements,
then no such change, failure, defect, unavailability or unsuitability shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of Rent, or relieve Tenant from any of its
obligations under the Lease.
9. SECURITY
With respect to security for the Building and the parking lot,
Landlord and Tenant hereby agree as follows: Security of the Premises is the
sole responsibility of the Tenant and that the Landlord has no liability for
breach of security to the Premises. Tenant may at Tenant's expense install a
security system to the Premises; provided, however, that Tenant, in addition to
access otherwise required hereunder, will provide Landlord adequate access to
the Premises in case of emergencies particularly regarding Premises that contain
fire sprinkler risers and equipment. Landlord will install in the Building, an
access device, such as a keypad or card reader, as Landlord may deem appropriate
for the Building, in Landlord's sole and absolute discretion. All repairs
required to the Premises caused by security breaches are the responsibility of
the Tenant, except to the extent caused by the negligence or willful misconduct
of Landlord, its agents, employees or contractors, however, Landlord may elect
to effect such repairs, if appropriate to insure continued security, protection
of property, or safety of life. The cost of such repairs shall be Additional
Rent.
A. TENANT'S RESPONSIBILITY. Tenant shall: (1) abide by all
reasonable policies, procedures and rules and regulations for use of the access
system, (2) report promptly the loss or theft of all keys which would permit
unauthorized entrance to the Premises, Building or parking lot, (3) promptly
report to Landlord door-to-door solicitation or other unauthorized activity in
the Building or parking lot, and (4) promptly inform the Landlord's security
contractor in the event of a break-in or other emergency. In addition, Tenant
may, at its option and sole cost and expense, install its own interior security
system pursuant to plans to be submitted to Landlord for Landlord's approval,
which approval shall not be unreasonably withheld. The Tenant shall deliver
mechanic's lien releases prior to the initiation of the work.
B. INTERRUPTION OF SECURITY. Tenant acknowledges that the
above security provisions may be suspended or modified at Landlord's sole
discretion or as a result of causes beyond the reasonable control of Landlord.
No such interruption, discontinuance or modification of security service will
constitute an eviction, constructive eviction, or a disturbance of Tenant's use
and possession of the Premises, and further, no interruption, discontinuance or
modification of security service will render Landlord liable to Tenant or
third-parties for damages, abatement of Rent, or otherwise, or relieve Tenant of
the responsibility of performing Tenant's obligations under this Lease.
C. HURRICANE SHUTTER OPTION. Tenant may, at Tenant's sole cost
and expense (which shall include all expenses reasonably incurred by Landlord
unless plans for hurricane shutters were incorporated as part of the initial
construction document review process) install protective hurricane shutters on
the interior of the windows of the Premises. Any such installation of hurricane
shutters shall be subject to the prior approval of the Landlord, which approval
shall not be unreasonably withheld. The hurricane shutters shall be approved by
the Landlord as to size, color, type of shutter, mode of attachment and such
other criteria as Landlord shall from time-to-time determine. The Tenant must
also receive the approval of the City of Boca Raton, Florida prior to the
installation of hurricane shutters.
10. REPAIRS, MAINTENANCE AND UTILITIES
A. LANDLORD'S RESPONSIBILITIES. During the Lease Term,
Landlord shall maintain the
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BLUE LAKE STANDARD LEASE
<PAGE>
level of repairs and maintenance (and replacements if needed) for the Building,
the Common Areas, and all other areas serving the Building, in a manner
comparable to office buildings of similar quality to and in the immediate
geographic area of the Building and perform or have performed all such repairs
and maintenance. Landlord's responsibilities for repairs and maintenance with
respect to this paragraph are as follows: (1) the structural, foundation, and
roof systems of the Building and the surface parking lot, (2) the Building
standard electrical and mechanical systems, (3) the primary water and sewer
systems, life-safety, air conditioning, and sprinkler systems, of the Building
and to the Premises (excluding, however, those systems which are installed by
Tenant for Tenant's sole use), (4) the Building Common Areas and the common area
furniture, fixtures, and equipment and exterior windows, (5) the landscaped
areas in and about the Building, (6) the parking lot, driveways, sidewalks,
drainage systems and exterior Common Areas, and (7) replacement of Building
standard fluorescent light bulbs in the Common Areas.
B. TENANT'S RESPONSIBILITIES. Tenant shall at its own cost and
expense keep and maintain all parts of the Premises and such portion of the
Building within the exclusive control of Tenant in good condition, promptly
making all necessary repairs and replacements, whether ordinary or
extraordinary, with materials and workmanship of the same character, kind and
quality as the original, including but not limited to interior windows, glass
and plate glass, doors, skylights, any, special office entries, interior walls
and finish work, floors and floor coverings, heating and air conditioning,
electrical systems and fixtures, sprinkler systems, water heaters, truck doors,
and plumbing work and fixtures, all of the foregoing systems inside the
Premises. Tenant as part of its obligation hereunder shall keep the whole of the
Premises in a clean and sanitary condition. Tenant will as far as possible keep
all such parts of the Premises from deteriorating, ordinary wear and tear
excepted, and from falling temporarily out of repair, and upon termination of
this Lease in any way. Tenant will yield up the Premises to Landlord in good
condition and repair, loss by fire or other casualty covered by insurance to be
secured pursuant to section 14 excepted (but not excepting any damage to glass
or loss not reimbursed by insurance because of the existence of a deductible
under the appropriate policy, ordinary wear and tear excepted). Tenant shall not
damage any demising wall or disturb the integrity and supports provided by any
demising wall and shall, at its sole cost and expense, properly repair any
damage or injury to any demising wall caused by Tenant or its employees, agents
or invitees. Tenant shall, at its own cost and expense, as additional rent, pay
for the repair of any damage to the Premises or the Building, resulting from
and/or caused in whole or in part by the negligence or misconduct of Tenant, its
agent, servants, employees, patrons, customers, or any other person entering
upon the Building as a result of Tenant's business activities caused by Tenant's
default hereunder.
C. REPAIRS AND MAINTENANCE; MISCELLANEOUS. Notwithstanding
anything to the contrary in this Lease, Landlord shall have no responsibility to
repair or maintain the Building, any of its components, the Common Areas, the
Premises, or any fixture, improvement, trade fixture, or any item of personal
property contained in the Building, the Common Areas, and/or the Premises if
such repairs or maintenance are required because of the occurrence of any of the
following: (i) the improper acts, misuse, improper conduct, omission or neglect
of Tenant or Tenant's Agents, or (ii) the conduct of business in the Premises.
Should Landlord elect to make repairs or maintenance occasioned by the
occurrence of any of the foregoing, Tenant shall pay as Additional Rent all such
reasonable costs and expenses incurred by Landlord. Landlord shall have the
right to reasonably approve in advance all work, repair, maintenance or
otherwise, to be performed under this Lease by Tenant and all of Tenant's
repairmen, contractors, subcontractors and suppliers performing work or
supplying materials. Tenant shall be responsible for all permits, inspections
and certificates for accomplishing the above. Tenant shall obtain lien waivers
for all work done in or to the Premises, by contractors, subcontractors, and
suppliers retained by Tenant.
11. TENANT'S ALTERATIONS
A. GENERAL. During the Lease Term, Tenant will make no
alterations, additions or improvements in or to the Premises or the Building
envelope, structure, roof, mechanical and plumbing systems, electrical systems,
or any area in which asbestos has been located (as noted in the Environmental
Report (as hereinafter defined) or as identified in writing by the Landlord) ,
and will perform no work the cost of which is in excess of $20,000.00 in the
aggregate (any and all of such alterations, additions or improvements other than
those set forth in the Work Letter attached hereto are collectively referred to
in this Lease as the "Alteration(s)", and the foregoing Alterations collectively
referred to as "Major Alterations"), without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant shall submit
to Landlord detailed drawings and plans of the proposed Major Alterations at the
time Landlord's consent is sought. Upon Landlord's consent to any proposed Major
Alterations by Tenant, such consent will be conditioned upon Tenant's agreement
to comply with all reasonable requirements established by Landlord, including
safety requirements and the matters referenced in Section 22 of this Lease. All
Alterations shall be done in compliance with all other applicable provisions of
this Lease and with all applicable laws, ordinances, directives, rules and
regulations of government or authorities having jurisdiction, including, without
limitation, the Americans with Disabilities Act (ADA), the Florida Accessibility
Code, and all laws dealing with the abatement, storage, transportation and
disposal of asbestos or other hazardous materials, which work, shall be effected
by contractors and consultants reasonably approved by Landlord and in compliance
with all applicable laws and with
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BLUE LAKE STANDARD LEASE
<PAGE>
Landlord's rules and regulations. Tenant may provide Landlord with a list of
proposed contractors and consultants regularly engaged by Tenant for minor
Alterations such as carpeting, painting, and low voltage wiring. Once such list
has been approved by Landlord, the Tenant shall not be required to obtain
separate approvals for such contractors and consultants for each such minor
Alterations project. Notwithstanding anything to the contrary contained in this
Section, Tenant shall not penetrate or disrupt the structural columns of the
Building located within the Premises; and shall not penetrate or disrupt any
area within three (3) feet of any structural column in performing any
Alterations, without Landlord's prior written consent which shall not be
unreasonably withheld or delayed. All Material Alterations shall be performed by
those pre-qualified architects and contractors designated by Landlord as
approved for the Blue Lake Corporate Center, a list of which are attached hereto
and made a part hereof as Exhibit "B-3", which list is subject to amendment from
time-to-time. If Tenant elects to remove any Major Alterations at the expiration
of the Lease, Tenant shall repair any and all damage caused to the Premise by
such removal. Additionally, prior to the commencement of any work by or for
Tenant, Tenant shall furnish to Landlord certificates evidencing the existence
of builder's risk, comprehensive general liability, and worker's compensation
insurance complying with the requirements of Insurance Section of this Lease.
Any damage to any part of the Building that occurs as a result of any
Alterations shall be repaired by Tenant, as soon as reasonably practicable, to
the reasonable satisfaction of Landlord. Tenant and its contractor and all other
persons performing any Alterations shall abide by the Landlord's reasonable job
site rules and regulations and reasonably cooperate with Landlord's construction
representative in coordinating all of the work in the Building including,
without limitation, the hours of work, parking, and use of the construction
elevator. Landlord shall not charge any other fee to Tenant in respect of
Landlord's construction representative. All alterations will comply with the
requirements of any energy efficiency program offered by the electric service
provided to the Building to the extent practicable. All materials used in any
Major Alterations, including, without limitation, paint, carpet, wall or window
coverings, carpet glues, and any other chemicals shall be subject to Landlord's
prior written reasonable approval. All alterations shall be done in a good and
workmanlike manner. Tenant shall, prior to the commencement of any Alterations,
obtain and exhibit to Landlord any governmental permit required for the
Alterations. Within ten (10) days after completion of any Alteration, Tenant
shall deliver to the Landlord, copies of any plans and specifications for such
Alteration. All contractors, sub-contractors, mechanics, laborers and
materialmen shall be put on notice of and shall be subject to the fact that
Tenant is not authorized to subject Landlord's interest in the Building or the
Premises to any claim for construction, mechanics, laborer's and materialman's
liens and all persons dealing directly or indirectly with Tenant may not look to
the Landlord's interest in the Premises as security for payment, all as more
fully provided in Section 26 of this Lease.
B. ALTERATION COSTS.
(1) Tenant shall pay to Landlord as Additional Rent
(or to its nominee or designated contractor, as Landlord may direct) in
connection with all Major Alterations (other than the initial tenant
improvements) reasonable fees and costs of Landlord's engineers, architects, and
construction managers for review and approval of all plans and specifications
for such Major Alteration, and for all other reasonable costs and expenses
incurred by Landlord as a result of or in connection with each such Major
Alteration, based on an hourly fee and reasonable and customary hours expended
for each such Major Alteration.
(2) The Major Alteration costs shall be paid monthly
installments during the course of the performance of the Major Alteration,
within thirty (30) days from receipt of Landlord's reasonably detailed invoice.
Within thirty (30) days after completion of the Major Alteration, Tenant shall
pay to Landlord the entire balance of the Major Alteration costs if not
theretofore paid in full.
12. LANDLORD'S ADDITIONS AND ALTERATIONS
Landlord has the right to make changes in and about the Building and
parking areas, including, but not limited to, signs, entrances, address or name
of Building. Such changes may include, but not be limited to, rehabilitation,
redecoration, refurbishment and refixturing of the Building and expansion of or
structural changes to the Building. The right of Tenant to quiet enjoyment and
peaceful possession given under the Lease will not be deemed breached or
interfered with by reason of Landlord's actions pursuant to this paragraph so
long as such actions do not materially deprive Tenant of its use and enjoyment
of the Premises. If Landlord voluntarily changes the street address of the
Building, then Landlord will reimburse Tenant for all reasonable expenses
incurred by Tenant in connection with reprinting stationery, business cards, and
brochures due to such change (but not to exceed $5,000.00), unless Landlord
provides Tenant at least one hundred twenty (120) days prior written notice of
such change.
13. ASSIGNMENT AND SUBLETTING
A. LANDLORD'S CONSENT REQUIRED. Except as provided below with
respect to assignment of this Lease following Tenant's bankruptcy, neither
Tenant, nor Tenant's legal representatives or successors-in-interest by
operation of law or otherwise will effect a "Transfer", as herein defined
without first obtaining the consent of Landlord, which consent Landlord shall
not unreasonably withhold or delay provided that all of the requirements of
paragraph B. of this Section 13 are satisfied. As used in this Section 13, any
of the following shall be deemed to be a Transfer ("Transfer"): assignment of
this Lease, in whole or in part; sublet of all or any part of the Premises; any
license allowing anyone other than Tenant to use or occupy all or any part of
the
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BLUE LAKE STANDARD LEASE
<PAGE>
Premises; a pledge or encumbrance by mortgage or other instrument of Tenant's
interest in this Lease; any transfer of corporate shares as described in
paragraph C. of this Section 13; or any transfer of partnership interest as
described in paragraph D. of this Section 13. Consent by Landlord to any
transfer shall not constitute a waiver of the requirement for such consent to
any subsequent transfer. Upon such approved assignment, Tenant shall not be
released from its obligations hereunder arising after such assignment has been
accomplished, unless the approved assignee specifically assumes, in writing, for
the benefit of the Landlord, all such obligations, in which event Tenant shall
be released of all such obligations hereunder.
B. CONDITIONS FOR TRANSFER APPROVAL. Unless all of the
following conditions are satisfied, Landlord withholding of consent will be
deemed reasonable:
(1) In Landlord's reasonable judgment, the proposed
assignee or subtenant or occupant is engaged in a business or activity, which
(a) is in keeping with the then zoning requirements, (b) is limited to the use
of the Premises as set forth in the BLI Rider, and (c) will not violate any
negative covenant as to use contained in any other lease of office space in the
Building; (d) use of the Premises by the proposed transferee or assignee will
not violate or create any potential violation of any laws or any other
agreements affecting the Premises, the Building, the Landlord or other tenants;
(2) The proposed transferee is a reputable person of
good character, in Landlord's reasonable judgment, and has sufficient financial
wherewithal to discharge its obligations under this Lease and/or the proposed
Agreement of Assignment or the Sublease.
(3) The form of the proposed sublease or instrument
of assignment or occupancy shall be reasonably satisfactory to Landlord, and
shall comply with the applicable provisions of this Section;
(4) There shall not be more than a total of three (3)
occupying entities (including Tenant and any assignee or sublessee requiring
approval by Landlord hereunder) of the Premises; and
(5) The proposed subtenant or assignee or occupant
shall not be entitled, directly or indirectly, to diplomatic or sovereign
immunity and shall be subject to the service of process in, and the jurisdiction
of the courts of the State of Florida.
(6) Such transferee (if an assignment) shall assume
in writing, in a form reasonably acceptable to Landlord, all of Tenant's
obligations hereunder and Tenant shall provide Landlord with a copy of such
assumption/ transfer document;
(7) Tenant shall reimburse Landlord for all of its
reasonable out-of-pocket costs and expenses incurred with respect to the
transfer, not to exceed $5,000.00.
(8) Tenant to which the Premises were initially
leased shall continue to remain liable under this Lease for the performance of
all terms, including but not limited to, payment of Rental due under this Lease;
(9) Tenant's Guarantor, if any, shall continue to
remain liable under the terms of the Guaranty of this Lease and, if Landlord
deems it necessary, such guarantor shall execute such documents necessary to
insure the continuation of its guaranty;
(10) Each of Landlord's Mortgagees shall have
consented in writing to such transfer.
(11) Tenant shall give notice of a requested transfer
to Landlord, which notice shall be accompanied by (a) a conformed or photostatic
copy of the proposed assignment or sublease, the effective or commencement date
of which shall be at least thirty (30) days after the giving of such notice, (b)
a statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Premises, (c) current financial information with respect to the proposed
assignee or subtenant, including, without limitation, its most recent financial
report and (d) such other information as Landlord may reasonably request.
(12) The proposed use of the Premises by the
Transferee will not require increased services from the Landlord from that
provided to Tenant under the Lease.
(13) Then sublease or assignment will not violate any
exclusivity clause contained in any lease affecting any portion of the Building.
C. TRANSFER OF CORPORATE SHARES. Notwithstanding anything to
the contrary contained in this Lease, Tenant may assign this Lease or sublet all
or any portion of the Premises from time to time, without Landlord's consent, to
any entity controlling, controlled by or under common control with Tenant, or to
any successor of Tenant resulting from a merger or consolidation of Tenant, or
as a result of a sale by Tenant of all or substantially all of its assets or
stock, provided that no such transfer shall relieve Tenant or the Guarantor from
any liability under this Lease, whether accrued to the date of such transfer or
thereafter accruing. In addition, any change in the controlling interest in the
stock of Tenant as a result of an initial public offering of Tenant's stock, and
any transfer of the capital stock of Tenant by persons or parties through the
"over-the-counter market" or through any recognized stock exchange, shall not be
deemed to be a transfer requiring Landlord's consent. Landlord shall not be
entitled to receive any portion of
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BLUE LAKE STANDARD LEASE
<PAGE>
the Transfer consideration as described below arising out of an assignment or
sublease not requiring Landlord's consent. Tenant shall provide written notice
of such assignment or subletting, together with the name and address of the
assignee or subtenant, five (5) days prior to the assignment or subletting to
the extent permitted by law, but in no event more than ten (10) days after such
assignment or subletting.
D. ACCEPTANCE OF RENT FROM TRANSFEREE. The acceptance by
Landlord of the payment of Rent following any assignment or other transfer
prohibited by this Section shall not be deemed to be a consent by Landlord to
any such assignment or other transfer nor shall the same be deemed to be a
waiver of any right or remedy of Landlord hereunder. Following a permitted
sub-lease, if Tenant breaches any of the terms and provisions of this Lease,
Landlord may elect to receive directly from the Sub-tenant due or payable to
Tenant by Sub-Tenant pursuant to the Sub-Lease, and upon receipt of a written
notice from Landlord referencing this section, Sub-Tenant shall have to pay to
Landlord any and all sums becoming due or payable under the Sub-Lease. Tenant
shall receive from Landlord a corresponding credit for such sums against any
payments then due or thereafter becoming due from Tenant. Neither the giving of
such written notice to Sub-Tenant nor the receipt of such direct payments from
the Sub-Tenant shall cause the Landlord to assume any of Tenant's duties,
obligations, and/or liabilities under any sublease, nor shall such event impose
upon Landlord the duty or obligation to honor the sublease or subsequently to
accept Sub-Tenant's attornment.
E. If, this Lease is purported to be assigned, without the
consent of the Landlord, or the Premises are sublet or occupied by anyone other
than Tenant, Landlord may accept rents from the assignee, subtenant or occupant
and apply the net amount received to the Rent reserved in this Lease, but no
such assignment, subletting, occupancy or acceptance of Rent shall be deemed a
waiver of the requirement for Landlord's consent as contained in this section or
constitute a novation or otherwise release Tenant from its obligations under
this Lease.
F. If Landlord shall consent to any Transfer, Tenant shall in
consideration therefor, pay to Landlord as Additional Rent, an amount equal to
one hundred (100%) percent of the Transfer Consideration, or Landlord may elect
to recapture the Transferred portion of the Premises and terminate this Lease
with respect to that portion only. For purposes of this paragraph, the term
Transfer Consideration shall mean in any Lease Year (i) any rents, additional
charges or other consideration payable to Tenant by the transferee of the
Transfer which is in excess of the Base Rent and Overhead Rent accruing during
such Lease Year, net of the reasonable costs incurred by Tenant in connection
with the Transfer including but not limited to reasonable fees paid to Tenant's
attorneys and accountants with respect to the Transfer, broker commissions, and
advertising costs associated therewith, and improvement costs. Landlord shall
have the right to audit Tenant's books and records during normal business hours,
at a location in South Florida reasonably designated by Tenant, upon reasonable
notice to determine the amount of Transfer Consideration payable to Landlord. In
the event such audit reveals an understatement of Transfer Consideration in
excess of five percent (5%) of the actual Transfer Consideration due Landlord,
Tenant shall pay for the cost of such audit within ten (10) business days after
Landlord's written demand for same otherwise, Landlord shall be solely
responsible for the costs of such audit.
G. Any permitted sublease shall provide: (i) the subtenant
shall comply with all applicable terms and conditions of this Lease to be
performed by Tenant (except as to Rent); (ii) the sublease is expressly subject
to all of the terms and provisions of this Lease; and (iii) unless Landlord
elects otherwise, the sublease will not survive the termination of this Lease
(whether voluntarily or involuntarily) or resumption of possession of the
Premises by Landlord following a default by Tenant. The sublease shall further
provide that if Landlord elects, the sublease shall further survive a
termination of this Lease or resumption of possession of the Premises by
Landlord following a default by Tenant, the subtenant will, at the election of
Landlord, attorn to the Landlord and continue to perform its obligations under
its sublease as if this Lease had not been terminated and the sublease were a
direct lease between the Landlord and subtenant. The sublease shall otherwise be
in form and substance reasonably satisfactory to the Landlord's lawyer. Any
permitted assignment of lease shall contain an assumption by the Assignee of all
terms, covenants and conditions of this Lease to be performed by the Tenant and
shall otherwise be in form and substance reasonably satisfactory to the
Landlord's lawyer.
H. BUILDING DIRECTORY ADDITIONS. The listing or posting of any
name, other than that of Tenant, whether on the door or exterior wall of the
Premises, the Building's tenant directory in the lobby or elevator, or elsewhere
shall not (i) constitute a waiver of Landlord's rights to withhold consent of
any sublease or assignment pursuant to this Section 13; (ii) be deemed an
implied consent by Landlord to any sublease of the Premises or any portion
thereof, to any assignment or transfer of the Lease, or to any unauthorized
occupancy of the Premises, except in accordance with the express terms of that
Lease; or (iii) operate to vest any right or interest in the Lease or in the
Premises. Any such listing as described in this subsection shall constitute a
privilege extended by Landlord to Tenant and shall be immediately revokable at
Landlord's will by notice to Tenant.
14. TENANT'S INSURANCE COVERAGE
A. GENERAL. Tenant agrees that, at all times during the Lease
Term (as well as prior and subsequent thereto if Tenant or any of Tenant's
Agents should then use or occupy any portion of the Premises), it will keep in
force, with an insurance company licensed to do business in the State of
Florida, and at least A+IX-rated in the most current
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BLUE LAKE STANDARD LEASE
<PAGE>
edition of Best's Insurance Reports and acceptable to Landlord, (i) without
deductible in excess of $5,000.00, comprehensive general liability insurance,
including coverage for bodily injury and death, property damage and personal
injury and contractual liability as referred to below, in the amount of not less
than the amount set forth in the BLI Rider, combined single limit per occurrence
for injury (or death) and damages to property, (ii) with deductible of not more
than Five Thousand Dollars ($5,000.00), insurance on an "All Risk or Physical
Loss" basis, including sprinkler leakage, vandalism, malicious mischief, fire
and extended coverage, covering all improvements to the Premises, fixtures,
furnishings, removable floor coverings, equipment, signs and all other
decoration or stock in trade, in the amounts of not less than the full
replacement value thereof, and (iii) workmen's compensation and employer's
liability insurance, if required by statute. Such policies will: (i) include
Landlord, Landlord's Lender, and Landlord's affiliates, or such other parties as
Landlord may reasonably designate as additional insured's, (ii) be considered
primary insurance, (iii) include within the terms of the policy or by
contractual liability endorsement coverage insuring Tenant's indemnity
obligations under paragraph 19 for bodily injury and property damage, and (v)
provide that it may not be canceled or changed without at least thirty (30) days
prior written notice from the company providing such insurance to each party
insured thereunder. Tenant will also maintain throughout the Lease Term worker's
compensation insurance with not less than the maximum statutory limits of
coverage.
B. EVIDENCE. The insurance coverages to be provided by Tenant
will be for a period of not less than one year. At least thirty (30) days prior
to the Commencement Date, Tenant will deliver to Landlord original certificates
of all such paid-up insurance; thereafter, at least thirty (30) days prior to
the expiration of any policy Tenant will deliver to Landlord such original
certificates as will evidence a paid-up renewal or new policy to take the place
of the one expiring. Any insurance required of Tenant under this Lease may be
furnished by Tenant under an umbrella or blanket policy carried by Tenant. Such
umbrella or blanket policy shall contain an endorsement that names Landlord as
an additional insured, references the Premises, and provides for a minimum limit
available for the Premises equal to the insurance amounts required in the Lease.
15. LANDLORD'S INSURANCE COVERAGE
A. GENERAL. Landlord will at all times during the Lease Term
maintain a policy or policies of insurance insuring the Building against loss or
damage by fire, explosion or other hazards and contingencies typically covered
by insurance for an amount acceptable to the mortgagees encumbering the
Building. Landlord reserves the right, in its reasonable business judgement, to
self insure in lieu of maintaining such policies.
B. TENANT'S ACTS. Tenant will not do or permit anything to be
done upon or bring or keep or permit anything to be brought or kept upon the
Premises which will increase Landlord's rate of insurance on the Building. If by
reason of the failure of Tenant to comply with the terms of this Lease, or by
reason of Tenant's occupancy (even though permitted or contemplated by this
Lease), the insurance rate shall at any time be higher than it would otherwise
be, Tenant will reimburse Landlord for that part of all insurance premiums
charged because of such violation or occupancy by Tenant. Tenant agrees to
comply with any reasonable requests or recommendation made by Landlord's
insurance underwriter inspectors.
C. EXCLUSIONS. Tenant acknowledges that Landlord will not
carry insurance on tenant improvements, furniture, furnishings, trade fixtures,
equipment installed in or made to the Premises by or for Tenant, in accordance
with the Work Letter attached hereto, and Tenant agrees that Tenant, and not
Landlord, will be obligated to promptly repair any damage thereto or replace the
same.
16. WAIVER OF RIGHT OF RECOVERY Except as otherwise provided in this
Lease, neither Landlord nor Tenant shall be liable to the other for any damage
to any building, structure or other tangible property, or any resulting loss of
income, or losses under worker's compensation laws and benefits, even though
such loss or damage might have been occasioned by the negligence of such party,
its agents or employees. The provisions of this Section shall not limit the
indemnification for liability to third parties pursuant to Section 19. As used
in this Section 16.A., "damage" refers to any loss, destruction or other damage.
17. DAMAGE OR DESTRUCTION BY CASUALTY
A. LANDLORD'S ABSOLUTE RIGHT TO TERMINATE. If by fire or other
casualty the Premises or the Building is damaged or destroyed to the extent of
Twenty Five (25%) Percent or more of the insured value thereof but in the
reasonable estimation of Landlord made within thirty (30) days of the fire or
casualty cannot be restored in less than two hundred ten (210) days from the
date of Landlord's notice, Landlord or Tenant will have the option of
terminating this Lease or any renewal thereof by serving written notice upon the
other within ninety (90) days from the date of the casualty and any prepaid Rent
or Additional Rent will be prorated as of the date of destruction and the
unearned portion of such Rent will be refunded to Tenant without interest. If
neither party elects to terminate, Landlord shall promptly commence to restore
and diligently and continuously complete within such two hundred and ten (210)
days.
B. QUALIFIED RIGHT TO TERMINATE. In addition to the foregoing,
if this Lease is not cancelled and the Landlord undertakes such reconstruction
or repair but does not complete the reconstruction or repair within two hundred
ten (210)
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BLUE LAKE STANDARD LEASE
<PAGE>
days after the date of the fire or other casualty, then the Tenant shall have
the additional right to terminate this Lease by written notice to the Landlord
delivered within thirty (30) days after the expiration of such two hundred ten
(210) day period.
C. OBLIGATION TO RESTORE. If by fire or other casualty either
the Premises or the Building is destroyed or damaged, but only to the extent of
less than Twenty-Five (25%) Percent of the insured value of the Premises or the
Building (as applicable), and more than one (1) year remains in either the
initial Lease Term or Renewal Term, as applicable, then Landlord will restore
the Premises within ninety (90) days of the date of the fire or other casualty
subject to events of force majeure.
D. RENT ADJUSTMENTS. In the event of restoration by Landlord,
all Base Rent and Additional Rent paid in advance shall be apportioned as of the
date of damage or destruction and all such Base Rent and Additional Rent as
above described, thereafter accruing, shall be equitably and proportionally
adjusted according to the nature and extent of the destruction or damage,
pending substantial completion of rebuilding, restoration or repair. In the
event the destruction or damage is so extensive as to make it impossible for
Tenant to conduct Tenant's business in the Premises, Rent and Additional Rent
will be fully abated until the Premises are substantially restored by Landlord
or until Tenant resumes use and occupancy of the Premises, whichever shall first
occur. In lieu of abating Rent and Additional Rent, as provided above, Landlord
shall have the right to temporarily or permanently relocate Tenant to another
space reasonably acceptable to Tenant. Landlord will not be liable for any
damage, whether proximate or consequential, to, or any inconvenience or
interruption of the business of Tenant or Tenant's Agents, occasioned by fire or
other casualty except to the extent caused by the negligence or its willful
misconduct of the Landlord, its agents, employees or contractors.
E. QUALIFICATIONS. Notwithstanding the foregoing, Landlord's
obligation to restore exists (i) only if and/or to the extent, that the
insurance proceeds received by Landlord are sufficient to compensate Landlord
for its restoration costs and/or (ii) the area unaffected by the casualty may,
as determined by Landlord's reasonable business judgment, be restored as a
profitable, and self functioning unit.
18. CONDEMNATION AND EMINENT DOMAIN
A. ABSOLUTE RIGHT TO TERMINATE. If all or a material part of
the Premises or the Building or the parking spaces is taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by right
of eminent domain or by purchase in lieu thereof, and the taking would prevent
or materially interfere with the use of the Premises for the purpose for which
they are then being used, this Lease will terminate and the Rent will be abated
during the unexpired portion of this Lease effective on the date physical
possession is taken by the condemning authority and any unearned portion of Rent
prepaid will be refunded to Tenant. Tenant will have no claim to the
condemnation award, other than as to its Tenant Improvements, trade fixtures,
moving expenses, and other out of pocket damages so long as such does not
diminish the Landlord's award.
B. OBLIGATION TO RESTORE. In the event an immaterial part of
the Premises or the Building or the parking spaces is taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by purchase in lieu thereof, and this Lease is not
terminated as provided in subsection A above, then Landlord shall, subject to
the remaining provisions of this Section, at Landlord's expense, as soon as
reasonably practicable, restore the portion of the Premises (for which Landlord
receives the condemnation award pursuant hereto) and the Building to the extent
necessary to make them reasonably tenantable. The Rent payable under this Lease
during the unexpired portion of the Lease Term shall be adjusted to such an
extent as may be fair and reasonable under the circumstances. Tenant shall have
no claim to the condemnation award with respect to the leasehold estate but, in
a separate proceeding, may make a separate claim for trade fixtures and tenant
improvements installed in the Premises by and at the expense of Tenant and
Tenant's moving expense. In no event will Tenant have any claim for the value of
the unexpired Lease Term.
C. QUALIFICATIONS. Notwithstanding the foregoing, Landlord's
obligation to restore exists (i) only if and/or to the extent, that the
condemnation or similar award received by Landlord is sufficient to compensate
Landlord for its loss and its restoration costs and/or (ii) the area unaffected
by the condemnation or similar proceeding may, as determined by Landlord's
reasonable business judgment, be restored as a profitable, and self functioning
unit.
19. LIMITATION OF LANDLORD'S LIABILITY; INDEMNIFICATION
A. PERSONAL PROPERTY. All personal property placed or moved
into the Building will be at the sole risk of Tenant or other owner. Landlord
will not be liable to Tenant or others for any damage to person or property
arising from theft, vandalism, air-conditioning malfunction, the bursting or
leaking of water pipes, any act or omission of any cotenant or occupant of the
Building or of any other person, or otherwise, except to the extent caused by
the negligence or willful misconduct of the Landlord, its agents, employees or
contractors.
B. LIMITATIONS. Notwithstanding any contrary provision of this
Lease: (i) Tenant will look solely (to the extent insurance coverage is not
applicable or available) to the interest of Landlord (or its successor as
Landlord hereunder) in the Building (including proceeds of sale, insurance and
condemnation) for the satisfaction of any judgment or other judicial process
requiring the payment of money
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as a result of any negligence or breach of this Lease by Landlord or its
successor or of Landlord's managing agent (including any beneficial owners,
partners, corporations and/or others affiliated or in any way related to
Landlord or such successor or managing agent) and Landlord has no personal
liability hereunder of any kind.
C. INDEMNITY. Tenant agrees to indemnify, defend and hold
harmless Landlord and its agents from and against all claims, causes of actions,
liabilities, judgments, damages, losses, costs and expenses, including
reasonable attorneys' fees and costs, including appellate proceedings and
bankruptcy proceedings, incurred or suffered by Landlord and arising from or in
any way connected with the Premises or the use thereof or any acts, omissions,
neglect or fault of Tenant or any of Tenant's Agents, including, but not limited
to, any breach of this Lease or any death, personal injury or property damage
occurring in or about the Premises or the Building or arising from Environmental
Concerns, as hereafter defined, except to the extent caused by the Landlord, its
agents, employees, or contractors. Tenant will reimburse Landlord upon request
for all costs incurred by Landlord in the interpretation and enforcement of any
provisions of this Lease and/or the collection of any sums due to Landlord under
this Lease, including collection of agency fees, and reasonable attorneys' fees
and costs, regardless of whether litigation is commenced, and through all
appellate actions and proceedings, including bankruptcy proceedings, if
litigation is commenced. The foregoing claims, causes of actions, liabilities,
judgments, damages, losses, costs and expenses shall include but not be limited
to any of same arising from Tenant's failure to comply with any of the
requirements of Americans with Disabilities Act ("ADA") or Florida Accessibility
Code ("FAC") within the Premises and/or any and all claims or liability arising
from the performance of the repair, renovation, and/or maintenance described
above. This indemnity shall include, but not be limited to, claims or
liabilities asserted against Landlord based upon negligence, strict liability or
other liability by operation of law to any third party or government entity, and
all costs, attorney's fees, expenses, and liabilities incurred by Landlord in
the defense of any such claim. Landlord shall defend any such claim at Tenant's
expense by counsel selected by Landlord. Tenant shall not alter, cut, drill,
penetrate, remove or damage any portion of the Premises in which Landlord has
identified to Tenant the presence or suspected presence of asbestos, without
Landlord's prior written consent. Tenant indemnifies Landlord from and against
any and all damages, liabilities, fines, costs and expenses, including without
limitation reasonable attorneys fees and costs, from Tenant's violation or
breach of this covenant.
20. RELOCATION OF TENANT
A. GENERAL. Recognizing that the Building is large and the
needs of tenants as to space may vary from time to time, and in order for
Landlord to accommodate Tenant and prospective tenants, Landlord expressly
reserves the right, prior to and/or during the Lease Term, at Landlord's sole
expense, to move Tenant from the Premises and relocate Tenant in other
comparable space of Landlord's choosing of approximately the same dimensions and
at least the same size within the Building (or additions to the Building or new
construction related to the Building or the campus in which Building is
located), which other space will be decorated by Landlord at its expense.
Landlord shall, in exercising its right to relocate the Tenant, make said
decision in full consideration and deference to the nature of Tenant's business
which business operates (including Tenant's on-line computer network) on a
twenty-four (24) hour basis, seven (7) days per week. Landlord may use
decorations and materials from the existing Premises, or other materials, so
that the space in which Tenant is relocated will be comparable in its interior
design and decoration to the space from which Tenant is removed.
B. NO INTERFERENCE. During the relocation period Landlord will
use reasonable efforts not to unduly interfere with Tenant's business activities
(recognizing that such business operations may only be shut down for a de
minimus period of time during the relocation, and will not limit Tenant's access
to the Premises prior to such relocation. Landlord agrees to substantially
complete the relocation within a reasonable time under all then existing
circumstances.
C. PREMISES. This Lease and each of its terms and conditions
will remain in full force and effect and be applicable to any such new space and
such new space will be deemed to be the Premises demised hereunder; upon request
Tenant will execute such documents which may be requested to evidence,
acknowledge and confirm the relocation (but it will be effective even in the
absence of such confirmation).
D. COSTS. Landlord's obligation for expenses of removal and
relocation will be the actual cost of relocating and decorating Tenant's new
space, moving expenses, telephone and computer relocation and all other
reasonable costs arising directly from such relocation, and Tenant agrees that
Landlord's exercise of its election to remove and relocate Tenant will not
release Tenant in whole or in part from its obligations hereunder for the full
Lease Term. No rights granted in this Lease to Tenant, including the right of
peaceful possession and quiet enjoyment, will be deemed breached or interfered
with by reason of Landlord's exercise of the relocation right reserved herein.
E. NOTICE. If Landlord exercises its relocation right under
this paragraph, Tenant will be given ninety (90) days prior notice in writing.
21. COMPLIANCE WITH LAWS AND PROCEDURES
A. COMPLIANCE. Except as otherwise provided herein, Tenant, at
its sole cost, will promptly comply with all applicable laws, guidelines, rules,
regulations and requirements, whether of
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federal, state, or local origin, applicable to the Premises, including, but not
limited to, the Americans with Disabilities Act, 42 U.S.C. ss. 12101 et seq, the
FAC (as to the interior of the Premises), and those for the correction,
prevention and abatement of nuisance, unsafe conditions, or other grievances
arising from or pertaining to the use or occupancy of the Premises. Tenant
acknowledges that (i) the Premises and the parking facilities may contain
potentially hazardous substances, including, but not limited to, asbestos
containing materials, radon gas, mineral fibers, and other like materials (all
of such materials are referred to herein as "Environmental Concerns") and (ii)
Tenant has been advised that the Premises and the Building do contain either
encapsulated or non-friable asbestos containing materials. Accordingly, Tenant
agrees that Tenant and Tenant's Agents shall comply with all operation and
maintenance programs and guidelines implemented or promulgated from time to time
by Landlord or its consultants, including, but not limited to, those matters set
forth in subsections B and C below, in order to reduce the risk to Tenant,
Tenant's Agents or any other tenants of the Building of injury from
Environmental Concerns. Except as otherwise provided herein, Tenant at its sole
cost and expense shall be solely responsible for taking any and all measures
which are required to substantially comply with the requirements of the ADA and
the FAC within the Premises. Landlord shall be responsible for causing
compliance of the Building, other than the Premises, with the requirements of
the ADA and the FAC, the cost of such compliance being an Operating Expense
hereunder. Any Alterations to the Premises made by or on behalf of Tenant for
the purpose of complying with the ADA and FAC or which otherwise require
compliance with the ADA and FAC shall be done in accordance with this Lease;
provided, that Landlord's consent to such Alterations shall not constitute
either Landlord's assumption, in whole or in part, of Tenant's responsibility
for substantial compliance with the ADA and FAC, or representation or
confirmation by Landlord that such Alterations comply with the provisions of the
ADA and FAC. Notwithstanding the foregoing, Landlord shall be solely responsible
at its sole cost and expense, for making any changes or improvements which are
required pursuant to the terms of this Lease, to the condition of the Premises
delivered by Landlord to Tenant.
B. NOTICE PRIOR TO WORK. Except as provided in Section 11,
Tenant shall provide thirty (30) days notice to Landlord prior to the
performance by Tenant, Tenant's Agents or contractors of any repairs, renovation
and/or major structural or mechanical systems maintenance, to the Premises. Such
notice shall include a detailed description of the work contemplated. Tenant
shall not perform, or cause to be performed, any such repair, renovation and/or
maintenance without the written consent of Landlord, and, if such consent is
granted, the repair, renovation and/or maintenance must be performed in
accordance with the terms of Landlord's consent.
22. RIGHT OF ENTRY
Landlord and its agents will have the right to enter the
Premises during all reasonable hours to make necessary repairs to the Premises
upon reasonable prior notice. In the event of an emergency, Landlord or its
agents may enter the Premises at any time, without notice (except that Landlord
shall make a good faith effort to contact Tenant's designated representative by
telephone prior to such entry), to appraise and correct the emergency condition.
Said right of entry will, after reasonable prior notice, likewise exist for the
purpose of removing placards, signs, fixtures, alterations, or additions which
do not conform to this Lease. Landlord or its agents will have the right to
exhibit the Premises at any time to prospective tenants within one hundred and
eighty days (180) before the Expiration Date of the Lease.
23. DEFAULT
A. EVENTS OF DEFAULT BY TENANT. The following shall, upon the giving of
notice to Tenant of the nature of the default and the expiration of any
applicable grace period afforded Tenant hereunder as set forth in Section 23.B.
constitute an Event of Default under this Lease. If (1) Tenant fails to make any
payment of Rent when due (a "Monetary Default"); or (2) Tenant fails to fulfill
any of the terms or conditions, covenants, agreements or any rules and
regulations attached to this Lease, as Exhibit "C" or promulgated by Landlord
under this Lease which shall in all instances be reasonable and have as close to
equal application to all tenants of the Building as is practicable (a
"Non-Monetary Default"); or (3) the appointment of a trustee or a receiver to
take possession of all or substantially all of Tenant's assets occurs, and such
appointment is not dismissed within thirty (30) days after appointment, or if
the attachment, execution or other judicial seizure of all or substantially all
of Tenant's assets located at the Premises, or of Tenant's interest in this
Lease, occurs; or (4) Tenant or any of its successors or assigns or any
guarantor of this Lease ("Guarantor"), if any, should file any voluntary
petition in bankruptcy, reorganization or arrangement, or an assignment for the
benefit of creditors or for similar relief under any present or future statute,
law or regulation relating to relief of debtors; or (5) Tenant or any of its
successors or assigns or any Guarantor should be adjudicated bankrupt or have an
involuntary petition in bankruptcy, reorganization or arrangement filed against
it and such proceeding is not dismissed within thirty (30) days of filing; or
(6) Tenant, before the expiration of the Lease Term and without the prior
written consent of Landlord, vacates the Premises or abandons possession of the
Premises, and fails to pay Rent on a timely basis; or (7) Tenant shall permit,
allow or suffer to exist any lien by or through Tenant, judgment, writ,
assessment, charge, attachment or execution upon Landlord's or Tenant's interest
in this Lease or to the Premises, and/or the fixtures, improvements and
furnishings located thereon, whether claimant or holder thereof has acquired its
right by or through Tenant, unless such lien, judgment, writ, assessment,
charge, attachment or execution is discharged of record or transferred from
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<PAGE>
the Property by bond within ten (10) days following notice to Tenant.
B. GRACE PERIOD. Notwithstanding anything contained in this
Lease to the contrary, Tenant shall have (i) a period of three (3) calendar days
after written notice from Landlord of a Monetary Default with respect to payment
of Base Rent or Overhead Rent; (ii) a period of ten (10) days after notice from
Landlord of a Monetary Default , other than as to payment of Base Rent or
Overhead Rent; and (iii) a period of twenty (20) days after notice from Landlord
of a Non-Monetary Default in which to cure the Event of Default. In addition,
provided that the Event of Default does not involve an emergency that must be
addressed in a shorter time frame, the grace period for Non-Monetary Defaults
shall be extended for such time as is reasonably necessary to complete such cure
if the Event of Default is of a nature that it cannot be completely cured within
the twenty (20) day period solely as a result of nonfinancial circumstances
outside of Tenant's control, provided that Tenant has promptly commenced all
appropriate actions to cure the default after notice and those actions are
thereafter diligently and continuously pursued by Tenant in good faith. However,
if the Non-Monetary Default is not cured prior to a maximum of ninety (90) days
from the date of the notice of the Non-Monetary Default, then Landlord may
pursue all of its remedies. The notice of a Non-Monetary Default to be given
under this subsection may be combined with the notice required under Section
83.20(3), Florida Statutes or any successor statute and this Lease shall not be
construed to require Landlord to give two separate notices to Tenant before
proceeding with any remedies.
C. REPEATED LATE PAYMENT. Regardless of the number of times of
Landlord's prior acceptance of late payments and/or late charges, (i) if
Landlord notifies Tenant four (4) times in any 12-month period that Rent has not
been paid when due, then any other late payment within such 12-month period
shall automatically constitute an event of default hereunder and (ii) the mere
acceptance by Landlord of late payments of Rent in the past shall not,
regardless of any applicable laws to the contrary, thereafter be deemed to waive
Landlord's right to strictly enforce this Lease, including Tenant's obligation
to make payment of Rent on the exact day same is due, against Tenant.
24. LANDLORD'S REMEDIES FOR TENANT'S DEFAULT
A. LANDLORD'S OPTIONS. Upon an Event of Default by Tenant
under this Lease, Landlord may, at its option exercise any of the remedies
enumerated below, in addition to such other remedies as may be available under
Florida law:
(1) terminate this Lease and Tenant's right of
possession by notice to Tenant; or
(2) terminate Tenant's right to possession but not
the Lease and/or proceed in accordance with any and all provisions of paragraph
B below.
B. LANDLORD'S REMEDIES. If there is an Event of Default by
Tenant under this Lease (subject to applicable notice and cure periods), in
addition to all other remedies available to Landlord at law or in equity,
Landlord may:
(1) Terminate this Lease by notice to Tenant and
retake possession of the Premises;
(a) Terminate Tenant's right of possession by
notice to Tenant without terminating this Lease and retaking possession of the
Premises and relet the Premises or any part of the Premises in the name of
Landlord, or otherwise, as Tenant's agent, for a term shorter or longer than the
balance of the Lease Term, and may grant concessions or free rent to the new
tenant, thereby terminating Tenant's tenancy in the Premises and right to
possess the Premises, without terminating Tenant's obligations to pay (a) the
entire balance of all forms of Base Rent and Additional Rent for the remainder
of the Lease Term, plus (b) the Reletting Expenses, and (c) the unamortized
balance of any brokerage commissions paid by Landlord in connection with this
Lease, any allowances granted to Tenant under this Lease, and the cost of any
Tenant Improvements made by Landlord. Landlord shall have no obligation to relet
the Premises, and its failure to do so, or failure to collect rent on reletting,
shall not affect Tenant's liability under this Lease. Landlord shall not, in any
event, be required to pay Tenant any surplus of any sums received by Landlord on
a reletting of the Premises in excess of the rent provided in this Lease. If
Landlord decides to relet the Premises or a duty to relet is imposed by law,
Landlord shall only be required to use commercially reasonable efforts to relet
the Premises. Commercially reasonable efforts shall not require Landlord to: (i)
use any greater efforts than Landlord then uses to lease other properties
Landlord or its affiliates owns or manages; (ii) relet the Premises in
preference to any other space in the Building; (iii) relet the Premises to any
party that Landlord could reasonably reject as a transferee under the Assignment
or Subletting section of this Lease; (iv) accept rent in an amount which is less
than the fair market rental for the Premises; (v) perform any tenant
improvements, grant any tenant improvement allowances, grant any "free rent," or
otherwise pay any sums or grant any monetary concessions in order to obtain a
new tenant; (vi) observe any instruction given by Tenant about the reletting
process or accept any tenant offered by Tenant unless the offered tenant leases
the entire Premises and the criteria of this subsection are otherwise fully met.
Any entry or reentry by Landlord, whether had or taken under summary proceedings
or otherwise, shall not absolve or discharge Tenant from liability under this
Lease so long as Landlord's actions are not in violation of applicable laws.
"Reenter" and "re-entry" as used in this Lease are not restricted to their
technical legal meaning. No reentry or taking possession of the Premises by
Landlord shall be construed as an election on Landlord's part to accept a
surrender of
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the Premises unless a notice of such intention is given to Tenant;
(2) Stand by and do nothing, and hold Tenant liable
for all Base Rent and additional rent payable under this Lease through the
remainder of the Lease Term;
(3) Institute any action as provided by law;
(4) Obtain injunctive and declaratory relief,
temporary or permanent, or both, against Tenant or any acts, conduct or
omissions of Tenant, and further to obtain specific performance of any term,
covenant, or condition of this Lease;
(5) After regaining possession of the Premises,
remove all or any part of Tenant's Property from the Premises and any property
removed may be stored at the cost of, and for the account of, Tenant, and
Landlord shall not be responsible for the care or safekeeping of Tenant's
Property whether in transport, storage, or otherwise, and Tenant waives any and
all claims against Landlord for loss, destruction, damage or injury that may be
occasioned by any acts taken by Landlord under this subsection. Landlord may
retain possession of Tenant's Property until all storage charges and all other
amounts owed by Tenant to Landlord under this Section 23 have been paid in full.
Nothing set forth in this subsection shall limit Landlord's rights to enforce
any lien or security interest in favor of Landlord against Tenant's Property or
Landlord's rights under the End of Term section of this Lease; and
(6) If all or any part of the Premises is then
assigned, sublet, transferred, or occupied by someone other than Tenant,
Landlord, at its option, may collect directly from the assignee, subtenant,
transferee, or occupant all rent becoming due to Tenant by reason of the
assignment, sublease, transfer, or occupancy. Any collection directly by
Landlord from the assignee, subtenant, transferee, or occupant shall not be
construed to constitute a novation or a release of Tenant from the further
performance of its obligations under this Lease.
C. ACCELERATION. If Landlord exercises the remedies provided
in Subsections (2), (3) or (4) above, Landlord may declare the entire balance of
all forms of Rent due under this Lease for the remainder of the Lease Term to be
forthwith due and payable and may collect the then present value of the rents
(calculated using a discount rate equal to the yield then obtainable from the
United States Treasury Bill or Note with a maturity date closest to the date of
expiration of the Lease Term) by distress or otherwise, provided, however that
Landlord shall utilize commercially reasonable attempts to mitigate its damages.
The accelerated additional rent for expenses shall be calculated by multiplying
the highest additional rent amount for Expenses payable by Tenant in any
calendar year times the number of calendar years (including any fractional
calendar year) remaining in the Lease Term following the date of default. If
Landlord exercises the remedy provided in Subsection (2) above and collects from
Tenant all forms of rent owed for the remainder of the Lease Term, Landlord
shall account to Tenant, at the date of the expiration of the Lease Term for
amounts actually collected by Landlord as a result of reletting, net of the
Tenant's obligations under Subsections 24 B. 2(a)-(c).
D. GUARANTY. In addition to the remedies of the Landlord
contained in this Section 24, a separate action or actions may, at Landlord's
option, be brought and prosecuted against the Guarantor, if any, whether or not
any action is first or subsequently brought against Tenant or whether or not
Tenant is joined in any such action. The Landlord may, at its sole option,
proceed against the Tenant without first seeking recourse against the Guarantor
and may pursue any other remedy in Landlord's power whatsoever and the Tenant
waives any right to complain of delay in enforcement of Landlord's rights under
this Lease.
E. Notwithstanding the foregoing or anything to the contrary
contained in this Lease, any and all rights and remedies of Landlord and Tenant
set for forth in this Lease shall be exercisable only to the extent permitted by
Florida law at the time of exercise. Any waivers by Tenant of damages or
liability shall be applicable only to the extent Landlord's actions are in
material accordance with applicable law and only to the extent that Landlord or
its agents, employees or contractors are not negligent or willfully at fault.
F. Landlord shall not be deemed to be in default of this Lease
unless and until Landlord fails to cure any default within thirty (30) days
after written notice from Tenant; provided, however, that if such default
reasonably requires more than thirty (30) days to cure, Landlord shall have a
reasonable time to cure such default, provided Landlord commences to cure within
such thirty (30) day period and thereafter diligently prosecutes such cure to
completion. In the event of an uncured default by Landlord, Tenant shall have
the right to exercise any available legal and equitable remedies.
25. LANDLORD'S RIGHT TO PERFORM FOR TENANT'S ACCOUNT.
Should Tenant fail to observe or perform any term or condition
of this Lease within a provided grace period following notice, Landlord may at
any time thereafter, perform the same for the account of Tenant in a
commercially reasonable manner. If Landlord makes any expenditure or incurs any
obligation for the payment of money in connection with such performance for
Tenant's account (including reasonable attorneys' fees and costs in instituting,
prosecuting and/or defending any action or proceeding through appeal), the sums
paid or obligations incurred, with interest at Twelve Percent (12%) per annum,
will be paid by Tenant to Landlord within ten (10) days after rendition of a
bill or statement to Tenant. In the event Tenant, in the performance or
non-performance of any term or
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condition of this Lease, should cause an emergency situation to occur or arise
within the Premises or in the Building, Landlord will have all rights set forth
in this paragraph immediately without the necessity of providing Tenant any
advance notice.
26. LIENS
A. GENERAL. In accordance with the applicable provisions of
the Florida Construction Lien Law and specifically Florida Statutes, Section
713.10, no interest of Landlord whether personally or in the Premises, or in the
underlying land or Building of which the Premises are a part, or the leasehold
interest aforesaid shall be subject to liens for improvements made by Tenant or
caused to be made by Tenant hereunder. Further, Tenant shall have no power or
authority to create any lien or permit any lien to attach to the present estate,
reversion, or other estate of Landlord in the Premises or in the Building, and
all mechanics, materialmen, contractors, artisans and other parties contracting
with Tenant or its representatives or privies as to the Premises or any part of
the Premises are hereby charged with notice that they must look to the Tenant to
secure payment of any bill for work done or material furnished or for any other
purpose during this Lease term. The foregoing provisions are made with express
reference to Section 713.10 of the Florida Statutes. Notwithstanding the
foregoing provisions, Tenant, at its expense, shall cause any liens filed
against the Premises or the Building for work or materials claimed to have been
furnished to Tenant to be discharged of record or properly transferred to a bond
under Section 713.24 of the Florida Statutes within ten (10) days after notice
to Tenant. Landlord has recorded a notice of the foregoing in the Public Records
of Palm Beach County, Florida, pursuant to the provisions of Section 713.10
Florida Statutes.
B. DEFAULT. Notwithstanding the foregoing, if any construction
lien or other lien, attachment, judgment, execution, writ, charge or encumbrance
is filed against the Building or the Premises or this leasehold, or any
alterations, fixtures or improvements therein or thereto, as a result of any
work action or inaction done by or at the direction of Tenant or any of Tenant's
Agents, Tenant will discharge same of record within ten (10) days after the
filing thereof and written notice from either Landlord or the lienor, failing
which Tenant will be in default under this Lease. Further, Tenant agrees to
indemnify, defend and save Landlord harmless from and against any damage or
loss, including reasonable attorneys' fees, incurred by Landlord as a result of
any liens or other claims arising out of or related to work performed in the
Premises by or on behalf of Tenant. In such event, without waiving Tenant's
default, Landlord, in addition to all other available rights and remedies,
without further notice, may discharge the same of record by payment, bonding or
otherwise, as Landlord may elect, and upon request Tenant will reimburse
Landlord for all costs and expenses so incurred by Landlord plus interest
thereon at the rate of eighteen percent (18%) per annum.
27. NOTICES
Notices to Tenant under this Lease will be in writing (unless
otherwise specifically provided herein) addressed to Tenant and mailed or
delivered to the address set forth for Tenant in the BLI Rider. Notices to
Landlord under this Lease (as well as the required copies thereof) will be in
writing and addressed to Landlord (and its agents) and mailed or delivered to
the address set forth in the BLI Rider. Notices will be personally delivered or
given by registered or certified mail, return receipt requested. As used herein,
personal delivery includes delivery by overnight courier. Notices delivered
personally will be deemed to have been given as of the date of delivery and
notices given by mail will be deemed to have been given forty-eight (48) hours
after the time said properly addressed notice is placed in the mail. Each party
may change its address from time to time by written notice given to the other as
specified above.
28. MORTGAGE ESTOPPEL CERTIFICATE; SUBORDINATION
Landlord has the unrestricted right to convey, mortgage and
refinance the Building, or any part thereof. Tenant and Landlord agree, within
ten (10) days after notice but not more than twice in any calendar year, to
execute and deliver to the other or its mortgagee or designee such instruments
as the other or its mortgagee may reasonably require, certifying (i) whether
this Lease is in full force and effect (or if there shall have been any
modification, that the Lease is in full force and effect as modified and stating
the modification, (ii) the amount of any prepaid rent paid under this Lease,
(iii) the dates to which the rents and other charges have been paid, (iv)
whether or not Tenant claims any defenses or offsets concerning its obligations
under this Lease and whether or not the other is in default in the performance
of any covenant, agreement, or condition contained in this Lease on its part to
be performed, and if so, specify each defense, offset or default of which the
party may have knowledge, and (v) such other matters as may be reasonably
required by institutional lenders or purchasers in similar estoppel
certificates. Nothing contained in this Section shall constitute a waiver by
Landlord of any default in payment of rent or other charges existing as of the
date of any notices or certificates under this Section. Subject to the
provisions hereof, this Lease is and at all times will be subject and
subordinate to all present and future mortgages or ground leases which may
affect the Building and/or the parking lot, and to all recastings, renewals,
modifications, consolidations, replacements, and extensions of any such
mortgage(s), and to all increases and voluntary and involuntary advances made
thereunder. The foregoing will be self-operative and no further instrument of
subordination will be required. However, in confirmation of this subordination,
Tenant shall execute promptly any certificate that Landlord may request provided
that, without limiting Landlord's right of specific performance and right to
injunctive relief, the Tenant's failure to do so shall constitute an Event of
Default under the Lease. In the event that the
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holder ("Lender") of any encumbrance ("Mortgage") on the Building or any other
person acquires title to the Building pursuant to the exercise of any remedy
provided for in the Mortgage or by reason of the acceptance of a deed in lieu of
foreclosure (the Lender, any other such person and their participants,
successors and assigns being referred to herein as the "Purchaser"), Tenant
covenants and agrees to attorn to and recognize and be bound to Purchaser as its
new Landlord, and except as provided below, this Lease shall continue in full
force and effect as a direct Lease between Tenant and Purchaser, except that,
notwithstanding anything to the contrary herein or in the Lease. It is an
express condition of the subordination of this Lease set forth herein, that so
long as Tenant is not in material default under any provision of this Lease
beyond any applicable notice or cure period, and no event has occurred that has
continued to exist for a period of time (after notice, if any, required by this
Lease) as would entitle Landlord to terminate this Lease or would cause without
further action by Landlord, the termination of this Lease or would entitle
Landlord to dispossess the Tenant thereunder:
A. The right of possession of Tenant to the Premises and
Tenant's rights hereunder shall not be terminated or disturbed by any steps or
proceedings taken by Lender or anyone claiming by or through Lender in the
exercise of any of its rights under the Mortgage or the indebtedness secured
thereby;
B. This Lease shall not be terminated or affected and Tenant's
possession, use, and enjoyment of the Premises shall not be disturbed by said
exercise of any remedy provided for in the Mortgage, and any sale by Lender of
the Building pursuant to the exercise of any rights and remedies under the
Mortgage or otherwise, shall be made subject to this Lease and the rights of
Tenant hereunder.
C. In no event shall Lender or any other Purchaser be:
(1) liable for any act or omission of Landlord or any
prior landlord (except to the extent such continue without cure after
acquisition of the Building by the Lender and such may be cured by Lender with
its reasonable efforts;
(2) subject to any offsets or defenses that the
Tenant might have against Landlord or any prior landlord;
(3) bound by any payment or rent or additional rent
that Tenant might have paid to Landlord or any prior landlord for more than the
current month unless the same is delivered to the Lender or the Purchaser; or
(4) bound by any material amendment or modifications
of the Lease made without Lender's or such other Purchaser's prior written
consent, which shall not be unreasonably withheld or delayed.
D. Provided that Landlord has previously notified Tenant of
Lender's address for notice, Tenant agrees to give written notice to Lender as
soon as reasonably practicable of any default by Landlord that would entitle
Tenant to cancel this Lease, and agrees that notwithstanding any provision of
this Lease, no notice of cancellation thereof given on behalf of Tenant shall be
effective unless Lender has received said notice and has failed within 30 days
of the date of receipt thereof to cure Landlord's default, or if the default
cannot be cured within 30 days, has failed to promptly commence and to
diligently pursue the cure of Landlord's default which gave rise to such right
of cancellation. Tenant further agrees to give such notices to any successor of
Lender, provided that such successor shall have given written notice of Tenant
of its acquisition of Lender's interest in the Mortgage and designated the
address to which such notices are to be sent.
E. Tenant acknowledges that Landlord may execute and deliver
to Lender an Assignment of Leases and Rents conveying the rentals under this
Lease as additional security for the loan secured by the Mortgage, and Tenant
hereby expressly consents to such Assignment.
F. Within ten (10) days after the execution of this Lease, and
as a condition to the effectiveness of this Lease, Landlord shall obtain, for
the benefit of Tenant, a Subordination, Non-disturbance and Attornment Agreement
from each and every Lender as of the date of this Lease, such Subordination,
Non-Disturbance and Attornment Agreement to be in form substantially similar to
that attached hereto as Exhibit "J". Landlord represents and warrants to Tenants
that, as of the date of this Lease, it is the fee simple owner of the Building,
and that, as of the date hereof, there are no (i) ground leases of all or any
part of Landlord's interest in the Building, or (ii) mortgages with respect to
the Building, other than with Lenders providing such Subordination,
Non-Disturbance and Attornment Agreements to Tenant.
G. Notwithstanding anything to the contrary contained in this
Lease, after the date of this Lease, any subordination of this Lease to a
mortgage or any ground lease shall be conditioned on Tenant obtaining a
Subordination, Non-Disturbance and Attornment Agreement from the applicable
Lender and ground lessor, such Subordination, Non-Disturbance and Attornment
Agreement in a form substantially similar to that attached hereto as Exhibit
"J".
29. ATTORNMENT AND MORTGAGEE'S REQUEST
A. ATTORNMENT. Subject to the provisions of Section 28, if any
mortgagee of the Building comes into possession or ownership of the Premises, or
acquires Landlord's interest by foreclosure of the mortgage or otherwise, upon
the mortgagee's request Tenant will attorn to the mortgagee.
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30. TRANSFER BY LANDLORD
If Landlord's interest in the Building terminates by reason of
a bona fide sale or other transfer, Landlord will, upon assumption by the new
owner of the Landlord's obligations hereunder from and after the date of
transfer, thereupon be released from all further liability to Tenant under this
Lease. At the expiration or termination of the Lease Term, Tenant shall deliver
to Landlord all keys to the Premises and make known to Landlord the location and
combination of all safes, locks and similar items.
31. SURRENDER OF PREMISES; HOLDING OVER
A. SURRENDER. Tenant agrees to surrender the Premises to
Landlord on the Expiration Date (or sooner termination of the Lease Term
pursuant to other applicable provisions hereof) in as good condition as they
were at the commencement of Tenant's occupancy, ordinary wear and tear, and
damage by fire and windstorm excepted.
B. RESTORATION. In all events, Tenant will promptly restore
all damage caused in connection with any removal of Tenant's personal property.
Tenant will pay to Landlord, upon request, all damages that Landlord may suffer
on account of Tenant's failure to surrender possession as and when aforesaid and
will indemnify Landlord against all liabilities, costs and expenses (including
all reasonable attorneys' fees and costs if any) arising out of Tenant's delay
in so delivering possession, including claims of any succeeding tenant.
C. REMOVAL. Upon expiration of the Lease Term, at Landlord's
option, Tenant may not be required to remove from the Premises, Building
Standard Items (as defined in the Work Letter), all of such Building Standard
Items are the property of Landlord or tenant improvements installed prior to the
Rent Commencement Date unless Landlord shall require such removal during the
review and approval of the plans and specifications as provided in the Work
Letter.
D. HOLDOVER. In the event of a holding-over by Tenant, after
the expiration of the Lease or the early termination of the Lease without the
written consent of Landlord, Tenant shall, in addition to being responsible for
any liquidated damages provided by Florida statute, also indemnify Landlord
against all claims for damages by any other tenant to whom Landlord may have
leased all or any part of the Premises covered hereby effective after the
termination of this Lease so long as Landlord has previously provided Tenant
notice of such lease. No payments of money by Tenant after the expiration of the
Lease Term of the earlier termination of this Lease will reinstate, continue or
extend the Term; reduce the liability of Tenant to Landlord for damages; or
affect any termination notice given by Landlord to Tenant. No extension of the
Lease Term will be valid unless and until the same will be reduced to writing
and signed by both Landlord and Tenant.
E. NO SURRENDER. No offer of surrender of the Premises, by
delivery to Landlord or its agent of keys to the Premises or otherwise, will be
binding on Landlord unless accepted by Landlord, in writing, specifying the
effective surrender of the Premises. At the expiration or termination of the
Lease Term, Tenant shall deliver to Landlord all keys to the Premises and make
known to Landlord the location and combinations of all locks, safes and similar
items.
32. NO WAIVER, CUMULATIVE REMEDIES
A. NO WAIVER. No waiver of any provision of this Lease by
either party will be deemed to imply or constitute a further waiver by such
party of the same or any other provision hereof. The rights and remedies of
Landlord and Tenant under this Lease or otherwise are cumulative and are not
intended to be exclusive and the use of one will not be taken to exclude or
waive the use of another, and Landlord and Tenant will be entitled to pursue all
rights and remedies available under the laws of the State of Florida.
B. RENT PAYMENTS. No receipt of money by Landlord from Tenant
at any time, or any act, or thing done by, Landlord or its agent shall be deemed
a release of Tenant from any liability whatsoever to pay Rent, Additional Rent,
or any other sums due hereunder, unless such release is in writing, subscribed
by a duly authorized officer or agent of Landlord and refers expressly to this
Section. Any payment by Tenant or receipt by Landlord of less than the entire
amount due at such time shall be deemed to be on account of the earliest sum
due. No endorsement or statement on any check or any letter accompanying any
check or payment shall be deemed an accord and satisfaction. In the case of such
a partial payment or endorsement, Landlord may accept such payment, check or
letter without prejudice to its right to collect all remaining sums due and
pursue all of its remedies under the Lease.
33. WAIVER
LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM INVOLVING ANY MATTER WHATSOEVER ARISING OUT OF OR IN
CONNECTION WITH (i) THIS LEASE, (ii) THE PREMISES, (iii) TENANT'S USE OR
OCCUPANCY OF THE PREMISES, OR (iv) THE RIGHT TO ANY STATUTORY RELIEF OR REMEDY.
TENANT FURTHER WAIVES THE RIGHT TO INTERPOSE ANY PERMISSIVE COUNTERCLAIM OF ANY
NATURE IN ANY ACTION OR PROCEEDING COMMENCED BY LANDLORD TO OBTAIN POSSESSION OF
THE PREMISES. IF TENANT VIOLATES THIS PROVISION BY FILING A PERMISSIVE
COUNTERCLAIM, WITHOUT PREJUDICE TO LANDLORD'S RIGHT TO HAVE SUCH COUNTERCLAIM
DISMISSED, THE PARTIES STIPULATE THAT SHOULD THE COURT PERMIT TENANT TO MAINTAIN
THE COUNTERCLAIM, THE
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<PAGE>
COUNTERCLAIM SHALL BE SEVERED AND TRIED SEPARATELY FROM THE ACTION FOR
POSSESSION PURSUANT TO RULE 1.270(b) OF THE FLORIDA RULES OF CIVIL PROCEDURE OR
OTHER SUMMARY PROCEDURES SET FORTH IN SECTION 51.011, FLORIDA STATUTES (1993).
THE WAIVERS SET FORTH IN THIS SECTION ARE MADE KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY BY TENANT. TENANT FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED
IN THE MAKING OF THIS WAIVER BY INDEPENDENT COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THESE WAIVERS WITH COUNSEL.
THIS PROVISION IS A MATERIAL INDUCEMENT TO LANDLORD IN AGREEING TO ENTER INTO
THIS LEASE.
34. CONSENTS AND APPROVALS
[Intentionally Omitted]
35. RULES AND REGULATIONS
Tenant agrees to abide by all rules and regulations attached
hereto as Exhibit "C" and incorporated herein by this reference, as reasonably
amended and supplemented from time to time by Landlord. Landlord will not be
liable to Tenant for violation of the same or any other act or omission by any
other tenant except to the extent the same materially affects Tenant's use and
enjoyment of the Premises as provided in this Lease. All rules and regulations
shall, to the extent reasonably practicable, be uniformly applicable to all
tenants and occupants and shall not interfere with Tenant's use of the Premises
in any material manner. In the event of a conflict between the rules and
regulations and the provisions of this Lease, the provisions of this Lease shall
prevail.
36. SUCCESSORS AND ASSIGNS
This Lease will be binding upon and inure to the benefit of
the respective heirs, personal and legal representatives, successors and
permitted assigns of the parties hereto.
37. QUIET ENJOYMENT
In accordance with and subject to the terms and provisions of
this Lease, Landlord warrants that it has full right to execute and to perform
under this Lease and to grant the estate demised. Tenant, upon Tenant's payment
of Rent and performing of all of the terms, conditions, covenants, and
agreements as and when required in this Lease, shall peaceably and quietly have,
hold and enjoy the Premises during the full Lease Term.
38. ENTIRE AGREEMENT
This Lease, together with the BLI Rider, exhibits, schedules,
addenda and guaranties (as the case may be) fully incorporated into this Lease
by this reference, contains the entire agreement between the parties hereto
regarding the subject matters referenced herein and supersedes all prior oral
and written agreements between them regarding such matters. This Lease may be
modified only by an agreement in writing dated and signed by Landlord and Tenant
after the date hereof.
39. HAZARDOUS MATERIALS
A. REPRESENTATION. Tenant represents, warrants and covenants
that (1) the Premises will not be used for any dangerous, noxious or offensive
trade or business and that it will not cause or maintain a nuisance there, (2)
it will not bring, generate, treat, store, use or dispose of Hazardous
Substances at the Premises other than use in the ordinary course of business and
in compliance with all applicable laws, (3) it shall, with respect to Tenant's
use and occupancy of the Premises, the parking lot and any other area of the
Building, as applicable, at all times comply with all Environmental Laws (as
hereinafter defined) and shall cause the Premises, while in the possession and
control of Tenant to comply, and (4) Tenant will keep the Premises free of any
lien imposed pursuant to any Environmental Laws. Only for purposes of this
paragraph entitled "Representation", the term "Premises" shall mean, only with
respect to Tenant's use and occupancy of the Premises, the Building including
Common Areas, parking areas, greenspace and all other elements thereof.
B. REPORTING REQUIREMENTS. Tenant warrants that it will
promptly deliver to the Landlord, (i) copies of any documents received from the
United States Environmental Protection Agency and/or any state, county or
municipal environmental or health agency concerning the Tenant's operations upon
the Premises; and (ii) copies of any documents submitted by the Tenant to the
United States Environmental Protection Agency and/or any state, county or
municipal environmental or health agency concerning its operations on the
Premises, including but not limited to copies of permits, licenses, annual
filings, registration forms.
C. TERMINATION, CANCELLATION, SURRENDER. At the Expiration
Date or earlier termination of this Lease, Tenant shall surrender the Premises
to Landlord free of any and all Hazardous Substances which have been placed on,
in or about the Premises by Tenant or Tenant's agents, and in compliance with
all Environmental Laws. Landlord may at Landlord's expense at the end of the
term, order a clean-site certification, environmental audit or site assessment
with respect to the Premises the cost of which shall be reimbursed by Tenant to
Landlord in the event such environmental audit reflects a violation of this
Section 39 by Tenant.
D. ACCESS AND INSPECTION. Landlord shall have the right,
subject to not materially disturbing Tenant's peaceful use and occupancy of the
Premises and the Common Areas and subject to reasonable advance notice, except
in the instance of emergencies, but not the obligation, at all times during
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<PAGE>
the term of this Lease to (i) enter upon and inspect the Premises, (ii) conduct
tests and investigations and take samples to determine whether Tenant is in
compliance with the provisions of this article, and (iii) request lists of all
Hazardous Substances used, stored or located on the Premises; the cost of all
such inspections, tests and investigations to be borne by Landlord, unless,
however, said inspections, tests and investigations reflect a violation of
Environmental Laws by Tenant in which instance the Tenant shall promptly either
pay or reimburse Landlord for all inspections, tests and investigations.
Promptly upon the written request of Landlord, from time to time, if Landlord
shall reasonably suspect a violation of Environmental Laws, Landlord may obtain
an environmental site assessment or environmental audit report prepared by an
environmental engineering firm acceptable to Landlord to assess, with a
reasonable degree of certainty, the presence or absence of any Hazardous
Substances and the potential costs in connection with abatement, clean-up, or
removal of any Hazardous Substances found on, under, at, or without the
Premises. If such audit reveals a violation of Environmental Laws caused by
Tenant or Tenant's agents, or the presence of Hazardous Substances not in the
Premises upon delivery of possession to Tenant, and such was not caused by
Landlord or its agents, the Tenant shall pay the cost of such audit. Tenant will
reasonably cooperate with Landlord, at no cost or expense to Tenant, and allow
Landlord and Landlord's representatives access, upon ten (10) days notice
(except in the case of an emergency), to any and all parts of the Premises and
to the records of Tenant with respect to the Premises for environmental
inspection purposes at any time. In connection therewith, Tenant hereby agrees
that Landlord, or Landlord's agent, may perform any testing upon or of the
Premises that Landlord's deems reasonably necessary for the evaluation of
environmental risks, costs, or procedures, including soils or other sampling or
coring. Landlord shall repair and restore the Premises damaged during such
testing unless testing reveals a violation by Tenant of Environmental Laws in
which case all such expenses shall be that of Tenant. Landlord shall use
reasonable effort to minimize any disruption or interference with Tenant's
operations in the Premises in connection with such inspection and/or testing.
E. VIOLATIONS - ENVIRONMENTAL DEFAULTS. Tenant shall give to
Landlord immediate verbal and follow-up written notice of any actual or
threatened spills, releases or discharges of Hazardous Substances on the
Premises, caused by the acts or omissions of Tenant or its agents, employees,
representatives, invitees, licensees, subtenants, customers or contractors.
Tenant covenants to promptly investigate, clean up and otherwise remediate any
spill, release or discharge of Hazardous Substances in or about the Premises or
the Building, including but not limited to those caused by the acts or omissions
of Tenant or its agents, employees, representatives, invitees, licensees,
subtenants, customers or contractors at Tenant's sole cost and expense; such
investigation, clean up and remediation to be performed in accordance with all
Environmental Laws and after Tenant has obtained Landlord's written consent,
which shall not be unreasonably withheld or delayed. Tenant shall return the
Premises to the condition existing prior to the introduction of any such
Hazardous Substances by Tenant or Tenant's agents.
(1) In the event of (1) a violation of an
Environmental Law by Tenant, (2) a release, spill or discharge of a Hazardous
Substance on or from the Premises, or (3) the discovery of an environmental
condition requiring response which violation, release, or condition is
attributable to the acts or omissions of Tenant, its agents, employees,
representatives, invitees, licensees, subtenants, customers, or contractors, or
(4) an emergency environmental condition which is the result of an act of Tenant
(collectively "Environmental Defaults"), Landlord shall have the right, but not
the obligation, within ten (10) business days after notice to Tenant, except in
the case of an emergency which requires more prompt action, to enter the
Premises, to supervise and approve any actions taken by Tenant to address the
Environmental Default; and in the event Tenant fails to immediately address such
Environmental Default, then Landlord may perform, at Tenant's expense, any
lawful actions necessary to address the Environmental Default.
(2) Landlord has the right, but not the obligation to
cure any Environmental Defaults, has the reasonable right to suspend some or all
of the operations to the extent that the operations have caused the
Environmental Default of the Tenant until it has determined to its sole
satisfaction that appropriate measures have been taken, and has the right to
terminate this Lease upon the occurrence of an Environmental Default.
F. ADDITIONAL RENT. Any expenses which the Landlord incurs,
which are to be at Tenant's expense pursuant to this Article, will be considered
Additional Rent under this Lease and shall be paid by Tenant on demand by
Landlord.
G. ASSIGNMENT AND SUBLETTING. Notwithstanding anything to the
contrary in this Lease, the Landlord may condition its approval of any
assignment or subletting by Tenant to an Assignee or Subtenant that in the
judgment of the Landlord, reasonably exercised, does not create any additional
environmental exposure.
H. INDEMNIFICATIONS.
(1) INDEMNIFICATION OF LANDLORD. Tenant shall
indemnify, defend (with counsel approved by Landlord) and hold Landlord and
Landlord's affiliates, shareholders, directors, officers, employees and agents
harmless from and against any and all claims, judgments, damages (including
consequential damages), penalties, fines, liabilities, losses, suits,
administrative proceedings, costs and expenses of any kind or nature which arise
out of or in anyway related to any Environmental Default by Tenant, its agents,
employees, representatives, invitees, licensees, subtenants, customers or
contractors during or after the term of this Lease
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<PAGE>
(including, but not limited to, attorneys', consultant, laboratory and expert
fees expert fees and including without limitation, diminution in the value of
the Premises, damages for the loss or restriction on use of rentable or usable
space or of any amenity of the Premises and damages arising from any adverse
impact on marketing of space), arising from or related to the use, presence,
transportation, storage, disposal, spill, release or discharge of Hazardous
Substances on or about the Premises, to the extent caused by Tenant or Tenant's
agents, employees, representatives, invitees, licensees, subtenants, customers
or contractors.
(2) INDEMNIFICATION OF TENANT. Landlord shall
indemnify, defend (with counsel reasonably approved by Tenant) and hold Tenant
and Tenant's affiliates, shareholders, directors, officers, employees and
agents, harmless from and against any and all claims, judgments, damages
(including consequential damages), penalties, fines, liabilities, losses, suits,
administrative proceedings, costs and expenses of any kind or nature which arise
out of or are in any way related to an environmental condition constituting a
violation of this Section, except due to the acts of Tenant or Tenant's agents,
employees, representatives, invitees, licensees, subtenants, customers or
contractors.
I. DEFINITIONS.
(1) "Hazardous Substance" means, (i) asbestos and any
asbestos containing material and any substance that is then defined or listed
in, or otherwise classified pursuant to, any Environmental Laws or any
applicable laws or regulations as a "hazardous substance", "hazardous material",
"hazardous waste", "infectious waste", "toxic substance", "toxic pollutant" or
any other formulation intended to define, list, or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or Toxicity Characteristic
Leaching Procedure (TCLP) toxicity, (ii) any petroleum and drilling fluids,
produced waters, and other wastes associated with the exploration, development
or production of crude oil, natural gas, or geothermal resources and (iii)
petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas,
radioactive material (including any source, special nuclear, or by-product
material), and medical waste. Excepted from the foregoing shall be substances
(for example, those used in construction or cleaning supplies or office
machines) which contain Hazardous Substances but in amounts and/or quantities
which comply with all Environmental Laws as hereinbelow defined.
(2) "Environmental Laws" collectively means and
includes all present and future laws and any amendments (whether common law,
statute, rule, order, regulation or otherwise), permits, and other requirements
or guidelines of governmental authorities applicable to the Premises and
relating to the environment and environmental conditions or to any Hazardous
Substance (including, without limitation, CERCLA, 42 U.S.C. ss. 9601, et. seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901, et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801, et seq., the
Federal Water Pollution Control Act, 33 U.S.C. ss.1251, et seq., the Clean Air
Act, 33 U.S.C. ss. 7401, et seq., the Clear Air Act, 42 U.S.C. ss.741, et seq.,
the Toxic Substances Control Act, 15 U.S.C. ss. 2601-2629, the Safe Drinking
Water Act, 42 U.S.C. ss. 300f-300j, the Emergency Planning and Community
Right-To-Know Act, 42 U.S.C. ss. 1101, et seq., and any so-called "Super Fund"
or "Super Lien" law, any law requiring the filing of reports and notices
relating to hazardous substances, environmental laws administered by the
Environmental Protection Agency, and any similar state and local laws and
regulations, all amendments thereto and all regulations, orders, decisions, and
decrees now or hereafter promulgated thereunder concerning the environment,
industrial hygiene or public health or safety.)
J. RADON. RADON GAS: Radon is a naturally occurring
radioactive gas that, when it has accumulated in a building in sufficient
quantities, may present health risk to persons who are exposed to it over time.
Levels of radon that exceed Federal and State Guidelines have been found in
buildings in Florida. Additional information regarding radon and radon testing
may be obtained from your county public health unit.
K. SURVIVAL OF INDEMNIFICATIONS. All indemnities herein shall
survive termination or expiration of this Lease.
40. BANKRUPTCY PROVISIONS
A. EVENT OF BANKRUPTCY. If this Lease is assigned to any
person or entity pursuant to the provisions of the United States Bankruptcy
Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), any and all monies
or other consideration payable to Landlord or otherwise to be delivered to
Landlord in connection with such assignment shall be paid or delivered to
Landlord, shall be and remain the exclusive property of Landlord, and shall not
constitute the property of Tenant or of the estate of Tenant within the meaning
of the Bankruptcy Code. Any and all monies or other considerations constituting
Landlord's property under this Section not paid or delivered to Landlord shall
be held in trust for the benefit of Landlord and shall be promptly paid or
delivered to Landlord. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. For purposes of this Lease, an
"Event of Bankruptcy" shall mean the filing of a voluntary petition by Tenant or
the entry of an order for relief against Tenant, under Chapter 7, 11 or 13 of
the Bankruptcy Code (or the conversion to a Chapter 11 or 13 proceeding of a
proceeding that is filed by or against Tenant under any other Chapter of the
Bankruptcy Code).
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B. ADDITIONAL REMEDIES. In addition to any rights or remedies
hereinbefore or hereinafter conferred upon Landlord under the terms of this
Lease, the following remedies and provisions shall specifically apply in the
event Tenant is in default of this Lease beyond applicable notice and cure
periods:
(1) In all events, any receiver or trustee in
bankruptcy shall either expressly assume or reject this Lease within ninety (90)
days following the entry of an "Order for Relief" or within such earlier time as
may be provided by applicable law.
(2) In the event of an assumption of this Lease by a
debtor or by a trustee, such debtor or trustee shall within thirty (30) days
after such assumption (i) cure any default or provide adequate assurance that
defaults will be promptly cured; (ii) compensate Landlord for actual pecuniary
loss or provide adequate assurance that compensation will be made for actual
losses, including, but not limited to, all attorneys' fees and costs incurred by
Landlord resulting from any such proceedings; and (iii) provide adequate
assurance of future performance.
(3) Where an Event of Default exists under this Lease
beyond applicable notice and cure periods, the trustee or debtor assuming this
Lease may not require Landlord to provide services or supplies incidental to
this Lease before its assumption by such trustee or debtor, unless Landlord is
compensated under the terms of this Lease for such services and supplies
provided before the assumption of such Lease.
(4) The debtor or trustee may only assign this Lease
if (i) it is assumed and the assignee agrees to be bound by this Lease, (ii)
adequate assurance of future performance by the assignee is provided, whether or
not there has been a default under this Lease, and (iii) the assignee has been
approved by Landlord in accordance with Section 13 or is an assignee permitted
under Section 13. Any consideration paid by any assignee in excess of the rental
reserved in this Lease shall be the sole property of, and paid to, Landlord.
(5) Landlord shall be entitled to the Rent provided
under the Federal Bankruptcy Code subsequent to the commencement of an Event of
Bankruptcy.
(6) Any security deposit given by Tenant to Landlord
to secure the future performance by Tenant of all or any of the terms and
conditions of this Lease shall be automatically transferred to Landlord upon the
entry of an "Order of Relief", such being deemed a material part of the
consideration for Landlord's agreement to enter into this Lease.
(7) The parties agree that Landlord is entitled to
adequate assurance of future performance of the terms and provisions of this
Lease in the event of an assignment under the provisions of the Bankruptcy Code.
For purposes of any such assumption or assignment of this Lease, the parties
agree that the term "adequate assurance" shall include, without limitation, at
least the following: (i) any proposed assignee must have, as demonstrated to
Landlord's reasonable satisfaction, a net worth (as defined in accordance with
generally accepted accounting principles consistently applied) in an amount
sufficient to assure that the proposed assignee will have the resources to meet
the financial responsibilities under this Lease, including the payment of all
Rent; the financial condition and resources of Tenant are material inducements
to Landlord entering into this Lease; (ii) any assumption of this Lease by a
proposed assignee shall not adversely affect Landlord's relationship with any of
the remaining tenants in the Building taking into consideration any and all
other "use" clauses and/or "exclusivity" clauses which may then exist under
their leases with Landlord; and (iii) any proposed assignee must not be engaged
in any business or activity which it will conduct on the Premises and which will
subject the Premises to contamination by any Hazardous Materials.
41. FIRE PREVENTION SYSTEMS
The Tenant shall be responsible for the cost of any change,
modification, alteration or installation of any new or existing sprinkler
system, fire extinguishing system and/or fire detection system which may now or
hereafter be required as follows:
A. If the National Board of Fire Underwriters or any local
Board of Fire Underwriters or Insurance Exchange (or other bodies hereafter
exercising similar functions) shall require or recommend the installation of
fire extinguishers, a "sprinkler system," fire detection and prevention
equipment (including, but not limited to, smoke detectors and heat sensors), or
any changes, modifications, alterations, or the installation of additional
sprinkler heads or other equipment for any existing sprinkler, fire
extinguishing system, and/or fire detection system for any reason, to the extent
attributable to Tenant's specific use of the Premises or Alterations performed
by Tenant; OR
B. If any law, regulation, or order or if any bureau,
department, or official of the Federal, State, and/or Municipal Governments
shall require or recommend the installation of fire extinguishers, a "sprinkler
system," fire detection and prevention equipment (including, but not limited to,
smoke detectors and heat sensors), or any changes, modifications, alterations,
or the installation of additional sprinkler heads or other equipment for any
existing sprinkler system, fire extinguishing system, and/or fire detection
system for any reason, to the extent attributable to Tenant's specific use of
the Premises or Alterations performed by Tenant; OR
C. If any such installations, changes, modifications,
alterations, sprinkler heads, or other equipment become necessary to prevent the
imposition of a penalty, an additional charge, or an increase in the fire
insurance rate as fixed by said
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BLUE LAKE STANDARD LEASE
<PAGE>
Board or Exchange, from time to time, or by any fire insurance company as a
result of the use of the Premises whether or not the same is a Permitted Use
under this Lease.
D. The Landlord may elect to perform the work and charge the
cost thereof to Tenant as Additional Rent. The Tenant shall pay to Landlord the
full cost of such work within thirty (30) days after Landlord has presented
invoices and/or paid receipts for the same. If the Landlord does not elect to
perform such work, the Tenant shall immediately proceed, at its sole cost, to
perform the work upon the following conditions:
(i) a general contractor licensed in Florida and
reasonably approved by Landlord shall be utilized
(ii) all laws, ordinances and regulations governing
such work shall be complied with
(iii) a payment and performance bond in Landlord's
favor and with a surety acceptable to Landlord shall be obtained
(iv) the construction contract and all plans and
specifications for the work shall be subject to Landlord's reasonable approval.
42. SPECIAL EVENTS
The Tenant shall not, without the prior written consent of the Landlord
which shall not be unreasonably withheld or delayed, schedule, advertise or
undertake any exposition, promotion or other type of special event at the
Premises. Any approval of the Landlord to a special event may include, but not
be limited to, at the Landlord's option, to reasonable conditions such as
guidelines for traffic and pedestrian control, security, parking and other
considerations in the interest of maintaining the health and safety for both the
Tenant's invitees as well as that of other tenants. In addition, the Landlord
may, in its reasonable discretion, require the Tenant to have delivered a bond
by a surety acceptable to Landlord to guaranty any financial undertakings of any
indemnification in connection with a special event.
43. MISCELLANEOUS
A. If Tenant has a lease for other space in the Building, an
Event of Default by Tenant under such lease beyond applicable notice and cure
periods will constitute a default hereunder.
B. If any term or condition of this Lease or the application
thereof to any person or circumstance is, to any extent, invalid or
unenforceable, the remainder of this Lease, or the application of such term or
condition to persons or circumstances other than those as to which it is held
invalid or unenforceable, is not to be affected thereby and each term and
condition of this Lease is to be valid and enforceable to the fullest extent
permitted by law. This Lease will be construed in accordance with the laws of
the State of Florida.
C. Submission of this Lease to Tenant does not constitute an
offer, and this Lease becomes effective only upon execution and delivery by both
Landlord and Tenant.
D. Tenant acknowledges that it has not relied upon any
statement, representation, prior or contemporaneous written or oral promises,
agreements or warranties, except such as are expressed herein.
E. Tenant agrees to pay, before delinquency, all taxes
assessed during the Lease Term agreement (i) all personal property, trade
fixtures, and improvements located in or upon the Premises and (ii) any
occupancy interest of Tenant in the Premises. Landlord agrees to pay all real
estate taxes and assessments against the Building before the Building would be
sold by tax deed to pay such delinquent taxes.
F. If Tenant, with Landlord's consent, occupies the Premises
or any part thereof for the purpose of conducting business prior to the Rent
Commencement Date all provisions of this Lease will be in full force and effect
commencing upon such occupancy, and Base Rent and Additional Rent, where
applicable, for such period will be paid by Tenant at the same rate herein
specified.
G. Each party represents and warrants that it has not dealt
with any agent or broker in connection with this transaction except for Blue
Lake Realty, Inc. and the agents or brokers specifically set forth in the BLI
Rider whose commissions shall be paid by Landlord pursuant to separate
agreement. If either party's representation and warranty proves to be untrue,
such party will indemnify the other party against all resulting liabilities,
costs, expenses, claims, demands and causes of action, including reasonable
attorneys' fees and costs through all appellate actions and proceedings, if any.
The foregoing will survive the end of the Lease Term.
H. Neither this Lease nor any memorandum hereof will be
recorded by Tenant.
I. Nothing contained in this Lease shall be deemed by the
parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and
Tenant, it being expressly understood and agreed that neither the method of
computation of Rent nor any other provisions contained in this Lease nor any act
of the parties hereto shall be deemed to create any relationship between
Landlord and Tenant other than the relationship of landlord and tenant.
J. Whenever in this Lease the
context allows, the word "including" will be deemed to
mean "including without limitation". The headings of
articles, sections or paragraphs are for convenience
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BLUE LAKE STANDARD LEASE
<PAGE>
only and shall not be relevant for purposes of interpretation of the provisions
of this Lease.
K. Except as otherwise stated in this Lease, this Lease does
not create, nor will Tenant have, any express or implied easement for or other
rights to air, light or view over or about the Building or any part thereof.
L. Landlord reserves the right, upon reasonable advance notice
to Tenant, except in the case of an emergency, to use, install, monitor, and
repair pipes, ducts and conduits within the walls, columns, and ceilings of the
Premises. Landlord shall use all reasonable efforts to not materially interfere
with Tenant's peaceful use and occupancy of the Premises.
M. Any acts to be performed by Landlord under or in connection
with this Lease may be delegated by Landlord to its managing agent or other
authorized person or firm. Provided, however that any such delegation shall not
reduce or alter the obligations to be performed by Landlord as set forth in this
Lease.
N. It is acknowledged that each of the parties hereto has been
fully represented by legal counsel and that each of such legal counsel has
contributed substantially to the content of this Lease. Accordingly, this Lease
shall not be more strictly construed against either party hereto by reason of
the fact that one party may have drafted or prepared any or all of the terms and
provisions hereof.
O. If more than one person or entity is named herein as
Tenant, their liability hereunder will be joint and several. In case Tenant is a
corporation, Tenant (a) represents and warrants that this Lease has been duly
authorized, executed and delivered by and on behalf of Tenant and constitutes
the valid and binding agreement of Tenant in accordance with the terms hereof,
and (b) Tenant shall deliver to Landlord or its agent, within three (3) business
days of the execution of this Lease, executed by Tenant, certified resolutions
of the board of directors authorizing Tenant's execution and delivery of this
Lease and the performance of Tenant's obligations hereunder. In case Tenant is a
partnership, Tenant represents and warrants that all of the persons who are
general or managing partners in said partnership have executed this Lease on
behalf of Tenant, or that this Lease has been executed and delivered pursuant to
and in conformity with a valid and effective authorization therefor by all of
the general or managing partners of such partnership, and is and constitutes the
valid and binding agreement of the partnership and every partner therein in
accordance with its terms. It is agreed that each and every present and future
partner in Tenant, to the extent that Tenant is a partnership, shall be and
remain at all times jointly and severally liable hereunder and that neither the
death, resignation or withdrawal of any partner, nor the subsequent modification
or waiver of any of the terms and provisions of this Lease, shall release the
liability of such partner under the terms of this Lease unless and until
Landlord shall have consented in writing to such release.
P. Landlord has made no inquiries about and makes no
representations (express or implied) concerning whether Tenant's proposed use of
the Premises is permitted under applicable law, including applicable zoning law;
should Tenant's proposed use be prohibited, Tenant shall be obligated to comply
with applicable law and this Lease shall nevertheless remain in full force and
effect. Landlord covenants that the Building is zoned to permit corporate
headquarters office use as contemplated in the BLI Rider.
Q. Notwithstanding anything to the contrary in this Lease, if
Landlord or Tenant cannot perform any of its non-monetary obligations due to
events beyond that party's control, the time provided for performing such
obligations shall be extended by a period of time equal to the duration of such
events. Events beyond either party's control include, but are not limited to,
hurricanes and floods and other acts of God, war, civil commotion, labor
disputes, strikes, fire, flood or other casualty, shortages of labor or
material, government regulation or restriction and weather conditions. Nothing
herein contained shall constitute a waiver or mitigation of Tenant's
responsibility to pay Rent.
R. Notwithstanding anything to the contrary contained in this
Lease, in the event of any litigation under this Lease the prevailing party will
be reimbursed by the non-prevailing party for all reasonable attorneys' fees and
costs including through all appellate actions and proceedings, including
bankruptcy proceedings.
S. This Lease and the schedules and riders attached, form part
of this Lease together with the Rules and Regulations adopted and promulgated by
Landlord and set forth all the covenants, promises, assurances, agreements,
representations, conditions, warranties, statements and understandings
("Representations") between Landlord and Tenant concerning the Premises and the
Building and there are no Representations, either oral or written between them
other than those in this Lease. This Lease supersedes and revokes all previous
negotiations, arrangements, letters of intent, offers to lease, lease proposals,
brochures, Representations and information conveyed whether oral or in writing,
between the parties hereto or their respective representatives or any other
person purporting to represent Landlord or Tenant. Tenant acknowledges it has
not been induced to enter into this Lease by any representations not set forth
in this Lease, and has not relied on any such Representations not set forth
herein, no such Representations not set forth herein shall be used in the
interpretation or construction of this Lease, and the Landlord shall have no
liability for any consequences arising as a result of any such Representations
not set forth herein. Except as herein otherwise provided, no subsequent
alteration, amendment, change, or addition to this Lease shall be binding upon
Landlord or Tenant unless in writing and signed by each of them.
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<PAGE>
T. Time shall be of the essence for all actions required under
this Lease.
44. DELIVERY OF GUARANTY
If Tenant is required to deliver a Guaranty by a Guarantor, Tenant
shall deliver a guaranty in the form of guaranty (the "Guaranty"),together with
the form of Guarantor's resolution in the form attached hereto attached as
Exhibit "K", and the Guarantor's certificate of financial standing attached
hereto as Exhibit "K" fully executed by each Guarantor. If a Guaranty is
required pursuant to the BLI Rider then, at or prior to the parties' execution
of this Lease Landlord has delivered to Tenant a form of guaranty (the
"Guaranty") to be signed by each Guarantor identified in the BLI Rider. Tenant's
failure to deliver the Guaranty fully executed by the Guarantor within 5 days
from the earliest date on which this Lease has been signed by the parties shall
constitute an Event of Default.
45. CONFIDENTIALITY
Landlord and Tenant acknowledge that the terms and provisions of this
Lease have been negotiated based upon a variety of factors, occurring at a
coincident point in time, including, but not limited to: (i) the individual
principals involved and the financial strength of Tenant, (ii) the nature of
Tenant's business and use of the Premises, (iii) the current leasing market
place and the economic conditions affecting rental rates, (iv) the present and
projected tenant mix of the Building, and (v) the projected juxtaposition of
tenants on the floor(s) upon which the Premises are located and the floors
within the Building. Therefore, recognizing the totality, uniqueness, complexity
and interrelation of the aforementioned factors, the Tenant agrees that
information concerning Landlord and the Blue Lake Building, and the financial
terms of this Lease, are confidential and proprietary information and Tenant
agrees that it will use all reasonable efforts to not permit the duplication or
disclosure (whether by word of mouth, mechanical reproduction, physical tender
or visual or oral transmission or review) of any such information, including the
terms and conditions of this Lease to third parties who could, in any way, be
considered presently or in the future as prospective tenants of the Building, to
any person, unless such duplication, use, or disclosure is specifically
authorized by Landlord in writing. Confidential information is not meant to
include any information that is in the public domain. In addition, Tenant agrees
to use all reasonable efforts to keep the terms and conditions as contained
herein confidential, with the following exceptions:
A. Tenant may disclose the contents of this Lease to its
advisors in the contemplated transaction, so long as the advisor agrees in
writing to use all reasonable efforts to maintain confidentiality;
B. Tenant may disclose such information as required by court
order;
C. Tenant may disclose such information as required by any
laws, regulations or requirements applicable to Tenant or any affiliate of
Tenant; and
D. Tenant may disclose the contents of this Lease to potential
assignees or subtenants, so long as such potential assignees or subtenants agree
in writing to use all reasonable efforts to maintain confidentiality.
Tenant shall issue no press release or statement to the media regarding
this Lease without the Landlord's prior approval, which approval shall not be
unreasonably withheld or delayed.
46. SIGNAGE CRITERIA
Tenant shall be permitted to erect or enplace a sign, as applicable, in
conformance with the BLCC design criteria for the Premises as attached hereto
and made a part hereof as Exhibit "H".
47. CARPOOLING, MASS TRANSIT AND TRAFFIC CONTROL
Tenant acknowledges that, due to the nature and size of the Building,
Landlord may be required by applicable governmental authorities to participate
in, and require tenants to participate in, carpool programs, mass transit
programs, flexible shift and other flexible time programs, and other traffic
reduction programs and measures. Tenant agrees to participate in and comply with
such programs and measures required by applicable governmental authorities or
agreed to by Landlord with respect to the Building. Tenant's breach of this
provision shall not be a default under this Lease or expose Tenant otherwise to
damages or injunction.
48. LEASE CONTINGENCIES
This Lease shall be conditioned and contingent upon the occurrence of
the following event: within ten (10) days from the Effective Date hereof,
Landlord's mortgagee(s) and other lenders have approved this Lease and the
Tenant (including but not limited to Tenant's financial condition).
49. ASSOCIATION
The Building, in which the Premises are located shall be subject to a
Declaration of Restrictive Covenants, Easements and Conditions (the
"Declaration") which shall govern certain matters with respect to the
development, management and maintenance of the Building and to satisfy
requirements with respect to surface water management, drainage and other
aspects of the Building. The Declaration shall provide for the creation of a
property owner's association ("Association") to perform certain management,
operational and maintenance obligations pursuant thereto. The Association will
have the authority to levy fees and assessments against the Building, including
the Building, to pay for the obligations of the Association.
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BLUE LAKE STANDARD LEASE
<PAGE>
This Lease is subject to the Declaration, upon the recordation of the
Declaration, and to the rights of the Association pursuant thereto.
Additionally, fees and assessments of the Association paid by the Landlord shall
be deemed Operating Expenses for the purpose of determining Overhead Rent. The
Declaration shall not materially impair Tenant's rights under this Lease.
50. VENDING MACHINES
No Tenant shall obtain, or accept for use in the Premises, vending
machines or pay telephones, or other similar services from any persons other
than those specifically designated by Landlord to offer or distribute such
services. Landlord shall designate at least one vendor for such services.
51. FOOD SERVICE
At all times during the term of the Lease (subject; however, to
reasonable temporary interruptions), Landlord will provide a cafeteria or other
food service facility within the Building campus to serve breakfast and lunches
to employees of Tenant and other tenants. The scope and types of food to be
served, and all other aspects of such food service facility shall be determined
in Landlord's sole discretion.
52. AUDITORIUM/CONFERENCE CENTER
Landlord will make available to Tenant on an as available, first come -
first serve basis, the existing auditorium and conference center, at a cost no
greater a cost than that charged to other tenants, together with Landlord's
charges for setup and cleanup, and for any damages thereto resulting from
Tenant's use thereof.
53. TELECOMMUNICATIONS
A. TENANT'S RESPONSIBILITY. Tenant acknowledges and agrees
that all telephone and telecommunications and data services, including wiring
and installation therefor, desired by Tenant shall be ordered and utilized at
the sole expense of Tenant. Unless Landlord otherwise requests or consents in
writing, all of Tenant's telecommunications equipment shall be and remain solely
in the Premises and the telephone closets on the floor on which the Premises is
located, in accordance with the rules and regulations adopted by Landlord from
time to time. Unless otherwise specifically agreed to in writing, Landlord shall
have no responsibility for the maintenance of Tenant's telecommunications or
data equipment, including wiring; nor for any wiring or other infrastructure to
which Tenant's telecommunications or data equipment may be connected. Tenant
agrees that, to the extent any such service is interrupted, curtailed or
discontinued, Landlord shall have no obligation or liability with respect
thereto and it shall be the sole obligation of Tenant at its expense to obtain
substitute service, unless caused by the negligence or willful misconduct of the
Landlord, its agents, employees, or contractors.
B. REMOVAL OF EQUIPMENT AND WIRING AND OTHER FACILITIES. Any
and all telecommunications and data equipment installed in the Premises or
elsewhere in the Building or the Project by or on behalf of Tenant, including
wiring, or other facilities for telecommunications or data transmittal
reception, shall be removed prior to the expiration or earlier termination of
the Term, by Tenant at its sole cost or, at Landlord's election, by Landlord at
Tenant's sole cost, with the cost therefor to be paid as Additional Rent.
C. NEW TELECOMMUNICATIONS OR DATA PROVIDER INSTALLATIONS.
Tenant acknowledges that the Landlord has or will enter into an agreement with a
telephone, telecommunications or data provider for the installation and
maintenance of telecommunications lines to and within the Building and that such
lines will be the exclusive lines serving the Building and the Premises. In the
event that Tenant wishes at any time to utilize the services of a telephone,
telecommunications or data provider whose equipment is not then servicing the
Project, no such provider shall be permitted to install its line within the
Building or Project without first securing the prior written approval of
Landlord, which approval shall be in the Landlord's sole and absolute
discretion. The Landlord's approval, if given, shall not be deemed any kind of
warranty or representation by Landlord, including without limitation, any
warranty or representation as to the suitability, confidence, or financial
strength of the provider without limitation of the foregoing standard and may be
conditioned upon such terms as shall be determined by Landlord in its reasonable
judgment.
D. LIMITS ON PROVIDER RELATIONSHIP. Notwithstanding anything
herein to the contrary, no telephone, telecommunications or data provider shall
be deemed a third-party beneficiary of this Lease.
E. INSTALLATION AND USE OF WIRELESS TECHNOLOGIES. Subject to
Paragraph 56 hereof, Tenant shall not utilize any wireless communications or
data equipment (other than usual and customary cellular telephones), including
antenna and satellite receiver dishes, within the Premises, or the Building or
the Project, without Landlord's prior written consent, which consent may be
arbitrarily withheld. Such consent may be conditioned in such manner so as to
protect Landlord's financial interest and the interest of the Building and the
other tenants therein, in a manner similar to the arrangement described in the
immediately preceding paragraphs.
F. CONSENT NOT LANDLORD WARRANTY. Landlord's consent under
this Section shall not be deemed any kind of warranty or representation by
Landlord, including without limitation, any warranty or representation as to the
suitability, competence or financial strength of provider.
G. TENANT RESPONSIBLE FOR SERVICE INTERRUPTION. Tenant agrees
that to the extent service by its provider is interrupted, curtailed or
discontinued, Landlord shall have no obligation or liability with
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BLUE LAKE STANDARD LEASE
<PAGE>
respect thereto and it shall be the sole obligation of Tenant at its expense to
obtain substitute service as to another, except to the extent caused by the
negligence or willful misconduct of Landlord, its agents, employees or its
contractors..
H. NO THIRD PARTY RIGHTS. The provisions of this Section may
be enforced solely by the Tenant and Landlord, and are not for the benefit of
any other party, specifically without limitation, no telephone or
telecommunications provider shall be deemed a third party beneficiary of the
Lease.
I. LIABILITY FOR EQUIPMENT INTERFERENCE. In the event that
telecommunications or data equipment, wiring and facilities or satellites and
antenna equipment of any kind installed by or at the request of Tenant within
the Premises, on the roof, or elsewhere within or on the Building, or the
Project, causes interference to equipment used by another party, Tenant shall
assume all liability related to such interference. Tenant shall use reasonable
efforts, and shall cooperate with Landlord and other parties to promptly
eliminate such interference. In the event that Tenant is unable to do so, Tenant
will substitute alternative equipment which remedies the situation. If such
interference persists, Tenant shall discontinue the use of such equipment, and
at Landlord's discretion, remove such equipment according to the foregoing
specifications. Tenant agrees to and shall indemnify and hold Landlord harmless
or any liabilities and claims against Landlord resulting from such interference.
54. INCENTIVE PROGRAMS. Tenant acknowledges advice from Landlord that
Landlord may, from time to time, apply for various loans, grants and/or other
incentive programs ("Incentive Programs"), which may enhance the value of the
Building. It is anticipated that certain applications for solicitations may
require a tenant or other possessor of portions of the Building to be the
applicant, co-applicant or participating party in applying for and/or securing
the Incentive Program(s). Within five (5) business days of Landlord's request,
Tenant shall, at Landlord's expense execute, to the extent required as to any
Incentive Program, any and all applications, petitions and/or other
documentation in support of Incentive Program. In any instance in which an
Incentive Program is applied for and secured, Tenant hereby irrevocably assigns
and quit-claims to Landlord any and all rights and interests which Tenant may
claim in and to any benefits or proceeds of the Incentive Programs. The
assignment contained in the immediately preceding sentence is self-effectuating
without need for further confirmation to be effective; however, at the request
of Landlord, Tenant shall execute and deliver such assignment(s), confirmations
with supporting documentation as may from time-to-time be required by Landlord
in furtherance of this Section. Landlord covenants with Tenant that Tenant shall
not incur any liability or obligation by virtue of or associated with the
application, processing or any participation in the securing of any Incentive
Program, and Landlord shall indemnify Tenant in connection therewith. Tenant
further agrees that, except that to the extent necessary in processing any
application for Incentive Programs, Tenant will use all reasonable efforts to
have all information received by Tenant or any employee, shareholder, attorney,
accountant or other party acting by, through or under Tenant shall and remain
confidential as proprietary information owned and reserved solely by Landlord.
Landlord may exclusively, and its sole option, prepare a memorandum of this
Section which shall be executed by Tenant upon request of Landlord and which may
be recorded in the public records of Palm Beach County, Florida.
55. SAVING PROVISION. If any provision of this Lease, or its
application to any situation shall be invalid or unenforceable to any extent,
the remainder of this Lease, or the application thereof to situations other than
that as to which it is invalid or unenforceable, shall not be affected thereby
and every provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.
56. SATELLITE DISH. Landlord agrees that Tenant, at its sole cost and
expense, has the right to install a satellite dish, fibre optics and microwave
transmission equipment (collectively, the "Satellite Dish") on the roof of the
Building. Should Tenant elect to install a Satellite Dish on the roof of the
Building, Tenant agrees to install the Satellite Dish in accordance with all
applicable codes and laws and sound engineering and construction practices.
Tenant further agrees to use any specified roofing contractor or other general
contractor required by Landlord to install the Satellite Dish so as avoid any
compromise to the roof structure or membrane. The architectural and engineering
plans and specifications for the Satellite Dish and any required Alterations to
the Building in connection therewith shall be subject to the Landlord's approval
as an Alteration under this Lease. Tenant warrants and represents that any
emissions from the Satellite Dish are not harmful to humans and indemnifies the
Landlord from and against any claims thereof in the same manner as for any other
Environmental Default hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties have signed and delivered this Lease as
of the day and year first above written.
Witnesses: "TENANT"
CYBEAR, INC., a Florida corporation
/s/ ANNET GONZALEZ By: /s/ SCOTT LODIN
- ----------------------------- ---------------------------------------
Annet Gonzalez Print Name: Scott Lodin
______________________________ Title: Vice President/General Counsel
(As to Tenant) [SEAL]
Witnesses: "LANDLORD"
______________________________ BLUE LAKE, LTD., a Florida limited partnership
______________________________
(As to Landlord) By: BLUE LAKE, INC., a Florida corporation, its
general partner
By:______________________________________
Print Name:_______________________________
Authorized Agent:__________________________
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "A"
FLOOR PLAN
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "B"
WORK LETTER AGREEMENT
In the event of any inconsistencies between this Agreement and the
Lease dated currently herewith to which this Agreement is attached as Exhibit
"B", this Agreement shall control. Capitalized terms used in this Agreement
shall, unless otherwise specifically set forth herein, have the same meanings as
in the Lease.
1. Tenant shall complete or cause the completion of improvements to the Premises
as shown on the Final Plans (defined below) and as more fully described in this
Section (the "Work"). Tenant shall retain an architect and engineer from and
amongst a group which shall consist of the published list of pre-approved
architects and engineers at Blue Lake Corporate Center, listed pursuant to
Schedule B-3 to prepare complete and detailed architectural plans and
specifications, and structural, mechanical and engineering plans and
specifications, showing the Work (collectively, the "Construction Plans").
Subject to the Landlord's Contribution for Tenant Improvements, the cost of the
Construction Plans shall be the responsibility of Tenant. The Construction Plans
shall be prepared in a manner as will be acceptable to Landlord in its
reasonable discretion. The Work shall meet or exceed the minimum standards for
the Work ("Minimum Building Materials and Construction") attached hereto as
Exhibit "B-1" and otherwise as determined by Landlord in its reasonable
discretion. It is the intent of the parties that Exhibit "B-1" set forth the
minimum quality of the Work, however, Exhibit "B-1" shall not be construed to
require any particular quantity of the items described therein except to the
extent required by applicable codes or laws. The Construction Plans shall be
consistent with all applicable laws, codes, ordinances and regulations,
including but not limited to the Americans with Disabilities Act of 1990, of
governmental and quasi-governmental entities having jurisdiction regarding the
Work and/or the Building.
Tenant's Construction Plans shall include, but not be limited to, indication or
identification of the following:
A. locations and structural design of all floor area requiring live
load capacities in excess of 75 pounds per square foot;
B. the density of occupancy in large work areas;
C. the location of any food service areas or vending equipment rooms if
permitted by Landlord;
D. areas requiring 24-hour air conditioning, Tenant's supplemental
air-conditioning units (if any), and electrical consumption subverters if
required by Landlord;
E. location of rooms for telephone equipment;
F. locations and types of plumbing, if any, required for toilets (other
than core facilities), sinks, drinking fountains, etc.;
G. light switching of offices, conference rooms, etc.;
H. layouts for specially installed equipment, including computers, size
and capacity of mechanical and electrical services required and heat projection
of equipment;
I. dimensioned location of: (a) electrical receptacles (120 volts),
including receptacles for wall clocks, and telephone outlets and their
respective locations (wall or floor), (b) electrical receptacles for use in the
operation of Tenant's business equipment which requires 208 volts or separate
electrical circuits, (c) electronic calculating, CRT systems, etc., and (d)
special audio-visual requirements;
J. special fire protection equipment and raised flooring where
permitted by Building systems and otherwise approved by Landlord;
K. reflected ceiling plan;
L. information concerning air conditioning loads, including, but not
limited to, air volume amounts at all supply vents;
M. non-building standard ceiling heights and/or materials;
N. materials, colors and designs of wall coverings and finishes;
O. painting and decorative treatment required to complete all
construction;
P. swing of each door;
Q. a schedule for doors (including dimensions for undercutting of doors
to clear carpeting) and frames complete with hardware; and
R. all other information necessary to make the work complete and in all
respects ready for operation.
2. Tenant shall deliver Construction Plans to Landlord for Landlord's approval.
Landlord shall respond to Tenant's request for approval of Tenant's Construction
Plans within ten (10) business days of their submission, during which time the
Landlord's architect and engineer ("Landlord's Consultants") will
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BLUE LAKE STANDARD LEASE
<PAGE>
review the Construction Plans. In the event Landlord or Landlord's Consultants
shall reasonably disapprove of all or a portion of Tenant's Construction Plans,
it shall set forth its reasons therefor in writing in reasonable detail within
such ten (10) business day period. Tenant shall be required to incorporate any
reasonable changes to the Construction Plans as required by Landlord. Landlord
or Landlord's Consultants shall respond to Tenant's request for consent of its
revised plans within three (3) business days of submission unless the revisions
are substantial in which event Landlord's response shall be within five (5)
business days thereafter. Neither the recommendation or designation by the
Landlord of a pre-approved list of architects or contractors shall be deemed to
create any liability on the part of Landlord with respect to the Construction
Plans (whether with respect to design, functionality, specifications, compliance
with legal requirements or otherwise). Tenant shall reimburse Landlord for
reasonable architect, engineer and other professional fees incurred by Landlord
in connection with review of Tenant's Construction Plans and Revisions to the
extent that such relate to an a Landlord-approved structural, roof or mechanical
system modification. However, (i) Tenant may use Landlord's Contribution, if
provided for in the BLI Rider, for such reimbursement, and (ii) reimbursement
shall be limited to customary rates.
3. As used herein, "Final Plans" refers to the Construction Plans after the same
have been approved in writing by Landlord. The Landlord Contribution to cost of
construction, if any, is set forth in the BLI Rider. Tenant shall be responsible
for the entire cost of demolition, if any, and Tenant's Initial Improvements
including any revisions to the Final Plans ("Revisions") subject to the
Landlord's Contribution. Tenant shall obtain, or cause to be obtained, all
necessary governmental permits and commence and diligently pursue at its sole
cost and expense construction of the Work contemplated by the Final Plans,
substantially in accordance with the Final Plans. Tenant shall obtain Landlord's
prior written approval of its building permit application before submission of
same. If applicable, Tenant's plans shall include all information necessary to
reflect Tenant's requirement for the installation of any supplemental air
conditioning system and ductor, electrical, plumbing and other mechanical
systems and all work necessary to connect any special or non-standard facilities
to the Building's base mechanical, electrical and structural systems. Tenant's
submission shall include not less than one (1) set of sepias, three (3) signed
and sealed sets, and six (6) bidding sets of black and white prints for each
bidder.
A. PERFORMANCE OF WORK. The Work shall be constructed in a good and
workmanlike manner substantially in accordance with the Construction Plans. The
Work shall be subject, at the option of Landlord, to the inspection of Landlord,
Landlord's Architect and Landlord's General Contractor from time to time, during
the period in which the Work is being performed, provided that such inspection
does not unreasonably interfere with the completion of the Work. If such
inspections reveal that any of the Work is not being constructed substantially
in conformance with the provisions of this Agreement or the Final Plans, Tenant
at its expense shall correct same forthwith. Only new, first class materials
shall be used in the performance of the Work. At all times during the
construction of the Work, it shall be Tenant's responsibility to cause each of
Tenant's contractors and subcontractors to maintain protection of the Premises
in such a manner as to prevent any damage to the Work, or to adjacent property
and improvements by reason of the performance of the Work. Tenant's contractor
and subcontractors shall properly secure the Premises, including, to the extent
required, the furnishing of temporary guard rails and barricades. Landlord for
good cause shall have the right to require Tenant to terminate any construction
work at any time being performed by or on behalf of Tenant in the Premises, and
to require that any contractor or subcontractor, or any employee of same, leave
the Building. Upon written notification, setting forth in reasonable detail such
good cause, from Landlord to Tenant to cease any work, Tenant shall forthwith
remove from the Premises all agents, employees and contractors of Tenant
performing such work until such time as Landlord shall have given its written
consent for the resumption of such construction work (such consent not to be
unreasonably withheld or delayed), and Tenant shall have no claim for damages of
any nature whatsoever against Tenant in connection therewith.
B. CHANGE ORDERS. Landlord's written approval shall be obtained by
Tenant prior to the undertaking of any construction work which deviates from or
modifies in a substantial manner from the Final Plans. Should Tenant or Tenant's
contractor request or desire to make any substantial changes to the Final Plans,
Tenant shall submit same to Landlord for its approval which shall not be
unreasonably withheld or delayed.
C. INSURANCE. During the course of construction, Tenant or Contractor
shall provide builder's risk insurance equal to the replacement cost of any
improvements being constructed, naming Landlord as an additional insured as its
interests may appears, and owners and contractors protective liability insurance
in an amount of not less than $3,000,000. In addition, Tenant shall maintain the
insurance required pursuant to the Lease.
D. BUILDING RULES AND REGULATIONS. During the course of construction,
Tenant and Contractor shall comply the with Building rules and regulations
relating to construction within the Building. Attached hereto as Exhibit "C" are
such rules and regulations, which Tenant and Contractor shall initial and cause
to be posted during the course of construction.
E. NOTICE OF COMMENCEMENT. Tenant agrees not to cause or permit the
Contractor to commence construction and shall not disburse any funds to
Contractor, any subcontractors, sub-
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<PAGE>
subcontractors, materialmen and laborers until a Notice of Commencement is
recorded pursuant to Chapter 713.13 of the Florida Statutes, a certified copy of
such Notice of Commencement has been posted on the construction site, and an
Affidavit of such posting is furnished to Landlord. Such Notice of Commencement
shall not be recorded without Landlord's prior written consent to the form and
content of same which shall not be unreasonably withheld or delayed. The form of
the Notice of Commencement shall be in accordance with Exhibit "B-2" attached
hereto. Landlord shall be named on the Notice of Commencement to receive copies
of Notices to Owner. Landlord may desire to inquire and communicate directly
with various parties named in statements provided to Landlord by Tenant and
Contractor or those parties who give a Notice to Owner. Tenant hereby authorizes
Landlord to make such inquiries and authorize those parties to furnish the
information required by Landlord.
F. LIENS. Pursuant to the provisions of the Florida Construction Lien
Law (Chapter 713) and this Lease, the interest of the Landlord shall not be
subject to the liens for improvements made by the Tenant, Contractor, any
subcontractor, sub-subcontractor, materialman, supplier or laborer, and the
Lease is hereby deemed to expressly prohibit such liability. Tenant agrees to
notify Contractor, any subcontractors, sub-subcontractors, materialmen, laborers
and suppliers doing Work for Tenant on the Premises of this provision.
G. LANDLORD'S CONTRIBUTION. Notwithstanding anything to the contrary
contained herein, Tenant acknowledges that Landlord is merely providing the
Landlord's Contribution as an incentive for Tenant to enter into this Lease and
Landlord is not in any way acting as a contractor or as any other party with
respect to construction of the Work, and further, that neither the Landlord nor
the Building are liable for, nor stand as security for the claims or liens of
any Contractor, subcontractors, sub-subcontractors, materialmen, laborers and
other third parties, hired by or on behalf of the Tenant, except to the extent
caused by the negligence or willful misconduct of Landlord, its agents,
employees, or contractors.
H. PAYMENT OF LANDLORD'S CONTRIBUTION. Payment of Landlord's
Contribution ("Payment"), shall be made by Landlord (at its election in a check
payable jointly to Tenant and Contractor), monthly, within thirty (30) days
after satisfaction of the following conditions:
(1) The Construction Contract has been fully performed by the
Contractor to date; and
(2) Tenant submits verifiable receipts that it has paid in
full the Contractor on the Construction Contract through the date of the
particular payment; and
(3) As to final payment, all punchlist relating to the Work
has been completed; and
(4) Tenant's architect has certified to Landlord, in form
reasonably acceptable to Landlord, that all of the Work has been performed (as
to monthly payments) or completed (as to final payment) substantially in
accordance with the Final Plans, except as modified by change orders approved in
writing by Landlord; and
(5) The Contractor has furnished to both the Landlord and
Landlord's Architect, a duly and properly executed Contractor's Progress Payment
Affidavit or Final Affidavit, as applicable, complying in all respects to the
provisions of Chapter 713 of Florida Statutes (the "Construction Lien Law"), a
duly and properly executed Contractor's Partial Release of Lien or Final Release
of Lien, as applicable, all in such form and having such content as is
satisfactory to Landlord in its reasonable discretion, duly and properly
executed Partial Releases of Lien or Final Releases of Lien, as applicable, from
each and every subcontractor, sub-subcontractor, materialman, supplier and
laborer and such other documents as Landlord shall be entitled to under the
Construction Lien Law, all in such form and having such content as is
satisfactory to Landlord in its reasonable discretion. In the event Contractor
does not furnish to Landlord all of the aforesaid final releases of lien, then
Landlord shall be entitled to subtract from the amount that Landlord determines
is necessary to transfer to bond or to pay in full any subcontractor,
sub-subcontractor, materialman, laborer who has not furnished a Release of Lien
(but no reduction in the Payment shall be made if the Contractor posts a cash
bond or other surety accessible to Landlord covering such amounts). Landlord
shall have the right to pay directly any subcontractor, sub-subcontractor,
materialman, supplier and laborer listed on the Contractor's Affidavit given in
connection with the Contractor's Application for Payment, and any such other
subcontractor, sub-subcontractor, materialman, supplier and laborer who has
given a Notice to Owner; and
(6) As to final payment, certification by Tenant in form
satisfactory to Landlord that Tenant accepts the Premises, and that all Work has
been substantially completed in accordance with the Final Plans; and
(7) As to final payment, receipt by Landlord of two (2) sets
of detailed and complete As-Built Final Plans of the Work, including all
architectural, structural, mechanical, plumbing and electrical work done in the
Premises; and
(8) As to final payment, evidence reasonably satisfactory to
Landlord that the Work is substantially complete in accordance with the Final
Plans and evidence of approval of such completion by local governmental
authorities; and
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BLUE LAKE STANDARD LEASE
<PAGE>
(9) As to final payment, Tenant is in occupancy of the
Premises and has made its first monthly installment of Base Rent, and is not
otherwise in default of the Lease beyond applicable notice and cure periods; and
(10) As to final payment, Landlord receives a copy of the
Certificate of Occupancy.
All progress payments shall be subject to a ten (10%) percent retainage
held by Landlord until final payment of Landlord's Contribution.
4. Tenant shall have the right to make Revisions from time to time after Final
Plans have been prepared. All Revisions, of a substantial nature (i.e., those
that are material, structural or mechanical in nature) shall be subject to
Landlord's prior written approval, which shall not be unreasonably withheld or
delayed. Landlord shall either approve or disapprove such Revisions within five
(5) business days after submission thereof by Tenant. Without limiting the
generality of the foregoing, no Revision will be approved unless (a) all changes
to and modifications from the Final Plans are circled or highlighted as per
standard practices and (b) said Revisions conform with the requirements of this
Work Letter. The cost of any Revisions shall be borne solely by Tenant and the
Revisions shall not delay the Commencement Date hereunder.
5. Tenant shall use due diligence to complete the Work as soon as may be
practicable.
6. Tenant shall notify Landlord of the date of Substantial Completion at least
five (5) days prior thereto. As used herein, "Substantial Completion" shall mean
that, with the exception of punch-list items, the Work shall have been completed
in accordance with the Final Plans. Landlord and Tenant shall thereupon set a
mutually convenient time for Tenant's Construction Agent and Landlord or
Landlord's Consultant to inspect the Premises. Upon completion of the
inspection, Tenant's Construction Agent shall acknowledge in writing that
substantial completion has occurred.
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "B-1"
TO WORK LETTER AGREEMENT
1. PARTITIONS
(A) Demising Walls:
One hour fire rated construction (unless otherwise required by
code due to existing conditions), full height from floor slab
to underside of upper deck, 3-5/8" 25 gauge (or as
structurally required for height to underside of upper deck)
steel studs spaced per code requirements, 3-1/2" fiberglass
batt insulation for sound attenuation full height of wall,
Type "X" 5/8" gypsum board, taped and finished 2" above
ceiling height ready to receive finishes, and fire taped to
the underside of the upper deck. Construction to include both
sides of wall.
(B) Interior Partitions:
Non-rated wall construction, framed
above ceiling height 2", or to ceiling
height (with zip bead), 3-5/8" 25 gauge
steel studs spaced per code
requirements, minimum 5/8" gypsum
board, taped and finished ready to
receive finishes.
(C) Interior Face of Concrete/Masonry
Walls:
Non-rated wall construction, furred
above ceiling height 2", furring strips
spaced per applicable code, minimum
1/2" gypsum board, taped and finished
ready to receive finishes. No
alterations or changes to exterior wall
without the written consent of the
Landlord
2. DOORS
(A) Interior Entry Doors:
(i). Main Entry: C-Label fire rated
door, 3'-0" X 8'-0" X 1-3/4", two flush solid core
wood, paint grade, steel frame.
(ii). Secondary Entry: same as
above. Landlord to review for
access to mechanical systems
and door requirements. Doors
to be recessed within the tenant
space.
(B) Exterior Entry Doors:
Two flush glass and aluminum non-label doors, 3'-0" X 8'-0",
with aluminum frame.
(C) Interior Doors:
Solid core wood, 3'-0" X 8'-0", paint grade, hollow metal
frame. Match existing for spaces re-using existing doors.
3. HARDWARE
(A) Interior Entry Doors:
Three (3) pair Hager BB1279 4.5" X
4.5" US 26D finish hinges, Lever
lockset Schlage "D" series Athens
model with US 26D finish and to have
top and bottom flush bolts with
threshold and weatherstrips, two door
closers LCN Smooth Series with US
26D finish, two door stoppers model
IVES 435/436 and eight door silencers
model IVES 20.
(B) Exterior Entry Doors:
Three (3) pair Hager BB1279 4.5" X
4.5" US 26D finish hinges, Lever
lockset Schlage "D" series Athens
model with US 26D finish and to have
top and bottom flush bolts with
threshold and weatherstrips, two door
closers LCN Smooth Series with US
26D finish, two door stoppers model
IVES 435/436 and eight door silencers
model IVES 20.
(C) Interior Doors: Three (3) Hager BB1279 4.5" X 4.5" US 26D
finish hinges, Lever latchset Schlage "D" series Athens model
with US 26D finish, one door stopper model IVES 435/436 and
four door silencers model IVES 20.
(D) Tenant shall provide one entry keyed to the Landlord's
building master key (see building engineer) that entry shall
be the closest door to the fire alarm control panel.
4. CEILINGS
(A) For new construction: 2' X 2' Armstrong Cortega #704 ceiling
tile with 15" X 16" white metal grid at 9'-0"
above finish floor.
(B) Existing construction: Match existing.
5. FLOORING
(A) Carpet:
Shaw, Lotus or equivalent 26 ounce commercial grade textured
loop pile direct glue down carpet in work areas and offices.
Vinyl base.
(B) Vinyl (VCT) tiles in kitchen areas.
(C) Ceramic tiles (4" X 4") in bathrooms.
6. FINISHES
(A) Paint - Walls primed first coat, latex based paint single
color.
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BLUE LAKE STANDARD LEASE
<PAGE>
(B) Window Treatments are to be mini-blinds, white, Levelor, to
match existing. The Y-buildings (001, 002, 031, 032, 003, 005)
shall be vertical blinds Satique-off white/3522.
(C) No wallcoverings to be used on exterior masonry/concrete
walls.
7. MECHANICAL
(A) Controls
All thermostats and other controls to
match existing controls (Johnson
Controls, Robert-Shaw, see Building
Engineer).
(B) Variable Air Volume Box:
Match existing VAV (Trane, Carrier)
(C) Registers, Grills:
MetalAire white perforated air diffuser series 7000 Model
PCS-CB-5 (4-way) all 24" X 24"
(D) Ductor:
Ducting shall be 24 gauge sheet metal construction with
appropriate connections and hangers as per code. Flex duct for
drops mounted per code. Match existing shall be code
compliant.
8. ELECTRICAL
(A) Light Fixtures:
2' X 4' four tube recessed fluorescent fixture with electronic
ballast and T-8 lamps or match/re-use existing lighting.
(B) Light Switches:
Toggle type single pole single throw switch.
(C) Exit Lights:
Battery backup and/or emergency
lighting circuit direct wired. Installed
per code.
(D) Receptacles:
Wall mounted duplex at 110 volts 20 amp rating at 16" above
finish floor as per code.
(E) Telephone:
Modular wall mounted outlets with pull string conduit stubbed
above ceiling with pull-string. 3/4" inch conduit supplied
from telephone room to leased space.
(F) Power:
Electric to be individually metered.
9. PLUMBING
Common area restrooms as per existing. New bathrooms and/or renovation
of existing bathrooms as below and are to be ADA compliant:
(A) Toilet Partitions: Formica laminate or equal solid color with
1-1/4" thick panels and 5'-10" high mounted with stainless
steel hardware.
(B) Vanity Top:
Formica laminate or equivalent solid color with ADA compliant
design.
(C) Water Closet:
Wall mounted, American Standard
(D) Per applicable code for ADA and density requirements.
10. LIFE SAFETY SYSTEMS
(A) Fire alarm panel to be Thorn AutoCall AL-1500.
(B) Approved fire alarm contractor is WSA Systems, Inc., contact
Brad Golub
(954) 422-9662.
(C) Fire Sprinkler system per code
11. EXTERIOR ENTRIES
All exterior entries to be per approved style as attached. Landlord to
review.
(A) Y-building entries.
(B) Flex building entries.
(C) Building 021/022/023/042 west face
entries.
12. ARCHITECTURAL STANDARDS
(A) Drawing standards.
(B) CAD storage maintenance standards
13. SIGNAGE
(A) Exterior signage to be submitted by tenant and approved in
writing by Landlord.
(B) Interior signage package to be submitted by tenant and
approved in writing by Landlord.
(C) Temporary directional signage: tenant to submit to Landlord a
signage package. Landlord to review and approve in writing.
14. OTHER
(A) Any exterior details, modifications, temporary signage,
posters, banners, etc.., to be reviewed and approved in
writing by Landlord prior to installation.
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "B-2"
FORM OF NOTICE OF COMMENCEMENT
Permit No.____________________________
Tax Folio No. _________________________
NOTICE OF COMMENCEMENT
STATE OF FLORIDA
COUNTY OF PALM BEACH
The undersigned hereby gives notice that improvement will be made to
certain real property, and in accordance with Chapter 713, Florida Statutes, the
following information is provided in this Notice of Commencement.
1. Description of property: (legal description of the property, and
street address if available)
See Exhibit "A" attached hereto and made a part hereof.
2. General description of improvement:
Tenant's build-out of leasehold improvements to a portion of
5000 Blue Lake Drive, Boca Raton, Florida, pursuant to Work
Letter Exhibit to Lease between Owner and Cybear, Inc..
3. Owner information
a. Name and address:
Cybear, Inc.
c/o Andrx Corporation
400 S. W. 47th Avenue, Suite 201
Fort Lauderdale, Florida 33314
Attention: Scott Lodin, Esq.
b. Interest in property:
Leasehold
c. Name and address of fee simple titleholder
(if other than Owner): N/A
Blue Lake, Ltd.
5000 Blue Lake Drive, Suite 100
Boca Raton, Florida 33431
Attn: Michael D. Masanoff, Exec. Vice President
4. Contractor (name and address):
a. Name and address:
b. Fax Number:
5. Surety
a. Name and address: N/A
b. Phone Number:
c. Fax Number:
(optional, if service by fax is acceptable).
d. Amount of bond: $
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BLUE LAKE STANDARD LEASE
<PAGE>
6. Lender: (name and address)
a. Name and address:
b. Fax Number:
(optional, if service by fax is acceptable).
7. Persons within the State of Florida designated by Owner upon whom
notices or other documents may be served as provided by Section 713.13(1)(a)7.,
Florida Statutes. (name and address)
Blue Lake, Ltd.
5000 Blue Lake Drive
Suite 100
Boca Raton, Florida 33432
Att: Michael D. Masanoff, Executive Vice President
8. In addition to himself, Owner designates___________________________
(name) _____________ ___________________(address) to receive a copy of the
Lienor's Notice as provided in Section 713.13(1)(b), Florida Statutes.
9. Expiration date of notice of commencement: Six (6) months from the
date of recordation.
CYBEAR, INC., a Florida corporation
By:________________________________
Print Name:________________________
Title: ____________________________
Sworn to and subscribed before me this _______ day of _______________,
1998, by _________________________ as _____________________________________ of
CYBEAR, INC., a Florida corporation, who is personally known to me or who has
furnished a _____________________ for identification.
-----------------------------------------------
Notary Public
My Commission Expires:
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "B-2"
LIST OF PRE-APPROVED BLUE LAKE CORPORATE CENTER CONTRACTORS
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<PAGE>
EXHIBIT "B2"
BLCC APPROVED GENERAL CONTRACTORS AND ARCHITECHTS
(AS OF JUNE 1, 1998)
CONTRACTORS
SHAKMAN CONSTRUCTION
MICHAEL GOLDMAN
BOCA RATON, FLORIDA
TELEPHONE: 561-750-8288
SEAWOOD BUILDERS
BETTY MASI
DEERFIELD BEACH, FLORIDA
TELEPHONE: 954-421-4200
BOCA CONTRACTING CORP.
CHARLES JOHNSON
BOCA RATON, FLORIDA
TELEPHONE: 561-998-3311
ARCHITECTS
PGAC ARCHITECTS
IAN NESTLER
BOCA RATON, FLORIDA
TELEPHONE: 561-998-3311
GEORGE F. WHITE & ASSOCIATES
JEFF FAIGMAN
BOCA RATON, FLORIDA
TELEPHONE: 561-997-6698
SLATTERY & ROOT ARCHITECTS
PAUL SLATTERY
BOCA RATON, FLORIDA
TELEPHONE: 561-392-3720
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "C"
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, and halls shall not be obstructed or encumbered by any
Tenant or used for any purpose other than ingress and egress to and from the
Premises.
2. No awnings or other projections shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades, or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises, without the prior written
consent of Landlord. Tenant shall be required to use only Landlord's standard
blinds and Tenant shall comply with any and all energy conservation measures
instituted by Landlord. Such awnings, projections, curtains, blinds, shades,
screens or other fixtures must be of a quality, type, design, and color, and
attached in the manner approved by Landlord.
3. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any Tenant on any part of the
outside of the Premises or Building or on the inside of the Premises if the same
can be seen from the outside of the Premises without the prior written consent
of Landlord except that the name of Tenant may appear on the entrance door of
the Premises. In the event of a violation of the foregoing by Tenant, Landlord
may remove same without any liability and may charge the expense incurred by
such removal to the Tenant or Tenants violating this rule. Interior signs on
doors and the directory shall be inscribed, painted or affixed for each Tenant
by Landlord at the expense of such Tenant and shall be of a size and style
acceptable to the Landlord. Tenant must furnish Landlord with evidence of
compliance with applicable legal requirements including Florida's Fictitious
Name Law if Tenant desires to identify itself by a name other than its legal
name.
4. Tenant shall not occupy or permit any portion of the Premises
demised to it to be occupied as an office for a public stenographer or typist,
or as a barber or manicure shop, or as an employment bureau. Tenant shall not
engage or pay any employees on the Premises, except those actually working for
Tenant at the Premises, nor advertise for labor giving an address at the
Premises. The Premises shall not be used for gambling, lodging, or sleeping or
for any immoral or illegal purposes.
5. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageway or other public places in the
Building shall not be covered or obstructed by any Tenant nor shall any bottles,
parcels or other articles be placed on the window sills. No materials shall be
placed in the corridors or vestibules nor shall any articles obstruct any air
conditioning supply or exhaust vent.
6. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures by Tenant, its servants,
employees, agents, or licensees shall be borne by Tenant.
7. No Tenant shall mark, paint, drill into, or in any way deface any
part of the Premises or the Building of which they form a part. No boring,
cutting, or stringing of wires shall be permitted, except with the prior written
consent of Landlord, and as it may direct. Should a Tenant require telegraphic,
telephonic, annunciator or other communication service, Landlord will direct the
electricians where and how wires are to be introduced and placed, and none shall
be introduced or placed except as Landlord shall direct. Electric current shall
not be used for power or heating without Landlord's prior written permission.
Neither Tenant nor Tenant's Agents including, but not limited to, electrical
repairmen and telephone installers, shall lift, remove or in any way alter or
disturb any of the interior ceiling materials of the Premises or Building, nor
shall any of same have any access whatsoever to the area above the interior
ceiling of the Premises or the Building except with the prior written consent of
Landlord and in accordance with guidelines established by Landlord. No antennas
shall be permitted.
8. No bicycles, vehicles, or animals of any kind shall be brought into
or kept in or about the Premises, and no cooling shall be done or permitted by
any Tenant on said Premises. Bicycles shall be locked in the racks provided
therefor. No Tenant shall cause or permit any unusual or objectionable odors to
be produced upon or permeate from the Premises.
9. Landlord shall have the right to retain a passkey and to enter the
Premises at any time, to examine same or to make such alterations and repairs as
may be deemed necessary, or to exhibit same to prospective Tenants during normal
business hours.
10. No Tenant shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, talking machine, unmusical noise, whistling,
singing, or in any other way. No Tenant shall throw anything out of doors,
windows, skylights, or down the passageways.
11. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any Tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Each Tenant must, upon the termination of his
tenancy restore to the Landlord all keys of offices and toilet rooms, either
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furnished to, or otherwise procured by, such Tenant. Tenant shall pay to the
Landlord the cost of any lost keys.
12. Tenant will refer all contractors, contractors' representatives and
installation technicians, rendering any service to Tenant, to Landlord for
Landlord's supervision, approval, and control before performance of any
contractual service. This provision shall apply to all work performed in the
building, including installations of telephones, telegraph equipment, electrical
devices and attachments, and installations of any nature affecting floors,
walls, woodwork, trim, windows, ceilings, equipment or any other physical
portion of the Building.
13. All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place during the hours
which the Landlord or its agent may determine from time to time. All such
movement shall be under supervision of Landlord and in the manner agreed between
Tenant and Landlord by pre-arrangement before performance. Such pre-arrangements
initiated by Tenant will include determination by Landlord, subject to his
decision and control, of the time, method, and routing of movement and
limitations imposed by safety or other concerns which may prohibit any article,
equipment or any other item from being brought into the building. Landlord
reserves the right to prescribe the weight and position of all safes, which must
be placed upon 2-inch thick plank strips to distribute the weight. Any damage
done to the Building or to other Tenants or to other persons in bringing in or
removing safes, furniture or other bulky or heavy articles shall be paid for by
the Tenant.
14. Tenant agrees that all machines or machinery placed in the Premises
by Tenant will be erected and placed so as to prevent any vibration or annoyance
to any other Tenants in the Building of which the Premises are a part, and it is
agreed that upon written request of Landlord, Tenant will, within ten (10) days
after the mailing of such notice, provide approved settings for the absorbing,
preventing, or decreasing of noise from any or all machines or machinery placed
in the Premises.
15. Each Tenant shall, at its expense, provide artificial light for the
employees of the Landlord while doing janitor service or other cleaning, and in
making repairs or alterations in said Premises.
16. The requirements of Tenant will be attended to only upon written
application at the office of the Building. Employees of Landlord shall not
receive or carry messages for or to any Tenant or other person nor contract with
or render free or paid services to any Tenant or Tenant's agent, employees, or
invitees.
17. Canvassing, soliciting, and peddling in the Building is prohibited
and each Tenant shall cooperate to prevent the same.
18. Landlord will not be responsible for lost, stolen, or damaged
property, equipment, money, or jewelry from Tenant's area or public rooms
regardless of whether such loss occurs when area is locked against entry or not,
except due to the negligence or willful misconduct of the Landlord, its agents,
employees or contractors.
19. Landlord specifically reserves the right to refuse admittance to
the Building from 6 p.m. to 8 a.m. daily, or on Saturdays, Sundays or legal
holidays, to any person or persons who cannot furnish satisfactory
identification, or to any person or persons who, for any other reason in the
Landlord's judgment, should be denied access to the Premises. Landlord, for the
protection of the Tenant and Tenant's effects may prescribe hours and intervals
during the night and on Saturdays, Sundays and holidays, when all persons
entering and departing the Building shall be required to enter their names, the
offices to which they are going or from which they are leaving, and the time of
entrance and departure in a register provided for the purpose by the Landlord.
20. Tenant shall remit the sum of TEN and NO/100 DOLLARS ($10.00) per
key/card to Landlord as security for any and all replacement buildings access
keys/cards provided to Tenant by Landlord, if Landlord elects, in its sole
discretion to install such system.
21. Landlord may refuse admission to the Building outside of ordinary
business hours to any person not known to Landlord or Landlord's agent in charge
or not having a pass issued by Landlord or not property identified, and may
require all persons admitted to or leaving the Building outside of ordinary
business hours to register. Tenants, employees, agents and visitors shall be
permitted to enter and leave the Building whenever appropriate arrangements have
been previously made between Landlord and Tenant with respect thereto. Each
tenant shall be responsible for all persons for whom he requests such permission
and shall be liable to Landlord for all acts of such persons. Any person whose
presence in the Building at any time shall, in the judgment of Landlord, be
prejudicial to the safety, character, reputation and interests of the Building
or its tenants may be denied access to the Building or may be ejected therefrom.
In case of invasion, riot, public excitement or other commotion, Landlord may
prevent all access to the Building during the continuance of the same, by
closing the doors or otherwise, for the safety of the tenants and protection of
property in the Building. Landlord may require any person leaving the Building
with any package or other object to exhibit a pass from the Tenant from whose
leased premises the package or object is being removed, but the establishment
and enforcement of such requirements shall not impose any responsibility on the
Landlord for the protection of any Tenant against the removal of property from
the leased premises of Tenant. Landlord shall in no way be liable to any Tenant
for damages or loss arising from the admission, exclusion or ejection of any
person to or from Tenant's leased premises or the Building under the provision
of this rule, except due to
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<PAGE>
the negligence or willful misconduct of the Landlord, its agents, employees or
contractors.
22. Tenant shall not obtain or accept for use in its leased premises
ice, drinking water, food, beverage, towel, barbering, boot blacking, floor
polishing, lighting maintenance, cleaning or other similar services from any
persons not authorized by Landlord in writing to furnish such services.
23. There shall not be used in any space, or in the public halls of the
Building, either by Tenant or by jobbers or others, in the delivery or receipt
of merchandise, any hand trucks, except those equipped with rubber tires and
side guards.
24. Tenant shall not permit its employees, licensees and invitees to
loiter around the hallways, plazas, lobbies, stairways, elevators, front, roof
or any other part of the Building used in common by the occupants thereof nor
permit them to use the same for purposes of lunches, coffee breaks or other
similar activities.
25. Tenant shall not advertise or permit any advertising which, in
Landlord's reasonable opinion, tends to impair the reputation of the Building or
its desirability as a building for offices or for financial, insurance and other
institutions and businesses of like nature; and upon written notice from the
Landlord, Tenant shall refrain from or discontinue any such advertising.
26. Each tenant, before closing and leaving the said leased premises at
any time, shall see that all windows are closed. All tenants must observe strict
care not to leave their windows open when it rains, and for any default or
carelessness in these respects, or any of them, shall make good any injury
sustained by other tenants, and to Landlord for damage to paint, plastering, or
other parts of the Buildings, resulting from default or carelessness.
27. Landlord reserves the right to make such other and further
reasonable rules and regulations as in its judgment may from time to time be
needed for the safety, care and cleanliness of the Premises, and for the
preservation of good order therein and any such other or further rules and
regulations shall be binding upon the parties hereto with the same force and
effect as if they had been inserted herein at the time of the execution hereof.
28. Tenant covenants and agrees, at its sole cost and expense, to
comply with all present and future laws, orders and regulations of all state,
federal, municipal, and local governments, departments, commissions and boards
regarding the collection, sorting, separation, and recycling of waste products,
garbage, refuse, and trash. Tenant shall, as required, sort and separate such
waste products, garbage, refuse and trash into such categories as provided by
law. Each separately sorted category of waste products, garbage, refuse, and
trash shall be placed in separate receptacles reasonably approved by Landlord.
Such separate receptacles may, at the Landlord's option be removed from the
Premises in accordance with a collection schedule prescribed by law. Landlord
reserves the right to refuse to collect or accept from Tenant any waste
products, garbage, refuse or trash that is not separated and sorted and required
by law and to require Tenant to arrange for such collection at Tenant's sole
cost and expense, utilizing a contractor reasonably satisfactory to Landlord.
Tenant shall pay all costs, expenses, fines, penalties or damages that may be
imposed on Landlord or Tenant by reason of Tenant's failure to comply with the
provisions of this Section, and, at Tenant's sole cost and expense shall
indemnify, defend, and hold Landlord harmless (including legal fees and
expenses) from and against any actions, claims and suits arising from such
non-compliance, utilizing counsel reasonable satisfactory to Landlord.
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EXHIBIT "D-1"
CORPORATE RESOLUTIONS
The undersigned Officer of CYBEAR, INC., a Florida corporation
authorized to transact business in Florida (the "Corporation") hereby certifies
that the following is a true and correct copy of the Resolutions adopted at a
duly called meeting of the Directors of the Corporation held on _________, 1998,
at which a quorum of Directors were present and voting throughout:
"BE IT RESOLVED, that this Corporation enter into a Lease with BLUE
LAKE, LTD., (the "Landlord") for space in The Blue Lake Corporate
Center, Boca Raton, Florida.
"BE IF FURTHER RESOLVED, that the President or any other officer of
this Corporation, acting singly or together, be and hereby is and are
authorized and directed to negotiate the specific terms and conditions
of the Lease and the rent and charges in connection therewith and to
execute and deliver on behalf of this Corporation such Lease and such
other documents as may be necessary or required by Landlord with
respect to the Lease.
"BE IT FURTHER RESOLVED, that the foregoing Resolutions are in
conformity with the Articles of Incorporation and the By-Laws of the
Corporation, and are within its corporate powers. The authority given
hereunder shall be deemed retroactive to the extent necessary or
convenient for the full effectuation of these Resolutions. In such
event, all acts performed prior to the adoption of these Resolutions,
but which are necessary or convenient for the full effectuation of
these Resolutions, are hereby ratified, adopted and affirmed. The
authority conferred by these Resolutions shall continue in full force
and effect until actual written notice of revocation of these
Resolutions shall have been received by the Landlord."
I FURTHER CERTIFY (i) that the above Resolutions were duly enacted by
the Board of Directors called for that purpose and held in accordance with the
Articles of Incorporation and By-Laws of the Corporation and the statutes of the
State of the incorporation of the Corporation; (ii) that the Directors of the
Corporation have full power and authority to bind the Corporation pursuant
thereto; and (iii) that the Resolutions are in full force and effect and have
not been altered, modified, rescinded or revoked in any way.
IN WITNESS WHEREOF, I have affixed my name as _______________ of the
Corporation, and have affixed the corporate seal of the Corporation this
_________ day of ________________, 1998.
CYBEAR, INC.
By: /s/ SCOTT LODIN
-----------------------------------
Print Name: Scott Lodin
Title: Vice President/General Counsel
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<PAGE>
EXHIBIT "F"
CAMPUS SKETCH
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<PAGE>
EXHIBIT "G"
STAND-BY ELECTRIC GENERATOR RIDER SUBSCRIPTION AGREEMENT
BLUE LAKE CORPORATE CENTER
SUPPLEMENT TO LEASE
FOR SUBSCRIPTION TO
STANDBY POWER FACILITIES
This Supplement to Lease for Subscription to Standby Power Facilities
Program ("Supplement") is made as of _________, 199__ ("Agreement Date") between
BLUE LAKE, LTD., a Florida limited partnership, Suite 100, 5000 Blue Lake Drive,
Boca Raton, Florida 33431 ("Landlord") and ______________ ("Tenant"),
_____________________, Boca Raton, Florida.
WHEREAS, Tenant has entered into a lease with Landlord dated
_____________ ("Lease") for the premises described on EXHIBIT "A" attached
hereto and made a part hereof ("Premises").
WHEREAS, Landlord has elected to install standby electric power
generators ("Generator(s)") to provide for standby power service ("Standby
Power") to subscribing tenants of the Blue Lake Corporate Center ("Center") as
part of Landlord's Standby Power Facilities Program ("Power Program"). Tenants
of the Center may subscribe ("Subscribing Tenants") until the Generator(s)
capacity available to tenants has been fully subscribed or otherwise reserved by
Landlord.
WHEREAS, the Tenant has elected to subscribe to the Power Program, and
Landlord has agreed to such subscription, as provided in this Supplement to the
Lease for its Premises.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the Landlord and the Tenant hereby agree as follows:
TERMS
1. RELATIONSHIP TO LEASE. This Supplement modifies and amends the Lease
as specifically provided herein. In all other respects the Lease is ratified,
remains in full force and effect without change, and the terms of the Lease
shall be deemed incorporated herein. Capitalized terms not defined herein shall
have the meanings set forth in the Lease. In the event of any inconsistencies
between the Lease and this Supplement, as it relates or applies to the Power
Program, the terms of this Supplement shall control.
2. TERM. The term of this Supplement shall commence on the date hereof
and continue for the balance of the Lease Term and any renewals thereof.
3. CAPACITY RESERVATION AND RESERVATION CHARGE. Tenant hereby
subscribes to the Power Program, and Landlord hereby accepts such subscription,
for the reservation of _______________ megawatts of Generator capacity
("Capacity Reservation") for the Premises. Tenant's Capacity Reservation is
expressly conditioned on Tenant paying to Landlord on or before ______________,
199__ ("Due Date"), the sum of $_____________ ("Capacity Reservation Charge"),
in federal wire transfer funds. If the Tenant fails to pay the Capacity
Reservation Charge on or before the Due Date, the Capacity Reservation shall be
canceled, and this Supplement shall automatically terminate without the
requirement of further notice or demand by Landlord, in which event Landlord may
sell to, and/or reserve for the Capacity Reservation to other Subscribing
Tenant(s). To the extent that the Generators have been placed in service prior
to the Agreement Date, the Tenant's Capacity Reservation shall not become
effective and the Tenant shall have no right to Standby Power, unless and until
the Capacity Reservation Charge is paid to Landlord, on or before the Due Date.
The Capacity Reservation Charge is neither refundable nor subject to proration
or abatement.
4. SERVED SYSTEMS.
a. Tenant acknowledges that the Standby Power for Tenant's
Capacity Reservation shall be limited to serving the equipment and systems
described on EXHIBIT "B" attached hereto and made a part hereof ("Served
Systems"). Tenant acknowledges and agrees that, the Capacity Reservation
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<PAGE>
includes Standby Power for Center air conditioning services ("Center AC") to the
Premises, which represents forty (40%) percent ("Center AC Capacity") of the
Capacity Reservation (except if, and only to the extent that, Tenant has
installed, pursuant to the Lease, a separate or supplemental air conditioning
system for any portion of the Premises.) All Served Systems shall be connected
to electrical panels and/or breakers separate from the main panels and breakers
for the Premises, so as to permit the disconnection of all electrical systems
and equipment, other than Served Systems, from the Standby Power.
b. In the event that Center AC is not supplied to the Premises
because Tenant, under the Lease, has installed a separate or supplemental air
conditioning system ("Premises AC"), then Tenant's Capacity Reservation may be
applied to the Premises AC to the extent that Center AC Capacity is not used for
the Premises.
c. Tenant shall solely be responsible for the compatibility
with the Generators, of the Served Systems, including but not limited to,
electrical systems, wire, conduit, panels, transformers, switchgear, and
breakers in the Premises, and Tenant's equipment (including but not limited to
trade equipment, office equipment, and other electrically-powered equipment) to
be connected to the Standby Power, Tenant, prior to the Served Systems being
connected to the Generator, shall make, at Tenant's sole cost and expense, any
and all modifications and enhancements to the Served Systems necessary for such
to be compatible with the Generators. Landlord shall have no liability or
responsibility for damage or injury to Served Systems or any of Tenant's
Equipment or personnel, due to such incompatibility, or for any resulting
business interruption (and any direct, indirect, consequential, or special
damages related thereto), such being expressly waived by Tenant.
5. GENERATOR OPERATION.
a. SERVICE COMMENCEMENT DATE. The Landlord shall place the
Generators in operation on or before December 31, 1998 ("Service Commencement
Date"), subject to Force Majeure (as hereinafter defined).
b. TENANT'S TEMPORARY GENERATORS. If Landlord has, under
separate agreement, permitted Tenant to operate a mobile, temporary backup
generator for its Premises, Tenant shall, within ten (10) days after the
Generators have been placed in operation, disconnect such mobile, temporary
backup generator and remove such from Landlord's property, and shall restore the
Landlord's property to the condition existing prior to the installation of such
mobile temporary backup generators. Tenant indemnifies Landlord from and against
any and all claims, demands, responsibility, liability, damages, fines,
penalties, costs and expenses; including but not limited to reasonable
attorney's fees and costs, arising from or related to Tenant's installation,
use, operation or removal of the Tenant's mobile, temporary backup generators,
including but not limited to any violations of environmental law or the
contamination of Landlord's property with hazardous or toxic materials or with
petroleum products.
c. EMERGENCY SERVICE USE. The Generators are only intended for
limited emergency backup use and are not designed for, nor does the Generators'
fuel storage tank have sufficient capacity for, more than temporary, limited use
of the Generators.
d. STARTUP DELAY. In the event of a power failure ("Outage"),
the Generators are designed to start up over [A PERIOD OF ONE TO THIRTY
MINUTES]. The Tenant acknowledges and agrees that the Landlord shall not be
liable or responsible for any resulting direct, indirect, consequential, or
special damages that may occur due to an interruption of Tenant's business or
business operations, or to Tenant's Equipment, or to Served Systems or any of
the Premises due to any delay in the startup of the Generators. Tenant shall be
responsible to provide for its own backup uniform power supply ("UPS") to its
Premises and the Served Systems to address any startup delay of the Generators.
e. EMERGENCY REPRESENTATIVE: Tenant designates
__________________ and ___________________ as its "Emergency Representative(s)"
for contact by Landlord in the event of an Outage. The Emergency
Representative(s) shall have full authority to act on behalf of Tenant in the
event of an Outage or other emergency and shall be required to be available to
Landlord in the event of an emergency or an Outage. Tenant shall provide to
Landlord in writing after- hours contact information for its Emergency
Representatives, including but not limited to home addresses and telephone
numbers, cellular telephone numbers and pager numbers. Notices to Tenant under
this Supplement shall be deemed made to Tenant if delivered or made to the
Emergency Representative. Tenant shall notify the
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<PAGE>
Landlord in writing of any changes in the after-hours contact information of the
Emergency Representative. Tenant shall provide written notice to Landlord of any
changes in its Emergency Representative(s) or in the appointment of temporary
Emergency Representative(s) in the absence of those otherwise identified by the
Tenant pursuant hereto, together with their contact information as provided
above. The Emergency Representative(s) shall participate in emergency drills
and, in the event of an emergency or an Outage, shall be available to meet with
Landlord and the emergency representatives of other tenants to address emergency
procedures implemented by Landlord as a result thereof.
e. GENERATOR OPERATION DURING EXTENDED OUTAGE. For the
purposes hereof, any Outage lasting more than one hour shall be referred to as
an "Extended Outage". Tenant acknowledges and agrees that, at the contemplated
total capacity of the Generators, the Generators' fuel storage capacity for the
Blue Lake Corporate Center is not sufficient for continuous or extended use of
the Generators at the capacity of the Power Program (as may be increased as
Generator capacity is increased from time to time) for all potential Subscribing
Tenants. In the event of an Extended Outage or a series of Outages, Landlord
shall have the right, but not the obligation, to regulate, reduce, and limit the
availability of Standby Power to Subscribing Tenants, including but not limited
to Tenant in Landlord's sole and absolute discretion, to essential needs in
order to meet the Federal Emergency Management Agency's ("FEMA") [seven (7)] day
generator recommendations, the safety of tenants of the Center, the availability
of fuel, or the operating conditions and requirements of the Generators.
In order to manage the Power Program in the best interests of the
Center, the Landlord has established the following rules, procedures and
protocols for responding to an Extended Outage:
(1) DEFINITIONS:
LEVEL ONE OUTAGE: An Extended Outage lasting more than one
hour, but anticipated by Landlord, in Landlord's sole
judgement and discretion, to last less than three (3) hours.
LEVEL TWO OUTAGE: An Extended Outage lasting or anticipated by
Landlord, in Landlord's sole judgement and discretion, to last
more than, three (3) hours, but less than 24 hours.
LEVEL THREE OUTAGE: An Extended Outage lasting or anticipated
by Landlord, in Landlord's sole judgement and discretion, to
last more than 24 hours.
(2) EXTENDED OUTAGE PROTOCOLS:
In the event of an Extended Outage, the Landlord has
established the following emergency protocols ("Protocols")
for each level of Extended Outage. Tenant shall comply with
the Protocols as invoked by Landlord from time to time.
LEVEL ONE OUTAGE: Tenant's Served Systems may operate as
anticipated under this Supplement. The Landlord shall notify
the Tenant of the occurrence of a Level One Outage.
LEVEL TWO OUTAGE: Tenant's Served Systems may operate as
anticipated under this Supplement. Tenant shall turn off or
disconnect all non-Served Systems within one (1) hour from
Landlord's notice of Level Two Outage. Tenant's personnel not
required in the operation of the Served Systems may be
required by the Landlord to immediately leave the Premises and
the Center, and Tenant shall comply with Landlord's emergency
procedures and rules promulgated from time to time in
accordance with the Lease. The Landlord may, in Landlord's
sole discretion, (i) reduce or eliminate Center AC, (ii)
reduce or eliminate non-emergency Common Area systems and
services (including but not limited to operation of the Food
Court, conference centers, and other services provided by the
Landlord to the Center), and (iii) require that Tenant turn
off or disconnect non-essential Served Systems, which shall be
accomplished within one (1) to three (3) hours from Landlord's
request to Tenant. The Landlord shall regularly update the
Tenant's Emergency Representative on the changes in status and
anticipated duration of the Level Two Outage.
LEVEL THREE OUTAGE: Only essential Served Systems may operate
as anticipated under this Supplement. Tenant shall turn off or
disconnect all non-essential Served
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BLUE LAKE STANDARD LEASE
<PAGE>
Systems and non-Served Systems within one (1) hour from
Landlord's notice of a Level Three Outage. Tenant's personnel
not required in the operation of the Served Systems shall
immediately leave the Premises and the Center, and Tenant
shall comply with Landlord's emergency procedures and rules
promulgated from time to time in accordance with the Lease.
The Landlord may, in Landlord's sole discretion, (i) reduce or
eliminate Center AC, (ii) reduce or eliminate non-emergency
Common Area systems and services (including but not limited to
operation of the Food Court, conference centers, and other
services provided by the Landlord to the Center), and (iii)
require that Tenant turn off, reduce, or disconnect all Served
Systems as the availability of necessary fuel supply may
require. During a Level Three Outage, the Landlord shall
regularly report to Tenant as to the status of the Extended
Outage, anticipated actions by Landlord, and the availability
of fuel supplies, and shall use all reasonable efforts to
notify Tenant of an impending shut down of Standby Power at
least sixty (60) minutes prior to such shut down.
The Tenant acknowledges and agrees that, upon Landlord's request, the
Tenant will immediately disconnect all non-essential Served Systems from the
Standby Power. Further, Tenant acknowledges and agrees that, in the event of a
Level Three Outage, fuel may become exhausted and additional fuel unavailable,
and, therefore, the Generators will be shut down and Standby Power discontinued
to the Premises, Served Systems and all Tenant Equipment. Tenant agrees to
cooperate with Landlord in maximizing the fuel supplies and in obtaining
deliveries of additional fuel supplies.
Tenant hereby waives, releases and holds harmless the Landlord, its
partners, affiliates, subsidiaries, officers, employees, and agents from all
claims, demands, damages, liability, costs and expenses with respect to the
Landlord's regulation, reduction, limitation, and discontinuation of the Standby
Power, Landlord's decisions, acts and omissions relating thereto, or the
inability to deliver the Standby Power hereunder.
f. GENERATOR MAINTENANCE PROGRAM. Landlord intends to enter
into a service agreement for the maintenance of the Generators with a generator
maintenance company selected by Landlord in its sole and absolute discretion.
The service agreement shall provide for maintenance of the Generators in
accordance with the National Fire Protection Agency Level 2 standards for
emergency generators. Copies of the maintenance and repair records for the
Generators shall be kept at the offices of Blue Lake Management, Inc.
("Management") for inspection by the Tenant upon reasonable written notice
during business normal hours.
6. EXCESS DEMAND LOAD. Tenant acknowledges and agrees that the Landlord
is providing Standby Power to other Subscribing Tenants and that Tenant may not
exceed its Capacity Reservation during any Outage. If the Tenant exceeds its
Capacity Reservation during an Outage ("Excess Demand"), Landlord may, in
Landlord's sole and absolute discretion: (i) require that Tenant immediately
disconnect non-essential Served Equipment and reduce the actual load to the
Capacity Reservation, (ii) if Tenant fails to do so immediately, Landlord may
reduce Standby Power to the Premises so that the actual load is at the Capacity
Reservation, or (iii) if there is sufficient Generator capacity for other
Subscribing Tenants, as Landlord shall determine in its sole and absolute
discretion, charge the Tenant an additional fee for the Excess Demand equal to
200% of the then current Capacity Reservation Fee prorated for the actual load
in excess of the Capacity Reservation ("Excess Demand Fee"). All of the
foregoing are in addition to Landlord's other rights and remedies under this
Supplement and at law or in equity, and, further, are in addition to Protocols
implemented by Landlord in the event of an Extended Outage. Such Excess Demand
Fee shall be billed by Landlord and paid by Tenant as Additional Rent under the
Lease.
7. USE CHARGES.
a. The Tenant shall pay for fuel consumed by the Generators
during an Extended Outage in proportion of its Capacity Reservation to the total
of all Capacity Reservations of Subscribing Tenants. The cost of fuel for
non-Extended Outages shall be charged as an Operating Expense under the Lease.
b. All other costs of maintaining, repairing, testing and
servicing the Generators shall be treated, budgeted and invoiced as Operating
Expenses under the Lease; however, such costs shall not be limited by any
provisions of the Lease limiting Operating Expenses or Overhead Rent.
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BLUE LAKE STANDARD LEASE
<PAGE>
8. COVENANTS OF TENANT. The Tenant covenants that:
a. The Tenant shall not cause or voluntarily permit any
modification or alteration to any of the Served Systems or the Premises which
would have the effect of increasing the level of electrical demand for the
Premises or which would adversely affect the Generators or Landlord's ability to
provide the Standby Power.
b. The Tenant shall maintain, repair and replace the Served
Systems as necessary and appropriate in accordance with prudent and sound
engineering practices so that the Served Systems is in proper condition to
receive, distribute, and or utilize the Standby Power without damage to Served
Systems or the Generators.
9. DEFAULT BY TENANT; TERMINATION BY LANDLORD. Landlord may terminate
this Supplement, discontinue the delivery of Standby Power to Tenant, and remove
the any and all equipment connecting the Premises to the Generators, upon the
occurrence of any one of the following events:
a. Failure of Tenant to pay any charges, including but not
limited to the Capacity Reservation Charge, due hereunder, as and when due.
b. Default by Tenant under the Lease, which is not cured
within any applicable cure periods (so ling as the Lease is also terminated).
c. Tenant's actual electric load connected to the Generators
increases in excess of the Capacity Reservation and Tenant fails to immediately
disconnect such of Tenant's Equipment so as to reduce the actual load below the
Capacity Reservation or enter into an agreement with Landlord in Landlord's sole
and absolute discretion and providing for an increase in Tenant's Capacity
Reservation, subject to availability and price.
10. NO WAIVER. The failure of a party to enforce any term of this
Supplement or a party's waiver of the nonperformance of a term by the other
party shall not be construed as a general waiver or amendment of that term, but
the term shall remain in effect and enforceable in the future. This Supplement
can only be amended by written agreement of the Parties.
11. INTERRUPTION OF BACKUP SERVICE. Landlord shall have the right to
temporarily interrupt the delivery of Standby Power to the Premises for purposes
of inspection, maintenance, repair, replacement, construction, installation,
removal or alteration of the Generators and related equipment or to prevent and
emergency situation from arising. Landlord shall give twenty-four (24) hours
notice to Tenant of any planned interruption of more than seven (7) days in
delivery of Standby Power reasonably in advance of such planned interruption.
12. PERMITTED ASSIGNMENT.
a. This Supplement, and the Capacity Reservation, shall not be
transferred, assigned, subcontracted, or sold by Tenant, in whole or part, other
than in connection with a permitted Transfer of Lease to a permitted Transferee,
so long as the permitted Transferee does not require or present a Demand Load
greater than that of the Tenant.
b. The Landlord may assign its obligations, rights and duties
under this Supplement, separate and apart from the Lease, without the consent of
the Tenant. In such event, the Lease shall continue in full force and effect
without change, abatement or offset, and Landlord shall be automatically
relieved of all liability and obligations under this Supplement so long as such
are expressly assumed in writing by the assignee.
13. FORCE MAJEURE. The obligations of Landlord and Tenant hereunder,
and Landlord's ability to install, maintain, and operate the Generators and to
provide the Standby Power pursuant hereto are subject to the occurrence of
events or circumstances that are beyond the reasonable control of Landlord
and/or Tenant, as applicable, or their respective agents, employees or
contractors, including, without limitation, strikes, lockouts or picketing
(legal or illegal); governmental action and condemnation; riot, civil commotion,
insurrection, and war; fire or other casualty, accident, acts of God or the
enemy; adverse weather conditions; unavailability of fuel, power, supplies or
materials; the passage or reasonably
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BLUE LAKE STANDARD LEASE
<PAGE>
unexpected interpretation or application of any statute, law, regulation or
moratorium of any governmental restriction or order; or delays in issuance of
permits or approvals.
IN WITNESS WHEREOF, the parties hereto have executed this Supplement as
of the day and year first above written.
LANDLORD:
BLUE LAKE, LTD., a Florida limited partnership
By: BLUE LAKE, INC.,
a Florida corporation, general partner.
By:__________________________________
Michael Masanoff
Executive Vice President
Date:_______________
TENANT:
By: /s/ SCOTT LODIN
Name: Scott Lodin
Its: Vice President/General Counsel
Date: 9/14/98
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "H"
SIGNAGE CRITERIA
TO BE SUBMITTED BY
LANDLORD AS APPROVED BY
ALL APPLICABLE GOVERNING BODIES
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "I"
RENT COMMENCEMENT/EXPIRATION CERTIFICATE
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "J"
SUBORDINATION NON-DISTURBANCE AGREEMENTS
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BLUE LAKE STANDARD LEASE
<PAGE>
EXHIBIT "K"
LEASE GUARANTY
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BLUE LAKE STANDARD LEASE
EXHIBIT 10.36
VERSION 4/98
INDUSTRIAL LEASE AGREEMENT
BETWEEN
INDUSTRIAL PROPERTY FUND II, L.P.
AS LANDLORD
AND
ANDA GENERICS, INC.
AS TENANT
<PAGE>
LEASE INDEX
SECTION SUBJECT
------- -------
1 Basic Lease Provisions
2 Demised Premises
3 Term
4 Base Rent
5 Security Deposit
6 Operating Expenses and Additional Rent
7 Use of Demised Premises
8 Insurance
9 Utilities
10 Maintenance and Repairs
11 Tenant's Personal Property; Indemnity
12 Tenant's Fixtures
13 Signs
14 Landlord's Lien
15 Governmental Regulations
16 Environmental Matters
17 Construction of Demised Premises
18 Tenant Alterations and Additions
19 Services by Landlord
20 Fire and Other Casualty
21 Condemnation
22 Tenant's Default
23 Landlord's Right of Entry
24 Lender's Rights
25 Estoppel Certificate
26 Landlord's Liability
27 Notices
28 Brokers
29 Assignment and Subleasing
30 Termination or Expiration
31 Reserved
32 Late Payments
33 Rules and Regulations
34 Quiet Enjoyment
35 Miscellaneous
36 Special Stipulations
37 Lease Date
38 Authority
39 No Offer Until Executed
Exhibit "A" Demised Premises
Exhibit "B" Building Shell Specifications
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E" Certificate of Authority - Tenant
Exhibit "E-1" Certificate of Authority - Landlord
Exhibit "F" Form of Letter of Credit
Exhibit "G" Site Plan for Building E
Exhibit "H" First Union SNDA
Exhibit "I" Memorandum of Lease
Exhibit "J" Hazardous Materials Management Plan
<PAGE>
INDUSTRIAL LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made as of the "Lease Date" (as
defined in Section 37 herein) by and between Industrial Property Fund II, L.P.,
a Georgia limited partnership ("Landlord"), and Anda Generics, Inc., a Florida
corporation ("Tenant") (the words "Landlord" and "Tenant" to include their
respective legal representatives, successors and permitted assigns where the
context requires or permits).
W I T N E S S E T H:
1. BASIC LEASE PROVISIONS. The following constitute the basic
provisions of this Lease:
(a) Demised Premises Address: 2915 Weston Road Weston, Florida
33331
(b) Demised Premises Square Footage: approximately 152,082 sq. ft.,
subject to remeasurement pursuant to Section 2.
(c) Building Square Footage: approximately 152,082 sq. ft., subject
to remeasurement pursuant to Section 2.
(d) Annual Base Rent (exclusive of applicable sales taxes):
Lease Year 1 $927,700.20 ($6.10 per sq. ft./yr.)
Lease Year 2 $959,637.42 ($6.31 per sq. ft./yr.)
Lease Year 3 $993,095.46 ($6.53 per sq. ft./yr.)
Lease Year 4 $1,028,074.32 ($6.76 per sq. ft./yr.)
Lease Year 5 $1,064,574.00 ($7.00 per sq. ft./yr.)
Lease Year 6 $1,102,594.50 ($7.25 per sq. ft./yr.)
Lease Year 7 $1,140,615.00 ($7.50 per sq. ft./yr.)
Lease Year 8 $1,180,156.32 ($7.76 per sq. ft./yr.)
Lease Year 9 $1,221,218.46 ($8.03 per sq. ft./yr.)
Lease Year 10 $1,263,801.48 ($8.31 per sq. ft./yr.)
(e) Monthly Base Rent Installments (exclusive of applicable sales
taxes):
Lease Year 1 $77,308.35 ($6.10 per sq. ft./yr.)
Lease Year 2 $79,969.79 ($6.31 per sq. ft./yr.)
Lease Year 3 $82,757.96 ($6.53 per sq. ft./yr.)
Lease Year 4 $85,672.86 ($6.76 per sq. ft./yr.)
Lease Year 5 $88,714.50 ($7.00 per sq. ft./yr.)
Lease Year 6 $91,882.88 ($7.25 per sq. ft./yr.)
Lease Year 7 $95,051.25 ($7.50 per sq. ft./yr.)
Lease Year 8 $98,346.36 ($7.76 per sq. ft./yr.)
Lease Year 9 $101,768.21 ($8.03 per sq. ft./yr.
Lease Year 10 $105,316.79 ($8.31 per sq. ft./yr.)
(f) Lease Commencement Date: The earlier of the date that (a)
Landlord achieves substantial completion of the Demised
Premises (excluding any improvements to be made by Tenant) or
(b) Tenant takes partial occupancy of the Demised Premises for
business purposes with proper approval by City of Weston.
<PAGE>
(g) Base Rent Commencement Date: Lease Commencement Date
(h) Expiration Date: Ten (10) years after the Lease Commencement
Date
(i) Term: 10 years
(j) Tenant's Operating Expense Percentage: 100%
(k) Security Deposit: See Special Stipulation 1.
(l) Permitted Use: Office, light manufacturing and assembly,
research and development, telemarketing, warehousing and
distribution, and ancillary and related uses to Tenant's
business.
(m) Address for notice:
Landlord: Industrial Property Fund II, L.P.
c/o Industrial Developments
International, Inc.
3424 Peachtree Road, N.E., Suite 1500
Atlanta, Georgia 30326
Attn: Vice President - Operations
Tenant: Anda Generics, Inc.
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
With copy to: Andrx Corporation
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
(n) Address for rental payments:
Industrial Property Fund II, L.P.
c/o IDI Services Group, Inc.
3424 Peachtree Road, N.E.
Suite 1500
Atlanta, Georgia 30326
(o) Broker(s): CB/Richard Ellis
Continental Real Estate Company
Capital Realty Services, Inc.
(p) Guarantor: Andrx Corporation
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
2. DEMISED PREMISES. For and in consideration of the rent hereinafter
reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
EXHIBIT A attached hereto and incorporated herein: approximately 152,082 square
feet of space, approximately 50,000 square feet of which is office space, having
an address as set forth in Section 1(a), located within Building A (the
"Building"), which contains a total of approximately 152,082 square feet and is
located within Weston Business Center (the "Project"), located in Broward
County, Florida. Within thirty (30) calendar days after substantial completion
of the Demised Premises, Landlord shall deliver to Tenant a written
certification of an architect of the square footage contained in the Building
and in the Demised Premises, based on a measurement from the outside of the
exterior walls of the Building and the Demised Premises. The square footage so
certified by such architect shall conclusively determine the Building Square
Footage and the Demised Premises Square Footage for all purposes under this
Lease, including, without limitation, calculation of annual base rent and
monthly base rent installments. The Annual Base Rent and Monthly
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<PAGE>
Base Rent Installments shall be adjusted on the basis of the square footage of
the Building and the Demised Premises so certified by such architect, using the
following amounts for calculation:
Lease Year 1 $6.10 per sq. ft./yr. Lease Year 6 $7.24 per sq. ft./yr.
Lease Year 2 $6.31 per sq. ft./yr. Lease Year 7 $7.50 per sq. ft./yr.
Lease Year 3 $6.53 per sq. ft./yr. Lease Year 8 $7.76 per sq. ft./yr.
Lease Year 4 $6.76 per sq. ft./yr. Lease Year 9 $8.03 per sq. ft./yr.
Lease Year 5 $7.00 per sq. ft./yr. Lease Year 10 $8.31 per sq. ft./yr.
Notwithstanding the foregoing, if the square footage of the Demised Premises as
determined by Landlord's architect exceeds one hundred five (105%) percent of
the square footage of the Demised Premises as shown in the Plans and
Specifications, then Tenant shall not be responsible for any Base Rent that
would be payable with respect to the square footage in excess of such 105%
figure.
3. TERM. To have and to hold the Demised Premises for a preliminary
term (the "Preliminary Term") commencing on the Lease Date and ending on the
Lease Commencement Date as set forth in Section 1(f), and a primary term (the
"Term") commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17. The term "Lease Year"
shall mean each one (1) year period of the Term (or portion thereof if the last
Lease Year of the Term is less than one (1) full year due to termination prior
to the Expiration Date) beginning on the Lease Commencement Date, and each
anniversary thereof, and ending on the day immediately prior to the next
succeeding anniversary of the Lease Commencement Date.
4. BASE RENT. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance, without demand and without abatement, reduction, set-off or deduction,
except as otherwise expressly set forth in this Lease, on the first day of each
calendar month during the Term. If the Base Rent Commencement Date shall fall on
a day other than the first day of a calendar month, the Base Rent shall be
apportioned pro rata on a per diem basis (i) for the period between the Base
Rent Commencement Date and the first day of the following calendar month (which
pro rata payment shall be due and payable on the Base Rent Commencement Date),
and (ii) for the last partial month of the Term, if applicable. No payment by
Tenant or receipt by Landlord of rent hereunder shall be deemed to be other than
on account of the amount due, and no endorsement or statement on any check or
any letter accompanying any check or payment of rent shall be deemed an accord
and satisfaction, and Landlord may accept such check as payment without
prejudice to Landlord's right to recover the balance of such installment or
payment of rent or pursue any other remedies available to Landlord.
5. SECURITY DEPOSIT. Upon Tenant's execution of this Lease, Tenant will
pay to Landlord the sum set forth in Section 1(k) (the "Security Deposit") as
security for the full and faithful performance by Tenant of each and every term,
covenant and condition of this Lease. The acceptance by Landlord of the Security
Deposit paid by Tenant shall not render this Lease effective unless and until
Landlord shall have executed and delivered to Tenant a fully executed copy of
this Lease. The Security Deposit may be commingled with Landlord's other funds
or held by Landlord in a separate interest bearing account, with interest paid
to Landlord, as Landlord may elect. In the event that Tenant is in default under
this Lease, Landlord may retain the security Deposit for the payment of any sum
due Landlord or which Landlord may expend or be required to expend by reason of
Tenant's default or failure to perform; PROVIDED, HOWEVER, that any such
retention by Landlord shall not be or be deemed to be an election of remedies by
Landlord or viewed as liquidated damages, it being expressly understood and
agreed that Landlord shall have the right to pursue any and all other remedies
available to it under the terms of this Lease or otherwise. In the event all or
any portion of the Security Deposit is so retained by Landlord, Tenant shall,
within five (5) days of demand therefor from Landlord, replenish the Security
Deposit to the full amount set forth in Section 1(k). In the event that Tenant
shall comply with all of the terms, covenants and conditions of this Lease, the
security deposit shall be returned to Tenant within thirty (30) days after the
later of (a) the Expiration Date or (b) the date that Tenant delivers possession
of the Demised Premises to Landlord. In the event of a sale of the Building,
Landlord shall transfer the security deposit to the purchaser, and upon
acceptance by such purchaser, Landlord shall be released from all liability for
the return of the security deposit. Tenant shall not assign or encumber the
money deposited as security, and neither Landlord nor its successors or assigns
shall be bound by any such assignment or encumbrance.
6. OPERATING EXPENSES AND ADDITIONAL RENT.
(a) Tenant agrees to pay as Additional Rent (as defined in Section
6(b) below) its proportionate share of Operating Expenses (as hereinafter
defined). "Operating Expenses" shall be defined as all reasonable expenses for
operation, repair, replacement and maintenance as necessary to keep the Building
and the common areas, driveways, and parking areas associated therewith
(collectively,
-3-
<PAGE>
the "Building Common Area") in good order, condition and repair, including but
not limited to, utilities for the Building Common Area, expenses associated with
the driveways and parking areas (including sealing and restriping, and snow,
trash and ice removal), security systems, fire detection and prevention systems,
lighting facilities, landscaped areas, walkways, painting and caulking,
directional signage, curbs, drainage strips, sewer lines, all charges assessed
against or attributed to the Building pursuant to any applicable easements,
covenants, restrictions, agreements, declaration of protective covenants or
development standards, property management fees, all real property taxes and
special assessments imposed upon the Building, the Building Common Area and the
land on which the Building and the Building Common Area are constructed, all
costs of insurance paid by Landlord with respect to the Building and the
Building Common Area, and costs of improvements to the Building and the Building
Common Area required by any law, ordinance or regulation applicable to the
Building and the Building Common Area generally (and not because of the
particular use of the Building or the Building Common Area by a particular
tenant), which cost shall be amortized on a straight line basis over the useful
life of such improvement, as reasonably determined by Landlord. Operating
Expenses shall also include the operating expenses of the common areas of the
Project, if any, which expenses shall be proportionately allocated among the
completed buildings of the Project, based on the square footage of each building
or as otherwise provided by the applicable covenants, restrictions, agreements
or declaration of protective covenants for the Project. Operating Expenses shall
not include expenses for the costs of any maintenance and repair required to be
performed by Landlord at its own expense under Section (10)(b). Further,
Operating Expenses shall not include the costs for capital improvements unless
such costs are incurred for the purpose of causing a material decrease in the
Operating Expenses of the Building or the Building Common Area or are made with
respect to improvements made to comply with laws, ordinances or regulations as
described above. The proportionate share of Operating Expenses to be paid by
Tenant shall be a percentage of the Operating Expenses based upon the proportion
that the square footage of the Demised Premises bears to the total square
footage of the Building (such figure referred to as "Tenant's Operating Expense
Percentage" and set forth in Section 1(j)). Prior to or promptly after the
beginning of each calendar year during the Term, Landlord shall reasonably
estimate the total amount of Operating Expenses to be paid by Tenant during each
such calendar year and Tenant shall pay to Landlord one-twelfth (1/12) of such
sum on the first day of each calendar month during each such calendar year, or
part thereof, during the Term. Within a reasonable time after the end of each
calendar year (but in no event later than one year after the end of each
calendar year), Landlord shall submit to Tenant a statement of the actual amount
of Operating Expenses for such calendar year, and the actual amount owed by
Tenant, and within thirty (30) days after receipt of such statement, Tenant
shall pay any deficiency between the actual amount owed and the estimates paid
during such calendar year, or in the event of overpayment, Landlord shall remit
such overpayment to Tenant if no Event of Default exists hereunder. The
obligations in the immediately preceding sentence shall survive the expiration
or any earlier termination of this Lease. If the Lease Commencement Date shall
fall on other than the first day of the calendar year, and/or if the Expiration
Date shall fall on other than the last day of the calendar year, Tenant's
proportionate share of the Operating Expenses for such calendar year shall be
apportioned prorata.
(b) Any amounts required to be paid by Tenant hereunder (in addition
to Base 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 Base
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 Base Rent. Tenant's obligations for payment of Additional Rent
shall begin to accrue on the Lease Commencement Date.
(c) If applicable in the jurisdiction where the Demised Premises are
located, Tenant shall pay and be liable for all rental, sales, use and inventory
taxes or other similar taxes, if any, on the amounts payable by Tenant hereunder
levied or imposed by any city, state, county or other governmental body having
authority, such payments to be in addition to all other payments required to be
paid Landlord by Tenant under the terms of this Lease. Such payment shall be
made by Tenant directly to such governmental body if billed to Tenant, or if
billed to Landlord, such payment shall be paid concurrently with the payment of
the Base Rent, Additional Rent, or such other charge upon which the tax is
based, all as set forth herein.
7. USE OF DEMISED PREMISES.
(a) The Demised Premises shall be used for the Permitted Use set
forth in Section 1(l) and for no other purpose.
(b) Tenant will permit no liens to attach or exist against the
Demised Premises for work ordered or contracted by Tenant, and shall not commit
any waste, reasonable wear and tear excepted.
(c) The Demised Premises shall not be used for any illegal purposes,
and Tenant shall not allow, suffer, or permit any vibration, noise, odor, light
or other effect to occur within or around the Demised Premises that constitutes
a nuisance or trespass. Upon notice by Landlord to Tenant that any of the
aforesaid prohibited uses are occurring, Tenant agrees to promptly remove or
control the same.
-4-
<PAGE>
(d) Tenant shall not in any way violate any restrictive covenant in
effect as of the Lease Date, the Protective Covenant referred to in Special
Stipulation 13, or any law or ordinance affecting the Demised Premises, and
shall not in any manner use the Demised Premises so as to cause cancellation of,
or increase the rate of, the fire and extended coverage insurance policy
required hereunder. Landlord makes no (and does hereby expressly disclaim any)
covenant, representation or warranty as to the Permitted Use being allowed by or
being in compliance with any applicable laws, rules, ordinances or restrictive
covenants now or hereafter affecting the Demised Premises, and any zoning
letters, copies of zoning ordinances or other information from any governmental
agency or other third party provided to Tenant by Landlord or any of Landlord's
agents or employees shall be for informational purposes only, Tenant hereby
expressly acknowledging and agreeing that Tenant shall conduct and rely solely
on its own due diligence and investigation with respect to the compliance of the
Permitted Use with all such applicable laws, rules, ordinances and restrictive
covenants and not on any such information provided by Landlord or any of its
agents or employees. Landlord represents and warrants that, as of the Lease
Date, the Building and land on which it is situated is zoned Industrial under
PUD under the Weston Zoning Code.
(e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the specific use of the Demised Premises by Tenant, Tenant shall cease the
extra-hazardous use or pay such additional amount as Additional Rent.
8. INSURANCE.
(a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:
(i) Liability insurance in the Commercial General Liability form
(or reasonable equivalent thereto) covering the Demised Premises and Tenant's
use thereof against claims for bodily injury or death, property damage and
product liability occurring upon, in or about the Demised Premises, such
insurance to be written on an occurrence basis (not a claims made basis), to be
in combined single limits amounts not less than $3,000,000.00 and to have
general aggregate limits of not less than $5,000,000.00 for each policy year.
The insurance coverage required under this Section 8(a)(i) shall, in addition,
extend to any liability of Tenant arising out of the indemnities provided for in
Section 11 and, if necessary, the policy shall contain a contractual endorsement
to that effect.
(ii) Insurance covering (A) all of the items included in the
leasehold improvements constructed in the Demised Premises by or at the expense
of Landlord (collectively, the "Improvements"), including but not limited to
demising walls and the heating, ventilating and air conditioning system and (B)
Tenant's trade fixtures, merchandise and personal property from time to time in,
on or upon the Demised Premises, in an amount not less than one hundred percent
(100%) of their full replacement value from time to time during the Term,
providing protection against perils included within the standard form of
"all-risks" fire and casualty insurance policy, together with insurance against
sprinkler damage, vandalism and malicious mischief. Any policy proceeds from
such insurance relating to the Improvements shall be used solely for the repair,
construction and restoration or replacement of the Improvements damaged or
destroyed unless this Lease shall cease and terminate under the provisions of
Section 20.
(b) All policies of the insurance provided for in Section 8(a) shall
be issued by insurance companies with a rating of not less than "A," and
financial size of not less than Class XII, in the most current available "Best's
Insurance Reports", and licensed to do business in the state in which the
Building is located. Each and every such policy:
(i) shall name Landlord, Lender (as defined in Section 24), and
any other party reasonably designated by Landlord, as an additional insured. In
addition, the coverage described in Section 8(a)(ii)(A) relating to the
Improvements shall also name Landlord as "loss payee";
(ii) shall be delivered to Landlord, in the form of an insurance
certificate reasonably acceptable to Landlord as evidence of such policy, prior
to the Lease Commencement Date and thereafter within thirty (30) days prior to
the expiration of each such policy, and, as often as any such policy shall
expire or terminate. Renewal or additional policies shall be procured and
maintained by Tenant in like manner and to like extent;
(iii) shall contain a provision that the insurer will give to
Landlord and such other parties in interest at least fifteen (15) days notice in
writing in advance of any material change, cancellation, termination or lapse,
or the effective date of any reduction in the amounts of insurance; and
(iv) shall be written as a primary policy which does not
contribute to and is not in excess of coverage which Landlord may carry.
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<PAGE>
(c) In the event that Tenant shall fail to carry and maintain the
insurance coverages set forth in this Section 8, Landlord may upon thirty (30)
days notice to Tenant (unless such coverages will lapse imminently, in which
event two (2) business days' notice shall be given) procure such policies of
insurance and Tenant shall promptly reimburse Landlord therefor, unless Tenant
establishes the lapsed coverage within such thirty (30) day (or two (2) business
day) period.
(d) Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, their respective property, the Demised Premises, its
contents or to the other portions of the Building, arising from any risk covered
by all risks fire and extended coverage insurance of the type and amount
required to be carried hereunder, provided that such waiver does not invalidate
such policies or prohibit recovery thereunder. The parties hereto shall cause
their respective insurance companies insuring the property of either Landlord or
Tenant against any such loss, to waive any right of subrogation that such
insurers may have against Landlord or Tenant, as the case may be.
9. UTILITIES. During the Term, Tenant shall promptly pay as billed to
Tenant all rents and charges for water and sewer services and all costs and
charges for gas, steam, electricity, fuel, light, power, telephone, heat and any
other utility or service used or consumed in or servicing the Demised Premises
and all other costs and expenses involved in the care, management and use
thereof. Such utilities shall be separately metered and billed to Tenant.
Landlord, at its expense, shall be responsible for all initial metering costs,
hook-up fees and connection charges for such utilities. If Tenant fails to pay
any utility bills or charges, Landlord may, at its option and upon reasonable
notice to Tenant, pay the same and in such event, the amount of such payment,
together with interest thereon at the Interest Rate as defined in Section 32
from the date of such payment by Landlord, will be added to Tenant's next due
payment as Additional Rent.
10. MAINTENANCE AND REPAIRS.
(a) Tenant shall, at its own cost and expense, maintain in good
condition and repair the interior of the Demised Premises, including but not
limited to the heating, air conditioning and ventilation systems, glass, windows
and doors, sprinkler, all plumbing and sewage systems, fixtures, interior walls,
floors (including floor slabs), ceilings, storefronts, plate glass, skylights,
all electrical facilities and equipment including, without limitation, lighting
fixtures, lamps, fans and any exhaust equipment and systems, electrical motors,
and all other appliances and equipment (including, without limitation, dock
levelers, dock shelters, dock seals and dock lighting) of every kind and nature
located in, upon or about the Demised Premises, except as to such maintenance
and repair as is the obligation of Landlord pursuant to Section 10(b). During
the Term, Tenant shall maintain in full force and effect a service contract for
the maintenance of the heating, ventilation and air conditioning systems with an
entity reasonably acceptable to Landlord. Tenant shall deliver to Landlord (i) a
copy of said service contract prior to the Lease Commencement Date, and (ii)
thereafter, a copy of a renewal or substitute service contract within thirty
(30) days prior to the expiration of the existing service contract. Tenant's
obligation shall exclude any maintenance and repair required because of the act
or negligence of Landlord, its employees, contractors or agents, which shall be
the responsibility of Landlord. Landlord shall grant to Tenant, until the
expiration or earlier termination of the Term, without recourse or warranty, a
non-exclusive right during the Term to exercise Landlord's rights under any
warranties obtained with respect to the heating, ventilation and air
conditioning system, or any other portions of the improvements within the
Demised Premises required to be maintained or repaired by Tenant pursuant to
this Lease.
(b) Landlord shall, at its own cost and expense, maintain in good
condition and repair the roof, foundation (beneath the floor slab) and
structural frame of the Building. Landlord's obligation shall exclude the cost
of any maintenance or repair required because of the act or negligence of Tenant
or Tenant's agents, contractors, employees and invitees (collectively, "Tenant's
Affiliates"), the cost of which shall be the responsibility of Tenant.
(c) Except to the extent caused by the negligent action or inaction
or willful misconduct of Landlord, its contractors, employees or agents, and is
not covered by the insurance required to be carried by Tenant pursuant to the
terms of this Lease, Landlord shall not be liable to Tenant or to any other
person for any damage occasioned by failure in any utility system or by the
bursting or leaking of any vessel or pipe in or about the Demised Premises, or
for any damage occasioned by water coming into the Demised Premises or arising
from the acts or neglects of occupants of adjacent property or the public.
11. TENANT'S PERSONAL PROPERTY; INDEMNITY. All of Tenant's personal
property in the Demised Premises shall be and remain at Tenant's sole risk.
Landlord, its agents, employees and contractors, shall not be liable for, and
Tenant hereby releases Landlord from, any and all liability for theft thereof or
any damage thereto occasioned by any act of God or by any acts, omissions or
negligence of any persons, except to the extent caused by the negligence or
willful misconduct of Landlord, its agents, employees and contractors. Landlord,
its agents, employees and contractors, shall not be liable for any injury to the
person or property of Tenant or other persons in or about the Demised Premises,
Tenant expressly agreeing to indemnify and save Landlord, its agents, employees
and contractors, harmless, in all such cases, except to the extent caused by the
negligence or willful misconduct of Landlord, its agents, employees and
contractors. Tenant further agrees to indemnify and reimburse Landlord for any
costs or
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expenses, including, without limitation, reasonable attorneys' fees, that
Landlord reasonably may incur in investigating, handling or litigating any such
claim against Landlord by a third person, unless such claim arose from the
negligence or willful misconduct of Landlord, its agents, employees or
contractors. The provisions of this Section 11 shall survive the expiration or
earlier termination of this Lease with respect to any damage, injury or death
occurring before such expiration or termination.
12. TENANT'S FIXTURES. Tenant shall have the right to install in the
Demised Premises trade fixtures and equipment required by Tenant or used by it
in its business, and if installed by Tenant, to remove any or all such trade
fixtures and equipment from time to time during and upon termination or
expiration of this Lease; PROVIDED, HOWEVER, that Tenant shall repair and
restore any damage or injury to the Demised Premises (to the condition in which
the Demised Premises existed prior to such installation) caused by the
installation and/or removal of any such trade fixtures and equipment.
13. SIGNS. No sign, advertisement or notice shall be inscribed,
painted, affixed, or displayed on the windows or exterior walls of the Demised
Premises or on any public area of the Building, except in such places, numbers,
sizes, colors and styles as are approved in advance in writing by Landlord
(which approval shall not be unreasonably withheld, conditioned or delayed), and
which conform to all applicable laws, ordinances, or covenants affecting the
Demised Premises. Any and all signs installed or constructed by or on behalf of
Tenant pursuant hereto shall be installed, maintained and removed by Tenant at
Tenant's sole cost and expense.
14. WAIVER OF LANDLORD'S LIEN. Landlord hereby waives any statutory and
common law liens for rent (other than judgment liens). Although such waiver is
hereby deemed to be automatic and self-executing, Landlord agrees to execute
such instruments as may be reasonably required from time to time in order to
confirm such waiver.
15. GOVERNMENTAL REGULATIONS. Tenant shall promptly comply throughout
the Term, at Tenant's sole cost and expense, with all present and future laws,
ordinances and regulations of all applicable governing authorities relating to
(a) all or any part of the Demised Premises, and (b) to the use or manner of use
of the Demised Premises and the Building Common Area. In the event that such
law, ordinance or regulation requires a renovation, improvement or replacement
to the Demised Premises or the Building Common Area, then Tenant shall be
required to make such renovation, improvement or replacement at Tenant's sole
cost and expense and in compliance with Section 18 hereof only if such law,
ordinance or regulation is applicable because of Tenant's particular use of the
Demised Premises or the Building Common Area, and is not applicable to the
Project in general. In addition, if the renovation, improvement or replacement
is required to comply with a law, ordinance or regulation that was not in effect
or did not require compliance at the time the leasehold improvements were
constructed in the Demised Premises pursuant to Section 17 and is not related to
Tenant's particular use of the Demised Premises, then the cost of such
renovation, improvement or replacement shall be amortized on a straight-line
basis over the useful life of the item in question, as reasonably determined by
Landlord, and Tenant shall be obligated to pay for the portion of such costs
attributable to the remainder of the Term, including any extensions thereof.
Tenant shall also observe and comply with the requirements of all policies of
public liability, fire and other policies of insurance at any time in force with
respect to the Demised Premises.
16. ENVIRONMENTAL MATTERS.
(a) For purposes of this Lease:
(i) "Contamination" as used herein means the presence of or
release of Hazardous Substances (as hereinafter defined) into any environmental
media from, upon, within, below, into or on any portion of the Demised Premises,
the Building, the Building Common Area or the Project so as to require
remediation, cleanup or investigation under any applicable Environmental Law (as
hereinafter defined).
(ii) "Environmental Laws" as used herein means all federal,
state, and local laws, regulations, orders, permits, ordinances or other
requirements, which exist now or as may exist hereafter, concerning protection
of human health, safety and the environment, all as may be amended from time to
time.
(iii) "Hazardous Substances" as used herein means any hazardous
or toxic substance, material, chemical, pollutant, contaminant or waste as those
terms are defined by any applicable Environmental Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any solid wastes,
polychlorinated biphenyls, urea formaldehyde, asbestos, radioactive materials,
radon, explosives, petroleum products and oil.
(b) Landlord represents that, except as revealed to Tenant in
writing by Landlord, to Landlord's actual knowledge, Landlord has not treated,
stored or disposed of any Hazardous Substances upon or within the Demised
Premises or the land on which the Building is constructed, nor, to Landlord's
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actual knowledge, has any predecessor owner of the Demised Premises or the land
on which the Building is constructed.
(c) Tenant covenants that all its activities, and the activities of
Tenant's Affiliates (as defined in Section 10(b)), on the Demised Premises, the
Building, or the Project during the Term will be conducted in compliance with
Environmental Laws. As to the business of Tenant which Tenant intends to conduct
at the Demised Premises, Tenant warrants that it is currently in compliance with
all applicable Environmental Laws and that there are no pending or threatened
notices of deficiency, notices of violation, orders, or judicial or
administrative actions involving alleged violations by Tenant of any
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall be
responsible for obtaining all permits or licenses or approvals under
Environmental Laws necessary for Tenant's operation of its business on the
Demised Premises and shall make all notifications and registrations required by
any applicable Environmental Laws. Tenant, at Tenant's sole cost and expense,
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations and with any other
applicable Environmental Laws. Tenant warrants that it has obtained or will
obtain all such permits, licenses or approvals and made all such notifications
and registrations required by any applicable Environmental Laws necessary for
Tenant's operation of its business on the Demised Premises.
(d) Tenant shall not cause or permit any Hazardous Substances to be
brought upon, kept or used in or about the Demised Premises, the Building, or
the Project without the prior written consent of Landlord, which consent shall
not be unreasonably withheld; PROVIDED, HOWEVER, that the consent of Landlord
shall not be required for the use at the Demised Premises of cleaning supplies,
toner for photocopying machines and other similar materials, and
pharmaceutical-related products in containers and quantities reasonably
necessary for and consistent with normal and ordinary use by Tenant in the
routine operation or maintenance of Tenant's office equipment or in the routine
janitorial service, cleaning and maintenance for the Demised Premises and
operation of Tenant's business. For purposes of this Section 16, Landlord shall
be deemed to have reasonably withheld consent if Landlord determines that the
presence of such Hazardous Substance within the Demised Premises could result in
a risk of harm to person or property or otherwise negatively affect the value or
marketability of the Building or the Project.
(e) Tenant shall not cause or permit the release of any Hazardous
Substances by Tenant or Tenant's Affiliates into any environmental media such as
air, water or land, or into or on the Demised Premises, the Building or the
Project in any manner that violates any Environmental Laws. If such release
shall occur, Tenant shall (i) take all steps reasonably necessary to contain and
control such release and any associated Contamination, (ii) clean up or
otherwise remedy such release and any associated Contamination to the extent
required by, and take any and all other actions required under, applicable
Environmental Laws and (iii) notify and keep Landlord reasonably informed of
such release and response.
(f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold
Landlord harmless from and against any and all expense, loss, and liability
suffered by Landlord (except to the extent that such expenses, losses, and
liabilities arise out of the negligence or willful act of Landlord, its agents,
employees or contractors), by reason of the storage, generation, release,
handling, treatment, transportation, disposal, or arrangement for transportation
or disposal, of any Hazardous Substances (whether accidental, intentional, or
negligent) by Tenant or Tenant's Affiliates or by reason of Tenant's breach of
any of the provisions of this Section 16. Such expenses, losses and liabilities
shall include, without limitation, (i) any and all expenses that Landlord may
incur to comply with any Environmental Laws; (ii) any and all costs that
Landlord may incur in studying or remedying any Contamination at or arising from
the Demised Premises, the Building, or the Project; (iii) any and all costs that
Landlord may incur in studying, removing, disposing or otherwise addressing any
Hazardous Substances; (iv) any and all fines, penalties or other sanctions
assessed upon Landlord; and (v) any and all legal and professional fees and
costs incurred by Landlord in connection with the foregoing. The indemnity
contained herein shall survive the expiration or earlier termination of this
Lease.
17. CONSTRUCTION OF DEMISED PREMISES.
(a) Landlord shall, at Landlord's sole cost and expense, construct
the shell of the Building in accordance with the specifications set forth on
EXHIBIT B attached hereto. Promptly after the Lease Date, Landlord and Tenant
shall meet to discuss the terms of preliminary space plans for the Demised
Premises (the "Preliminary Space Plans") and, within twenty one (21) days from
the Lease Date, Landlord and Tenant shall agree upon the Preliminary Space
Plans. Within thirty (30) days after the Preliminary Space Plans are agreed upon
by Landlord and Tenant, Landlord shall prepare, at Landlord's sole cost and
expense, and submit to Tenant a set of plans and specifications and/or
construction drawings (collectively, the "Plans and Specifications") based on
the Preliminary Space Plans, covering all work to
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be performed by Landlord in constructing the Improvements (as defined in Section
8(a)(ii)) which will also incorporate Tenant provided work necessary for
permitting in the City of Weston (i.e. racking, conveying, power etc.). Tenant
shall have five (5) business days after receipt of the plans and specifications
in which to review and to give to Landlord written notice of its approval of the
plans and specifications or its requested changes to the Plans and
Specifications. Tenant shall have no right to request any changes to the plans
and specifications which would materially alter either the Demised Premises or
the exterior appearance or basic nature of the Building, as the same are
contemplated by the preliminary Space Plans. If Tenant fails to approve or
request changes to the Plans and Specifications by five (5) business days after
its receipt thereof, then Tenant shall be deemed to have approved the Plans and
Specifications and the same shall thereupon be final (subject to the following
paragraph). If Tenant requests any changes to the Plans and Specifications,
Landlord shall make those changes which are reasonably requested by Tenant and
shall within ten (10) days of its receipt of such request submit the revised
portion of the Plans and specifications to Tenant. Tenant may not thereafter
disapprove the revised portions of the Plans and specifications unless Landlord
has unreasonably failed to incorporate reasonable comments of Tenant and,
subject to the foregoing and subject to the following paragraph, the Plans and
specifications, as modified by said revisions, shall be deemed to be final upon
the submission of said revisions to Tenant.
Landlord shall retain Current Construction Company as its
general contractor for the Improvements. Within five (5) business days following
receipt of the final approved Plans and Specifications for the Demised Premises,
Landlord shall submit the major subcontracted portions of the final approved
Plans and Specifications for competitive bid to at least three (3)
subcontractors. Within five (5) business days after the opening of the bids,
Landlord shall submit to Tenant a proposed construction budget for the
Improvements (the "Construction Budget"), delineating the cost of the
Improvements and any excess thereof over the Tenant Allowance (as defined in
Special Stipulation 12). Landlord will make every reasonable effort to obtain
the best possible pricing in connection with the construction of the
Improvements. If the Construction Budget does not exceed the amount of the
Tenant Allowance, then Tenant shall acknowledge and approve the Construction
Budget simultaneously with Landlord's submission of the Construction Budget to
Tenant. If the Construction Budget exceeds the amount of the Tenant Allowance,
then, within five (5) business days from submission of the Construction Budget
by Landlord, Tenant shall either approve the Construction Budget as submitted or
provide Landlord with modifications to the Plans and Specifications to reduce
the Construction Budget. If Tenant fails to approve the Construction Budget or
submit modifications to the Plans and Specifications within such five (5)
business day period, then the Construction Budget shall be deemed approved as
submitted. If Tenant timely submits modifications to the Plans and
Specifications pursuant to the preceding sentence, Landlord shall, within seven
(7) business days, review and approve the modified Plans and Specifications (and
submit a revised Construction Budget), or disapprove the modified Plans and
Specifications (and give Tenant its reasons for disapproval). If the revised
Construction Budget does not exceed the amount of the Tenant Allowance, then
Tenant shall acknowledge and approve the revised Construction Budget
simultaneously with Landlord's submission of the Construction Budget to Tenant.
If the revised Construction Budget exceeds the amount of the Tenant Allowance
and Tenant elects to make further changes to the Plans and Specifications, the
time required to make such changes shall be a Tenant delay and the Term and
Tenant's obligation to pay Base Rent hereunder shall nevertheless begin on the
date Landlord would have achieved substantial completion, but for such Tenant's
delay.
Tenant shall at all times in its review of the plans and
specifications, and of any revisions thereto, act reasonably and in good faith.
After Tenant has approved the Plans and Specifications or the Plans and
Specifications have otherwise been finalized pursuant to the procedures set
forth hereinabove, any subsequent changes to the Plans and Specifications
requested by Tenant shall be at Tenant's sole cost and expense and subject to
Landlord's written approval, which approval shall not be unreasonably withheld,
conditioned or delayed. If after the Plans and specifications have been
finalized pursuant to the procedures set forth hereinabove Tenant requests any
further changes to the Plans and specifications, the time required to make such
changes shall be a Tenant delay and, the Term and Tenant's obligation to pay
Base Rent hereunder shall nevertheless begin on the date Landlord would have
achieved substantial completion, but for such Tenant's delay.
Additionally, within twenty one (21) days after the Lease Date,
Tenant shall prepare and submit to Landlord Tenant's furniture, fixture and
equipment plans (including, but not limited to, plans for racking and
conveyor/material handling systems) (the "FFE Plans") in form and detail
necessary to enable Landlord to obtain its permits and licenses to construct the
Demised Premises. Any delay in delivery to Landlord of the FFE Plans, or changes
to the FFE Plans, which delays Landlord in obtaining its permits and licenses to
construct the Demised Premises, shall be deemed a Tenant delay and the Term and
Tenant's obligation to pay Base Rent hereunder shall nevertheless begin on the
date Landlord would have achieved substantial completion, but for such Tenant's
delay.
(b) Landlord shall use reasonable speed and diligence to
substantially complete the Improvements, at Landlord's sole cost and expense
(including, without limitation, all architectural and engineering fees, all
impact fees and all permitting fees and costs related to the construction of the
Demised Premises), and have the Demised Premises ready for occupancy on or
before the Lease Commencement Date set forth in Section 1(f). If the Demised
Premises are not substantially complete on that date, such failure to complete
shall not in any way affect the obligation of Tenant hereunder except that the
Lease Commencement Date, the Base Rent Commencement Date, and the Expiration
Date shall
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be postponed one day for each day substantial completion is delayed until the
Demised Premises are substantially complete, unless the delay is caused by
Tenant's failure to approve the Plans and Specifications as set forth in Section
17(a) or by change orders requested by Tenant after approval of the Plans and
Specifications. No liability whatsoever shall arise or accrue against Landlord
by reason of its failure to deliver or afford possession of the Demised
Premises, and Tenant hereby releases and discharges Landlord from and of any
claims for damage, loss, or injury of every kind whatsoever as if this Lease
were never executed. In no event shall substantial completion be deemed to have
occurred prior to the date that a conditional or non-conditional Certificate of
Occupancy (or other similar certificate allowing Tenant to occupy the Demised
Premises) has been obtained for the Demised Premises and the Landlord's
construction of the Demised Premises and the parking area for the Building is
sufficiently complete in accordance with the Plans and Specifications so as to
allow Tenant to occupy the Demised Premises for the use and purposes intended
without unreasonable disturbance or interruption, subject to Landlord's
completion of the Punchlist items.
(c) Upon substantial completion of the Demised Premises, a
representative of Landlord and a representative of Tenant together shall inspect
the Demised Premises and generate a punchlist of defective or uncompleted items
relating to the completion of construction of the Improvements (the
"Punchlist"). Landlord shall, within a reasonable time after the Punchlist is
prepared and agreed upon by Landlord and Tenant, complete such incomplete work
and remedy such defective work as is set forth on the Punchlist. All
construction work performed by Landlord shall be deemed approved by Tenant in
all respects except for (i) items of said work which are not completed or do not
conform to the Plans and Specifications and which are included on the Punchlist
or (ii) items warranted by or to be maintained by Landlord or (iii) latent
defects. Upon Landlord's completion of the Punchlist, Landlord shall prepare a
completion of punchlist agreement which Tenant shall promptly execute.
(d) Upon substantial completion of the Demised Premises and the
creation of the Punchlist, Tenant shall execute and deliver to Landlord a letter
of acceptance in which Tenant (i) accepts the Demised Premises subject only to
items listed in Section 17(c)(i) - (iii) above and Landlord's completion of the
items listed on the Punchlist and (ii) confirms that the Lease Commencement
Date, the Base Rent Commencement Date and the Expiration Date remain as set
forth in Section 1, or if revised pursuant to the terms hereof, setting forth
such dates as so revised and (iii) confirms the Building Square Footage, the
Demised Premises Square Footage and the Annual Base Rent and Monthly Base Rent
Installments in accordance with Section 2.
(e) Notwithstanding anything to the contrary contained in this
Lease, for the first (1st) Lease Year, Landlord hereby provides a warranty in
favor of Tenant to repair or replace (if needed) any defect in the Improvements
constructed by Landlord, so long as the need for such repair or replacement is
not caused by the negligence or willful misconduct of Tenant or its agents,
employees or contractors. The warranty contained herein is not intended to
derogate from Landlord's obligations expressly set forth in Section 10 of this
Lease.
(f) The Tenant shall have the right to retain, at Tenant's sole
cost and expense, a third party consultant to assist Tenant throughout the
entire construction process, including without limitation the space planning and
plans preparation process. In addition, in no event may Landlord charge Tenant
at any time for any supervisory or coordination or management fees regarding any
construction related to the initial construction of the Demised Premises.
(g) Tenant shall have the right to install, at Tenant's sole cost
and expense and risk, its furniture, trade fixtures and equipment prior to
substantial completion and Landlord shall cooperate regarding same; provided,
however, that no such pre-substantial completion installation may delay or
interfere with Landlord's work pursuant to this Section, and Tenant shall
arrange a meeting to coordinate with Landlord prior to any such pre-substantial
completion installation.
(h) Notwithstanding the provisions of Section 17(b) of this Lease,
in the event that Landlord is unable to substantially complete the Demised
Premises for occupancy by Tenant on or before October 1, 1999, as extended by
Delay as defined below, Tenant may, at its option and as its sole remedy,
terminate this Lease by written notice to Landlord given by November 1, 1999
(provided that substantial completion has not occurred prior to Landlord's
receipt of said termination notice), and thereafter neither Landlord nor Tenant
shall have any further obligation hereunder. For purposes of this Lease, "Delay"
shall mean delays incurred by reason of Tenant's failure to approve the Plans
and Specifications as set forth in Section 17(a) or changes requested by Tenant
in the Plans and Specifications after Tenant's approval thereof, and for such
additional time as is equal to the time lost by Landlord or Landlord's
contractors or suppliers in connection with the performance of Landlord's work
and/or the construction of the Building and related improvements due to strikes
or other labor troubles, governmental restrictions and limitations, war or other
national emergency, non-availability of materials or supplies, delay in
transportation, accidents, floods, fire, damage or other casualties, weather or
other conditions, acts or omissions of Tenant, or delays by utility companies in
bringing utility lines to the Demised Premises.
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18. TENANT ALTERATIONS AND ADDITIONS.
(a) Except for interior, non-structural improvements costing less
than $50,000 each, and $100,000 in the aggregate, Tenant shall not make or
permit to be made any alterations, improvements, or additions to the Demised
Premises (a "Tenant's Change"), without first obtaining on each occasion
Landlord's prior written consent (which consent Landlord agrees not to
unreasonably withhold) and Lender's prior written consent (if such consent is
required). As part of its approval process, Landlord may require that Tenant
submit plans and specifications to Landlord, for Landlord's approval or
disapproval, which approval shall not be unreasonably withheld. All Tenant's
Changes shall be performed in accordance with all legal requirements applicable
thereto and in a good and workmanlike manner with first-class materials. Tenant
shall maintain insurance reasonably satisfactory to Landlord during the
construction of all Tenant's Changes. If Landlord at the time of giving its
approval to any Tenant's Change notifies Tenant in writing that approval is
conditioned upon restoration, then Tenant shall, at its sole cost and expense
and upon the termination or expiration of this Lease, remove the same and
restore the Demised Premises to its condition prior to such Tenant's Change.
Unless consented to in writing by Landlord, no Tenant's Change shall be
structural in nature or impair the structural strength of the Building or reduce
its value. Tenant shall pay the full cost of any Tenant's Change and shall give
Landlord such reasonable security as may be requested by Landlord to insure
payment of such cost. Except as otherwise provided herein and in Section 12, all
Tenant's Changes and all repairs and all other property attached to or installed
on the Demised Premises by or on behalf of Tenant shall immediately upon
completion or installation thereof be and become part of the Demised Premises
and the property of Landlord without payment therefor by Landlord and shall be
surrendered to Landlord upon the expiration or earlier termination of this
Lease.
(b) To the extent permitted by law, all of Tenant's contracts and
subcontracts for such Tenant's Changes shall provide that no lien shall attach
to or be claimed against the Demised Premises or any interest therein other than
Tenant's leasehold interest in the Demised Premises, and that all subcontracts
let thereunder shall contain the same provision. Whether or not Tenant furnishes
the foregoing, Tenant agrees to hold Landlord harmless against all liens, claims
and liabilities of every kind, nature and description which may arise out of or
in any way be connected with such work. Tenant shall not permit the Demised
Premises to become subject to any mechanics', laborers' or materialmen's lien on
account of labor, material or services furnished to Tenant or claimed to have
been furnished to Tenant in connection with work of any character performed or
claimed to have been performed for the Demised Premises by, or at the direction
or sufferance of Tenant and if any such liens are filed against the Demised
Premises, Tenant shall promptly discharge the same; PROVIDED, HOWEVER, that
Tenant shall have the right to contest, in good faith and with reasonable
diligence, the validity of any such lien or claimed lien if Tenant shall give to
Landlord, within fifteen days after demand, such security as may be reasonably
satisfactory to Landlord to assure payment thereof and to prevent any sale,
foreclosure, or forfeiture of Landlord's interest in the Demised Premises by
reason of non-payment thereof; provided further that on final determination of
the lien or claim for lien, Tenant shall immediately pay any judgment rendered,
with all proper costs and charges, and shall have the lien released and any
judgment satisfied. If Tenant fails to post such security or does not diligently
contest such lien, Landlord may, without investigation of the validity of the
lien claim, discharge such lien and Tenant shall reimburse Landlord upon demand
for all costs and expenses incurred in connection therewith, which expenses
shall include any reasonable attorneys' fees, paralegals' fees and any and all
costs associated therewith, including litigation through all trial and appellate
levels and any costs in posting bond to effect a discharge or release of the
lien. Nothing contained in this Lease shall be construed as a consent on the
part of Landlord to subject the Demised Premises to liability under any lien law
now or hereafter existing of the state in which the Demised Premises are
located, including, but not limited to the Construction Lien Law of the State of
Florida, for Demised Premises in the State of Florida. For Demised Premises
which are located in the State of Florida, Landlord hereby advises Tenant that
pursuant to the provisions of Chapter 713, Florida Statutes, Tenant has the
obligation to advise Tenant's contractors of the existence of this Section of
the Lease. If Tenant fails to so notify Tenant's contractors, it may render
Tenant's contract(s) with such contractors voidable at the option of Tenant's
contractors.
19. SERVICES BY LANDLORD. Landlord shall be responsible for providing
for maintenance of the Building Common Area, and, except as required by Section
10(b) hereof, Landlord shall be responsible for no other services whatsoever.
Tenant, by payment of Tenant's share of the Operating Expenses, shall pay
Tenant's pro rata share of the expenses incurred by Landlord hereunder.
20. FIRE AND OTHER CASUALTY. In the event the Demised Premises are
damaged by fire or other casualty insured by Landlord, Landlord agrees to
promptly restore and repair the Demised Premises at Landlord's expense,
including the Improvements to be insured by Tenant but only to the extent
Landlord receives insurance proceeds therefor, including the proceeds from the
insurance required to be carried by Tenant on the Improvements. Notwithstanding
the foregoing, in the event that the Demised Premises are (i) in the reasonable
opinion of Landlord, so destroyed that they cannot be repaired or rebuilt within
two hundred forty (240) days after the date of such damage; or (ii) destroyed by
a casualty which is not covered by Landlord's insurance, or if such casualty is
covered by Landlord's insurance but Lender or other party entitled to insurance
proceeds fails to make such proceeds available to Landlord in an amount
sufficient for restoration of the Demised Premises, then Landlord shall give
written notice to Tenant of such determination (the "Determination Notice")
within forty five (45) days of such casualty. Either Landlord or Tenant may
terminate and cancel this Lease effective as of the date of such casualty by
giving
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written notice to the other party within fifteen (15) days after Tenant's
receipt of the Determination Notice. Upon the giving of such termination notice,
all obligations hereunder with respect to periods from and after the effective
date of termination shall thereupon cease and terminate. If no such termination
notice is given, Landlord shall, to the extent of the available insurance
proceeds, make such repair or restoration of the Demised Premises to the
approximate condition existing prior to such casualty, promptly and in such
manner as not to unreasonably interfere with Tenant's use and occupancy of the
Demised Premises (if Tenant is still occupying the Demised Premises). Base Rent
and Additional Rent shall proportionately abate during the time that the Demised
Premises or any part thereof are unusable by reason of any such damage thereto.
In addition to the foregoing, if this Lease is not cancelled and the Landlord
undertakes such reconstruction or repair but does not complete the
reconstruction or repair within eight (8) months after the date of the fire or
other casualty, then the Tenant shall have the additional right to terminate
this Lease by written notice to the Landlord delivered within thirty (30) days
after the expiration of such eight (8) month period, provided that said notice
is received by Landlord prior to substantial completion of said reconstruction,
whereupon both parties shall be relieved of all further obligations hereunder,
except for those obligations which expressly survive a termination of this
Lease.
21. CONDEMNATION.
(a) If all of the Demised Premises is taken or condemned for a
public or quasi-public use, or if a material portion of the Demised Premises is
taken or condemned for a public or quasi-public use and the remaining portion
thereof is not usable by Tenant in the reasonable opinion of Tenant, this Lease
shall terminate as of the earlier of the date title to the condemned real estate
vests in the condemnor or the date on which Tenant is deprived of possession of
the Demised Premises. In such event, the Base Rent herein reserved and all
Additional Rent and other sums payable hereunder shall be apportioned and paid
in full by Tenant to Landlord to that date, all Base Rent, Additional Rent and
other sums payable hereunder prepaid for periods beyond that date shall
forthwith be repaid by Landlord to Tenant, and neither party shall thereafter
have any liability hereunder, except that any obligation or liability of either
party, actual or contingent, under this Lease which has accrued on or prior to
such termination date shall survive.
(b) If only part of the Demised Premises is taken or condemned for
a public or quasi-public use and this Lease does not terminate pursuant to
Section 21(a), Landlord shall, to the extent of the award it receives, restore
the Demised Premises to a condition and to a size as nearly comparable as
reasonably possible to the condition and size thereof immediately prior to the
taking, and there shall be an equitable adjustment to the Base Rent and
Additional Rent according to the value of the Demised Premises before and after
the taking.
(c) Landlord shall be entitled to receive the entire award in any
proceeding with respect to any taking provided for in this Section 21, without
deduction therefrom for any estate vested in Tenant by this Lease, and Tenant
shall receive no part of such award. Nothing herein contained (including the
termination of this Lease) shall be deemed to prohibit Tenant from making a
separate claim, against the condemnor, to the extent permitted by law, for the
value of Tenant's moveable trade fixtures, machinery and moving expenses the
unamortized value of any leasehold improvements paid for directly by Tenant and
any other compensable damages, provided that the making of such claim shall not
and does not adversely affect or diminish Landlord's award.
22. TENANT'S DEFAULT.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or any Additional Rent
hereunder as and when such rent becomes due and such failure shall continue for
more than five (5) days after Landlord gives written notice to Tenant of such
failure;
(ii) Reserved
(iii) if Tenant fails to take possession of the Demised
Premises on the Lease Commencement Date or promptly thereafter;
(iv) if Tenant permits to be done anything which creates a lien
upon the Demised Premises and fails to discharge or bond such lien, or post
security with Landlord acceptable to Landlord within thirty (30) days after
receipt by Tenant of written notice thereof;
(v) if Tenant fails to maintain in force all policies of
insurance required by this Lease and such failure shall continue for more than
ten (10) days after Landlord gives Tenant written notice of such failure;
(vi) if any petition is filed by or against Tenant or any
guarantor of this Lease under any present or future section or chapter of the
Bankruptcy Code, or under any similar law or statute of the United States or any
state thereof (which, in the case of an involuntary proceeding, is not
permanently discharged, dismissed, stayed, or vacated, as the case may be,
within sixty (60) days of
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commencement), or if any order for relief shall be entered against Tenant or any
guarantor of this Lease in any such proceedings;
(vii) if Tenant or any guarantor of this Lease becomes
insolvent or makes a transfer in fraud of creditors or makes an assignment for
the benefit of creditors;
(viii) if a receiver, custodian, or trustee is appointed for
the Demised Premises or for all or substantially all of the assets of Tenant or
of any guarantor of this Lease, which appointment is not vacated within sixty
(60) days following the date of such appointment; or
(ix) if Tenant fails to perform or observe any other term of
this Lease and such failure shall continue for more than thirty (30) days after
Landlord gives Tenant written notice of such failure, or, if such failure cannot
be corrected within such thirty (30) day period, if Tenant does not commence to
correct such default within said thirty (30) day period and thereafter
diligently prosecute the correction of same to completion within a reasonable
time.
(b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22 or by applicable law):
(i) Terminate this Lease by giving Tenant notice of
termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or
(ii) Terminate this Lease as provided in Section 22(b)(i)
hereof and recover from Tenant all damages Landlord may incur by reason of
Tenant's default, including, without limitation, an amount which, at the date of
such termination, is calculated as follows: (1) the value of the excess, if any,
of (A) the Base Rent, Additional Rent and all other sums which would have been
payable hereunder by Tenant for the period commencing with the day following the
date of such termination and ending with the Expiration Date had this Lease not
been terminated (the "Remaining Term"), over (B) the aggregate reasonable rental
value of the Demised Premises for the Remaining Term (including Additional Rent
and any other sums) (which excess, if any shall be discounted to present value
at the "Treasury Yield" as defined below for the Remaining Term); PLUS (2) the
costs of recovering possession of the Demised Premises and all other expenses
incurred by Landlord due to Tenant's default, including, without limitation,
reasonable attorney's fees; PLUS (3) the unpaid Base Rent and Additional Rent
earned as of the date of termination plus any interest and late fees due
hereunder, plus other sums of money and damages owing on the date of termination
by Tenant to Landlord under this Lease or in connection with the Demised
Premises. The amount as calculated above shall be deemed immediately due and
payable. The payment of the amount calculated in subparagraph (ii)(1) shall not
be deemed a penalty but shall merely constitute payment of liquidated damages,
it being understood and acknowledged by Landlord and Tenant that actual damages
to Landlord are extremely difficult, if not impossible, to ascertain. "Treasury
Yield" shall mean the rate of return in percent per annum of Treasury Constant
Maturities for the length of time specified as published in document H.15(519)
(presently published by the Board of Governors of the U.S. Federal Reserve
System titled "Federal Reserve Statistical Release") for the calendar week
immediately preceding the calendar week in which the termination occurs. If the
rate of return of Treasury Constant Maturities for the calendar week in question
is not published on or before the business day preceding the date of the
Treasury Yield in question is to become effective, then the Treasury Yield shall
be based upon the rate of return of Treasury Constant Maturities for the length
of time specified for the most recent calendar week for which such publication
has occurred. If no rate of return for Treasury Constant Maturities is published
for the specific length of time specified, the Treasury Yield for such length of
time shall be the weighted average of the rates of return of Treasury Constant
Maturities most nearly corresponding to the length of the applicable period
specified. If the publishing of the rate of return of Treasury Constant
Maturities is ever discontinued, then the Treasury Yield shall be based upon the
index which is published by the Board of Governors of the U.S. Federal Reserve
System in replacement thereof or, if no such replacement index is published, the
index which, in Landlord's reasonable determination, most nearly corresponds to
the rate of return of Treasury Constant Maturities. In determining the aggregate
reasonable rental value pursuant to subparagraph (ii)(1)(B) above, the parties
hereby agree that, at the time Landlord seeks to enforce this remedy, all
relevant factors should be considered, including, but not limited to, (a) the
length of time remaining in the Term, (b) the then current market conditions in
the general area in which the Building is located, (c) the net effective rental
rates then being obtained by landlords for similar type space of similar size in
similar type buildings in the general area in which the Building is located, (d)
the vacancy levels in the general area in which the Building is located, (e)
current levels of new construction that will be completed during the remainder
of the Term and how this construction will likely affect vacancy rates and
rental rates and (f) inflation; or
(iii) without terminating this Lease, declare immediately due
and payable the sum of the following: (1) the present value (calculated using
the "Treasury Yield") of all Base Rent and Additional Rent due and coming due
under this Lease for the entire remaining Term (as if by the terms of this Lease
they were payable in advance), plus (2) the cost of recovering and reletting the
Demised Premises and all other expenses incurred by Landlord in connection with
Tenant's default, plus
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(3) any unpaid Base Rent, Additional Rent and other rentals, charges,
assessments and other sums owing by Tenant to Landlord under this Lease or in
connection with the Demised Premises as of the date this provision is invoked by
Landlord, plus (4) interest on all such amounts from the date due at the
Interest Rate, and Landlord may immediately proceed to distrain, collect, or
bring action for such sum, or may file a proof of claim in any bankruptcy or
insolvency proceedings to enforce payment thereof; provided, however, that such
payment shall not be deemed a penalty or liquidated damages, but shall merely
constitute payment in advance of all Base Rent and Additional Rent payable
hereunder throughout the Term, and provided further, however, that upon Landlord
receiving such payment, Tenant shall be entitled to receive from Landlord all
rents received by Landlord from other assignees, tenants and subtenants on
account of said Demised Premises during the remainder of the Term (provided that
the monies to which Tenant shall so become entitled shall in no event exceed the
entire amount actually paid by Tenant to Landlord pursuant to this subparagraph
(iii)), less all costs, expenses and attorneys' fees of Landlord incurred but
not yet reimbursed by Tenant in connection with recovering and reletting the
Demised Premises; or
(iv) Without terminating this Lease, in its own name but as
agent for Tenant, enter into and upon and take possession of the Demised
Premises or any part thereof to the extent permitted by law. Any property
remaining in the Demised Premises may be removed and stored in a warehouse or
elsewhere at the cost of, and for the account of, Tenant without Landlord being
deemed guilty of trespass or becoming liable for any loss or damage which may be
occasioned thereby unless caused by the negligence or willful misconduct of
Landlord, its agents, employees or contractors. Thereafter, Landlord may, but
shall not be obligated to, lease to a third party the Demised Premises or any
portion thereof as the agent of Tenant upon such terms and conditions as
Landlord may deem necessary or desirable in order to relet the Demised Premises.
The remainder of any rentals received by Landlord from such reletting, after the
payment of any indebtedness due hereunder from Tenant to Landlord, and the
payment of any costs and expenses of such reletting, shall be held by Landlord
to the extent of and for application in payment of future rent owed by Tenant,
if any, as the same may become due and payable hereunder. If such rentals
received from such reletting shall at any time or from time to time be less than
sufficient to pay to Landlord the entire sums then due from Tenant hereunder,
Tenant shall pay any such deficiency to Landlord. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect to
terminate this Lease for any such previous default provided same has not been
cured; or
(v) Without terminating this Lease, and with notice to Tenant,
to the extent permitted by law, enter into and upon the Demised Premises and,
without being liable for prosecution or any claim for damages therefor, maintain
the Demised Premises and repair or replace any damage thereto or do anything or
make any payment for which Tenant is responsible hereunder. Tenant shall
reimburse Landlord immediately upon demand for any expenses which Landlord
incurs in thus effecting Tenant's compliance under this Lease and Landlord shall
not be liable to Tenant for any damages with respect thereto, except for the
negligence or willful misconduct of Landlord, its agents, employees or
contractors; or
(vi) With or without terminating this Lease, allow the Demised
Premises to remain unoccupied and collect rent from Tenant as it comes due; or
(vii) Pursue such other remedies as are available at law or
equity.
(c) If this Lease shall terminate as a result of or while there
exists an Event of Default hereunder, any funds of Tenant held by Landlord may
be applied by Landlord to any damages payable by Tenant (whether provided for
herein or by law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor the
settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises and
no act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice of such intention is given to Tenant. No provision
of this Lease shall be deemed to have been waived by either party unless such
waiver is in writing and signed by the party making such waiver. Landlord's
acceptance of Base Rent or Additional Rent in full or in part following an Event
of Default hereunder shall not be construed as a waiver of such Event of
Default. No custom or practice which may grow up between the parties in
connection with the terms of this Lease shall be construed to waive or lessen
either party's right to insist upon strict performance of the terms of this
Lease, without a written notice thereof to the other party.
(f) If an Event of Default shall occur, Tenant shall pay to
Landlord, on demand, all expenses incurred by Landlord as a result thereof,
including reasonable attorneys' fees, court costs and expenses actually
incurred.
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(g) Notwithstanding anything to the contrary contained in this
Lease, (i) Landlord's exercise of its rights and remedies upon an Event of
Default by Tenant shall be subject to the compliance by Landlord with applicable
Florida law, and (ii) in the event of any litigation between Landlord and Tenant
arising out of this Lease or Tenant's use and occupancy of the Demised Premises,
the prevailing party shall be entitled to recover its actual, third party costs
and expenses incurred in such litigation, including reasonable attorneys' fees,
at all levels, including appeals. In the event of an uncured default by
Landlord, Tenant shall have the right to exercise any available legal and
equitable remedies (except for the right to set-off rent, except as otherwise
set forth in this Lease), including, without limitation, that if a default by
Landlord renders the Demised Premises untenantable, and such default is not
cured by Landlord within the applicable cure period, then Tenant shall have the
right to terminate this Lease by written notice to Landlord delivered within
thirty (30) days after the expiration of such cure period, whereupon both
parties shall be relieved of all further obligations hereunder (but not from
accrued liabilities).
(h) Landlord shall not be deemed to be in default of this Lease
unless and until Landlord fails to cure any alleged default within thirty (30)
days after written notice from Tenant; provided, however, that if such default
reasonably requires more than thirty (30) days to cure, Landlord shall have a
reasonable time to cure such default, provided Landlord commences to cure within
such thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
23. LANDLORD'S RIGHT OF ENTRY. Subject to Tenant's right to have a
representative of Tenant accompany Landlord, and subject to Tenant's reasonable
security procedures, Tenant agrees to permit Landlord and the authorized
representatives of Landlord and of Lender to enter upon the Demised Premises at
all reasonable times for the purposes of inspecting the Demised Premises and
Tenant's compliance with this Lease, and making any necessary repairs thereto;
provided that, except in the case of an emergency, Landlord shall give Tenant
reasonable prior notice of Landlord's intended entry upon the Demised Premises.
Nothing herein shall imply any duty upon the part of Landlord to do any work
required of Tenant hereunder, and the performance thereof by Landlord shall not
constitute a waiver of Tenant's default in failing to perform it. Landlord shall
not be liable for inconvenience, annoyance, disturbance or other damage to
Tenant by reason of making such repairs or the performance of such work in the
Demised Premises or on account of bringing materials, supplies and equipment
into or through the Demised Premises during the course thereof, and the
obligations of Tenant under this Lease shall not thereby be affected; PROVIDED,
HOWEVER, that Landlord shall (and shall cause its agents, employees and
contractors to) use reasonable efforts not to disturb or otherwise interfere
with Tenant's operations in the Demised Premises in making such repairs or
performing such work. Landlord also shall have the right to enter the Demised
Premises at all reasonable times upon reasonable prior notice to exhibit the
Demised Premises to any prospective purchaser, mortgagee or, in the last six (6)
months of the Term, tenant thereof.
24. LENDER'S RIGHTS.
(a) For purposes of this Lease:
(i) "Lender" as used herein means the current holder of a
Mortgage; (ii) "Mortgage" as used herein means any or all mortgages, deeds to
secure debt, deeds of trust or other instruments in the nature thereof which may
now or hereafter affect or encumber Landlord's title to the Demised Premises,
and any amendments, modifications, extensions or renewals thereof.
(b) This Lease and all rights of Tenant hereunder are and shall be
subject and subordinate to the lien and security title of any Mortgage, subject
to the provisions of this Section 24. Tenant recognizes and acknowledges the
right of Lender to foreclose or exercise the power of sale against the Demised
Premises under any Mortgage.
(c) Tenant shall, in confirmation of the subordination set forth in
Section 24(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary,
upon demand, at any time or times, execute, acknowledge, and deliver to Landlord
or to Lender any and all instruments requested by either of them to evidence
such subordination.
(d) At any time during the Term, Landlord may, by written notice to
Tenant, make this Lease superior to the lien of any Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all instruments that may be necessary to make
this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall, if requested by such successor, attorn to and recognize such
successor as Tenant's landlord under this Lease without change in the terms and
provisions of this Lease and shall promptly execute and deliver any instrument
that may be necessary to evidence such attornment, provided that such successor
shall not be bound by (i) any payment of Base Rent or Additional Rent for
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more than one month in advance, except prepayments in the nature of security for
the performance by Tenant of its obligations under this Lease, and then only if
such prepayments have been deposited with and are under the control of such
successor, (ii) any provision of any amendment to the Lease to which Lender has
not consented, which consent shall not be unreasonably withheld or delayed (and
it shall be Landlord's responsibility to request such consent) (iii) the
defaults of any prior landlord under this Lease, except as to continuing repair
and maintenance obligations of Landlord or (iv) any offset rights arising out of
the defaults of any prior landlord under this Lease. Upon such attornment, this
Lease shall continue in full force and effect as a direct lease between each
successor landlord and Tenant, subject to all of the terms, covenants and
conditions of this Lease.
(f) Landlord represents and warrants to Tenant that, as of the date
of this Lease, it is the fee simple owner of the Building, and that, as of the
date hereof, there are no (i) ground leases of all or any part of Landlord's
interest in the Building, or (ii) Mortgages with respect to the Building, except
for a Mortgage in favor of First Union. Simultaneously with the execution of
this Lease, Tenant shall execute a Subordination, Non-Disturbance and Attornment
Agreement ("First Union SNDA") in the form attached hereto as EXHIBIT H.
Landlord shall execute the First Union SNDA and, within fifteen (15) days after
the Lease date, Landlord shall cause First Union to execute the First Union SNDA
and shall be promptly returned to Tenant. After the Lease Date, any
subordination of this Lease to a Mortgage or any ground lease shall be
conditioned on the Lender (or ground lessor) and Tenant executing a
Subordination, Non-Disturbance and Attornment Agreement ("SNDA"), in which the
holder of said Mortgage agrees not to disturb Tenant's possession of the Demised
Premises so long as Tenant is not in default hereunder. The SNDA shall also
include (a) the conditions contained in Section 24(e) of this Lease, (b) a
requirement that said holder be given notice and opportunity to cure a landlord
default and (c) other provisions customarily required by lenders. Tenant shall
promptly execute such SNDA upon Landlord's request.
25. ESTOPPEL CERTIFICATE. Landlord and Tenant agree, at any time, and
from time to time, within fifteen (15) days after written request of the other,
to execute, acknowledge and deliver a statement in writing in recordable form to
the requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
accepted the Demised Premises and is conducting its business therein, and (v)
and as to such additional matters as may be reasonably requested, it being
intended that any such statement delivered pursuant hereto may be relied upon by
the requesting party and by any purchaser of title to the Demised Premises or by
any mortgagee or any assignee thereof or any party to any sale-leaseback of the
Demised Premises, or the landlord under a ground lease affecting the Demised
Premises, or any assignee, subtenant or lender of Tenant.
26. LANDLORD LIABILITY. No owner of the Demised Premises, whether or
not named herein, shall have liability hereunder after it ceases to hold title
to the Demised Premises except for accrued liabilities. Neither Landlord nor
Tenant nor any officer, director, shareholder, partner or principal of Landlord
or Tenant, whether disclosed or undisclosed, shall be under any personal
liability with respect to any of the provisions of this Lease. In the event
Landlord is in breach or default with respect to Landlord's obligations or
otherwise under this Lease, Tenant shall look solely to the equity of Landlord
in the Building for the satisfaction of Tenant's remedies, which includes,
without limitation, (a) net proceeds of sale actually received by Landlord and
(b) insurance and condemnation proceeds actually received by Landlord (net of
costs of collection and any transfer of such proceeds to any Lender) which have
not been used to restore the Building. It is expressly understood and agreed
that Landlord's liability under the terms, covenants, conditions, warranties and
obligations of this Lease shall in no event exceed the loss of Landlord's equity
interest in the Building (which equity interest shall be deemed to be the
greater of (y) Landlord's actual equity interest in the Building or (z) twenty
percent (20%) of the then fair market value of the Building) . However, if
Tenant has received a final judgment, not subject to appeal, for damages against
Landlord as a result of an uncured default by Landlord under this Lease, which
judgment exceeds Landlord's equity in the Building, and Landlord fails to pay
said amount within sixty (60) days from the date of the final judgment, then
Tenant will have the right to deduct the unpaid amount of such judgment against
the Base Rent and Additional Rent to become due under this Lease until fully
credited.
27. NOTICES. Any notice required or permitted to be given or served by
either party to this Lease shall be deemed given when made in writing, and
either (i) personally delivered, (ii) deposited with the United States Postal
Service, postage prepaid, by registered or certified mail, return receipt
requested, or (iii) delivered by licensed overnight delivery service providing
proof of delivery, properly addressed to the address set forth in Section 1(m)
(as the same may be changed by giving written notice of the aforesaid in
accordance with this Section 27). If any notice mailed is properly addressed
with appropriate postage but returned for any reason, such notice shall be
deemed to be effective notice and to be given on the date of mailing.
28. BROKERS. Landlord and Tenant represent and warrant to each other
that, except for those parties set forth in Section 1(o) (the "Brokers"), each
party has not engaged or had any conversations or negotiations with any broker,
finder or other third party concerning the leasing of the Demised Premises to
Tenant who would be entitled to any commission or fee based on the execution of
this Lease. Landlord and Tenant hereby further represent and warrant to each
other that they are not receiving and are not
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entitled to receive any rebate, payment or other remuneration, either directly
or indirectly, from the Brokers, and that they are not otherwise sharing in or
entitled to share in any commission or fee paid to the Brokers by Landlord or
any other party in connection with the execution of this Lease, either directly
or indirectly. Landlord and Tenant hereby indemnify and hold harmless each other
against and from any claims for any brokerage commissions by any broker or agent
claiming to have dealt with, by or through the indemnifying party (except those
payable to the Brokers, all of which are payable by Landlord pursuant to a
separate agreement and against which Landlord shall indemnify and hold harmless
Tenant) and all costs, expenses and liabilities in connection therewith,
including, without limitation, reasonable attorneys' fees and expenses, for any
breach of the foregoing. The foregoing indemnification shall survive the
termination of this Lease for any reason.
29. ASSIGNMENT AND SUBLEASING.
(a) Tenant may not assign, mortgage, pledge, encumber or otherwise
transfer this Lease, or any interest hereunder, or sublet the Demised Premises,
in whole or in part, without on each occasion first obtaining the prior express
written consent of Landlord, which consent Landlord shall not unreasonably
withhold, delay or condition. Any change in control of Tenant resulting from a
merger, consolidation, stock transfer or asset sale shall be considered an
assignment or transfer which requires Landlord's prior written consent. For
purposes of this Section 29, by way of example and not limitation, Landlord
shall be deemed to have reasonably withheld consent if Landlord reasonably
determines (i) that there is a reasonable chance that the prospective assignee
does not have the financial strength to fulfill the obligations of the Lease,
(ii) that the prospective assignee or subtenant has a poor business reputation,
(iii) that the proposed use of the Demised Premises by such prospective assignee
or subtenant (including, without limitation, a use involving the use or handling
of Hazardous Substances) will negatively affect the value or marketability of
the Building or the Project or (iv) that the prospective assignee or subtenant
is a current tenant in the Project or is a bona-fide third-party prospective
tenant.
(b) If Tenant desires to assign this Lease or sublet the Demised
Premises or any part thereof, Tenant shall give Landlord written notice no later
than thirty (30) days in advance of the proposed effective date of any proposed
assignment or sublease, specifying (i) the name and business of the proposed
assignee or sublessee, (ii) the amount and location of the space within the
Demised Premises proposed to be subleased, (iii) the proposed effective date and
duration of the assignment or subletting and (iv) the proposed rent or
consideration to be paid to Tenant by such assignee or sublessee. Tenant shall
promptly supply Landlord with financial statements and other information as
Landlord may reasonably request to evaluate the proposed assignment or sublease.
Landlord shall have a period of twenty one (21) days following receipt of such
notice and other information requested by Landlord within which to notify Tenant
in writing that Landlord elects: (i) to permit Tenant to assign or sublet such
space; PROVIDED, HOWEVER, that, if the rent rate agreed upon between Tenant and
its proposed subtenant is greater than the rent rate that Tenant must pay
Landlord hereunder for that portion of the Demised Premises, or if any
consideration shall be promised to or received by Tenant in connection with such
proposed assignment or sublease (in addition to rent), then one half (1/2) of
such excess rent and other consideration (other than goodwill) (after payment of
brokerage commissions, attorneys' fees, improvements and other disbursements
reasonably incurred by Tenant for such assignment and subletting if acceptable
evidence of such disbursements is delivered to Landlord) shall be considered
Additional Rent owed by Tenant to Landlord, and shall be paid by Tenant to
Landlord, in the case of excess rent, in the same manner that Tenant pays Base
Rent and, in the case of any other consideration, within ten (10) business days
after receipt thereof by Tenant; or (ii) to refuse, in Landlord's reasonable
discretion (taking into account all relevant reasonable factors including,
without limitation, the factors set forth in the Section 29(a) above), to
consent to Tenant's assignment or subleasing of such space and to continue this
Lease in full force and effect as to the entire Demised Premises. If (1)
Landlord fails to notify Tenant in writing of such election within the aforesaid
thirty (30) day period, and (2) after the expiration of said thirty (30) day
period, Tenant notifies Landlord in writing of said failure and, within five (5)
business days after receipt of Tenant's notice, Landlord fails to notify Tenant
in writing of Landlord's election, then Landlord shall be deemed to have elected
option (i) above. Tenant agrees to reimburse Landlord for reasonable and actual
legal fees (not to exceed $1,000.00 for each such transfer) and any other
reasonable costs incurred by Landlord in connection with any requested
assignment or subletting, and such payments shall not be deducted from the
Additional Rent owed to Landlord pursuant to subsection (ii) above. Tenant shall
deliver to Landlord copies of all documents executed in connection with any
permitted assignment or subletting, which documents shall be in form and
substance reasonably satisfactory to Landlord and which shall require such
assignee to assume performance of all terms of this Lease on Tenant's part to be
performed.
(c) No acceptance by Landlord of any rent or any other sum of money
from any assignee, sublessee or other category of transferee shall be deemed to
constitute Landlord's consent to any assignment, sublease, or transfer.
Permitted subtenants or assignees shall become liable directly to Landlord for
all obligations of Tenant hereunder, without, however, relieving Tenant of any
of its liability hereunder. No such assignment, subletting, occupancy or
collection shall be deemed the acceptance of the assignee, tenant or occupant,
as Tenant, or a release of Tenant from the further performance by Tenant of
Tenant's obligations under this Lease. 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.
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(d) Notwithstanding anything to the contrary contained in this
Lease, Tenant may assign this Lease or sublet all or any portion of the Demised
Premises from time to time, without Landlord's consent, to any entity
controlling, controlled by or under common control with Tenant, or to any
successor of Tenant resulting from a merger or consolidation of Tenant, or as a
result of a sale by Tenant of all or substantially all of its assets or stock,
provided that no such transfer shall relieve Tenant from any liability under
this Lease, whether accrued to the date of such transfer or thereafter accruing.
In addition, any change in the controlling interest in the stock of Tenant as a
result of an initial public offering of Tenant's stock, and any transfer of the
capital stock of Tenant by persons or parties through the "over-the-counter
market" or through any recognized stock exchange, shall not be deemed to be a
transfer requiring Landlord's consent.
30. TERMINATION OR EXPIRATION.
(a) No termination of this Lease prior to the normal ending
thereof, by lapse of time or otherwise, shall affect Landlord's right to collect
rent for the period prior to termination thereof.
(b) At the expiration or earlier termination of the Term of this
Lease, Tenant shall surrender the Demised Premises and all improvements,
alterations and additions thereto, and keys therefor to Landlord, clean and
neat, and in the same condition as at the Lease Commencement Date, excepting
normal wear and tear, condemnation and casualty other than that required to be
insured against by Tenant hereunder.
(c) If Tenant remains in possession of the Demised Premises after
expiration of the Term, with or without Landlord's acquiescence and without any
express agreement of the parties, Tenant shall be a tenant-at-sufferance at one
hundred fifty percent (150%) of the Base Rent in effect at the end of the Term.
Tenant shall also continue to pay all other Additional Rent due hereunder, and
there shall be no renewal of this Lease by operation of law. In addition to the
foregoing, Tenant shall be liable for all damages, direct and consequential,
incurred by Landlord as a result of such holdover; provided, however, that in
order for Landlord to recover consequential damages resulting from the loss of a
replacement tenant for the Demised Premises, Landlord must notify Tenant that
Landlord has entered into negotiations with a bona fide replacement tenant for
all or a part of the Demised Premises and Tenant must not have vacated the
Demised Premises as required by this Lease by the later of (i) the Expiration
Date and (ii) thirty (30) days after receipt of Landlord's notice. No receipt of
money by Landlord from Tenant after the termination of this Lease or Tenant's
right of possession of the Demised Premises shall reinstate, continue or extend
the Term or Tenant's right of possession.
31. RESERVED.
32. LATE PAYMENTS. In the event any installment of rent, inclusive of
Base Rent, or Additional Rent or other sums due hereunder, if any, is not paid
(i) within five (5) days after Tenant's receipt of written notice of such
failure to pay on the first two (2) occasions during any twelve (12) month
period, or (ii) within five (5) days after the due date (exclusive of any cure
periods or notice requirements) with respect to any subsequent late payments in
any twelve (12) month period, Tenant shall pay an administrative fee equal to
$500.00, plus interest on the amount past due at the lesser of (i) the maximum
interest rate allowed by law or (ii) a rate of fifteen percent (15%) per annum
(the "Interest Rate") to defray the additional expenses incurred by Landlord in
processing such payment.
33. RULES AND REGULATIONS. Tenant agrees to abide by the rules and
regulations set forth on EXHIBIT D attached hereto, as well as other rules and
regulations reasonably promulgated by Landlord from time to time.
34. QUIET ENJOYMENT. So long as Tenant has not committed an Event of
Default hereunder, Landlord agrees that Tenant shall have the right to quietly
use and enjoy the Demised Premises for the Term.
35. MISCELLANEOUS.
(a) The parties hereto hereby covenant and agree that Landlord
shall receive the Base Rent, Additional Rent and all other sums payable by
Tenant hereinabove provided as net income from the Demised Premises, without any
abatement (except as set forth in Section 20 and Section 21), reduction,
set-off, counterclaim, defense or deduction whatsoever, except as otherwise
expressly set forth in this Lease.
(b) If any clause or provision of this Lease is determined to be
illegal, invalid or unenforceable under present or future laws effective during
the Term, 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 that in lieu of
such illegal, invalid or unenforceable clause or provision there shall be
substituted 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.
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<PAGE>
(c) All rights, powers, and privileges conferred hereunder upon the
parties hereto shall be cumulative, but not restrictive to those given by law.
(d) Time is of the essence of this Lease.
(e) No failure of Landlord or Tenant to exercise any power given
Landlord or Tenant hereunder or to insist upon strict compliance by Landlord or
Tenant with its obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of Landlord's or
Tenant's rights to demand exact compliance with the terms hereof.
(f) This Lease contains the entire agreement of the parties hereto
as to the subject matter of this Lease and no representations, inducements,
promises or agreements, oral or otherwise, between the parties not embodied
herein shall be of any force and effect. The masculine (or neuter) pronoun,
singular number shall include the masculine, feminine and neuter gender and the
singular and plural number.
(g) This contract shall create the relationship of landlord and
tenant between Landlord and Tenant; no estate shall pass out of Landlord; Tenant
has a usufruct, not subject to levy and sale, and not assignable by Tenant
except as expressly set forth herein.
(h) Under no circumstances shall Tenant or Landlord have the right
to record this Lease. Either party may require the other to execute a memorandum
of this Lease in recordable form as attached hereto as EXHIBIT B, and such party
may, at its expense, record such memorandum in the Public Records of Broward
County, Florida.
(i) The captions of this Lease are for convenience only and are not
a part of this Lease, and do not in any way define, limit, describe or amplify
the terms or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.
(k) This Lease shall be interpreted under the laws of the State
where the Demised Premises are located.
(l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.
36. SPECIAL STIPULATIONS. The Special Stipulations, if any, attached
hereto as EXHIBIT C, are incorporated herein and made a part hereof, and to the
extent of any conflict between the foregoing provisions and the Special
Stipulations, the Special Stipulations shall govern and control.
37. LEASE DATE. For purposes of this Lease, the term "Lease Date" shall
mean the later date upon which this Lease is signed by Landlord and Tenant.
38. AUTHORITY. Landlord and Tenant shall each cause its corporate
secretary to execute the certificate attached hereto as EXHIBITS E-1 AND E-2.
Landlord and Tenant are authorized by all required corporate action to enter
into this Lease and the individual(s) signing this Lease on behalf of Landlord
and Tenant are each authorized to bind Landlord and Tenant to its terms.
39. NO OFFER UNTIL EXECUTED. The submission of this Lease to Tenant for
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.
40. RADON DISCLOSURE. Radon is a naturally occurring radioactive gas
that, when it has accumulated in a building in sufficient quantities may present
health risks to persons who are exposed to it over a period of time. Levels of
radon that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from your county public health unit.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seals, the day and year first above written.
LANDLORD:
Date: 9/23/98
Industrial PROPERTY FUND II, L.P.,
a Georgia limited partnership
By: IDI-GP II, Inc.,
a Georgia corporation,
its sole general partner
/s/ MERRELYN ROGERS
- ----------------------------------------
Witness (print name): Merrelyn Rogers
By: /s/ TIMOTHY J. GUNTER
-------------------------------------
Name: TIMOTHY J. GUNTER
Title: SECRETARY
/s/ MARIA CARABALLO
- ----------------------------------------
Witness (print name): Maria Caraballo
/s/ MERRELYN ROGERS Attest: /s/ GREGORY J. RYAN
- ---------------------------------------- ---------------------------------
Witness (print name):Merrelyn Rogers Name: GREGORY J. RYAN
Title: ASSISTANT SECRETARY
/s/ MARIA CARABALLO [CORPORATE SEAL]
- ----------------------------------------
Witness (print name): Maria Caraballo
TENANT:
Date: 9/18/98
ANDA GENERICS, INC.,
a Florida corporation
/s/ ANNET GONZALEZ By: /s/ SCOTT LODIN
- ---------------------------------------- ------------------------------------
Witness (print name): Annet Gonzalez Name: Scott Lodin
Title: Vice President &
General Counsel
/s/ [ILLEGIBLE]
- --------------------------------
Witness (print name): __________________
/s/ ANNET GONZALES Attest: /s/ ANGELO C. [ILLEGIBLE]
- ---------------------------------------- ---------------------------------
Witness (print name):Annet Gonzales Name: Angelo C. [Illegible]
Title: V.P. & C.F.O.
/s/ ALLISON A. LICHTEE [CORPORATE SEAL]
- ----------------------------------------
Witness (print name): Allison A. Lichtee
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<PAGE>
ATTESTATION
LANDLORD - PARTNERSHIP:
STATE OF Georgia
COUNTY OF Fulton
BEFORE ME, a Notary Public in and for said County, personally appeared
Timothy J. Gunter and Greg J. Ryan, known to me to be the person(s) who, as
Secretary and Asst. Secretary of IDI-GP II, Inc., a Georgia corporation, its
sole general partner, the corporation which executed the foregoing instrument in
its capacity as general partner of Tenant, signed the same, and acknowledged to
me that they did so sign said instrument in the name and upon behalf of said
partnership, that the same is their free act and deed and they were duly
authorized thereunto by the partnership.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this 23 day of September, 1998 .
/s/ CHARLOTTE ROBINSON
----------------------------------------
Notary Public
My Commission Expires: 10-06-01
TENANT - CORPORATION:
STATE OF Florida
COUNTY OF Broward
BEFORE ME, a Notary Public in and for said County, personally appeared
Angelo C. [Illegible] and Scott Lodin, known to me to be the person(s) who, as
Vice President and CFO and V.P./General Counsel, respectively, of Anda Generics,
Inc., the corporation which executed the foregoing instrument in its capacity as
Tenant, signed the same, and acknowledged to me that they did so sign said
instrument in the name and upon behalf of said corporation as officers of said
corporation, that the same is their free act and deed as such officers,
respectively, and they were duly authorized thereunto by its board of directors;
and that the seal affixed to said instrument is the corporate seal of said
corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this 18 day of September, 1998 .
/s/ ALLISON A. LICHTER
----------------------------------------
Notary Public
My Commission Expires: 3/14/00
-21-
<PAGE>
EXHIBIT A
FLOOR PLAN
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
<PAGE>
EXHIBIT "B"
BUILDING SHELL CRITERIA
<PAGE>
WESTON BUSINESS CENTER
BUILDING 'A'
<PAGE>
EXHIBIT "B"
RHON ERNEST-JONES
CONSULTING ENGINEERS, INC.
MEMORANDUM
<PAGE>
EXHIBIT C
SPECIAL STIPULATIONS
The Special Stipulations set forth herein are hereby incorporated into
the body of the lease to which these Special Stipulations are attached (the
"Lease"), and to the extent of any conflict between these Special Stipulations
and the Lease, these Special Stipulations shall govern and control.
1. SECURITY DEPOSIT. Upon Tenant's execution of this Lease, Tenant will
deliver to Landlord an Irrevocable Letter of Credit in the amount of
$1,000,000.00 as additional security for the full and faithful performance by
Tenant of each and every term, covenant and condition of this Lease, in a form
attached hereto as EXHIBIT F and from a financial institution acceptable to
Landlord. The Letter of Credit shall dissolve and be returned to Tenant or the
issuing institution upon satisfaction of the following conditions: (a) Guarantor
shall have either (i) positive net income from operations in accordance with
GAAP and reported on Guarantor's Form 10-Q and/or Form 10-K filed with the SEC
for six (6) consecutive fiscal quarters from and after the Lease Commencement
Date or (ii) positive net income from operations in accordance with GAAP and
reported on Guarantor's Form 10-K filed with the SEC for two consecutive fiscal
years from and after the Lease Commencement Date, (b) Tenant shall have
deposited with Landlord in cash (or delivered to Landlord a Letter of Credit
acceptable to Landlord), an amount equal to one month's Base Rent as security
deposit, which cash deposit shall be governed by Section 5 of the Lease and (c)
Guarantor shall have a Tangible Net Worth of at least $50 million. For purposes
herein, "Tangible Net Worth" is defined as the excess of the value of tangible
assets (i.e. assets excluding those which are intangible such as goodwill,
patents and trademarks) over liabilities.
2. OPERATING EXPENSES.
(a) Notwithstanding anything to the contrary contained in Section
6, in addition to the exclusions described in Section 6, the following costs and
expenses shall be excluded from Operating Expenses:
(1) expenses relating to the leasing of space in the Project
(including tenant improvements and painting, decorating, Landlord construction
allowances or contributions, leasing commissions, rental concessions, and
advertising expenses incurred in connection with the listing of available space
in the Project);
(2) legal fees and disbursements incurred for negotiation of
leases or enforcement of leases;
(3) the cost of utilities in the Project to the extent paid for
directly by tenants;
(4) expenditures for financing and refinancing and for mortgage
debt service or any other cost incurred in respect of any mortgage or other
financing of the Building or Project;
(5) depreciation of the Building or Project and amortization;
(6) franchise, transfer, gains, inheritance, estate, mortgage
recording, and income taxes imposed upon Landlord;
(7) salaries or fringe benefits of personnel above the grade of
building manager;
(8) capital improvements or replacement of capital items except
as otherwise expressly permitted in the Lease;
(9) costs for which Landlord receives a credit against any
payment due from Landlord to Tenant or any third party costs and expenses
otherwise includible in Operating Expenses, to the extent that Landlord is
reimbursed from other sources for such costs and expenses;
(10) rent and additional rent payable under a ground lease or
any other superior lease affecting the Building or Project;
(11) costs for which Landlord is actually compensated by
insurance proceeds related to a specific Operating Expense item, exclusive of
deductibles and costs of collection;
(12) costs incurred in connection with a sale of all or a
portion of the Building or Project or the sale or transfer of any beneficial
ownership interest in and to the Landlord and/or the Building or Project or the
grant of a ground lease or any other superior lease affecting the Building or
Project;
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(13) any fee or expenditure paid to a related party in excess
of the amount which would be paid in an arm's length transaction for materials
or services of comparable quality (but only to the extent of such excess);
(14) all costs or expenses (including fines, penalties and
legal fees) incurred due to any violation by Landlord, its employees, agents or
contractors, or any tenant or other occupant of the Project or noncompliance of
the Building or Project with, the terms and conditions of any lease or other
occupancy agreement pertaining to the Project, or any applicable code,
governmental rule, regulation or law;
(15) salaries or fringe benefits of personnel not employed
exclusively at the Project, to the extent such salaries and benefits relate to
work performed outside the Project, as determined on a pro rata basis;
(16) any expense fully reimbursed to Landlord by Tenant or any
other tenant of the Project, or any expense billed to and paid directly by same
for their own account or on Landlord's behalf;
(17) advertising and promotional expenditures, and costs of
signs in or at the Project identifying the Project, Landlord or any tenant of
the Project;
(18) any bad debt loss, rent loss, or reserves for bad debts or
rent loss;
(19) costs incurred by Landlord for repairs or replacements to
the extent that Landlord is reimbursed under warranties or guarantees;
(20) expenses resulting from the gross negligence or willful
misconduct of Landlord or its agents, employees or contractors; and
(21) all costs of correcting defects, including any allowances
for same, in the construction of the Building (including latent defects) or the
Building equipment (or the replacement of defective equipment).
(b) For the purpose of determining Tenant's pro rata share of
Operating Expenses, Tenant's share of property management fees for the Building
shall not exceed three percent (3.0%) per year of the Annual Base Rent and
annual Additional Rent due under the Lease.
3. Intentionally Omitted.
4. OPERATING EXPENSES.
(a) CONTESTING OF TAXES. If Landlord does not elect to contest real
estate taxes applicable to the Building and the Building Common Area for a
particular tax period during the Term, Tenant may request that Landlord contest
such taxes by written notice to Landlord given, if at all, within sixty (60)
days following Tenant's receipt of the statement required to be delivered by
Landlord pursuant to Section 6(a) of the Lease covering the tax period in
question. Landlord may then elect either to contest such taxes or to allow
Tenant to so contest such taxes subject to Landlord's reasonable approval of the
firm or individual hired to conduct such contest. In either case, Tenant shall
be responsible for all costs of contesting such taxes to the extent that said
costs exceed the savings realized by such contest. Any resulting savings over
and above the cost of such contest shall be distributed on a prorata basis
between Landlord, Tenant and the other tenants of the Building that contributed
toward payment of the applicable tax bill.
(b) OPERATING EXPENSES - CAP ON CONTROLLABLE EXPENSES. In the event
that the amount of Operating Expenses attributable to all items OTHER THAN
taxes, utilities, insurance and charges assessed against or attributed to the
Building pursuant to any applicable declaration of protective covenants
(Operating Expenses attributable to all such other items being referred to
collectively herein as "Controllable Expenses") in any calendar year exceeds the
amount attributable to Controllable Expenses during the immediately preceding
calendar year by more than eight (8%) (the "Cap"), after making adjustments for
any changes in the size of the Demised Premises due to expansions or
contractions, then the amount attributable to Controllable Expenses, for
purposes of determining the amount of Tenant's proportionate share of Operating
Expenses, shall be limited to the amount included in Tenant's proportionate
share of Operating Expenses during the immediately preceding calendar year
multiplied by the sum of one hundred percent (100%) and the Cap.
(c) AUDIT RIGHTS. During the Term or any extension thereof, but not
more than one (1) time per year, Tenant shall have the right to cause Landlord's
books and records with respect to Operating Expenses to be audited by an
independent certified public accountant or a lease auditing firm of Tenant's
choosing and reasonably acceptable to Landlord. Landlord shall cause such books
and records to be made available for such inspection during such normal business
hours and at such location where Landlord regularly keeps its books and records,
upon ten (10) days' prior notification to Landlord. Such audit shall be done in
accordance with generally accepted accounting principles, consistently applied.
If,
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at the conclusion of such audit, Tenant's audit of such expenses for the
preceding year indicates that Tenant made an overpayment to Landlord for such
preceding year, Landlord shall remit the amount of such overpayment to Tenant
within thirty (30) days after receipt of notice from Tenant of the amount of
such overpayment in no Event of Default is then continuing. Should Landlord
disagree with the results of Tenant's audit, Landlord and Tenant shall refer the
matter to a mutually acceptable independent certified public accountant, who
shall work in good faith with Landlord and Tenant to resolve the discrepancy.
The fees and costs of such independent accountant to which such dispute is
referred shall be borne by the unsuccessful party and shall be shared pro rata
to the extent each party is unsuccessful as determined by such independent
certified public account, whose decision shall be final and binding. Landlord
shall pay the cost of Tenant's initial audit if Tenant's overpayment of such
expenses exceeded seven and one-half percent (7.5%) or more of the payment that
should properly have been made.
All of the information obtained through Tenant's inspection with
respect to financial matters (including, without limitation, costs, expenses,
income) and any other matters pertaining to Landlord, the Demised Premises, the
Building and/or the Project as well as any compromise, settlement, or adjustment
reached between Landlord and Tenant relative to the results of the inspection
shall be held in strict confidence by Tenant and its officers, agents, and
employees; and Tenant shall use its best efforts to cause its independent
professionals and any of its officers, agents or employees to be similarly
bound.
5. LANDLORD INSURANCE.
(a) Landlord shall maintain at all times during the Term of this
Lease, with such deductible as Landlord in its sole judgment determines
advisable, insurance on the "All-Risk" or equivalent form on a Replacement Cost
Basis against loss or damage to the Building. Such insurance shall be in the
amount of 100% of the replacement value of the Building (excluding all fixtures
and property required to be insured by Tenant under this Lease).
(b) Landlord shall maintain at all times during the Term commercial
liability insurance with limits at least equal to the amount as Tenant is
required to maintain pursuant to Section 8(a)(i) of this Lease.
6. LANDLORD INDEMNITY. Except for the negligence or willful misconduct
of Tenant, its agents, employees or contractors, Landlord will indemnify and
hold harmless Tenant of and from, all fines, suits, damages, claims, demands,
losses, actions, liabilities and expenses (including reasonable attorneys' fees
at all tribunal levels), for any injury to person or damage to or loss of
property on or about the Demised Premises and Building caused by the negligence
or willful misconduct of Landlord, its agents, employees or contractors.
7. COMPLIANCE WITH LAWS.
(a) BUILDING COMPLIANCE WITH LAWS. Landlord covenants to Tenant
that the design and construction of the Building shall materially comply with
all applicable federal, state, county and municipal laws, ordinances and codes
in effect as of the Lease Commencement Date, excepting therefrom any
requirements related to Tenant's specific use of the Demised Premises. If
Landlord or Tenant receives a notice of violation of any such federal, state and
local laws, ordinances, rules and regulations as in effect as of the Lease
Commencement Date (other than as a result of the negligence or willful
misconduct of Tenant or its agents, employees or contractors), then the work
required to bring the applicable item into compliance with such federal, state
and local laws, ordinances, rules and regulations as in effect as of the Lease
Commencement Date will be performed by Landlord, at its expense (and shall not
be included in Operating Expenses). Landlord agrees to indemnify and hold
harmless Tenant from and against any claims, liabilities, costs, fines, damages
and expenses (including reasonable attorneys' fees and costs at all tribunal
levels) (but excluding consequential damages) arising from Landlord's failure to
comply with the foregoing covenant.
(b) LANDLORD'S AND TENANT'S COMPLIANCE WITH ADA. Subject to the
last sentence hereof, Landlord, at its sole cost and expense, shall be
responsible for causing the Building to comply with Title III of the Americans
With Disabilities Act of 1990 (the "ADA"), or the regulations promulgated
thereunder, as said Title III is in effect and pertains to the general public as
of the Lease Commencement Date. During the Term, Tenant hereby agrees that it
shall be responsible, at its sole cost and expense, for (a) causing the
Building, the Building common Area and the Demised Premises to comply with Title
III of the ADA as a result of (i) any special requirements of the ADA relating
to accommodations for individual employees, invitees and/or guests of Tenant and
(ii) any alterations made to the Demised Premises by Tenant, and (b) complying
with all obligations of Tenant under Title I of the ADA.
8. INSTALLATION OF SATELLITE DISH. Tenant shall have the right to
install up to three (3) satellite dishes (collectively, the "Dish") on the roof
of the Building subject to the following:
(a) The installation, maintenance and removal shall be at Tenant's
sole cost and expense, including, but not limited to, the reasonable costs for
Landlord's roofing contractor to inspect and oversee said installation,
maintenance and removal.
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(b) The installation and location shall be in compliance with all
applicable governmental regulations, laws and ordinances. Prior to installation,
Tenant shall provide Landlord with satisfactory evidence of compliance with law.
(c) The radius of the Dish shall be no greater than six (6) feet.
(d) The installation shall require Landlord's prior written
approval of installation plans, which approval shall not be unreasonably
withheld or delayed.
(e) Tenant hereby indemnifies Landlord against all costs, losses,
damages, fines, attorney and contractor fees and other expenses and fees
incurred by Landlord as a result of Tenant's installation, maintenance and
removal of the Dish, including, but not limited to, the loss of Landlord's roof
warranty as a result of Tenant's, or its agents, employees or contractors, acts
or omissions. This indemnity shall survive the expiration or earlier termination
of this Lease.
(f) The installation, maintenance and removal shall be completed
lien free, or, in the alternative, Tenant shall bond over any such lien.
(g) The plans for installation shall receive the prior written
approval of Landlord's roofing contractor, which approval must explicitly
confirm that the roof warranty shall not be affected in any way by said
installation and maintenance.
(h) The Dish shall be located at least fifty feet from all sides of
the Building.
(i) Tenant's access to the roof shall be provided by Landlord's
property management personnel, which personnel shall have the right to accompany
Tenant onto the roof.
9. PARKING. The Tenant shall have the exclusive use of the entire
parking area for the Building, which shall provide no less than three hundred
seventy five (375) automobile parking spaces as shown on EXHIBIT A. The parking
area shall be constructed by Landlord at its expense as part of Landlord's
obligation to achieve substantial completion of the Demised Premises in
accordance with Plans and Specifications, and in accordance with all applicable
laws, codes and ordinances.
10. OPTION TO EXTEND TERM.
(a) Landlord hereby grants to Tenant two (2) consecutive options to
extend the Term for a period of five (5) years each time, each option to be
exercised by Tenant giving written notice of its exercise to Landlord in the
manner provided in this Lease at least two hundred forty (240) days prior to
(but not more than three hundred sixty (360) days prior to) the expiration of
the Term, as it may have been previously extended. No extension option may be
exercised by Tenant if an Event of Default has occurred and is then continuing
either at the time of exercise of the option or at the time the applicable Term
would otherwise have expired if the applicable option had not been exercised.
(b) For the first extension option, the Base Rent shall be based on
95% of the Prevailing Market Rate for such space. For the second extension
option, the Base Rent shall be based on the Prevailing Market Rate for such
space. If Tenant exercises its option[s] to extend the Term, Landlord shall,
within thirty (30) days after the receipt of Tenant's notice of exercise, notify
Tenant in writing of Landlord's reasonable determination of the Base Rent for
the Demised Premises, based on Landlord's reasonable determination of the
Prevailing Market Rate as defined below. Tenant shall have thirty (30) days from
its receipt of Landlord's notice of Landlord's determination of the Base Rent to
notify Landlord in writing that Tenant does not agree with Landlord's
determination. Tenant shall then elect either (i) to determine the Prevailing
Market Rate (as defined and calculated below) or (ii) to retract its option to
extend the Term, in which case the Term, as it may have been previously
extended, shall expire on its scheduled expiration date and Tenant's option to
extend the Term shall be void and of no further force and effect. If Tenant does
not notify Landlord of such election within thirty (30) days of its receipt of
Landlord's notice, Base Rent for the Demised Premises for the applicable
extended term shall be the Base Rent set forth in Landlord's notice to Tenant.
The phrase "Prevailing Market Rate" shall mean the then prevailing market rate
for base minimum rental calculated on a per square foot basis for leases
covering buildings comparable to the Building (as adjusted for any variances
between such buildings and the Building) located in the area of West Broward
County (hereinafter referred to as the "Market Area"). The Prevailing Market
Rate shall be determined by an appraisal procedure as follows:
In the event that Tenant notifies Landlord that Tenant disagrees
with Landlord's determination of the market rate and that Tenant
elects to determine the Prevailing Market Rate, then Tenant shall
specify, in such notice to Landlord, Tenant's selection of a real
estate appraiser who shall act on Tenant's behalf in determining
the Prevailing Market Rate. Within twenty (20) days after
Landlord's receipt of Tenant's selection of a real estate
appraiser, Landlord, by written notice to Tenant, shall designate a
real estate appraiser, who shall act on Landlord's behalf in the
determination of the Prevailing Market Rate. Within twenty (20)
days of the selection of Landlord's appraiser, the two (2)
appraisers shall render a joint written determination of the
Prevailing Market Rate, which determination shall take into
consideration any differences between the Building and those
buildings comparable to the Building located in the Market Area,
including
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without limitation age, location, setting and type of building. If
the two (2) appraisers are unable to agree upon a joint written
determination within said twenty (20) day period, the two
appraisers shall select a third appraiser within such twenty (20)
day period. Within twenty (20) days after the appointment of the
third appraiser, the third appraiser shall render a written
determination of the Prevailing Market Rate and such determination
shall be final, conclusive and binding. All appraisers selected in
accordance with this subparagraph shall have at least ten (10)
years prior experience in the commercial leasing market of the
Market Area and shall be members of the American Institute of Real
Estate Appraisers or similar professional organization. If either
Landlord or Tenant fails or refuses to select an appraiser, the
other appraiser shall alone determine the Prevailing Market Rate.
Landlord and Tenant agree that they shall be bound by the
determination of Prevailing Market Rate pursuant to this paragraph.
Landlord shall bear the fee and expenses of its appraiser; Tenant
shall bear the fee and expenses of its appraiser; and Landlord and
Tenant shall share equally the fee and expenses of the third
appraiser, if any.
(c) Except for the Base Rent, which shall be determined as set
forth in subparagraph (b) above, leasing of the Demised Premises by Tenant for
the applicable extended term shall be subject to all of the same terms and
conditions set forth in this Lease, including Tenant's obligation to pay
Tenant's share of Operating Expenses as provided in this Lease; provided,
however, that any improvement allowances, rent abatements or other concessions
applicable to the Demised Premises during the initial Term shall not be
applicable during any such extended term, nor shall Tenant have any additional
extension options unless expressly provided for in this Lease. Landlord and
Tenant shall enter into an amendment to this Lease to evidence Tenant's exercise
of its renewal option. If this Lease is guaranteed, it shall be a condition of
Landlord's granting the renewal that Tenant deliver to Landlord a reaffirmation
of the guaranty in which the guarantor acknowledges Tenant's exercise of its
renewal option and reaffirms that the guaranty is in full force and effect and
applies to said renewal.
11. RIGHT OF FIRST OFFER. So long as the Lease is in full force and
effect and no Event of Default has occurred and is then continuing, Landlord
hereby grants to Tenant a right of first offer (the "Right of First Offer") to
expand the Demised Premises to include space within proposed Building E of the
Project as shown on EXHIBIT G attached hereto which is currently contemplated to
be constructed by Landlord (the "Offer Space"), but only if Landlord (or an
entity controlling or controlled by Landlord (collectively, "Landlord's
Affiliate")) owns Building E (Landlord and Landlord's Affiliate having no
obligation, express or implied, to do so, and if Landlord or Landlord's
Affiliate does build Building E, Landlord and Landlord's Affiliate reserve the
right to change the configuration and size thereof) and only if and for so long
as Landlord or Landlord's Affiliate shall own Building E once constructed,
subject to the terms and conditions set forth herein.
(a) Reserved
(b) The term of the Right of First Offer shall commence on the
Lease Date and shall expire thirty-six (36) months thereafter, unless the Right
of First Offer is sooner terminated pursuant to the terms hereof.
(c) Subject to the other terms of this Right of First Offer, after
any part of the Offer Space has or will "become available" (as defined herein)
for leasing by Landlord, Landlord shall not, during the applicable term of the
Right of First Offer, lease to another tenant any portion of the Offer Space
which is greater than twenty-five percent (25%) of the total square footage of
Building E without first offering Tenant the right to lease the portion of the
Offer Space so offered to said other tenant as set forth herein.
(i) Space shall be deemed to "become available" when Landlord
desires to lease all or a portion of the Offer Space to a bona fide third party
that has manifested an intention to lease all or a portion of the Offer Space.
(ii) Notwithstanding subsection c(i) above, Offer Space shall
not be deemed to "become available" if the space is leased on a temporary basis
for a period of less than twelve (12) months without any right to extend.
(d) Consistent with subsection (c), Landlord shall not lease to
another tenant all or any portion of the Offer Space which is greater than
twenty-five percent (25%) of the total square footage of Building E unless and
until Landlord has first offered such portion of the Offer Space to Tenant in
writing (the "Offer"). The Offer shall contain (i) a description of the Offer
Space (which description shall include the square footage amount); (ii) the date
on which Landlord expects the Offer Space to become available and (iii) the Base
Rent and all other business terms and conditions (including, without limitation,
length of term and improvement allowance, if any) for the Offer Space. Upon
receipt of the Offer, Tenant shall have the right, for a period of five (5)
calendar days after receipt of the Offer, to exercise the Right of First Offer
by giving Landlord written notice that Tenant desires to lease the Offer Space
at the Base Rent and upon such other special terms and conditions as are
contained in the Offer.
(e) If, within such five (5)-day period, Tenant exercises the Right
of First Offer, then Landlord and Tenant shall amend the Lease (or execute a
separate lease) to include the Offer Space subject to the same terms and
conditions as the Lease, as modified by the terms and conditions of the
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Offer. If the Lease is guaranteed now or at anytime in the future, Tenant
simultaneously shall deliver to Landlord an original, signed, and notarized
reaffirmation of each Guarantor's personal guaranty, in form and substance
reasonably acceptable to Landlord.
(f) If, within such five (5)-day period, Tenant declines or fails
to exercise the Right of First Offer, Landlord shall then have the right to
lease the Offer Space in portions or in its entirety to a third party, unrelated
to and unaffiliated with Landlord, at any time within six (6) months without
regard to the restrictions in this Right of First Offer and on whatever terms
and conditions Landlord may decide in its sole discretion, provided the Base
Rent, Additional Rent, Tenant Allowance, and any rent concessions applicable to
the Offer Space are not substantially more favorable to such tenant than those
set forth in the Offer, without again complying with all the provisions of this
Right of First Offer.
(g) If Landlord does lease all or any portion of the Offer Space to
such a third party within said six (6) months after complying with the terms and
conditions of this Right of First Offer, then the Right of First Offer shall
terminate, and Tenant shall have no further Right of First Offer on the portion
of the Offer Space so leased to said third party.
(h) If Landlord desires to lease the Offer Space at a base rent per
square foot that is substantially less than the base rent per square foot set
forth in the Offer, or if Landlord desires to materially alter or modify the
material terms and conditions of the Offer, if any, Landlord shall be required
to present the altered or modified Offer to Tenant pursuant to this Right of
First Offer, in the same manner that the original Offer was submitted to Tenant.
12. CONSTRUCTION OF DEMISED PREMISES.
(a) Notwithstanding the provisions of Section 17 of this Lease,
Landlord shall be responsible for the cost of the construction of the
Improvements (as defined in Section 8(a)(ii) of the Lease) only up to an amount
equal to $1,635,410.00 (the "Tenant Allowance"). Upon substantial completion of
the Improvements, Landlord shall deliver to Tenant a bill for all amounts in
excess of the Tenant Allowance. Tenant agrees to pay such bill in full to
Landlord within thirty (30) calendar days following receipt of such bill.
(b) For purposes of this Special Stipulation, the cost of the
construction of the Improvements shall be deemed to include, but not be limited
to, the cost of the Plans and Specifications, permits and all tenant buildout,
including, without limitation, demising walls, utilities, the heating,
ventilating and air conditioning system and lighting.
(c) Upon substantial completion of the Improvements and Tenant's
payment of all amounts due and owing, at Landlord's request, the parties shall
restate the Lease and delete this Special Stipulation 12 in its entirety.
13. ENVIRONMENTAL MATTERS - HAZARDOUS MATERIALS MANAGEMENT PLAN.
(a) The term "Environmental Laws", as defined in Section 16 of the
Lease shall be deemed to include that certain Hazardous Materials Management
Plan for Weston Park of Commerce, prepared by Higgins Engineering Inc., dated
August 1989 attached hereto as EXHIBIT J and incorporated herein (the "Plan").
(b) As of the Lease Date, Tenant believes that Tenant's use of the
Demised Premises would involve the use, storage or generation of hazardous
materials as described in the Plan. If, as of the Lease Date or at any time
during the Term, Tenant's use of the Demised Premises involves the use, storage
or generation of hazardous materials as described in the Plan, Tenant shall, at
Tenant's sole cost and expense, (i) within ten (10) days thereafter, designate a
Facility Safety Officer (as described in the Plan) and notify Landlord of the
name and address of such Facility Safety Officer and (ii) otherwise promptly
comply with all applicable provisions of the Plan, including, but not limited
to, management activities, design and operating standards and emergency response
provisions. Each Lease Year, Landlord or the Association (as defined in the
Plan) may deliver a questionnaire to Tenant to facilitate reporting requirements
under the Plan. Within twenty (20) days of delivery of the questionnaire to
Tenant, Tenant shall complete and execute the questionnaire and return the
questionnaire to Landlord or other party designated by Landlord.
(c) Landlord shall have the right to conduct such independent
auditing, monitoring and reporting to ensure Tenant's compliance with the Plan
(the "Inspections"), as Landlord may deem advisable from time to time. Tenant
shall be responsible for all reasonable and actual costs of the Inspections;
provided, however, that Tenant shall not be responsible for the cost and expense
of any Inspections performed more than once in any Lease Year. If possible, all
costs and expenses incurred as a result of the Inspections shall be billed
directly to Tenant and Tenant shall promptly pay such costs and expenses. Any
costs and expenses incurred as a result of the Inspections that are not billed
directly to Tenant shall be billed to Tenant by Landlord at Landlord's actual
cost. In the event any Inspection is performed to ensure not only Tenant's
compliance with the Plan, but any other tenant's compliance with the Plan, the
costs and expenses of such Inspection shall be borne equally by Tenant and such
other tenant. Regardless of whether Landlord inspects or audits Tenant's
operations, Landlord shall not be
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liable for Tenant's violation of the Plan and Tenant's indemnity of Landlord in
Section 16 of the Lease shall apply to any claim or liability against Landlord
arising out of Tenant's failure to comply with the Plan.
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<PAGE>
EXHIBIT D
RULES AND REGULATIONS
These Rules and Regulations have been adopted by Landlord for the
mutual benefit and protection of all the tenants of the Building in order to
insure the safety, care and cleanliness of the Building and the preservation of
order therein.
1. The sidewalks shall not be obstructed or used for any purpose other
than ingress and egress. No tenant and no employees of any tenant shall go upon
the roof of the Building without the consent of Landlord.
2. No awnings or other projections shall be attached to the outside
walls of the Building.
3. The plumbing fixtures shall not be used for any purpose other than
those for which they were constructed, and no sweepings, rubbish, rags or other
substances, including Hazardous Substances, shall be thrown therein.
4. No tenant shall cause or permit any objectionable or offensive odors
to be emitted from the Demised Premises.
5. The Demised Premises shall not be used for lodging or sleeping or
for any immoral or illegal purposes.
6. No tenant shall make, or permit to be made any unseemly or
disturbing noises, sounds or vibrations or disturb or interfere with tenants of
this or neighboring buildings or premises or those having business with them.
7. Each tenant must, upon the termination of this tenancy, return to
the Landlord all keys of stores, offices, and rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay to the Landlord the cost of replacing the same
or of changing the lock or locks opened by such lost key if Landlord shall deem
it necessary to make such change.
8. Canvassing, soliciting and peddling in the Building and the Project
are prohibited and each tenant shall cooperate to prevent such activity.
9. Landlord will direct electricians as to where and how telephone or
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without written consent of Landlord. The
location of telephones, call boxes and other office equipment affixed to the
Demised Premises shall be subject to the approval of Landlord.
10. Parking spaces associated with the Building are intended for the
exclusive use of passenger automobiles. Except for intermittent deliveries, no
vehicles other than passenger automobiles may be parked in a parking space
without the express written permission of Landlord. Trucks and tractor trailers
may only be parked at designated areas of the Building. Trucks and tractor
trailers shall not block access to the Building.
11. No tenant shall use any area within the Project for storage
purposes other than the interior of the Demised Premises.
12. In the event of conflict between these Rules and Regulations and
the Lease, the Lease shall control.
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<PAGE>
EXHIBIT E
CERTIFICATE OF AUTHORITY
CORPORATION
(TENANT)
The undersigned, Secretary of Anda Generics, Inc., a Florida
corporation ("Tenant"), hereby certifies as follows to Industrial Property Fund
II, L.P., a Georgia limited partnership ("Landlord"), in connection with
Tenant's proposed lease of premises in Building A, at Weston Business Center,
Broward County, Florida (the "Premises"):
1. Tenant is duly organized, validly existing and in good standing
under the laws of the State of Florida, and duly qualified to do business in the
State of Florida.
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of Tenant, a lease
of the Premises and that the signature opposite the name of each individual is
an authentic signature:
<TABLE>
<S> <C> <C>
Vice President &
Scott Lodin General Counsel /s/ SCOTT LODIN
- -------------------- -------------------- ---------------------
(name) (title) (signature)
Vice President &
Angelo C. [Illegible] Chief Financial Officer /s/ ANGELO C. [ILLEGIBLE]
- -------------------- -------------------- ---------------------
(name) (title) (signature)
- -------------------- -------------------- ---------------------
(name) (title) (signature)
</TABLE>
3. That the foregoing authority was conferred upon the person(s) named
above by the Board of Directors of Tenant, at a duly convened meeting held
_____________, 19___.
/s/ [ILLEGIBLE]
---------------------------
Secretary
[CORPORATE SEAL]
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<PAGE>
EXHIBIT E-1
CERTIFICATE OF AUTHORITY
PARTNERSHIP
(LANDLORD)
The undersigned, Secretary of Industrial Property Fund II, L.P., a
Georgia limited partnership ("Landlord"), hereby certifies as follows to Anda
Generics, Inc., a Florida corporation ("Tenant"), in connection with Tenant's
proposed lease of premises in Building A, at Weston Business Center, Broward
County, Florida (the "Premises"):
1. Landlord is duly formed, validly existing and in good standing under
the laws of the State of Georgia, and duly qualified to do business in the State
of Florida. IDI-GP II, Inc. is duly formed, validly existing and in good
standing under the laws of the State of Georgia.
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of IDI-GP II, Inc.,
as general partner of Tenant, a lease of the Premises and that the signature
opposite the name of each individual is an authentic signature:
<TABLE>
<S> <C> <C>
Timothy J. Gunter Secretary /s/ TIMOTHY J. GUNTER
- -------------------- -------------------- ---------------------
(name) (title) (signature)
Greg J. Ryan Asst. Secretary /s/ GREG J. RYAN
- -------------------- -------------------- ---------------------
(name) (title) (signature)
- -------------------- -------------------- ---------------------
(name) (title) (signature)
</TABLE>
3. Landlord has obtained all requisite partnership consent to enter
into the lease of the Premises and IDI-GP II, Inc. is authorized to execute the
lease on behalf of Tenant.
/s/ [ILLEGIBLE]
-------------------------------
Secretary of IDI-GP II, Inc.
[CORPORATE SEAL]
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<PAGE>
EXHIBIT F
IRREVOCABLE LETTER OF CREDIT
Industrial Property Fund II, L.P.
c/o Industrial Developments International, Inc.
3424 Peachtree Road N.E.
Suite 1500
Atlanta, Georgia 30326
Attention: Mr. Timothy Gunter
Ladies and Gentlemen:
At the request and on the instructions of our customer, Anda Generics,
Inc. (the "Applicant"), we hereby establish this Irrevocable Letter of Credit
No. ______________ (the "Letter of Credit") in the amount of $__________________
in your favor. This Letter of Credit is effective immediately and shall have a
minimum term of one year from the date hereof (the "Initial Term"). This Letter
of Credit shall automatically renew for successive one year periods (each, a
"Successive Term") unless we notify you in writing at least thirty (30) days
prior to the expiration of the applicable Successive Term that the Letter of
Credit will not be renewed by us. Notwithstanding anyting to the contrary
contained herein, this Letter of Credit will not be renewed after [eleven years
from date of this Letter].
Funds under this Letter of Credit will be made available to you against
receipt by us of (1) a sight draft in the form of Annex A attached hereto and
(2) your drawing certificate in the form of Annex B attached hereto, in each
case appropriately completed and purportedly signed by one of your authorized
officers.
Presentation of any such sight draft and drawing certificate shall be
made at our office located at [PRESENTATION OFFICE ADDRESS], Attention:
________________, during our banking hours of ____ a.m., Eastern Standard Time
to ____ p.m., Eastern Standard Time.
If a sight draft and drawing certificate are presented hereunder by
sight as permitted hereunder, by 11:00 a.m., Eastern Standard Time, and provided
that such sight draft and drawing certificate conform to the terms and
conditions of this Letter of Credit, payment shall be made to you, or to your
designee, of the amount specified, in immediately available funds, not later
than 2:00 p.m., Eastern Standard Time, on the same day. If a sight draft and a
drawing certificate are presented by you hereunder after the time specified
above, and provided that such sight draft and drawing certificate conform to the
terms and conditions of this Letter of Credit, payment shall be made to you, or
to your designee, of the amount specified, in immediately available funds, not
later than 2:00 p.m., Eastern Standard Time, on the next business day. If a
demand for payment made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you notice
within one business day that the demand for payment was not effected in
accordance with the terms and conditions of this Letter of Credit, stating the
reasons therefor and that we will upon your instructions hold any documents at
your disposal or return the same to you. Upon being notified that the demand for
payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such non-conforming demand for payment to the extent that
you are entitled to do so and within the validity of this Letter of Credit.
Partial drawings are allowed under this Letter of Credit. Any drawing
under this Letter of Credit will be paid from our general funds and not directly
or indirectly from funds or collateral deposited with or for our account by the
Applicant, or pledged with or for our account by the Applicant.
This Letter of Credit is transferable and notwithstanding Article 48 of
the Uniform Customs (as defined below), this Letter of Credit may be
successively transferred. Transfer of this Letter of Credit to a transferee
shall be effected only upon the presentation to us of the original of this
Letter of Credit accompanied by a certificate in the form of Annex C. Upon such
presentation we shall transfer the same to your transferee or, if so requested
by your transferee, issue a letter of credit to your transferee with provisions
consistent with, and substantially the same as, this Letter of Credit.
This Letter of Credit shall be subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 (the "Uniform Customs"), which is incorporated into
the text of this Letter of Credit by this reference.
Very truly yours,
[ISSUING BANK]
By:_____________________________________
Name:________________________________
Title:_______________________________
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<PAGE>
ANNEX A
SIGHT DRAFT
[Date]
At Sight
Pay to the order of Industrial Property Fund II, L.P. the sum of
_________________________ and ____/100 Dollars ($_________) drawn on [ISSUING
BANK], as issuer of its Irrevocable Letter of Credit No. __________ dated
_____________, 199__.
Industrial PROPERTY FUND II, L.P.,
a Georgia limited partnership
By: IDI-GP II, Inc.,
a Georgia corporation,
its sole general partner
By:_________________________________
Name:____________________________
Title:___________________________
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<PAGE>
ANNEX B
DRAWING CERTIFICATE
[Date]
[ISSUING BANK]
[ADDRESS]
Attention: ______________________
Re: Irrevocable Letter of Credit No. _____________ (the "Letter of
Credit") For the Account of Anda Generics, Inc. (the "Applicant")
Ladies and Gentlemen:
The undersigned, Industrial Property Fund II, L.P. (the "Beneficiary")
hereby certifies that:
1)_______The Beneficiary is the lessor under that certain Industrial
Lease Agreement dated ___________, 199__, as amended, between the Beneficiary,
as lessor, and the Applicant, as lessee (the "Lease").
2)_______The Beneficiary is entitled to payment under the Letter of
Credit in the amount of $______________ by reason of the following condition
(mark only one):
___ The Applicant has defaulted under the Lease.
___ The Beneficiary has received notice from you that the Letter
of Credit will not be renewed for an additional one year term
and Applicant has failed to provide a replacement Letter of
Credit within five (5) business days after written notice from
Beneficiary to Applicant.
___ The Letter of Credit will expire pursuant to its terms within
thirty (30) days from the date of this Certificate, the
Applicant is not entitled to a release of the Letter of Credit
under the Lease and Applicant has failed to provide a
replacement Letter of Credit within five (5) business days
after written notice from Beneficiary to Applicant.
3)_______Please direct payment under the Letter of Credit by wire
transfer to:
[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate.
Industrial PROPERTY FUND II, L.P.,
a Georgia limited partnership
By: IDI-GP II, Inc.,
a Georgia corporation,
its sole general partner
By:_________________________________
Name:____________________________
Title:___________________________
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<PAGE>
ANNEX C
NOTICE OF TRANSFER
[Date]
[ISSUING BANK]
[ADDRESS]
Attention: ______________________
Re: Irrevocable Letter of Credit No. _____________ (the "Letter of
Credit") For the Account of Anda Generics, Inc.
Ladies and Gentlemen:
You are hereby directed to transfer and endorse the Letter of Credit to
__________________ (the "Transferee") or to issue in accordance with the terms
of the Letter of Credit, a new letter of credit to the Transferee having the
same terms as the Letter of Credit.
We submit herewith for endorsement or cancellation the original of the
Letter of Credit.
Very truly yours,
Industrial PROPERTY FUND II, L.P.,
a Georgia limited partnership
By: IDI-GP II, Inc.,
a Georgia corporation,
its sole general partner
By:_________________________________
Name:____________________________
Title:___________________________
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<PAGE>
Exhibit "G"
Site Plan for Building E
<PAGE>
EXHIBIT H
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made as of the day of , 199_, by and among FIRST
UNION NATIONAL BANK ("Lender"), ANDA GENERICS, INC., a Florida corporation
("Tenant"), and Industrial Property Fund II, L.P., a Georgia corporation
("Landlord").
W I T N E S S E T H:
A. Landlord is the owner of those certain premises commonly known as
__________, as more particularly described in EXHIBIT "A" attached hereto (the
"Real Estate");
B. Lender is now the owner and holder of a certain Promissory Note (the
"Note"), dated _______, and a Mortgage and Security Agreement (the "Mortgage"),
dated ____________________, to be recorded in the BROWARD County, Florida
Records;
C. The Mortgage constitutes a first lien upon the Real Estate and the
improvements (the "Improvements") to be developed thereon (collectively, the
"Property");
D. Under the terms of a certain Industrial Lease Agreement (the
"Lease"), dated August __, 1998, Landlord leased to Tenant the Improvements, as
more particularly described in the Lease; and
E. The parties hereto desire to establish additional rights of quiet
and peaceful possession for the benefit of Tenant under the Lease and further to
define the terms, covenants and conditions precedent for such additional rights;
NOW, THEREFORE, in consideration of the respective covenants made
herein and of the sum of TEN DOLLARS ($10.00) and other good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, it is
hereby mutually covenanted and agreed as follows:
1. SUBORDINATION. The Lease is and at all times shall be subordinate to
the Mortgage and to all renewals, modifications and amendments thereof and
thereto.
2. NO AMENDMENT. Landlord and Tenant each agree not to amend or modify
the Lease without the prior written consent of Lender, which shall not be
unreasonably withheld or delayed. It is Landlord's responsibility to apply for
and obtain the consent from Lender.
3. NON-DISTURBANCE. In the event of foreclosure of the Mortgage or
conveyance in lieu of foreclosure, which foreclosure or conveyance occurs prior
to the expiration date of the Lease, including any extensions and renewals of
the Lease now provided thereunder, and so long as Tenant is not in default under
any of the terms, covenants, and conditions of the Lease beyond any applicable
grace or cure period, Lender agrees on behalf of itself, its successors and
assigns, and on behalf of any purchaser at such foreclosure ("Purchaser") that
Tenant shall not be disturbed in the quiet and peaceful possession of the
premises demised, and Tenant's rights, under the Lease.
4. ATTORNMENT. In the event of foreclosure of the Mortgage or
conveyance in lieu of foreclosure, which foreclosure or conveyance occurs prior
to the expiration date of the Lease, including any extensions and renewals of
the Lease now provided
-1-
<PAGE>
thereunder, Tenant shall attorn to Lender or Purchaser and recognize Lender or
Purchaser as its landlord under the Lease, and Lender and Purchaser shall
recognize and accept Tenant as its tenant thereunder, whereupon the Lease shall
continue, without further agreement, in full force and effect as a direct lease
between Lender or Purchaser and Tenant for the full term thereof, together with
all extensions and renewals now provided thereunder, upon the same terms,
covenants and conditions as therein provided, and Lender or Purchaser shall
thereafter assume and perform all of Landlord's obligations, as landlord under
the Lease, with the same force and effect as if Lender or Purchaser were
originally named therein as Landlord and Tenant shall thereafter make all rent
payments directly to either Lender or Purchaser, as the case may be, subject to
limitations contained in paragraph 5 below. Tenant acknowledges that Lender has
a claim superior to Tenant's claim for Landlord's separate insurance or
condemnation proceeds, if any, received with respect to the Improvements or the
Property.
5. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
contained herein or in the Lease, in the event of foreclosure of the Mortgage or
conveyance in lieu of foreclosure, which foreclosure or conveyance occurs prior
to the expiration date of the Lease, including any extensions and renewals of
the Lease now provided thereunder, the liability of Lender, its successors and
assigns, or Purchaser, as the case may be, shall be limited to its interest in
the Property as described in the third and fourth sentences of Section 26 of the
Lease; provided, however, that Lender, its successors and assigns, or Purchaser,
as the case may be, shall in no event or to any extent:
(a) be liable to Tenant for any past act, omission, or default
on the part of the original or any prior landlord under the Lease, and
Tenant shall have no right to assert the same or any damages arising
therefrom as an offset, defense or deficiency against Lender except for
defaults under the Lease which continue due to the act or omission of
Lender or Purchaser after such party acquires title to the Property;
(b) be liable to Tenant for any payment of Base Rent or
Additional Rent for more than one month in advance, except prepayments
in the nature of security for the performance by Tenant of its
obligations under the Lease, and then only if such prepayments have
been deposited with and are under the control of Lender or Purchaser;
(c) be bound by any amendment or modification of the Lease not
consented to by Lender, which consent shall not be unreasonably
withheld or delayed. It is Landlord's responsibility to apply for and
obtain the consent from Lender;
(d) be bound by any warranty or representation of Landlord
relating to work performed by Landlord under the Lease; or
(e) be liable to Tenant for construction of the Improvements
or the portion thereof leased to Tenant.
The parties acknowledge that, if Lender, its successors and assigns, or
Purchaser (collectively, "Successor Landlord") acquires the Property as
contemplated by this Section 5, then Successor landlord shall not be required to
perform any construction or restoration of the Improvements or be bound by any
warranty or representation of Landlord relating to Landlord's construction of
the Improvements (collectively, the "Construction Obligations"). If a
Construction Obligation should arise and Successor Landlord does not perform
such Construction Obligation in accordance with the terms of the Lease, then
Tenant shall have the right to terminate this Lease subject to the following
conditions:
-2-
<PAGE>
(x) Tenant notifies Successor Landlord of the Construction
Obligation and Successor Landlord fails to confirm within thirty (30)
days of such notice that Successor Landlord will perform the
Construction Obligation; and
(y) The failure to perform the Construction Obligation
constitutes a material detriment to Tenant's ability to conduct its
business (as contemplated by the Lease) in the Improvements.
Tenant's notice in (x) above shall specify the effective termination
date (of the Lease) which shall be at least forty-five (45) days, but not more
than sixty (60) days, after the date of such notice.
6. FURTHER DOCUMENTS. The foregoing provisions shall be self-operative
and effective without the execution of any further instrument on the part of any
party hereto. Tenant agrees, however, to execute and deliver to Lender, or to
any person to whom Tenant herein agrees to attorn, such other instruments as
either shall reasonably request in order to effectuate said provisions.
7. LEASE. Tenant certifies that, as of the date hereof and to the best
of Tenant's knowledge, there are no defaults on the part of the Tenant under the
Lease and, there are no defaults on the part of Landlord under the Lease except
as follows: __________________________________________________ [If none, state
"None"]; the Lease has not been amended and is a complete statement of the
agreement of the parties thereto with respect to the letting of the demised
premises; and all the agreements and provisions therein contained are in full
force and effect on the date of this Agreement.
8. NOTICE AND CURE. Tenant agrees that if there occurs a default by
Landlord under the Lease:
(a) a copy of each notice given to Landlord pursuant to the
Lease shall also be given to Lender, and no such notice shall be
effective as to Lender for any purpose under the Lease unless so given
to Lender; and
(b) If Landlord shall fail to cure any default within the time
prescribed by the Lease, Tenant shall give further notice of such fact
to Lender. Lender shall be allowed thirty (30) days from the later of
(i) receipt of Tenant's notice of Landlord's failure to cure or (ii)
the expiration of any Landlord cure period, to cure such default or
commence to cure and diligently pursue such cure to completion, and so
long as Lender shall cure or be proceeding diligently to cure the
defaults that are not susceptible of cure within said thirty (30) day
period, no such default shall operate or permit Tenant to terminate
this Lease.
9. OPTIONS. Tenant hereby acknowledges and agrees that notwithstanding
anything to the contrary herein or in the Lease, any interest of the Tenant in
an option to purchase or a right of first refusal to purchase with respect to
all or a part of the Property, shall not apply to, and may not be exercised or
utilized in connection with (a) any sale or other conveyance of the Property in
connection with an exercise by Lender of any of Lender's remedies under the
Mortgage, including by way of illustration but not limitation, a foreclosure or
a deed or conveyance in lieu of foreclosure; or (b) any sale or other conveyance
of the Property by Lender or any affiliate or subsidiary of Lender or other
party related to Lender, which has taken title to the Property in connection
with any action described in Paragraph 9(a) above, to a third-party.
10. NOTICES. All notices, demands and requests given or required to be
given hereunder shall be in writing and shall be deemed to have been properly
given when personally served, sent by nationally recognized commercial courier,
or sent by U.S. registered or certified mail, postage prepaid, addressed as
follows:
-3-
<PAGE>
Lender: First Union National Bank
Mail Code GA 9068
Post Office Box 740074
Atlanta, Georgia 30374
Attn: Real Estate Portfolio Management
with copy to: McCullough Sherrill, LLP
1409 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attn: James H. Kaminer, Jr., Esq.
Tenant: Anda Generics, Inc.
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
with copy to: Andrx Corporation
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
Landlord: Industrial Property Fund II, L.P.
c/o Industrial Developments
International, Inc.
3424 Peachtree Road, N.E., Suite 1500
Atlanta, Georgia 30326
Attn: M. Thomas Mayfield
with copy to: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Chris Sawyer, Esq.
11. BINDING EFFECT. The terms, covenants, and conditions hereof shall
inure to the benefit of and be binding upon the parties hereto, and their
respective heirs, executors, administrators, successors and assigns.
12. MODIFICATION. This Agreement may not be modified orally or in a
manner other than by an agreement signed by the parties hereto or their
respective successors in interest.
13. CHOICE OF LAW. This Agreement shall be governed by the internal law
(and not the law of conflicts) of the State of Florida.
-4-
<PAGE>
WITNESS the due execution of this instrument under seal by the parties
hereto the day and year first above written.
"LENDER":
FIRST UNION NATIONAL BANK,
_____________________________ a national banking association
Signature
_____________________________
Print Name By:_____________________________________
Name:___________________________________
Title:__________________________________
_____________________________
Signature
[BANK SEAL]
_____________________________
Print Name
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-5-
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
"TENANT":
ANDA GENERICS, a Florida corporation
___________________________
Signature By:_____________________________________
Name:________________________________
Title:_______________________________
___________________________
Print Name
___________________________
Signature
___________________________
Print Name
Attest:_________________________________
Name:____________________________
Title:___________________________
___________________________
Signature [CORPORATE SEAL]
___________________________
Print Name
___________________________
Signature
___________________________
Print Name
-6-
<PAGE>
"LANDLORD":
Industrial PROPERTY FUND II, L.P.,
a Georgia limited partnership
By: IDI-GP II, Inc.,
a Georgia corporation,
its sole general partner
___________________________
Signature By:_____________________________________
Name:________________________________
Title:_______________________________
___________________________
Print Name
___________________________
Signature
___________________________
Print Name
Attest:_________________________________
Name:____________________________
Title:___________________________
___________________________
Signature [CORPORATE SEAL]
___________________________
Print Name
___________________________
Signature
___________________________
Print Name
-7-
<PAGE>
CORPORATE ACKNOWLEDGMENT
STATE OF )
) SS
COUNTY OF )
I hereby certify that on this day, before me, an officer duly
authorized to administer oaths and take acknowledgments, personally appeared ,
of FIRST UNION NATIONAL BANK, a national banking association, named as Lender in
the foregoing Subordination, Non-Disturbance and Attornment Agreement, and that
he acknowledged executing the same in the presence of two subscribing witnesses
freely and voluntarily under authority duly vested in him by said association.
Witness my hand and official seal in the County and State last
aforesaid this __ day of _____ , 1998..
________________________________________
Notary Public
My commission expires
__________________________
[NOTARIAL SEAL]
-8-
<PAGE>
CORPORATE ACKNOWLEDGMENT
TENANT
STATE OF )
) SS
COUNTY OF )
I hereby certify that on this day, before me, an officer duly
authorized to administer oaths and take acknowledgments, personally appeared AND
_____________________________ known to me to be the ________________________ and
______________________________ of _________________________________________, a
____________________, named as Tenant in the foregoing Subordination,
Non-Disturbance and Attornment Agreement, and that he acknowledged executing the
same in the presence of two subscribing witnesses freely and voluntarily under
authority duly vested in them by said
- ---------------------------.
Witness my hand and official seal in the County and State last
aforesaid this __ day of _____ , 1998..
________________________________________
Notary Public
My commission expires
__________________________
[NOTARIAL SEAL]
-9-
<PAGE>
CORPORATE ACKNOWLEDGMENT
LANDLORD
STATE OF )
) SS
COUNTY OF )
I hereby certify that on this day, before me, an officer duly
authorized to administer oaths and take acknowledgments, personally appeared AND
_______________________________________known to me to be the
_____________________ and ____________________________________ of
_____________________________________, a ______________________________, the
general partner of Landlord in the foregoing Subordination, Non-Disturbance and
Attornment Agreement, and that he acknowledged executing the same in the
presence of two subscribing witnesses freely and voluntarily under authority
duly vested in him by said corporation.
Witness my hand and official seal in the County and State last
aforesaid this __ day of _____ , 1998..
________________________________________
Notary Public
My commission expires
__________________________
[NOTARIAL SEAL]
-10-
<PAGE>
EXHIBIT I
PREPARED BY, RECORD, AND RETURN TO:
ERIC D. RAPKIN, ESQ.
HUGHES HUBBARD & REED LLP
201 SOUTH BISCAYNE BOULEVARD, SUITE 2500
MIAMI, FLORIDA 33131
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, made as of the _____ day of
__________, 1998 between INDUSTRIAL PROPERTY FUND II, L.P., a Georgia limited
partnership (the "Landlord"), and ANDA GENERICS, INC., a Florida corporation
(the "Tenant").
W I T N E S S E T H:
1. Landlord is the owner of that certain real property, as more
particularly described in Exhibit "A," attached to and made a part of this
Memorandum.
2. Landlord and Tenant have entered into an Industrial Lease Agreement
of even date herewith (the "Lease") whereby Landlord leased to Tenant, and
Tenant leased from Landlord, a building to be constructed on the real property,
consisting of approximately 152,082 square feet (the "Demised Premises"). The
Demised Premises is located within an industrial development being constructed
by Landlord known as Weston Business Center, Broward County, Florida (the
"Project").
3. The term of the Lease will commence as set forth in the Lease and
will be for ten (10) years, unless earlier terminated in accordance with the
terms of the Lease. The Lease also contains an option for Tenant to renew the
term of the Lease for two (2) terms of sixty (60) months each, subject to the
terms and conditions set forth in the Lease.
4. The Lease contains substantially the following language:
To the extent permitted by law, all of Tenant's contracts and
subcontracts for alterations, improvements, or additions to the Demised Premises
shall provide that no lien shall attach to or be claimed against the Demised
Premises or any interest therein other than Tenant's leasehold interest in the
Demised Premises, and that all subcontracts let thereunder shall contain the
same provision.
5. This Memorandum does not set forth the entire Lease, and is solely
intended to give notice thereof. This Memorandum is subject to all of the
covenants, conditions, and terms set forth in the Lease, which is incorporated
herein and made a part hereof by reference, to the same extent as if all of the
covenants, conditions, and terms thereof were set forth in full herein. If any
conflict exists between the provisions of this Memorandum and the provisions of
the Lease, the provisions of the Lease shall control.
[signatures on next page]
-1-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have caused this
Memorandum to be executed as of the day and year first above written.
LANDLORD:
Date:______________________
INDUSTRIAL PROPERTY FUND II, L.P.,
a Georgia limited partnership
________________________________ By: IDI-GP II, Inc.,
Witness (print name): ________________ a Georgia corporation
its sole general partner
________________________________ By:____________________________________
Witness (print name): ________________ Name:_______________________________
Title:______________________________
_______________________________
Witness (print name): ________________
Attest:________________________________
_______________________________ Name:___________________________
Witness (print name): ________________ Title:__________________________
[CORPORATE SEAL]
TENANT:
Date:________________________
ANDA GENERICS, INC.,
a Florida Corporation
________________________________ By:_____________________________________
Witness (print name): ________________ Name:________________________________
Title:_______________________________
- --------------------------------
Witness (print name): ________________
________________________________ Attest:_________________________________
Witness (print name): ________________ Name:____________________________
Title:___________________________
________________________________ [CORPORATE SEAL]
Witness (print name): ________________
-2-
<PAGE>
<PAGE>
STATE OF _____________)
)ss:
COUNTY OF ____________)
The foregoing instrument was acknowledged before me this _____ day of
___________, 1998, by ___________________________________ and _______________,
as _________________ and ________________________ of IDI-GP II, Inc., a Georgia
corporation, the general partner of Industrial Property Fund II, L.P., on behalf
of such corporation. He/she is personally known to me or produced a valid
__________ driver's license as identification.
Notary Public, State of________________
Print Name:___________________________________
My commission expires:
STATE OF FLORIDA )
)ss:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
___________, 1998, by ___________________________________ and _________________,
as _________________ and ___________________________, of ANDA GENERICS, INC., a
Florida corporation, on behalf of such corporation. He/she is personally known
to me or produced a valid __________ driver's license as identification.
Notary Public, State of Florida
Print Name:__________________________
My commission expires:
-3-
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
-4-
<PAGE>
EXHIBIT J
HAZARDOUS MATERIALS MANAGEMENT PLAN
FOR
WESTON PARK OF COMMERCE
<PAGE>
GUARANTY
THIS GUARANTY (this "Guaranty"), made and entered into this ___ day of
September, 198, by Andrx Corporation, a Florida corporation (hereinafter
referred to as "Guarantor") in favor of Industrial Property Fund II, L.P., a
Georgia limited partnership (hereinafter called "Landlord") and any subsequent
owner or holder of the Lease (as hereinafter defined).
R E C I T A L S :
Landlord has entered into an Industrial Lease Agreement ("Lease") with
Anda Generics, Inc., a Florida corporation ("Tenant"), in which
Guarantor has a direct or indirect financial interest or affiliation,
which Lease was executed by Tenant on September 18, 1998, and provides
for the leasing to Tenant of approximately 152,082 square feet of space
in a building located in Weston Business Center, in Broward County,
Florida; and
Landlord will not enter into the Lease unless Guarantor guarantees the
obligations of Tenant under the Lease as set forth herein; and
Guarantor derives benefits from the Lease to Tenant.
NOW THEREFORE, as a material inducement to Landlord to enter into the
Lease with Tenant, and for other good and valuable consideration, the receipt
and sufficiency of all of which are hereby acknowledged and confessed, Guarantor
does hereby, irrevocably and unconditionally covenant and agree with Landlord as
follows:
1. GUARANTY - Guarantor hereby unconditionally guarantees the full,
faithful and punctual payment of all rent, additional rent and other amounts due
to Landlord under the Lease by Tenant and the full, faithful and punctual
performance by Tenant of all the terms, provisions and conditions of the Lease,
together with interest or late charges on all of the foregoing as provided in
the Lease and all other reasonable costs and expenses of collection as provided
in the Lease and herein (all of the foregoing sometimes hereinafter referred to
as the "Obligations").
2. NO DISCHARGE - This Guaranty by Guarantor shall continue for the
benefit of Landlord notwithstanding (a) any extension, modification, amendment
or alteration of the Lease entered into with Anda Generics, Inc. or any related
entity thereto, (b) any assignment of the Lease, with or without the consent of
Landlord, (c) any bankruptcy, reorganization, or insolvency of Tenant or any
successor or assignee thereof, or (d) any release, extension or modification of
the liability of Tenant or any other party liable under the Lease or any other
guaranty of the Lease. This Guaranty shall in all respects be a continuing,
absolute and unconditional guaranty of payment and performance and shall remain
in full force and effect notwithstanding, without limitation, the death or
incompetency of Guarantor or Tenant, or any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Guarantor or Tenant or by any defense which Tenant
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
3. PRIMARILY LIABLE - This Guaranty is a guaranty of payment and not of
collection. The liability of Guarantor under this Guaranty shall be joint and
several and primary and direct and in any right of action which shall accrue to
Landlord under the Lease. Landlord shall have the right, at its option, to
proceed against Guarantor (or any one or more parties constituting Guarantor)
without having commenced any action, or having obtained any judgment, against
Tenant or any other party liable under the Lease or any other guaranty of the
Lease.
-1-
<PAGE>
4. DEFAULT - In the event of an Event of Default by Tenant under the
Lease, Landlord shall have the right to enforce its rights, powers and remedies
under the Lease, any other guaranty of the Lease, and under this Guaranty and
all rights, powers and remedies available to Landlord shall be non-exclusive and
cumulative of all other rights, powers and remedies under the Lease, any other
guaranty of the Lease or under this Guaranty or by law or in equity. The
obligations of Guarantor hereunder are independent of the obligations of Tenant
or any other guarantor, and Landlord may proceed directly to enforce all rights
under this Guaranty without proceeding against or joining Tenant, any other
guarantor or any other person or entity. Until all of the Obligations have been
performed and paid in full, Guarantor shall have no right of subrogation to
Landlord, and Guarantor hereby waives any rights to enforce any remedy which
Landlord may have against Tenant.
5. WAIVERS - Guarantor expressly waives and agrees not to assert or
take advantage of: (a) any defense that may arise by reason of the failure of
the Landlord to file or enforce a claim against Guarantor or Tenant in
bankruptcy or in any other proceeding, (b) any defense based on the failure of
Landlord to give notice of the creation, existence or incurring of any new
obligations or on the action or non-action of any person or entity in connection
with the Obligations so long as Anda Generics, Inc. or any related entity is the
Tenant under the Lease, (c) any duty on the part of Landlord to disclose to
Guarantor any facts it may know or may hereafter acquire regarding Tenant, (d)
any defense based on lack of diligence on the part of Landlord in the collection
of any and all of the Obligations, or (e) any demand for payment, presentment,
notice of protest or dishonor, notice of acceptance of this Guaranty and any and
all other notices or demands except for notices and demands to which Guarantor
might otherwise be entitled by law and notices or demands required to be given
to Guarantor or Tenant under the Lease.
6. SUBORDINATION; WAIVER OF SUBROGATION; PREFERENCE AND FRAUDULENT
TRANSFER INDEMNITY. Any indebtedness (including, without limitation, interest
obligations) of Tenant to Guarantor now or hereafter existing shall be, and such
indebtedness hereby is, deferred, postponed and subordinated to the Obligations.
Guarantor hereby unconditionally and irrevocably agrees that (a) Guarantor will
not at any time assert against Tenant (or Tenant's estate in the event Tenant
becomes bankrupt or becomes the subject of any case or proceeding under the
bankruptcy laws of the United States of America) any right or claim to
indemnification, reimbursement, contribution or payment for or with respect to
any and all amounts Guarantor may pay or be obligated to pay Landlord,
including, without limitation, any and all Obligations which Guarantor may
perform, satisfy or discharge, under or with respect to this Guaranty; (b)
Guarantor waives and releases all such rights and claims and any other rights
and claims to indemnification, reimbursement, contribution or payment which
Guarantor, or any of them, may have now or at any time against Tenant (or
Tenant's estate in the event Tenant becomes bankrupt or becomes the subject of
any case or proceeding under any bankruptcy laws); (c) Guarantor shall have no
right of subrogation, and Guarantor waives any right to enforce any remedy which
Landlord now has or may hereafter have against Tenant; (d) Guarantor waives any
benefit of, and any right to participate in, any security now or hereafter held
by Landlord; and (e) Guarantor waives any defense based upon an election of
remedies by Landlord which destroys or otherwise impairs any subrogation rights
of Guarantor or the right of Guarantor to proceed against Tenant for
reimbursement. The waivers hereunder shall continue and survive after the
payment and satisfaction of the Obligations, and the termination or discharge of
Guarantor's obligations under this Guaranty. Guarantor further hereby
unconditionally and irrevocably agrees and guarantees (on a joint and several
basis) to make full and prompt payment to Landlord of any of the Obligations or
other sums paid by Tenant to Landlord pursuant to the Lease which Landlord is
subsequently ordered or required to pay or disgorge on the grounds that such
payments constituted an avoidable preference or a fraudulent transfer under
applicable bankruptcy, insolvency or fraudulent transfer laws; and Guarantor
shall fully and promptly indemnify Landlord for all reasonable costs (including,
without limitation, reasonable attorney's fees) incurred by Landlord in defense
of such claims of avoidable preference or fraudulent transfer.
-2-
<PAGE>
7. CHOICE OF LAW - This Guaranty is to be performed in the State of
Florida and shall be governed by and construed in accordance with the laws of
the State of Florida, without regard to its conflicts laws or choice of law
rules.
8. TIME OF ESSENCE - Time is of the essence of this Guaranty.
9. NOTICES - Wherever any notice or other communication is required or
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by hand, or by nationally-recognized overnight express
delivery service, by U. S. registered or certified mail, return receipt
requested, postage prepaid to the addresses set out below or at such other
addresses as are specified by written notice delivered in accordance herewith:
Landlord: Industrial Property Fund II, L.P.
c/o Industrial Developments
International, Inc.
3424 Peachtree Road, N.E., Suite 1500
Atlanta, Georgia 30326
Attn: Vice President - Operations
Guarantor: Andrx Corporation
4001 S.W. 47th Ave., Suite 201
Fort Lauderdale, Florida 33314
Attn: Scott Lodin
Any notice or other communication mailed as hereinabove provided shall be deemed
effectively given (a) on the date of delivery, if delivered by hand; or (b) on
the date mailed if sent by overnight express delivery or if sent by U.S. mail.
Such notices shall be deemed received (a) on the date of delivery, if delivered
by hand or overnight express delivery service; or (b) on the date indicated on
the return receipt if mailed. If any notice mailed is properly addressed but
returned for any reason, such notice shall be deemed to be effective notice and
to be given on the date of mailing.
10. AUTHORITY - If Guarantor is not a natural person,
Guarantor shall cause its corporate secretary or general partner, as applicable,
to execute the certificate attached hereto as EXHIBIT A. Guarantor is authorized
by all required corporate or partnership action to enter into this Guaranty and
the individual(s) signing this Guaranty on behalf of Guarantor are each
authorized to bind Guarantor to its terms.
11. SUCCESSORS AND ASSIGNS - This Guaranty shall be binding
upon and inure to the benefit of the parties hereto and their heirs, legal
representatives, successors and assigns.
-3-
<PAGE>
IN WITNESS WHEREOF, Guarantor has executed under seal and
delivered this Guaranty to Landlord on the date and year above first written.
GUARANTOR:
ANDRX CORPORATION, a Florida corporation
By: /s/ ANGELO C. [ILLEGIBLE]
-------------------------------------
Name: Angelo C. [Illegible]
Title: Vice President and CFO
Attest: /s/ SCOTT LODIN
-------------------------------------
Name: Scott Lodin
Title: V.P./General Counsel
[CORPORATE SEAL]
-4-
<PAGE>
EXHIBIT A
CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of Andrx Corporation, a Florida corporation
("Guarantor"), hereby certifies as follows to Industrial Property Fund II, L.P.,
a Georgia limited partnership ("Landlord"), in connection with the execution of
a Guaranty by Guarantor (the "Guaranty) of that certain Industrial Lease
Agreement dated _____, 1998 between Landlord and Anda Generics, Inc. ("Tenant")
(the "Lease") relating to the lease of approximately 152,082 square feet within
Building A, at Weston Business Center, Broward County, Florida (the "Premises"):
1. Guarantor is duly organized, validly existing and in good standing
under the laws of the State of Florida, and duly qualified to do business in the
State of Florida.
2. That the following named persons, acting individually, are each
authorized and empowered to negotiate and execute, on behalf of Guarantor, a
Guaranty of the Lease and that the signature opposite the name of each
individual is an authentic signature:
<TABLE>
<S> <C> <C>
- -------------------- -------------------- ---------------------
(name) (title) (signature)
- -------------------- -------------------- ---------------------
(name) (title) (signature)
- -------------------- -------------------- ---------------------
(name) (title) (signature)
</TABLE>
3. That the foregoing authority was conferred upon the person(s) named
above by the Board of Directors of Guarantor, at a duly convened meeting held
_____________, 19___.
--------------------------------
Secretary
[CORPORATE SEAL]
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