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<PAGE>
Exhibit 10.42
LEASE
BETWEEN
AMERICAN PREPAID PROFESSIONAL SERVICES, INC.,
AS TENANT
AND
200 WEST JACKSON OWNER LLC,
AS LANDLORD
200 WEST JACKSON BOULEVARD, CHICAGO, ILLINOIS
THE SUBMISSION OF AN UNSIGNED COPY OF THIS DOCUMENT TO TENANT FOR
TENANT'S
CONSIDERATION DOES NOT CONSTITUTE AN OFFER TO LEASE THE PREMISES OR
AN OPTION TO
OR FOR THE PREMISES. THIS DOCUMENT SHALL BECOME EFFECTIVE AND
BINDING ONLY UPON
THE EXECUTION AND DELIVERY OF THIS LEASE BY BOTH LANDLORD AND
TENANT.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
----
<S> <C>
ARTICLE 1 BASIC DATA;
DEFINITIONS....................................... 1
1.1 Basic Data.............................................. 1
1.2 Additional Definitions.................................. 2
1.3 Enumeration of Exhibits................................. 3
ARTICLE 2 PREMISES AND APPURTENANT
RIGHTS............................... 3
2.1 Lease of Premises....................................... 3
2.2 Appurtenant Rights and Reservations..................... 3
ARTICLE 3 BASIC
RENT.................................................... 4
3.1 Payment................................................. 4
ARTICLE 4 COMMENCEMENT AND
CONDITION.................................... 4
4.1 Commencement Date....................................... 4
4.2 Preparation of the Premises............................. 4
ARTICLE 5 USE OF
PREMISES............................................... 4
5.1 Permitted Use........................................... 4
5.2 Installations and Alterations by Tenant................. 5
5.3 Extra Hazardous Use..................................... 6
5.4 Hazardous Materials..................................... 6
ARTICLE 6 ASSIGNMENT AND
SUBLETTING..................................... 7
6.1 Prohibition............................................. 7
6.2 Acceptance of Rent...................................... 7
6.3 Excess Payments......................................... 8
6.4 Landlord's Recapture Right.............................. 8
6.5 Further Requirements.................................... 8
ARTICLE 7 RESPONSIBILITY FOR REPAIRS AND CONDITION OF PREMISES;
SERVICES TO BE FURNISHED BY LANDLORD..........................
9
7.1 Landlord Repairs........................................ 9
7.2 Tenant Repairs.......................................... 9
7.3 Floor Load - Heavy Machinery............................ 10
7.4 Utility Services........................................ 10
7.5 Other Services.......................................... 11
7.6 Interruption of Service................................. 12
ARTICLE 8 REAL ESTATE
TAXES............................................. 13
8.1 Payments on Account of Real Estate Taxes................ 13
8.2 Abatement............................................... 14
ARTICLE 9 OPERATING AND UTILITY
EXPENSES................................ 14
9.1 Definitions............................................. 14
9.2 Tenant's Payment of Operating Expenses.................. 14
9.3 Utility Payments........................................ 15
ARTICLE 10 INDEMNITY AND PUBLIC LIABILITY
INSURANCE...................... 15
10.1 Tenant's Indemnity......................................
15
10.2 Tenant Insurance........................................
16
10.3 Tenant's Risk...........................................
16
10.4 Waiver of Subrogation...................................
17
ARTICLE 11 FIRE, EMINENT DOMAIN,
ETC..................................... 17
11.1 Landlord's Right of Termination.........................
17
11.2 Restoration; Tenant's Right of Termination..............
17
11.3 Landlord's Insurance....................................
18
11.4 Abatement of Rent.......................................
18
11.5 Condemnation Award......................................
19
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 12 HOLDING OVER;
SURRENDER....................................... 19
12.1 Holding Oven............................................
19
12.2 Surrender of Premises...................................
19
ARTICLE 13 RIGHTS OF MORTGAGEES; TRANSFER OF
TITLE....................... 20
13.1 Rights of Mortgagees....................................
20
13.2 Assignment of Rents and Transfer of Title...............
20
13.3 Notice to Mortgagee.....................................
20
ARTICLE 14 DEFAULT;
REMEDIES............................................. 21
14.1 Tenant's Default........................................
21
14.2 Landlord's Remedies.....................................
23
14.3 Additional Rent.........................................
25
14.4 Remedying Defaults......................................
25
14.5 Remedies Cumulative.....................................
25
14.6 Enforcement Costs.......................................
25
14.7 Waiver..................................................
25
14.8 Security Deposit........................................
25
14.9 Landlord's Default......................................
26
ARTICLE 15 MISCELLANEOUS
PROVISIONS...................................... 26
15.1 Rights of Access........................................
26
15.2 Covenant of Quiet Enjoyment.............................
26
15.3 Landlord's Liability....................................
26
15.4 Estoppel Certificate....................................
27
15.5 Brokerage...............................................
27
15.6 Rules and Regulations...................................
27
15.7 Financial Statements....................................
27
15.8 Substitute Space........................................
27
15.9 Invalidity of Particular Provisions.....................
27
15.10 Provisions Binding, Etc.................................
27
15.11 Recording...............................................
28
15.12 Notice..................................................
28
15.13 When Lease Becomes Binding; Entire Agreement;
Modification............................................ 28
15.14 Paragraph Headings and Interpretation of Sections.......
28
15.15 Dispute Resolution......................................
28
15.16 Waiver of Jury Trial....................................
29
15.17 Time Is of the Essence..................................
29
15.18 Multiple Counterparts...................................
29
15.19 Governing Law...........................................
29
EXHIBIT A Location Plan of
Premises..................................... A-1
EXHIBIT B Intentionally
Omitted......................................... B-l
EXHIBIT C Commencement Date
Letter...................................... C-l
EXHIBIT D Operating
Expenses............................................ D-1
EXHIBIT E Rules and Regulations of
Building............................. E-l
EXHIBIT F
Workletter....................................................
F-1
EXHIBIT G Additional
Provisions......................................... G-l
EXHIBIT H Cleaning
Specifications....................................... H-1
</TABLE>
ii
<PAGE>
LEASE
THIS LEASE is dated as of October 15, 2003 between the Landlord and
the
Tenant named below, and is of space in the Building described
below.
BASIC DATA; DEFINITIONS
BASIC DATA. Each reference in this Lease to any of the following
terms
shall be construed to mean the following:
LANDLORD: 200 West Jackson Owner LLC, a Delaware limited liability
company
LANDLORD'S ADDRESS: 200 West Jackson Street
Suite 1310
Chicago, Illinois 60606
TENANT: American Prepaid Professional Services, Inc., a Florida
corporation
TENANT'S ADDRESS: 200 West Jackson Street
Suite 900
Chicago, Illinois 60606
GUARANTOR(S): None.
PROPERTY: The land located in Chicago, Illinois, together with the
Building
and other improvements thereon.
BUILDING: The 29-story building commonly known and numbered as 200
West
Jackson Boulevard.
BUILDING RENTABLE AREA: Agreed to be 468,929 square feet.
PREMISES: The portion of the Building known as Suite No. 900
located on the
9th floor as shown on the location plan attached hereto as EXHIBIT
A.
PREMISES RENTABLE AREA: Agreed to be 17,289 square feet.
BASIC RENT: The Basic Rent is as follows:
<TABLE>
<CAPTION>
ANNUAL RENTAL MONTHLY
PERIOD OR MONTHS RATE PER ANNUAL PAYMENT OF
OF TERM SQUARE FOOT BASIC RENT BASIC RENT
---------------- ------------- ----------- ----------
<S> <C> <C> <C>
7/1/04-6/30/05 $24.00 $414,936.00 $34,578.00
7/1/05-6/30/06 $24.40 $421,851.60 $35,154.30
7/1/06-6/30/07 $24.80 $428,767.20 $35,730.60
7/1/07-6/30/08 $25.20 $435,682.80 $36,306.90
7/1/08-6/30/09 $25.60 $442,598.40 $36,883.20
7/1/09-10/31/09 $26.00 $149,838.00* $37,459.50
</TABLE>
* based on a 4-month period
Notwithstanding anything to the contrary contained in this Lease
and provided
that Tenant is not then in default under any of the terms,
covenants or
conditions of this Lease beyond any applicable cure periods, Basic
Rent and
Escalation Charges (as hereinafter defined) shall abate in full and
Tenant shall
have no liability therefor during the first 7 full calendar months
of the Term.
(initials)
<PAGE>
BASE YEAR: Calendar year 2004
TENANT'S PROPORTIONATE SHARE: 3.6869% (which is based on the ratio
of (a)
Premises Rentable Area to (b) Building Rentable Area).
SECURITY DEPOSIT: None.
SCHEDULED COMMENCEMENT DATE: July 1, 2004.
TERM: Five (5) years and four (4) months, commencing on the
Commencement
Date (as defined in SECTION 4.1) and expiring at the close of the
last day of
the sixty-fourth (64th) full calendar month following the
Commencement Date. The
Term shall include any extension thereof that is expressly provided
for by this
Lease and that is effected strictly in accordance with this Lease;
if no
extension of the Term is expressly provided for by this Lease, no
right to
extend the Term shall be implied by this provision.
PERMITTED USES: Executive and general offices.
CONSTRUCTION DEADLINE: N/A.
LANDLORD'S CONTRIBUTION: An amount equal to $380,358.00 (i.e.,
$22.00 per
square foot of Premises Rentable Area).
LANDLORD'S CONSTRUCTION REPRESENTATIVE: John Wegforth
TENANT'S CONSTRUCTION REPRESENTATIVE: Rosa Vichcales
BROKER: MB Real Estate Services, LLC and CB Richard Ellis, Inc.
1.2 ADDITIONAL DEFINITIONS. When used in Lease, the capitalized
terms set
forth below shall bear the meanings set forth below.
ADDITIONAL RENT: All charges and sums payable by Tenant as set
forth in
this Lease, other than and in addition to Basic Rent.
BUSINESS DAY: All days except Saturdays, Sundays, New Year's Day,
Martin
Luther King Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
Christmas Day, and such other days on which landlords of comparable
buildings
determine are holidays.
ENVIRONMENTAL CONDITION: Any disposal, release or threat of release
of
Hazardous Materials on, from or about the Building or the Property
or storage of
Hazardous Materials on, from or about the Building or the
Property.
ENVIRONMENTAL LAWS: Any federal, state and/or local statute,
ordinance,
bylaw, code, rule and/or regulation now or hereafter enacted,
pertaining to any
aspect of the environment or human health, including, without
limitation, the
Environmental Protection Act of Illinois, 415 ILCS 5/1 et seq., and
state and
local superlien and environmental statutes and ordinances, with
implementing
regulations, rules and guidelines, and the Comprehensive
Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq.,
the Toxic Substances Control Act, 15 U.S.C. Section 2061 et seq.,
the Federal
Clean Water Act, 33 U.S.C. Section 1251, and the Federal Clean Air
Act, 42
U.S.C. Section 7401 et seq.
ESCALATION CHARGES: The Additional Rent arising pursuant to ARTICLE
8 and
ARTICLE 9 of this Lease.
FORCE MAJEURE: Collectively and individually, strikes or other
labor
trouble, fire or other casualty, acts of God, war, terrorist acts,
civil
disturbances, governmental preemption of priorities or other
controls in
connection with a national or other public emergency or shortages
of fuel,
supplies or labor resulting therefrom, or any other cause, whether
similar or
dissimilar, beyond the reasonable control of the party required to
perform an
obligation, other than the payment of Rent or any Security
Deposit.
2
<PAGE>
HAZARDOUS MATERIALS: Shall mean each and every element, compound,
chemical
mixture, contaminant, pollutant, material, waste or other substance
which is
defined, determined or identified as hazardous or toxic under any
Environmental
Law, including, without limitation, any "oil," "hazardous
material," "hazardous
waste," "hazardous substance" or "chemical substance or mixture",
as the
foregoing terms (in quotations) are defined in any Environmental
Laws.
LAND: The land that constitutes a portion of the Property.
LEASE YEAR: Means each period of one year during the Term
commencing on the
Commencement Date or on any anniversary thereof, or, if the
Commencement Date
does not fall on the first day of a calendar month, the first Lease
Year shall
consist of the partial calendar month following the Commencement
Date and the
succeeding twelve full calendar months, and each succeeding Lease
Year shall
consist of a one-year period commencing on the first day of the
calendar month
following the calendar month in which the Commencement Date
fell.
1.3 ENUMERATION OF EXHIBITS. The following Exhibits are a part of
this
Lease, are incorporated herein by reference attached hereto, and
are to be
treated as a part of this Lease for all purposes: EXHIBIT A -
Location Plan of
the Premises; EXHIBIT B - Intentionally omitted; EXHIBIT C -
Commencement Date
Letter - Intentionally Omitted; EXHIBIT D - Operating Expenses;
EXHIBIT E -
Rules and Regulations; EXHIBIT F - Workletter; EXHIBIT G -
Additional
Provisions; and EXHIBIT H - Cleaning Specifications. Undertakings
contained in
such Exhibits are agreements on the part of Landlord and Tenant, as
the case may
be, to perform the obligations stated therein.
ARTICLE 2
PREMISES AND APPURTENANT RIGHTS
2.1 LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant
hereby
leases from Landlord the Premises for the Term and upon the terms
and conditions
hereinafter set forth.
2.2 APPURTENANT RIGHTS AND RESERVATIONS.
(a) Tenant shall have, as appurtenant to the Premises, the
non-exclusive right to use, and permit its invitees to use in
common with
Landlord and others, (i) public or common lobbies, hallways,
stairways,
elevators and common walkways necessary for access to the Building
and the
Premises, and if the portion of the Premises on any floor includes
less
than the entire floor, the common toilets, corridors and elevator
lobby of
such floor; and (ii) the loading areas, pedestrian sidewalks,
landscaped
areas, trash enclosures, and other areas or facilities, if any,
which are
located in or on the Property and designated by Landlord from time
to time
for the non-exclusive use of tenants and other occupants of the
Building
(the "COMMON FACILITIES"); but such rights shall always be subject
to
reasonable rules and regulations from time to time established by
Landlord
pursuant to SECTION 15.6 (the "RULES AND REGULATIONS") and to the
right of
Landlord to designate and change from time to time areas and
facilities so
to be used.
(b) Excepted and excluded from the Premises and the Common
Facilities
are the ceiling, floor, perimeter walls and exterior windows
(except the
inner surface of each thereof), and any space in the Premises used
for
shafts, stacks, pipes, conduits, fan rooms, ducts, electric or
other
utilities, sinks or other Building facilities, but the entry doors
(and
related glass and finish work) to the Premises are a part thereof.
Landlord
shall have the right to place in the Premises (but in such manner
as to
reduce to a minimum interference with Tenant's use of the
Premises)
interior storm windows, sun control devices, utility lines,
equipment,
stacks, pipes, conduits, ducts and the like. In the event that
Tenant shall
install any hung ceilings or walls in the Premises, Tenant shall
install
and maintain, as Landlord may require, proper access panels therein
to
afford access to any facilities above the ceiling or within or
behind the
walls. Tenant shall be entitled to install any such ceilings or
walls only
in compliance with the other terms and conditions of this Lease
(c) Landlord, at its sole cost and expense, shall cause Tenant's
name
to be listed on the building directory in the Building lobby.
3
<PAGE>
ARTICLE 3
BASIC RENT
3.1 PAYMENT.
(a) Tenant agrees to pay the Basic Rent and Additional Rent to
Landlord, or as directed by Landlord, commencing on the
Commencement Date,
without offset, abatement (except as provided in SECTION 11.4),
deduction
or demand. Basic Rent shall be payable in equal monthly
installments, in
advance, on the first day of each and every calendar month during
the Term
of this Lease, to Landlord at Landlord's Address or at such other
place as
Landlord shall from time to time designate by notice, in lawful
money of
the United States. In the event that any installment of Basic Rent
or any
regularly scheduled payment of Additional Rent is not paid within
five (5)
days following the date due, Tenant shall pay, in addition to any
charges
under SECTION 14.4, at Landlord's request an administrative fee
equal to 5%
of the overdue payment. Landlord and Tenant agree that all amounts
due from
Tenant under or in respect of this Lease, whether labeled Basic
Rent,
Escalation Charges, Additional Rent or otherwise, shall be
considered as
rental reserved under this Lease for all purposes, including
without
limitation regulations promulgated pursuant to the Bankruptcy Code,
and
including further without limitation Section 502(b) thereof.
(b) Basic Rent for any partial month shall be pro-rated on a
daily
basis, and if the first day on which Tenant must pay Basic Rent
shall be
other than the first day of a calendar month, the first payment
which
Tenant shall make to Landlord shall be equal to a proportionate
part of the
monthly installment of Basic Rent for the partial month from the
first day
on which Tenant must pay Basic Rent to the last day of the month in
which
such day occurs, plus the installment of Basic Rent for the
succeeding
calendar month.
ARTICLE 4
COMMENCEMENT AND CONDITION
4.1 COMMENCEMENT DATE. The "COMMENCEMENT DATE" shall be the
Scheduled
Commencement Date set forth in SECTION 1.1.
4.2 PREPARATION OF THE PREMISES.
Tenant shall perform improvements to the Premises in accordance
with the
provisions with of SECTION 5.2 of this Lease and the Workletter
attached hereto
as EXHIBIT F. The Premises are being leased in their present
condition, AS IS,
WITHOUT REPRESENTATION OR WARRANTY by Landlord except as expressly
set forth
herein. Tenant acknowledges that it has inspected the Premises and
Common
Facilities and has found the same satisfactory.
ARTICLE 5
USE OF PREMISES
5.1 PERMITTED USE.
(a) Tenant agrees that the Premises shall be used and occupied
by
Tenant only for Permitted Uses and for no other use without
Landlord's
express written consent.
(b) Tenant agrees to conform to the following provisions during
the
Term of this Lease:
(i) Tenant shall cause all freight to be delivered to or
removed
from the Building and the Premises in accordance with the Rules
and
Regulations established by Landlord therefor;
(ii) Tenant will not place on the exterior of the Premises
(including both interior and exterior surfaces of doors and
interior
surfaces of windows) or on any part of the Building outside the
Premises, any sign, symbol, advertisement or the like visible
to
public view outside of the Premises. Landlord will not
4
<PAGE>
withhold consent for signs or lettering on the entry doors to
the
Premises provided such signs conform to sign standards for the
Building adopted by Landlord in its sole discretion and Tenant
has
submitted to Landlord a plan or sketch in reasonable detail
(showing,
without limitation, size, color, location, materials and method
of
affixation) of the sign to be placed on such entry doors.
Landlord
agrees, however, to maintain a tenant directory in the lobby of
the
Building (and, in the case of multi-tenant floors, in that
floor's
elevator lobby) in which will be placed Tenant's name and the
location
of the Premises in the Building;
(iii) Tenant shall not perform any act or carry on any practice
which may injure the Premises, or any other part of the Building,
or
cause any offensive odors or loud noise or constitute a nuisance or
a
menace to any other tenant or tenants or other persons in the
Building;
(iv) Tenant shall, in its use of the Premises, comply with the
requirements of all applicable governmental laws, rules and
regulations, including, without limitation, the Americans With
Disabilities Act of 1990 and the City of Chicago; and
(v) Tenant shall not abandon the Premises and cease paying Rent
therefor without Landlord's prior written consent, which consent
shall
not be unreasonably withheld.
5.2 INSTALLATIONS AND ALTERATIONS BY TENANT.
(a) Tenant shall make no alterations, additions (including, for
the
purposes hereof, wall-to-wall carpeting), or improvements
(collectively,
"ALTERATIONS") in or to the Premises (including any Alterations
necessary
for Tenant's initial occupancy of the Premises) without Landlord's
prior
written consent, which consent shall not be unreasonably withheld
or
delayed with respect to non-structural Alterations that do not
affect or
involve the Building's electrical, plumbing or mechanical systems
or any
other Building systems. Any Alterations shall be in accordance with
the
Rules and Regulations in effect with respect thereto and with plans
and
specifications meeting the requirements set forth in the Rules
and
Regulations and approved in advance by Landlord. All work shall (i)
be
performed in a good and workmanlike manner and in compliance with
all
applicable laws, ordinances and regulations; (ii) be made at
Tenant's sole
cost and expense; (iii) become part of the Premises and the
property of
Landlord; and (iv) be coordinated with any work being performed by
Landlord
in such a manner as not to damage the Building or interfere with
the
construction or operation of the Building. At Landlord's request,
Tenant
shall, before its work is started, secure assurances satisfactory
to
Landlord in its reasonable discretion protecting Landlord against
claims
arising out of the furnishing of labor and materials for the
Alterations.
If any Alterations shall involve the removal of fixtures, equipment
or
other property in the Premises which are not Tenant's Removable
Property,
such fixtures, equipment or property shall be promptly replaced by
Tenant
at its expense with new fixtures, equipment or property of like
utility and
of at least equal quality. Tenant shall promptly reimburse Landlord
for all
reasonable costs, including attorneys', architects', engineers',
and
consultants' fees, incurred by Landlord in connection with any
request from
Tenant pursuant to this SECTION 5.2 in an amount not to exceed 5%
of the
hard construction costs of such alterations.
(b) All articles of personal property and all business
fixtures,
machinery and equipment and furniture owned or installed by Tenant
solely
at its expense in the Premises ("TENANT'S REMOVABLE PROPERLY")
shall remain
the property of Tenant and may be removed by Tenant at any time
prior to
the expiration or earlier termination of the Term, provided that
Tenant, at
its expense, shall repair any damage to the Building caused by
such
removal.
(c) Notice is hereby given that Landlord shall not be liable for
any
labor or materials furnished or to be furnished to Tenant upon
credit, and
that no mechanic's or other lien for any such labor or materials
shall
attach to or affect the reversion or other estate or interest of
Landlord
in and to the Premises, the Building or the Property. To the
maximum extent
permitted by law, before such time as any contractor commences to
perform
work on behalf of Tenant, such contractor (and any subcontractors)
shall
furnish
5
<PAGE>
a written statement acknowledging the provisions set forth in the
prior
clause. Tenant agrees to pay promptly when due the entire cost of
any work
done on behalf of Tenant, its agents, employees or independent
contractors,
and not to cause or permit any liens for labor or materials
performed or
furnished in connection therewith to attach to all or any part of
the
Property and immediately to discharge any such liens which may so
attach.
If, notwithstanding the foregoing, any lien is filed against all or
any
part of the Property for work claimed to have been done for, or
materials
claimed to have been furnished to, Tenant or its agents, employees
or
independent contractors, Tenant, at its sole cost and expense,
shall cause
such lien to be dissolved promptly after receipt of notice that
such lien
has been filed, by the payment thereof or by the filing of a
bond
sufficient to accomplish the foregoing. If Tenant shall fail to
discharge
any such lien, Landlord may, at its option, discharge such lien and
treat
the cost thereof (including reasonable attorneys' fees incurred
in
connection therewith) as Additional Rent payable upon demand, it
being
expressly agreed that such discharge by Landlord shall not be
deemed to
waive or release the Event of Default in not discharging such lien.
Tenant
shall indemnify and hold Landlord harmless from and against any and
all
expenses, liens, claims, liabilities and damages based on or
arising,
directly or indirectly, by reason of the making of any
alterations,
additions or improvements by or on behalf of Tenant to the Premises
under
this Section, which obligation shall survive the expiration or
termination
of this Lease.
(d) In the course of any work being performed by Tenant
(including,
without limitation, the "field installation" of any Tenant's
Removable
Property), Tenant agrees to use labor compatible with that being
employed
by Landlord for work in the Building or on the Property or other
buildings
owned by Landlord or its affiliates (which term, for purposes
hereof, shall
include, without limitation, entities which control or are under
common
control with or are controlled by Landlord or, if Landlord is a
partnership
or limited liability company, by any partner or member of Landlord)
and not
to employ or permit the use of any labor or otherwise take any
action which
might result in a labor dispute involving personnel providing
services in
the Building or on the Property pursuant to arrangements made by
Landlord.
5.3 EXTRA HAZARDOUS USE. Tenant covenants and agrees mat Tenant
will not do
or permit anything to be done in or upon the Premises, or bring in
anything or
keep anything therein, which shall increase the rate of property or
liability
insurance on the Premises or the Property above the standard rate
applicable to
Premises being occupied for the Permitted Uses. If the premium or
rates payable
with respect to any policy or policies of insurance carried by or
on behalf of
Landlord with respect to the Property increases as a result of any
act or
activity on or use of the Premises during the Term or payment by
the insurer of
any claim arising from any act or neglect of Tenant, its employees,
agents,
contractors or invitees, Tenant shall pay such increase, from time
to time,
within fifteen (15) days after demand therefor by Landlord, as
Additional Rent.
5.4 HAZARDOUS MATERIALS.
(a) Tenant may use chemicals such as adhesives, lubricants,
ink,
solvents and cleaning fluids of the kind and in amounts and in the
manner
customarily found and used in business offices in order to conduct
its
business at the Premises and to maintain and operate the business
machines
located in the Premises, provided Tenant complies with all
applicable
Environmental Laws. Tenant shall not use, store, handle, treat,
transport,
release or dispose of any other Hazardous Materials on or about
the
Premises or the Property without Landlord's prior written consent,
which
Landlord may withhold or condition in Landlord's sole
discretion.
(b) Any handling, treatment, transportation, storage, disposal or
use
of Hazardous Materials by Tenant in or about the Premises or the
Property
and Tenant's use of the Premises shall comply with all
applicable
Environmental Laws. Tenant shall, within ten (10) Business Days
of
Landlord's written request therefor, disclose in writing all
Hazardous
Materials that are being used by Tenant in the Premises, the nature
of such
use and the manner of storage and disposal. Without Landlord's
prior
written consent, Tenant shall not conduct any sampling or
investigation of
soil or groundwater on the Property to determine the presence of
any
constituents therein.
6
<PAGE>
(c) Tenant shall indemnify, defend upon demand with counsel
reasonably
acceptable to Landlord, and hold Landlord harmless from and
against, any
liabilities, losses claims, damages, interest, penalties, fines,
attorneys'
fees, experts' fees, court costs, remediation costs, and other
expenses
which result from the use, storage, handling, treatment,
transportation,
release, threat of release or disposal of Hazardous Materials in or
about
the Premises or the Property by Tenant or Tenant's agents,
employees,
contractors or invitees. The provisions of this PARAGRAPH (C) shall
survive
the expiration or earlier termination of this Lease.
(d) Tenant shall give written notice to Landlord as soon as
reasonably
practicable of (i) any communication received by Tenant from
any
governmental authority concerning Hazardous Materials which relates
to the
Premises or the Property, and (ii) any Environmental Condition of
which
Tenant is aware.
ARTICLE 6
ASSIGNMENT AND SUBLETTING
6.1 PROHIBITION.
(a) Tenant covenants and agrees that neither this Lease nor the
term
and estate hereby granted, nor any interest herein or therein, will
be
assigned, mortgaged, pledged, encumbered or otherwise transferred,
whether
voluntarily, involuntarily, by operation of law or otherwise, and
that
neither the Premises nor any part thereof will be encumbered in any
manner
by reason of any act or omission on the part of Tenant, or used or
occupied
or permitted to be used or occupied, by anyone other than Tenant,
or for
any use or purpose other than a Permitted Use, or be sublet (which
term,
without limitation, shall include granting of concessions, licenses
and the
like) in whole or in part, or be offered or advertised for
assignment or
subletting by Tenant or any person acting on behalf of Tenant,
without, in
each case, the prior written consent of Landlord which consent
shall not be
unreasonably withheld, conditioned or delayed. Without limiting
the
foregoing, any agreement pursuant to which: (x) Tenant is relieved
from the
obligation to pay, or a third party agrees to pay on Tenant's
behalf, all
or any portion of the Basic Rent or Additional Rent under this
Lease;
and/or (y) a third party undertakes or is granted by or on behalf
of Tenant
the right to assign or attempt to assign this Lease or sublet or
attempt to
sublet all or any portion of the Premises, shall for all purposes
hereof be
deemed to be an assignment of this Lease and subject to the
provisions of
this ARTICLE 6. The provisions of this PARAGRAPH (A) shall apply to
a
transfer (by one or more transfers) of a controlling portion of or
interest
in the stock or partnership or membership interests or other
evidences of
equity interests of Tenant as if such transfer were an assignment
of this
Lease; provided that if equity interests in Tenant at any time are
or
become traded on a public stock exchange, the transfer of equity
interests
in Tenant on a public stock exchange shall not be deemed an
assignment
within the meaning of this Article.
(b) The provisions of PARAGRAPH (A) shall not apply to either
(x)
transactions with an entity into or with which Tenant is merged
or
consolidated, or to which all or substantially all of Tenant's
assets are
transferred, or (y) transactions with any entity which controls or
is
controlled by Tenant or is under common control with Tenant;
provided that
in any such event: (i) the successor to Tenant has a net worth,
computed in
accordance with generally accepted accounting principles
consistently
applied, at least equal to the greater of (1) the net worth of
Tenant
immediately prior to such merger, consolidation or transfer, or (2)
the net
worth of Tenant herein named on the date of this Lease, (ii)
proof
satisfactory to Landlord of such net worth shall have been
delivered to
Landlord at least ten (10) days prior to the effective date of any
such
transaction, and (iii) the assignee agrees directly with Landlord,
by
written instrument in form satisfactory to Landlord in its
reasonable
discretion, to be bound by all the obligations of Tenant
hereunder,
including, without limitation, the covenant against further
assignment and
subletting.
6.2 ACCEPTANCE OF RENT. If this Lease be assigned, or if the
Premises or
any part thereof be sublet or occupied by anyone other than Tenant,
whether or
not in violation of the terms and conditions of the Lease, Landlord
may, at any
time and from time to time, collect rent and other charges from the
assignee,
subtenant or occupant, and apply the net amount collected
7
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to the rent and other charges herein reserved, but no such
assignment,
subletting, occupancy, collection or modification of any provisions
of this
Lease shall be deemed a waiver of this covenant, or the acceptance
of the
assignee, subtenant or occupant as a tenant or a release of Tenant
from the
further performance of covenants on the part of Tenant to be
performed
hereunder. Any consent by Landlord to a particular assignment,
subletting or
occupancy or other act for which Landlord's consent is required
under PARAGRAPH
(A) of SECTION 6.1 shall not in any way diminish the prohibition
stated in
PARAGRAPH (A) of SECTION 6.1 as to any further such assignment,
subletting or
occupancy or other act or the continuing liability of the original
named Tenant.
No assignment or subletting hereunder shall relieve Tenant from its
obligations
hereunder, and Tenant shall remain fully and primarily liable
therefor. Landlord
may revoke any consent by Landlord to a particular assignment,
subletting or
occupancy if the assignment or sublease does not provide that the
assignee,
subtenant or other occupant agrees to be independently bound by and
upon all of
the covenants, agreements, terms, provisions and conditions set
forth in this
Lease on the part of Tenant to be kept and performed.
6.3 EXCESS PAYMENTS. If Tenant assigns this Lease or sublets the
Premises
or any portion thereof, Tenant shall pay to Landlord as Additional
Rent fifty
percent (50%) of the amount, if any, by which (a) any and all
compensation
received by Tenant as a result of such assignment or subletting,
net of (i)
reasonable expenses actually incurred by Tenant in connection with
such
assignment or subletting (prorated over the term of the assignment
or
subletting) and (ii) any amounts paid/reimbursed to Landlord
pursuant to SECTION
6.5 below, exceeds (b) in the case of an assignment, the Basic Rent
and
Additional Rent under this Lease, and in the case of a subletting,
the portion
of the Basic Rent and Additional Rent allocable to the portion of
the Premises
subject to such subletting. Such payments shall be made on the date
the
corresponding payments under this Lease are due. Notwithstanding
the foregoing,
the provisions of this Section shall impose no obligation on
Landlord to
consent to an assignment of this Lease or a subletting of all or a
portion of
the Premises.
6.4 LANDLORD'S RECAPTURE RIGHT. Notwithstanding anything herein to
the
contrary, in addition to withholding or granting consent with
respect to any
proposed assignment of this Lease or proposed sublease of all or a
portion of
the Premises, Landlord shall have the right, to be exercised in
writing within
thirty (30) days after written notice from Tenant seeking
Landlord's consent to
assign this Lease or sublease all or any portion of the Premises,
to terminate
this Lease (in the event of a proposed assignment) or recapture
that portion of
the Premises to be subleased (in the event of a proposed sublease).
In the case
of a proposed assignment, this Lease shall terminate as of the date
(the
"RECAPTURE DATE") which is the later of (a) thirty (30) days after
the date of
Landlord's election, and (b) the proposed effective date of such
assignment or
sublease, as if such date were the last day of the Term of this
Lease. If
Landlord exercises the rights under this Section in connection with
a proposed
sublease, this Lease shall be deemed amended to eliminate the
proposed sublease
premises from the Premises as of the Recapture Date, and thereafter
all Basic
Rent and Escalation Charges shall be appropriately prorated to
reflect the
reduction of the Premises as of the Recapture Date.
6.5 FURTHER REQUIREMENTS. Tenant shall reimburse Landlord within
ten (10)
days following Landlord's invoice therefor, as Additional Rent, for
any
reasonable out-of-pocket costs (including reasonable attorneys'
fees and
expenses) incurred by Landlord in connection with any actual or
proposed
assignment or sublease or other act described in PARAGRAPH (A) of
SECTION 6.1,
whether or not consummated, including the costs of making
investigations as to
the acceptability of the proposed assignee or subtenant. Any
sublease to which
Landlord gives its consent shall not be valid unless and until
Tenant and the
sublessee execute a consent agreement in form and substance
satisfactory to
Landlord in its reasonable discretion and a fully executed
counterpart of such
sublease has been delivered to Landlord. Any sublease shall provide
that: (i)
the term of the sublease ends no later than one day before the last
day of the
Term of this Lease; (ii) such sublease is subject and subordinate
to this Lease;
(iii) Landlord may enforce the provisions of the sublease,
including collection
of rents; and (iv) in the event of termination of this Lease or
reentry or
repossession of the Premises by Landlord, Landlord may, at its sole
discretion
and option, take over all of the right, title and interest of
Tenant, as
sublessor, under such sublease, and such subtenant shall, at
Landlord's option,
attorn to Landlord, but nevertheless Landlord shall not (A) be
liable for any
previous act or omission of Tenant under such sublease; (B) be
subject to any
defense or offset previously accrued in favor of the subtenant
against Tenant;
or (C) be bound by any previous modification of such sublease made
without
Landlord's written consent or by any previous prepayment of more
than one
month's rent.
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ARTICLE 7
RESPONSIBILITY FOR REPAIRS AND CONDITION OF PREMISES; SERVICES TO
BE
FURNISHED BY LANDLORD
7.1 LANDLORD REPAIRS.
(a) Except as otherwise provided in this Lease, Landlord agrees
to
keep in good order, condition and repair the roof, public areas,
exterior
walls (including exterior glass) and structure of the Building
(including
all plumbing, mechanical and electrical systems installed by
Landlord, but
specifically excluding any supplemental beating, ventilation or
air
conditioning equipment or systems installed at Tenant's request or
as a
result of Tenant's requirements in excess of Building standard
design
criteria), all insofar as they affect the Premises, except that
Landlord
shall in no event be responsible to Tenant for the repair of glass
in the
Premises, the doors (or related glass and finish work) leading to
the
Premises, or any condition in the Premises or the Building caused
by any
act or neglect of Tenant, its invitees or contractors. Landlord
shall also
keep and maintain all Common Facilities in a good and clean
order,
condition and repair, free of snow and ice and accumulation of dirt
and
rubbish, and shall keep and maintain all landscaped areas on the
Property
in a neat and orderly condition. Landlord shall not be responsible
to make
any improvements or repairs to the Building other than as expressly
in this
SECTION 7.1 provided, unless expressly provided otherwise in this
Lease.
(b) Landlord shall never be liable for any failure to make
repairs
which Landlord has undertaken to make under the provisions of this
SECTION
7.1 or elsewhere in this Lease, unless Tenant has given notice to
Landlord
of the need to make such repairs, and Landlord has failed to
commence to
make such repairs within a reasonable time after receipt of such
notice, or
fails to proceed with reasonable diligence to complete such
repairs.
(c) If Landlord shall be required to make any repairs or
alterations
to the Premises to comply with any laws or requirements of
public
authorities hereafter in effect, or with any directions, rules
or
regulations of governmental agencies having or purporting to
have
jurisdiction, and if the cost to Landlord of making such repairs
or
alterations, together with the cost of other such repairs or
alterations
theretofore required, would exceed an amount equal to fifteen
months' Basic
Rent in the aggregate, Landlord may (but shall not be required to)
elect to
terminate this Lease by giving Tenant notice of its desire to do
so, which
notice shall set forth a date not less than ninety (90) days from
the
giving of such notice on which this Lease shall terminate with the
same
force and effect as if such date were the date originally set forth
herein
as the expiration hereof. Tenant may, however, void Landlord's
election to
so terminate this Lease by giving Landlord notice, within fifteen
days
after the date of Landlord's notice to Tenant, to the effect that
Tenant
shall, at Tenant's expense, promptly and diligently cause all such
repairs
or alterations to be performed in the Premises, and Tenant shall
hold
Landlord harmless from and against any and all costs, expenses,
penalties
and/or liabilities (including without limitation reasonable legal
fees and
costs) in connection therewith.
7.2 TENANT REPAIRS.
(a) Tenant will keep the Premises and every part thereof neat
and
clean, and will maintain the same in good order, condition and
repair,
excepting only those repairs and maintenance obligations for which
Landlord
is responsible under the terms of this Lease, reasonable wear and
tear of
the Premises, and damage by fire or other casualty or as a
consequence of
the exercise of the power of eminent domain; and Tenant shall
surrender the
Premises, at the end of the Term, in such condition. Without
limitation,
Tenant shall comply with all laws, codes and ordinances from time
to time
in effect and all directions, rules and regulations of
governmental
agencies having jurisdiction, and the standards recommended by the
Chicago
Board of Fire Underwriters applicable to Tenant's use and occupancy
of the
Premises, and shall, at Tenant's expense, obtain all permits,
licenses and
the like required thereby. Subject to SECTION 10.4 regarding waiver
of
subrogation, Tenant shall be responsible for the cost of repairs
which may
be made necessary by reason of damage to the Building caused by any
act or
neglect of Tenant, or its contractors or invitees (including any
damage by
fire or other casualty arising therefrom).
9
<PAGE>
(b) If repairs are required to be made by Tenant pursuant to the
terms
hereof, and Tenant fails to make the repairs within a reasonable
time after
receipt of such written notice, Landlord may make or cause such
repairs to
be made (but shall not be required to do so), and the provisions of
SECTION
14.4 shall be applicable to the costs thereof. Landlord shall not
be
responsible to Tenant for any loss or damage whatsoever that may
accrue to
Tenant's stock or business by reason of Landlord's making such
repairs.
7.3 FLOOR LOAD - HEAVY MACHINERY.
(a) Tenant shall not place a load upon any floor in the
Premises
exceeding fifty (50) pounds live load per square foot of usable
area of the
Premises. Landlord reserves the right to prescribe the weight and
position
of all business machines and mechanical equipment, including safes,
which
shall be placed so as to distribute the weight. Business machines
and
mechanical equipment shall be placed and maintained by Tenant at
Tenant's
expense in settings sufficient, in Landlord's judgment, to absorb
and
prevent vibration, noise and annoyance. Tenant shall not move any
safe,
heavy machinery, heavy equipment, freight, bulky matter or fixtures
into or
out of the Building without Landlord's prior consent, which consent
may
include a requirement to provide insurance, naming Landlord as an
insured,
in such amounts as Landlord may deem reasonable. Landlord has
examined the
Premises and has determined that as of the date hereof, the
placement of
Tenant's personal property and equipment do not exceed the floor
load
limitation set forth above.
(b) If any such safe, machinery, equipment, freight, bulky matter
or
fixtures requires special handling, Tenant agrees to employ only
persons
holding a Master Rigger's License to do such work, and that all
work in
connection therewith shall comply with applicable laws and
regulations. Any
such moving shall be at the sole risk and hazard of Tenant, and
Tenant will
exonerate, indemnify and save Landlord harmless against and from
any
liability, loss, injury, claim or suit resulting directly or
indirectly
from such moving.
7.4 UTILITY SERVICES.
(a) Landlord shall, on all Business Days from 8:00 a.m. to 6:00
p.m.
and on Saturdays from 8:00 a.m. to 1:00 p.m., furnish heating and
cooling
as normal seasonal changes may require to provide reasonably
comfortable
space temperature and ventilation for occupants of the Premises
under
normal business operation at an occupancy of not more than one
person per
140 square feet of usable area and an electrical load not exceeding
2.5
watts per usable square foot. If Tenant shall require air
conditioning,
heating or ventilation outside the hours and days above specified,
Landlord
may furnish such service and Tenant shall pay therefore such
charges as may
from time to time be in effect for the Building upon demand as
Additional
Rent. As of the date hereof, Landlord's current charge for
after-hours air
conditioning, heating and ventilation is $120.00 per hour and is
subject to
change from time to time. In the event Tenant introduces into the
Premises
personnel or equipment which overloads the capacity of the Building
system
or in any other way interferes with the system's ability to
perform
adequately its proper functions, supplementary systems may, if and
as
needed, at Landlord's option, be provided by Landlord, and the cost
of such
supplementary systems shall be payable by Tenant to Landlord upon
demand as
Additional Rent.
(b) Tenant agrees in its use of the Premises (i) not to exceed
the
electrical standard for the Premises, and (ii) that its total
connected
lighting load it will not exceed the maximum from time to time
permitted
under applicable governmental regulations. The electrical standard
for the
Premises is designed to meet a demand requirement not to exceed
4.78 watts
per usable square foot of the Premises for 120/208 volt, three
phase power.
If, without in any way derogating from the foregoing limitation,
Tenant
shall require electricity in excess of the requirements set forth
above,
Tenant shall notify Landlord and Landlord may (without being
obligated to
do so) supply such additional service or equipment at Tenant's sole
cost
and expense. Landlord shall purchase and install, at Tenant's
expense, all
lamps, tubes, bulbs, starters and ballasts. In order to assure that
the
foregoing requirements are not exceeded and to avert possible
adverse
effect on the Building's electric system, Tenant shall not,
without
Landlord's prior consent, connect any fixtures, appliances or
equipment to
the Building's electric
10
<PAGE>
distribution system other than personal computers, facsimilie
transceivers,
typewriters, pencil sharpeners, adding machines, photocopiers, word
and
data processors, clocks, radios, hand-held or desk top
calculators,
dictaphones, desktop computers and other similar small electrical
equipment
normally found in business offices. All charges to Tenant under
this
paragraph shall be due and payable as Additional Rent within thirty
(30)
days after receiving Landlord's invoice therefor. Landlord has
examined the
Premises and has determined that as of the date hereof, Tenant's
equipment
in the Premises does not exceed the limitations set forth
above.
(c) From time to time during the Term of this Lease, Landlord
shall
have the right to have an independent electrical consultant
selected by
Landlord make a survey of Tenant's electric usage, the result of
which
survey shall be conclusively binding upon Landlord and Tenant. In
the event
that such survey shows that Tenant has exceeded the requirements
set forth
in PARAGRAPH (B), in addition to any other rights Landlord may
have
hereunder, Tenant shall, upon demand, reimburse Landlord for the
cost of
such survey and the cost, as determined by such consultant, of
electricity
usage in excess of such requirements as Additional Rent.
(d) Tenant acknowledges that electricity to the Premises is
separately
metered and Tenant shall pay the applicable public utility company
directly
for all electrical services in the Premises.
7.5 OTHER SERVICES.
Landlord shall also provide:
(a) Passenger elevator service from the existing passenger
elevator
system in common with Landlord and others entitled thereto.
(b) Warm water for lavatory purposes and cold water (at
temperatures
supplied by the city in which the Property is located) for
drinking,
lavatory and toilet purposes. If Tenant uses water for any purpose
other
than for ordinary lavatory and drinking purposes, Landlord may
assess a
reasonable charge for the additional water so used, or install a
water
meter and thereby measure Tenant's water consumption for all
purposes. In
the latter event, Tenant shall pay the cost of the meter and the
cost of
installation thereof as Additional Rent upon demand and shall keep
such
meter and installation equipment in good working order and repair.
Tenant
agrees to pay for water consumed, as shown on such meter, together
with the
sewer charge based on such meter charges, as and when bills are
rendered,
and in the event Tenant fails timely to make any such payment,
Landlord may
pay such charges and collect the same from Tenant upon demand as
Additional
Rent.
(c) Cleaning and janitorial services to the Premises, provided
the
same are kept in order by Tenant, substantially in accordance with
the
cleaning standards from time to time in effect for the Building.
The
cleaning specifications for the Building as of the date hereof are
attached
hereto as EXHIBIT H. and remain subject to change from time to
time.
(d) Access to the Premises at all times, subject to security
precautions from time to time in effect, if any, and subject always
to
restrictions based on emergency conditions.
Landlord shall provide one or more attendants in or about the lobby
of the
Building which service shall be consistent with that of
buildings
comparable to the Building in the West Loop of downtown Chicago,
and the
costs of such services shall constitute Operating Expenses in
accordance
with the provisions of ARTICLE 9 hereof. Tenant expressly
acknowledges and
agrees that, if provided: (i) such attendants shall not serve as
police
officers, and will be unarmed, and will not be trained in
situations
involving potentially physical confrontation; and (ii) such
attendants will
be solely an amenity to tenants of the Building for purposes such
as
assisting visitors and invitees of tenants and others in the
Building,
monitoring fire control and alarm equipment, and summoning
emergency
services to the Building as and when needed, and not for the
purpose of
securing any individual tenant premises or guaranteeing the
physical safety
of Tenant's
11
<PAGE>
Premises or of Tenant's employees, agents, contractors or invitees.
If and
to the extent that Tenant desires to provide security for the
Premises or
for such persons or their property, Tenant shall be responsible for
so
doing, after having first consulted with Landlord and after
obtaining
Landlord's consent, which shall not be unreasonably withheld.
Except to the
extent caused by the gross negligence or willful misconduct of
Landlord,
Landlord expressly disclaims any and all responsibility and/or
liability
for the physical safety of Tenant's property, and for that of
Tenant's
employees, agents, contractors and invitees, and, without in any
way
limiting the operation of ARTICLE 10 hereof, Tenant, for itself and
its
agents, contractors, invitees and employees, hereby expressly
waives any
claim, action, cause of action or other right which may accrue or
arise as
a result of any damage or injury to the person or property of
Tenant or any
such agent, invitee, contractor or employee, except to the extent
caused by
the gross negligence or willful misconduct of Landlord. Tenant
agrees that,
as between Landlord and Tenant, it is Tenant's responsibility to
advise its
employees, agents, contractors and invitees as to necessary and
appropriate
safety precautions.
7.6 INTERRUPTION OF SERVICE.
(a) Landlord reserves the right to curtail, suspend, interrupt
and/or
stop the supply of water, sewage, electrical current, cleaning, and
other
services, and to curtail, suspend, interrupt and/or stop use of
entrances
and/or lobbies serving access to the Building, or other portions of
the
Property, without thereby incurring any liability to Tenant, when
necessary
by reason of accident or emergency, or for repairs,
alterations,
replacements or improvements in the judgment of Landlord
reasonably
exercised desirable or necessary, or when prevented from supplying
such
services or use due to any act or neglect of Tenant or Tenant's
agents
employees, contractors or invitees or any person claiming by,
through or
under Tenant or by Force Majeure, including, but not limited to,
strikes,
lockouts, difficulty in obtaining materials, accidents, laws or
orders, or
inability, by exercise of reasonable diligence, to obtain
electricity,
water, gas, steam, coal, oil or other suitable fuel or power.
Except as set
forth in PARAGRAPH (B) below, no diminution or abatement of rent or
other
compensation, nor any direct, indirect or consequential damages
shall or
will be claimed by Tenant as a result of, nor shall this Lease or
any of
the obligations of Tenant be affected or reduced by reason of, any
such
interruption, curtailment, suspension or stoppage in the furnishing
of the
foregoing services or use, irrespective of the cause thereof.
Except as set
forth in PARAGRAPH (B) below, failure or omission on the part of
Landlord
to furnish any of the foregoing services or use as provided in
this
paragraph shall not be construed as an eviction of Tenant, actual
or
constructive, nor entitle Tenant to an abatement of rent, nor to
render the
Landlord liable in damages, nor release Tenant from prompt
fulfillment of
any of its covenants under this Lease.
(b) Notwithstanding anything contained in this Lease to the
contrary,
if (i) an interruption or curtailment, suspension or stoppage of
an
Essential Service (as said term is hereinafter defined) shall
occur, except
any of the same due to any act or neglect of Tenant or Tenant's
agents
employees, contractors or invitees or any person claiming by,
through or
under Tenant (any such interruption of an Essential Service
being
hereinafter referred to as a "SERVICE INTERRUPTION"), and (ii) such
Service
Interruption occurs or continues as a result of the negligence or
a
wrongful conduct of the Landlord or Landlord's agents, servants,
employees
or contractors, and (iii) such Service Interruption continues for
more than
five (5) consecutive Business Days after Landlord shall have
received
notice thereof from Tenant, and (iv) as a result of such
Service
Interruption, the conduct of Tenant's normal operations in the
Premises are
materially and adversely affected, then there shall be an abatement
of one
day's Basic Rent and Escalation Charges for each day during which
such
Service Interruption continues after such five (5) Business Day
period;
provided, however, that if any part of the Premises is reasonably
useable
for Tenant's normal business operations or if Tenant conducts all
or any
part of its operations in any portion of the Premises
notwithstanding such
Service Interruption, then the amount of each daily abatement of
Basic Rent
and Escalation Charges shall only be proportionate to the nature
and extent
of the interruption of Tenant's normal operations or ability to use
the
Premises. In the event of a (a) Service Interruption that continues
for 180
days after Landlord shall have received notice thereof from Tenant,
and (b)
occurs or continues as a result of the negligence or a wrongful
conduct of
the Landlord or Landlord's agents, servants, employees or
contractors, and
(c) as a result of
12
<PAGE>
such Service Interruption, the conduct of Tenant's normal
operations in the
Premises are materially and adversely affected, and (d) such
Service
Interruption is not being diligently remedied by Landlord, Tenant,
as its
sole remedy, shall have the right to elect to terminate this Lease
within
ten (10) days after the expiration of said one hundred eighty (180)
day
period by delivering written notice thereof to Landlord. The rights
granted
to Tenant under this PARAGRAPH (B) shall be Tenant's sole and
exclusive
remedy resulting from a failure of Landlord to provide services,
and
Landlord shall not otherwise be liable for any loss or damage
suffered or
sustained by Tenant resulting from any failure or cessation of
services.
For purposes hereof, the term "ESSENTIAL SERVICES" shall mean the
following
services: access to the Premises, water and sewer/septic service
and
electricity, but only to the extent that Landlord has an obligation
to
provide same to Tenant under this Lease. Any abatement of Basic
Rent under
this paragraph shall apply only with respect to Basic Rent
allocable to the
period after each of the conditions set forth in subsections (i)
through
(iv) hereof shall have been satisfied and only during such times as
each of
such conditions shall exist.
ARTICLE 8
REAL ESTATE TAXES
8.1 PAYMENTS ON ACCOUNT OF REAL ESTATE TAXES.
(a) "TAX YEAR" shall mean a twelve-month period commencing on
January
1 and falling wholly or partially within the Term, and "TAXES"
shall mean
(i) all taxes, assessments (special or otherwise), levies, fees and
all
other government levies, exactions and charges of every kind and
nature,
general and special, ordinary and extraordinary, foreseen and
unforeseen,
which are, at any time prior to or during the Term, imposed or
levied upon
or assessed against the Property or any portion thereof, or against
any
Basic Rent, Additional Rent or other rent of any kind or nature
payable to
Landlord by anyone on account of the ownership, leasing or
operation of the
Property, or which arise on account of or in respect of the
ownership,
development, leasing, operation or use of the Property or any
portion
thereof; (ii) all gross receipts taxes or similar taxes imposed or
levied
upon, assessed against or measured by any Basic Rent, Additional
Rent or
other rent of any kind or nature or other sum payable to Landlord
by anyone
on account of the ownership, development, leasing, operation, or
use of the
Property or any portion thereof; (iii) all value added, use and
similar
taxes at any time levied, assessed or payable on account of the
ownership,
development, leasing, operation, or use of the Property or any
portion
thereof; and (iv) reasonable expenses of any proceeding for
abatement of
any of the foregoing items included in Taxes, but the amount of
special
taxes or special assessments included in Taxes shall be limited to
the
amount of the installment (plus any interest, other than penalty
interest,
payable thereon) of such special tax or special assessment required
to be
paid during the year in respect of which such Taxes are being
determined.
There shall be excluded from Taxes all income, estate,
succession,
inheritance and transfer taxes of Landlord; provided, however, that
if at
any time during the Term the present system of ad valorem taxation
of real
property shall be changed so that a capital levy, franchise,
income,
profits, sales, rental, use and occupancy, or other tax or charge
shall in
whole or in part be substituted for, or added to, such ad valorem
tax and
levied against, or be payable by, Landlord with respect to the
Property or
any portion thereof, such tax or charge shall be included in the
term
"TAXES" for the purposes of this Article.
(b) Tenant shall pay to Landlord as Additional Rent for Taxes
an
amount equal to Tenant's Proportionate Share of the increase in
Taxes for
any calendar year over Taxes for the Base Year. If the calendar
year is
only partially within the Term, the payment to be made by Tenant
shall be
proportionately reduced. The obligation of Tenant to make this
payment
shall survive the expiration or other termination of the Lease. The
tax and
assessment bills used in calculating Tenant's obligation for
Additional
Rent for Taxes in each calendar year shall be those which become
due for
payment during such calendar year, without regard to the period for
which
the tax assessment is levied or assessed and without regard to
whether or
not the Lease was in existence during such period. If, however,
there is a
change in the time payment of taxes during the term of the Lease
which
would result in Tenant paying taxes allocable to a
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period longer or shorter than the term of the Lease, the tax
payments for
the last calendar year shall be equitably adjusted so that the
period for
which Tenant pays taxes is the of the same duration as the term of
the
Lease (though it may not be the same period of time).
(c) Estimated payments by Tenant on account of Taxes shall be made
on
the first day of each and every calendar month during the Term of
this
Lease, in the fashion herein provided for the payment of Basic
Rent. The
monthly amount so to be paid to Landlord shall be sufficient to
provide
Landlord by the time real estate tax payments are due with a sum
equal to
Tenant's required payment, as reasonably estimated by Landlord from
time to
time, on account of Taxes for the then current Tax Year. Promptly
after
receipt by Landlord of bills for such Taxes, Landlord shall advise
Tenant
of the amount thereof and the computation of Tenant's payment on
account
thereof. If estimated payments theretofore made by Tenant for the
Tax Year
covered by such bills exceed the required payment on account
thereof for
such Tax Year, Landlord shall credit the amount of overpayment
against
subsequent obligations of Tenant on account of Taxes (or promptly
refund
such overpayment if the Term of this Lease has ended and Tenant has
no
further obligation to Landlord); but if the required payments on
account
thereof for such Tax Year are greater than estimated payments
theretofore
made on account thereof for such Tax Year, Tenant shall pay the
difference
to Landlord within thirty (30) days after being so advised by
Landlord, and
the obligation to make such payment for any period within the Term
shall
survive expiration of the Term.
8.2 ABATEMENT If Landlord contests the amount of any taxes or
assessments,
the attorneys fees and expenses incurred in conducting such a
contest shall
be considered a part of the tax payment for the purposes of this
provision. If
the result of such a contest if to defer the time of payment of
taxes to a later
date or to obligate the Landlord to pay any additional taxes or
assessments in
the year in which the tax or assessment was originally due, Taxes
shall be
recalculated and Tenant shall pay the additional amount due. In the
event of a
reduction of Taxes for which Tenant has paid its Proportionate
Share of the
increase in Taxes over the Taxes for the Base Year, Tenant shall
receive a
credit (or refund in the event this Lease has terminated) for
Tenant's
Proportionate Share of such reduction in the increase of Taxes over
Taxes for
the Base Year. Tenant shall have the right to examine the tax and
assessment
bills on written request. Tenant shall have the right to examine
the tax and
assessment bills on written request.
ARTICLE 9
OPERATING AND UTILITY EXPENSES
9.1 DEFINITIONS. "OPERATING YEAR" shall mean each calendar year all
or any
part of which falls within the Term, and "OPERATING EXPENSES" shall
mean the
aggregate costs and expenses incurred by Landlord with respect to
the operation,
administration, cleaning, repair, maintenance and management of the
Property,
all as set forth in EXHIBIT D attached hereto, provided that if
during any
portion of the Operating Year for which Operating Expenses are
being computed,
less than all of the Building was occupied by tenants or Landlord
was not
supplying all tenants with the services being supplied under this
Lease, actual
Operating Expenses incurred shall be extrapolated reasonably by
Landlord on an
item by item basis to the estimated Operating Expenses that would
have been
incurred if the Building were fully occupied for such Operating
Year and such
services were being supplied to all tenants, and such extrapolated
amount shall,
for the purposes hereof, be deemed to be the Operating Expenses for
such
Operating Year.
9.2 TENANT'S PAYMENT OF OPERATING EXPENSES.
(a) Tenant shall pay to Landlord as Additional Rent for
Operating
Expense, an amount equal to Tenant's Proportionate Share of the
increase,
if any, in Operating Expenses over Operating Expenses for the Base
Year. If
the calendar year is only partially within the Term, the payment to
be made
by Tenant shall be proportionately reduced. The obligation of
Tenant to
make this payment shall survive the expiration or other termination
of the
Lease.
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(b) Estimated payments by Tenant on account of Operating
Expenses
shall be made on the first day of each and every calendar month
during the
Term of this Lease, in the fashion herein provided for the payment
of
Basic Rent. The monthly amount to be paid to Landlord shall be
sufficient
to provide Landlord by the end of each Operating Year a sum equal
to
Tenant's required payment, as reasonably estimated by Landlord from
time to
time during each Operating Year, on account of Operating Expenses
for such
Operating Year. After the end of each Operating Year, Landlord
shall submit
to Tenant a reasonably detailed accounting of Operating Expenses
for such
Operating Year. If estimated payments theretofore made for such
Operating
Year by Tenant exceed Tenant's required payment on account thereof
for such
Operating Year according to such statement, Landlord shall credit
the
amount of overpayment against subsequent obligations of Tenant with
respect
to Operating Expenses (or promptly refund such overpayment if the
Term of
this Lease has ended and Tenant has no further obligation to
Landlord); but
if the required payments on account thereof for such Operating Year
are
greater than the estimated payments (if any) theretofore made on
account
thereof for such Operating Year, Tenant shall make payment to
Landlord
within thirty (30) days after being so advised by Landlord, and
the
obligation to make such payment for any period within the Term
shall
survive expiration of the Term.
(c) Tenant shall have the right to have a CPA licensed in the state
in
which the audit occurs examine, copy and audit Landlord's books and
records
establishing Operating Expenses for any Operating Year for a period
of six
(6) months following the date that Tenant receives the statement
of
Operating Expenses for such Operating Year from Landlord. Tenant
shall give
Landlord not less than thirty (30) days prior notice of its
intention to
examine and audit such books and records, and such examination and
audit
shall take place at such place within the continental United States
as
Landlord routinely maintains such books and records, unless
Landlord elects
to have such examination and audit take place in another
location
designated by Landlord in the city and state in which the Property
is
located. All costs of the examination and audit shall be borne by
Tenant;
provided, however, that if such examination and audit establishes
that the
actual Operating Expenses for the Operating Year in question are
less than
the amount set forth as the annual Operating Expenses on the
annual
statement delivered to Tenant by at least five percent (5%), then
Landlord
shall pay the reasonable costs of such examination and audit. If,
pursuant
to the audit, the payments made for such Operating Year by Tenant
exceed
Tenant's required payment on account thereof for such Operating
Year,
Landlord shall credit the amount of overpayment against
subsequent
obligations of Tenant with respect to Operating Expenses (or
promptly
refund such overpayment if the Term of this Lease has ended and
Tenant has
no further obligation to Landlord); but, if the payments made by
Tenant for
such Operating Year are less than Tenant's required payment as
established
by the examination and audit, Tenant shall pay the deficiency to
Landlord
within thirty (30) days after conclusion of the examination and
audit, and
the obligation to make such payment for any period within the Term
shall
survive expiration of the Term. If Tenant does not elect to
exercise its
right to examine and audit Landlord's books and records for any
Operating
Year within the time period provided for by this paragraph, Tenant
shall
have no further right to challenge Landlord's statement of
Operating
Expenses.
9.3 UTILITY PAYMENTS. Tenant shall be responsible for the payment
of all
utilities used and consumed in the Premises. If Landlord separately
meters the
Premises directly to the applicable utility company, as provided in
Section 7.4
above, Tenant shall pay all such charges directly to the utility
company on or
before the date when due. The obligation to pay for electricity
used and
consumed in the Premises during the last month of the Term hereof
shall survive
expiration of the Term.
ARTICLE 10
INDEMNITY AND PUBLIC LIABILITY INSURANCE
10.1 TENANT'S INDEMNITY. Except to the extent arising from the
gross
negligence or willful misconduct of Landlord or its agents or
employees, Tenant
agrees to indemnify and save harmless Landlord and Landlord's
partners, members,
shareholders, officers, directors, managers, employees, agents and
contractors
and any Holder from and against all claims, losses,
15
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cost, damages, liability or expenses of whatever nature arising:
(i) from any
accident, injury or damage whatsoever to any person, or to the
property of any
person, occurring in or about the Premises; (ii) from any accident,
injury or
damage whatsoever to any person, or to the property of any person,
occurring
outside of the Premises but on or about the Property, where such
accident,
damage or injury results or is claimed to have resulted from any
act or omission
on the part of Tenant or Tenant's agents, employees, contractors,
invitees or
sublessees; or (iii) the use or occupancy of the Premises or of any
business
conducted therein or any thing or work whatsoever done or any
condition created
(other than by Landlord) in or about the Premises, and, in any
case, occurring
after the Commencement Date (or such earlier date as of which
Tenant takes
possession of the Premises) until the expiration of the Term of
this Lease and
thereafter so long as Tenant is in occupancy of any part of the
Premises. This
indemnity and hold harmless agreement shall include indemnity
against all
losses, costs, damages, expenses and liabilities incurred in or in
connection
with any such claim or any proceeding brought thereon, including,
without
limitation, reasonable attorneys' fees and costs. The provisions of
this SECTION
10.1 shall survive the expiration or earlier termination of this
Lease.
10.2 TENANT INSURANCE. Tenant agrees to maintain in full force from
the
date upon which Tenant first enters the Premises for any reason,
throughout the
Term of this Lease, and thereafter so long as Tenant is in
occupancy of any part
of the Premises, (a) a policy of commercial general liability and
property
damage insurance (including broad form contractual liability,
independent
contractor's hazard and completed operations coverage) in at least
the amounts
of $3,000,000 per occurrence/$4,000,000 aggregate (combined single
limit) for
property damage, bodily injury or death, or such commercially
reasonably greater
amounts as Landlord in its reasonable discretion shall from time to
time
request, under which Tenant is named as an insured and Landlord,
and, at
Landlord's request, Landlord's property manager, any Holder, and
such other
persons as Landlord reasonably may request are named as additional
insureds, and
under which the insurer agrees to indemnify and hold Landlord and
such other
additional named insureds harmless from and against all cost,
expense and/or
liability arising out of or based upon any and all claims,
accidents, injuries
and damages set forth in SECTION 10.1 and (b) "all-risk" property
insurance on a
"replacement cost" basis, insuring Tenant's Removable Property and
any
Alterations made by Tenant pursuant to SECTION 5.2, to the extent
that the same
have not become the property of Landlord. Tenant may satisfy such
insurance
requirements by including the Premises in a so-called "blanket"
and/or
"umbrella" insurance policy, provided that the amount of coverage
allocated to
the Premises pursuant to a "per location" endorsement shall fulfill
the
requirements set forth herein. Tenant's insurance shall be primary
to, and not
contributory with any insurance carried by Landlord, whose
insurance shall be
considered excess only. Each policy required hereunder shall be
non-cancelable
and non-amendable with respect to Landlord and Landlord's said
designees without
thirty (30) days' prior notice, shall be written on an "occurrence"
basis, and a
duplicate original or certificates thereof satisfactory to
Landlord, together
with a photocopy of the entire policy, shall be delivered to
Landlord. The
policies of insurance required to be maintained by Tenant hereunder
shall be
issued by companies domiciled in the United States and qualified
and licensed to
conduct business in the state in which the Property is located, and
shall be
rated A:X or better in the most current issue of Best's Insurance
Reports.
Tenant's insurance policies shall not include deductibles in excess
of Five
Thousand Dollars ($5,000.00).
10.3 TENANT'S RISK. Tenant agrees to use and occupy the Premises
and to use
such other portions of the Property as Tenant is herein given the
right to use
at Tenant's own risk. Landlord shall not be liable to Tenant, its
employees,
agents, invitees or contractors for any damage, injury, loss,
compensation, or
claim (including, but not limited to, claims for the interruption
of or loss to
Tenant's business) based on, arising out of or resulting from any
cause
whatsoever, including, but not limited to, repairs to any portion
of the
Premises or the Property, any fire, robbery, theft, mysterious
disappearance
and/or any other crime or casualty, the actions of any other
tenants of the
Building or of any other person or persons, or any leakage in any
part or
portion of the Premises or the Building, or from water, rain or
snow that may
leak into, or flow from any part of the Premises or the Building,
or from
drains, pipes or plumbing fixtures in the Building, unless due to
the gross
negligence or willful misconduct of Landlord or Landlord's agents,
contractors
or employees. Any goods, property or personal effects stored or
placed in or
about the Premises shall be at the sole risk of Tenant, and neither
Landlord nor
Landlord's insurers shall in any manner be held responsible
therefor. Landlord
shall not be responsible or liable to Tenant, or to those claiming
by, through
or under Tenant, for any loss or damage that may be occasioned by
or through the
acts or omissions of persons occupying adjoining premises
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<PAGE>
or any part of the premises adjacent to or connecting with the
Premises or any
part of the Property or otherwise. Notwithstanding the foregoing,
Landlord shall
not be released from liability for any injury, loss, damages or
liability to the
extent arising from any gross negligence or willful misconduct of
Landlord, its
servants, employees or agents acting within the scope of their
authority on or
about the Premises; provided, however, that in no event shall
Landlord, its
servants, employees or agents have any liability to Tenant based on
any loss
with respect to or interruption in the operation of Tenant's
business. The
provisions of this SECTION 10.3 shall be applicable from and after
the execution
of this Lease and until the end of the Term of this Lease, and
during such
further period as Tenant may use or be in occupancy of any part of
the Premises
or of the Building.
10.4 WAIVER OF SUBROGATION. The parties hereto shall each procure
an
appropriate clause in, or endorsement on, any property insurance
policy on the
Premises or any personal property, fixtures or equipment located
thereon or
therein, pursuant to which the insurer waives subrogation or
consents to a
waiver of right of recovery in favor of either party, its
respective agents or
employees. Having obtained such clauses and/or endorsements, each
party hereby
agrees that it will not make any claim against or seek to recover
from the other
or its agents or employees for any loss or damage to its property
or the
property of others resulting from fire or other perils covered by
such property
insurance regardless of the cause or origin of such loss or damage,
including,
but not limited to, the negligence of such other party or its
agents or
employees.
ARTICLE 11
FIRE, EMINENT DOMAIN, ETC.
11.1 LANDLORD'S RIGHT OF TERMINATION. If the Premises or the
Building are
substantially damaged by fixed or casualty (the term "substantially
damaged"
meaning damage of such a character that the same cannot, in the
ordinary course,
reasonably be expected to be repaired within ninety (90) days from
the time that
repair work would commence), or if any part of the Building is
taken by any
exercise of the right of eminent domain, then Landlord shall have
the right to
terminate this Lease (even if Landlord's entire interest in the
Premises may
have been divested) by giving notice of Landlord's election so to
do within
ninety (90) days after the occurrence of such casualty or the
effective date of
such taking, whereupon this Lease shall terminate thirty (30) days
after the
date of such notice with the same force and effect as if such date
were the date
originally established as the expiration date hereof. Landlord
shall deliver to
Tenant a notice ("DAMAGE NOTICE") advising Tenant of Landlord's
estimate of the
time required to substantially complete Landlord's Restoration Work
(as
hereinafter defined).
11.2 RESTORATION; TENANT'S RIGHT OF TERMINATION.
(a) If the Premises or the Building are damaged by fire or
other
casualty, and this Lease is not terminated pursuant to SECTION
11.1,
Landlord shall thereafter use reasonable efforts to restore the
Building
and the Premises to proper condition for Tenant's use and
occupation
(excluding Tenant's Restoration Work, as defined below), provided
that
Landlord's obligation shall be limited to the amount of insurance
proceeds
available therefor, and Landlord shall not be obligated to
commence
restoration until Landlord has received the insurance proceeds
("LANDLORD'S
RESTORATION WORK"). Landlord's Restoration Work shall not include,
and
Tenant shall be solely responsible for, the repair and restoring,
at
Tenant's sole cost and expense, of Tenant Alterations necessary
for
Tenant's initial occupancy of the Premises, any Alterations made by
Tenant
pursuant to SECTION 5.2, and Tenant's Removable Property
("TENANT'S
RESTORATION WORK")). Notwithstanding anything to the contrary
contained
herein, if in Landlord's sole discretion, it would be appropriate
for
safety reasons, health reasons or the efficient operation or
restoration of
the Building or the Premises for Landlord to perform all or a
portion of
Tenant's Restoration Work on behalf of Tenant, then (x) Landlord
shall give
Tenant a notice specifying the portion of Tenant's Restoration Work
to be
performed by Landlord (the "SPECIFIED RESTORATION WORK"), (y)
Landlord
shall perform the Specified Restoration Work, and (z) Tenant shall
pay to
Landlord within ten (10) days following the giving of Landlord's
written
demand therefor the cost of such Specified Restoration Work.
17
<PAGE>
(b) Landlord shall not carry any insurance on Tenant's
Removable
Property or on the Alterations that constitute part of Tenant's
Restoration
Work and shall not be obligated to repair or replace Tenant's
Removable
Property or such Alterations (whether or not installed by or at the
expense
of Landlord). Tenant shall look solely to its insurance for
recovery of any
damage to or loss of Tenant's Removable Property or any
Alterations. Tenant
shall notify Landlord promptly of any casualty in the Premises. In
the
event of a partial or total destruction of the Premises, Tenant
shall as
soon as practicable (but no later than five (5) Business Days
after
receiving a notice from Landlord) remove any and all of Tenant's
Removable
Property from the Premises or the portion thereof destroyed, as the
case
may be, and if Tenant does not promptly so remove Tenant's
Removable
Property, Landlord, at Tenant's expense, may discard the same or
may remove
Tenant's Removable Property to a public warehouse for deposit or
retain the
same in its own possession and at its discretion may sell the same
at
either public auction or private sale, the proceeds of which shall
be
applied first to the expenses of removal, storage and sale, second
to any
sums owed by Tenant to Landlord, with any balance remaining to be
paid to
Tenant; if the expenses of such removal, storage and sale shall
exceed the
proceeds of any sale, Tenant shall pay such excess to Landlord upon
demand.
Tenant shall be solely responsible for arranging for any visits to
the
Premises by Tenant's insurance adjuster that may be desired by
Tenant prior
to the removal of Tenant's Removable Property by Tenant or
Landlord, as
provided in this SECTION 11.2(B), or the performance by Landlord
of
Landlord's Restoration Work or the Specified Restoration Work and
Landlord
shall be under no obligation to delay the performance of same, nor
shall
Landlord have any liability to Tenant in the event that Tenant
fails to do
so. Tenant shall promptly permit Landlord access to the Premises
for the
purpose of performing Landlord's Restoration Work and, if
applicable, the
Specified Restoration Work.
(c) If, for any reason the Premises or the Building are
subst
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