1
Exhibit 10.35
LEASE
Date: As of June 30, 1997
Landlord: MMG Investments, LLC
c/o Southern Showcase Housing, Inc.
000-X Xxxxxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Tenant: Southern Showcase Housing, Inc.
000-X Xxxxxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Premises: That part of the building located 0000 Xxxxxx Xxxxx as indicated on
the attached floor plan, comprising 5,220 sf of usable area and
6,152 sf of rentable area
In consideration of the agreements in this Lease, Landlord and Tenant agree
as follows:
1. PREMISES
1.1. Demise
Landlord leases the Premises to Tenant, and Tenant takes them from
Landlord.
1.2. Condition of Property
a. As is
Tenant accepts the Premises in its condition on
the date of this Lease.
b. Alterations
Tenant may make interior, non-structural alterations, additions
or other changes to the Premises only with Landlord's prior approval,
not to be unreasonably withheld. Tenant may not make other
alterations, additions or other changes to the Premises.
1.3. Fixtures and Equipment
Tenant's fixtures, furnishings, and equipment in the Premises remain
Tenant's personal property and may be removed by Tenant, so long as any
damage is repaired.
2. COMMON AREA
2.1. Defined
2
The "Common Area" is all of Landlord's property except that which is
leased to others, including parking areas, loading docks, delivery areas,
sidewalks, equipment rooms, that part of the building and its mechanical
and utility systems not maintained by tenants, landscaped areas, lobbies,
hallways, conference rooms, restrooms, and any other areas and improvements
provided by Landlord from time to time for common use by the tenants and
their customers.
2.2. Use and Control of Common Area
Tenant, its employees and customers may use the Common Area with
Landlord and all others entitled to use the Common Area, subject to
regulations imposed by Landlord. Tenant shall not interfere with anyone's
use of the Common Area.
However, Landlord grants to Tenant the exclusive right to use the 20
parking spaces (not including the handicap parking spaces) nearest the
front door on the west side of the building in which the Premises are
located.
Landlord retains exclusive control and management of the Common Area,
and may perform such acts in the Common Area as Landlord in its sole
discretion deems advisable. However, Tenant may exercise control over the
conference room as long as Tenant makes the conference room available to
all tenants in the building on an equitable basis.
Landlord may establish, amend and enforce rules and regulations for
the Common Area and the Premises. Tenant shall comply with the rules and
regulations, as amended, and shall cause its employees, agents, customers
and invitees to observe them.
2.3. Changes
Landlord may make such changes to the Common Area as it desires,
including changing, adding to, or subtracting from the size and dimensions
of any part of the property; the number, location and dimensions of
buildings and streets; dimensions of hallways and corridors; the number of
floors in any building; the location, size and number of tenant spaces; the
identity, type and location of other tenants; and the size, shape,
location, arrangement, areas and facilities of the Common Area;
3. LEASE TERM
3
The term of this Lease begins on the date of this Lease and ends on
September 30, 2007. If Tenant holds over after the termination of the lease
term, Tenant becomes a tenant at sufferance and shall pay double per diem rent
for each day it holds over.
4. RENT
4.1. General
Commencing on the Rent Commencement Date, Tenant shall pay Landlord
rent in arrears, on the first day of each month, partial months prorated,
in the following monthly rent amount (based on 6,152 rentable square feet
and an annual rent increase of 3%):
Lease
Year PSF Rent Annual Rent Monthly Rent
1 $15.00 $92,280.00 $ 7,690.00
2 $15.45 $95,048.40 $ 7,920.70
3 $15.91 $97,899.85 $ 8,158.32
4 $16.39 $100,836.85 $ 8,403.07
5 $16.88 $103,861.95 $ 8,655.16
6 $17.39 $106,977.81 $ 8,914.82
7 $17.91 $110,187.15 $ 9,182.26
8 $18.45 $113,492.76 $ 9,457.73
9 $19.00 $116,897.54 $ 9,741.46
10 $19.57 $120,404.47 $10,033.71
4.2. Rent Commencement Date
The Rent Commencement Date is October 1, 1997. A "Lease Year" is a
12-month period beginning on the Rent Commencement Date (or its
anniversary) and ending on the day before the following anniversary date.
4.3. Miscellaneous
a. Additional Rent
All sums Tenant is required to pay under this Lease in addition
to Rent are payable by Tenant and collectible by Landlord as rent.
b. Late Payment
Any rent or additional rent not paid when due bears interest at
the lesser of (a) the rate charged by large U.S. money center
commercial banks, from time to time, as published in the Wall Street
Journal, (or as fixed in Landlord's reasonable opinion if the Wall
Street Journal ceases publishing that rate); or
(b) the maximum rate allowed by law.
c. Without Demand; No Setoff
4
Tenant shall pay all rent without prior notice or demand.
Tenant's agreements to pay rent and other amounts under this Lease
are independent covenants, and except as this Lease provides
otherwise, Tenant may not setoff, xxxxx, deduct or fail to pay any
such amounts for any reason.
d. Acceptance on Account
Landlord may treat any payment of rent (or any other sum) that is
less than the amount due as a payment on account, and Landlord's
acceptance of the lesser amount does not prejudice its other rights
or remedies.
5. SECURITY DEPOSIT - N/A
6. TENANT'S USE OF PREMISES
Tenant may use the Premises only for general office purposes.
7. REAL ESTATE TAXES ("RET")
7.1. Payment by Tenant
Tenant shall pay Landlord that part of RET as the total rentable
floor area of the Premises bears to all rentable floor area in the building
of which the Premises are a part. Tenant shall pay its share of RET for a
calendar year in monthly installments, in amounts estimated by Landlord, on
the first day of each month of that calendar year. After each calendar
year, Landlord shall notify Tenant of its share of RET for that year.
Landlord shall credit any excess to amounts to be paid by Tenant for the
following year. Tenant shall pay any deficiency to Landlord promptly.
7.2. RET Defined
RET includes all real estate taxes, charges and assessments by
governmental and quasi-governmental authorities. RET also includes any
governmental tax or charge (other than income tax) imposed on account of
Tenant's payment or Landlord's receipt of, or based in whole or in part on,
the rents in this Lease, the value of those rents or Landlord's interest in
the Premises. RET also includes any substitutions or partial substitutions
for or additions to RET, if the substitute or additional taxes have
materially different applicability to real property, to owners of real
property, or to rental income than they do to other kinds of property, to
owners of other kinds of property, or to other kinds of income,
5
respectively. RET also includes all of Landlord's costs and fees to contest
or negotiate RET with the taxing authority.
8. INSURANCE
Tenant shall carry commercial general liability insurance (including
coverage for bodily injury, property damage, contractual liability, and
personal injury), written on an occurrence form, and with policy limits
approved by Landlord. All of the liability insurance shall be primary to
any coverage carried by Landlord. Tenant shall name Landlord and Landlord's
lender as additional insureds under the liability insurance (and shall
otherwise comply with the liability insurance requirements of Landlord's
lender). Tenant shall give Landlord insurance certificates showing that the
insurance required above is in force and stating the terms of the policies.
The certificates must require the insurer to give Landlord at least 30
days' notice before coverage under any policy is reduced or canceled and
before any policy expires, if the insurer intends not to renew the policy.
9. MAINTENANCE OF PREMISES
Tenant shall maintain in good repair and replace when necessary the
interior of the Premises, including mechanical and utility systems (e.g.,
HVA/C, lighting, other electrical, plumbing, and telephone) within the
Premises. Tenant also shall make all changes and improvements to the
Premises required by law because of any feature of Tenant's operations
beyond general office purposes.
10. MAINTENANCE OF COMMON AREAS
Landlord shall operate, maintain, and replace (when necessary) the Common
Area. Landlord also shall carry property and liability insurance in amounts
and types deemed prudent by Landlord.
Tenant shall pay Landlord that part of CAM costs as the total rentable
floor area of the Premises bears to all rentable floor area in the building
of which the Premises are a part. Tenant shall pay its share of CAM costs
for a calendar year in monthly installments, in amounts estimated by
Landlord, on the first day of each month of that calendar year. After each
calendar year, Landlord shall notify Tenant of its share of CAM costs for
that year. Landlord shall credit any excess to amounts to be paid by
6
Tenant for the following year. Tenant shall pay any deficiency to Landlord
promptly.
"CAM costs" are all of Landlord's costs to perform its obligations under
this ss.10, including an administrative fee equal to 15% of all of such
costs.
11. UTILITIES AND SERVICES
Tenant shall pay promptly all charges for sewer, gas, electricity, water
and all other utility services consumed at the Premises. If Tenant defaults
under this Lease, Landlord may discontinue any utility and services that
Landlord has been supplying to Tenant, without notice or liability to
Tenant, including water, gas, electricity, sewer, heating, and
air-conditioning. Landlord is not liable to Tenant for any interruption in
service of any utility at the Premises or the property of which the
Premises are a party, and Tenant waives all claims (including claims for
consequential damages) against Landlord connected with the interruption of
any utility service at the Premises or the property.
12. ASSIGNMENT/SUBLETTING
Tenant may not assign its interest in this Lease or sublet all or any part
of the Premises without Landlord's prior consent. However, no assignment by
Tenant releases Tenant from its obligations under this Lease.
13. INDEMNITY
Tenant shall indemnify Landlord, defend it (if requested by Landlord) and
hold Landlord harmless from and against all any cost, damage, expense,
liability, and loss in connection with any occurrence connected with the
Premises.
14. CASUALTY DAMAGE
14.1. Termination Rights
Either party may terminate this Lease by notice within 15 days after
the casualty if the damage is so extensive that rebuilding (i) cannot
reasonably be accomplished within 180 days following the occurrence; or
(ii) would require 30 days or more to accomplish and such damage or
destruction occurs within the last year of the lease term.
If the building of which the Premises are a part is damaged by casualty and
the cost to rebuild exceeds 50% of the cost to rebuild the entire building,
then Landlord may terminate
7
this Lease effective as of the date of the casualty by notifying Tenant
within 15 days after the casualty.
If the building of which the Premises are a part (but not the Premises) is
damaged by casualty during the last year of the lease term, Landlord may
terminate this Lease on 5 days' notice, within 15 days after the casualty.
14.2. Rebuilding
If the Premises are damaged by a casualty covered by insurance that
Landlord carries, and if neither party elects to terminate the Lease,
Landlord shall promptly rebuild them to their condition before the casualty
within 180 days after the casualty (excluding stock in trade, fixtures,
furniture, furnishings, carpeting, floor covering, wall covering, drapes
and equipment and any improvements or alterations installed by Tenant).
However, Landlord is not obligated to spend more to rebuild than the
insurance proceeds available. Rent adjusts in proportion to that part of
the Premises, if any, that Tenant cannot occupy.
15. CONDEMNATION
15.1. Definitions
"Condemnation" means a taking by exercise of the power of eminent
domain and any conveyance in lieu of such a taking, whether permanent or
temporary (more than 6 months) for any public or quasi-public use by any
competent authority in appropriate proceedings, and includes any
governmental action preventing or substantially restricting use of the
Premises for permitted activities or of the Common Area for access and
parking for more than 6 consecutive months. The "date of condemnation" is
the date the condemning authority takes possession of the condemned area.
15.2. Right to Terminate
If any of the Premises are taken by condemnation to the extent that they
are untenantable and cannot be restored to a tenantable whole within 90
days after a taking, either Landlord or Tenant may terminate this Lease by
notice to Landlord within 15 days after the date of condemnation. Rent
adjusts in proportion to that part of the Premises that Tenant cannot
occupy. If this Lease so terminates, rent abates as of the date of
termination.
15.3. Rebuilding
8
If neither party elects to so terminate the Lease, Landlord shall promptly
rebuild the Premises to a complete unit of a quality and character as close
as practical to that which existed before the condemnation, using available
condemnation proceeds.
15.4. Award
The condemnation award belongs to Landlord. However, Tenant may seek
a separate award for its losses as long as Tenant's award does not diminish
Landlord's award.
16. DEFAULT
16.1. Monetary Default
Tenant defaults under this Lease if it fails to pay any rent or any
other charges within 5 days after Landlord notifies Tenant of the failure
to pay.
16.2. Non-Monetary Default
Tenant defaults under this Lease if it fails to do anything it is
required to do under this Lease other than payment of rent or any other
charges, or does anything it is not permitted to do under this Lease,
within 30 days after notice from Landlord specifying the failure or
violation; or if the failure or violation cannot be cured by due diligence
within the 30 day period, then if Tenant fails to begin curing within the
30 day period or fails to continue curing with due diligence after the 30
day period.
17. REMEDIES
If Tenant defaults, Landlord may treat the default as a breach of this
Lease, and in addition to any and all other rights or remedies of Landlord
in this Lease or at law or in equity, Landlord may do any or all of the
following, without further notice or demand to Tenant or any other person:
17.1. General
Landlord may declare the Lease Term ended (even though it may have
relet the Premises as provided under this Lease) and may re-enter and
re-take possession of the Premises and remove all persons and property from
the Premises.
17.2. Money Damages
If Landlord terminates this Lease under this ss.17, Tenant shall pay
to Landlord, in addition to any other amounts Tenant is obligated to pay to
Landlord under this
9
Lease:
a. Past rent
any unpaid rent, including interest, that is due when the Lease
is terminated; plus
b. Future rent
1. Post-termination, pre-judgment
that rent, including interest, that would have been earned
after termination until the time of judgment, plus
2. Post-judgment
the present value (using a discount rate of 5%) of the
excess, if any, of the total rent and charges under this Lease
for the remainder of the Lease Term over the then reasonable
rental value of the Premises for the remainder of the Lease Term.
The total rent payable by Tenant for each Lease Year after
default equals the average Minimum Annual and Percentage Rents
that Tenant was obligated to pay from the Rent Commencement Date
to the time of default or during the 2 full Lease Years before
default, whichever period is shorter; plus
c. Recycling costs
any other amount necessary to compensate Landlord for its damages
caused by Tenant's failure to perform its obligations under this
Lease, such as costs to re-enter and retake possession of the
Premises and remove all persons and property from the Premises, to
alter, repair, and decorate the Premises, and reasonable attorneys'
fees, brokerage commissions, advertising, and other reletting costs;
plus
d. Other legal damages
such other amounts, in addition to or in lieu of the foregoing,
as may be permitted from time to time by applicable law.
Nothing in this Lease limits Landlord's right to recover as damages
in any bankruptcy, insolvency, receivership, reorganization or arrangement
proceeding the maximum allowed by the law then governing such proceedings,
even if that amount is greater than the amount Landlord may recover under
this Lease.
17.3. Rent Suit; No Re-entry/Termination
Landlord may xxx to collect rent (as it accrues under this Lease) and
damages (including reasonable attorneys' fees and the cost to renovate the
Premises) without
10
retaking possession of the Premises or terminating this Lease;
17.4. Re-entry without Termination
Landlord may re-enter and retake possession of the Premises from
Tenant by summary proceedings or otherwise and remove Tenant and any other
occupants from the Premises in such manner as Landlord deems advisable with
or without legal process and using self-help if necessary. Landlord also
may remove from the Premises all or any of the personal property in the
Premises and may place it in storage at a public warehouse at the expense
and risk of the owner or owners thereof. "Re-enter" or "re-entry" as used
in this Lease are not restricted to their technical meaning but are used in
their broadest sense. Neither Landlord's commencement and prosecution of
any action in unlawful detainer, ejectment or otherwise, nor Landlord's
execution of any judgment or decree obtained in any action to recover
possession of the Premises, nor any other re-entry and removal, terminates
this Lease, (even if the re-entry is done under summary proceedings or
otherwise) or discharges Tenant from any obligation under the Lease. In any
of such events, Tenant remains obligated to pay Rent and to perform all of
its other obligations under this Lease, and Tenant shall pay to Landlord
all monthly deficits in Rent, after any such re-entry, in monthly
installments as the amounts of such deficits from time to time are
ascertained. If Landlord retakes possession, Landlord may relet parts or
all of the Premises for terms greater or less than or equal to the
unexpired part of the Lease Term on such terms and conditions and for such
rent as the Landlord deems proper. Landlord shall apply the rent from such
reletting (if and when received): first, to pay any indebtedness other than
Rent due under this Lease from Tenant to Landlord; second, to pay any cost
to relet (including costs to alter, repair or decorate the Premises as
Landlord deems advisable); third, to pay Rent due and unpaid under this
Lease; and the residue, if any, to be held by Landlord and applied to pay
future Rent as it becomes due. If the rent received from reletting, after
being applied as required in this ss.17, is not enough to pay the Rent
under this Lease, then Tenant shall pay such deficiency to Landlord each
month. Tenant has no right to any excess. Tenant also shall pay to
Landlord, as soon as ascertained, any costs to relet, alter, and repair not
covered by the rent received from reletting, including brokerage
commissions and attorneys' fees. Nothing in this
11
Lease obligates Landlord to relet all or any part of the Premises.
18. MISCELLANEOUS
18.1. Quiet Enjoyment
If Tenant performs its obligations under this Lease, Tenant may
peaceably and quietly hold and enjoy the Premises for the term of this
Lease without interruption by Landlord.
18.2. Recording
Neither party may record this Lease. At either party's request, each
party shall sign a recordable memorandum of lease containing the terms
required by statute. Either party may record the memorandum, at the
recording party's cost, including taxes, fees and other expenses connected
with recording.
18.3. Lease Subject to Matters of Record
This Lease is subject to all matters of record at the date of this
Lease and to any interests created during the Lease Term. Tenant may not
violate any restrictions and conditions of record. Unless requested
otherwise by a lender as to its lien, this Lease is also subject to the
liens resulting from any method of financing, whether created before or
during the Lease Term, and to all renewals, modifications, replacements,
consolidations and extensions of the liens. Tenant shall sign and deliver
all documents requested by Landlord, a lender, or other interest owner to
further evidence the subordination.
18.4. Transfer of Landlord's Interest
If Landlord transfers any of its interest in any of
this Lease or the property of which the Premises are a part (including
assignment of this Lease to a mortgagee as security and any subsequent
transfer by foreclosure sale), Tenant shall attorn to the transferee (or,
in the case of conditional assignments, shall agree to attorn to the
assignee if the condition occurs) and shall recognize the transferee as
Landlord under this Lease. At Landlord's request, Tenant shall sign an
attornment agreement in the form required by Landlord. If Landlord
transfers its entire interest in this Lease, its obligations under this
Lease terminate on the date of the transfer (including obligations
regarding any Security Deposit transferred to the transferee-Landlord).
12
18.5. Estoppel Certificate
Tenant shall sign and deliver to any person designated by Landlord
recordable certificates that (a) ratify this Lease; (b) state the
commencement and termination dates; and (c) state that this Lease is in
full force and has not been assigned or amended (except as stated); (d)
state that all conditions under this Lease to be performed by Landlord have
been satisfied (stating exceptions, if any); (e) state that neither Tenant
nor Landlord is in default under the Lease or have failed to perform their
obligations under the Lease (or stating the default or the failure); (f)
state that no defenses or offsets against the enforcement of this Lease by
Landlord exist (or, if any, stating those claimed), (g) state the advance
rent, if any, paid by Tenant, (h) state the date to which rent has been
paid, (i) state the amount of any security deposited with Landlord, and (j)
contain such other information as Landlord reasonably requires. The
certificate binds Tenant, and those receiving the certificate may rely on
it.
18.6. Signing Documents
Tenant shall sign and return documents required under this ss.18
within 10 days after receiving them.
18.7. Lender's Approval of Lease
The approval of Landlord's construction and permanent lenders is a
condition subsequent to this Lease.
18.8. Limitation on Landlord's Liability
Landlord's liability under this Lease is limited to its interest in
the property of which the Premises are a part, and no person or entity that
constitutes Landlord has any personal liability under this Agreement.
18.9. Partial Invalidity
If any provision of this Lease is unenforceable, all other provisions
remain enforceable.
18.10.Governing Law
This Lease shall be construed under the laws of the state in which
the Premises are located.
18.11.Cost of Performance
Except as provided otherwise in this Lease, the party obligated or
permitted to perform is obligated, as between Tenant and Landlord, to pay
the cost of performance.
13
18.12.Include, Shall, May
"Include," "includes," and "including" mean
considered as part of a larger group, and not limited to
the items recited. "Shall" means "is obligated to";
"may" means "is permitted to, but is not obligated to."
18.13.Section, Exhibit, party
References to a section or exhibit refer to the section or exhibit of
this Lease unless otherwise expressly indicated. A "party" means Tenant and
Landlord. Each document referred to as an exhibit is made a part of this
Lease as if set forth in this Lease in full.
18.14.Right of Entry
Landlord and its agents may enter and examine the Premises at
reasonable times.
In witness whereof, the parties have hereunto fixed or set their hands and
seals, or if corporate, have caused this instrument to be signed in its
corporate name by its duly authorized officers and its seal to be hereunto
affixed by authority of its Board of Directors, as of the date first written
above.
Landlord:
MMG Investments, LLC (SEAL)
(SEAL)
---------------------
M. Xxxx Xxxx, Manager
Tenant:
Southern Showcase Housing, Inc.
ATTEST: -----------------------
President
--------------
---------------------------
Secretary
------------------
(corporate seal)
