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Exhibit 10.1
INDUSTRIAL BUILDING
LEASE
(BOND-TYPE)
1.
BASIC TERMS . This Section 1
contains the Basic Terms of this Industrial Building Lease (the "
Lease ") between Landlord and Tenant, named below. Other
Sections of the Lease referred to in this Section 1 explain
and define the Basic Terms and are to be read in conjunction with
the Basic Terms.
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1.1.
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Effective Date of Lease: December
28, 2006
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1.2.
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Landlord: FR Net Lease
Co-Investment Program 13, LLC, a Delaware limited liability
company
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1.3.
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Tenant: Lenox, Incorporated, a
New Jersey corporation
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1.4.
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Premises: Approximately forty
(40) acres of land on which the Building (the " Building ")
commonly known as 16507 Hunters Green Parkway, Hagerstown,
Maryland, is located, which Building contains approximately 506,003
rentable square feet, as legally described on Exhibit A
attached hereto.
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1.5.
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Guarantor: Lenox Group
Inc.
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1.6.
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Lease Term: Fifteen (15) years ("
Term "), commencing December 28, 2006 (" Commencement
Date ") and ending, subject to Section 2.5 below and
Rider 1 hereof, on December 31, 2021 (" Expiration
Date ").
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1.7.
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Permitted Uses: (See Section
4.1 ) Any lawful purposes, subject to applicable zoning
restrictions, provided that Tenant’s use does not otherwise
violate the other terms and conditions of this Lease; provided,
however, that if Tenant desires to use the Premises for any use
other than warehouse, and distribution and ancillary office use,
then Tenant must first obtain Landlord’s consent, which
consent shall not be withheld unless such use creates a nuisance
(e.g., by production or emission of objectionable or unpleasant
odors, smoke, dust, gas, light, noise or vibrations) or materially
increases the risk of environmental contamination.
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1.8.
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Tenant’s Broker: N/A
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1.9.
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Exhibits and Riders to Lease: The
following exhibits and riders are attached to and made a part of
this Lease. Exhibit A (legal description); Exhibit B
(Tenant Operations Inquiry Form); Exhibit C (Broom Clean
Condition and Repair Requirements), Exhibit D (Termination
Fee); Exhibit E (Guaranty); Exhibit F (Right of First
Offer); and Rider No. 1 (Tenant’s Expansion
Option).
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2.
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LEASE OF PREMISES;
RENT .
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2.1.
Lease of Premises for Lease Term . Landlord hereby leases
the Premises to Tenant, and Tenant hereby rents the Premises from
Landlord, for the Term and subject to the conditions of this
Lease.
2.2.
Types of Rental Payments . Tenant shall pay net base rent to
Landlord in monthly installments, in advance, on the first day of
each and every calendar month during the Term of this Lease (the "
Base Rent ") in the amounts and for the periods as set forth
below:
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Rental Payments
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Lease Period
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Annual Base Rent
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Monthly Base
Rent
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12/28/06 - 12/31/06
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Per
diem
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$5,268.00
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1/1/07 – 12/31/07
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$1,922,820.00
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$160,235.00
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1/1/08 – 12/31/08
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$1,961,268.00
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$163,439.00
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1/1/09 – 12/31/09
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$2,000,496.00
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$166,708.00
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1/1/10 – 12/31/10
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$2,040,504.00
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$170,042.00
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1/1/11 – 12/31/11
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$2,081,316.00
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$173,443.00
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1/1/12 – 12/31/12
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$2,122,944.00
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$176,912.00
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1/1/13 – 12/31/13
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$2,165,400.00
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$180,450.00
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1/1/14 – 12/31/14
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$2,208,708.00
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$184,059.00
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1/1/15 – 12/31/15
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$2,252,880.00
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$187,740.00
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1/1/16 – 12/31/16
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$2,297,940.00
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$191,495.00
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1/1/17 – 12/31/17
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$2,343,900.00
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$195,325.00
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1/1/18 – 12/31/18
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$2,390,784.00
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$199,232.00
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1/1/19 – 12/31/19
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$2,438,604.00
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$203,217.00
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1/1/20 – 12/31/20
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$2,487,372.00
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$207,281.00
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1/1/21 – 12/31/21
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$2,537,124.00
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$211,427.00
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Tenant shall also pay all Operating Expenses
(defined below) and any other amounts owed by Tenant hereunder
(collectively, "Additional Rent" ). In the event any monthly
installment of Base Rent or Additional Rent, or both, is not paid
within 5 days of the date when due, a late charge in an amount
equal to 2% of the then delinquent installment of Base Rent and/or
Additional Rent (the " Late Charge "; the Late Charge,
Default Interest, as defined in Section 21.3 below, Base
Rent and Additional Rent shall collectively be referred to as "
Rent ") shall be paid by Tenant to Landlord. Default
Interest shall not be charged on the Late Charge and the Late
Charge shall not be imposed on accrued Default Interest. Tenant
shall deliver all Rent payments to Landlord at [311 South Wacker
Drive, Suite 4000, Chicago, IL, 60606, Attn: Joint Venture
Accounting Group] (or to such other entity designated as
Landlord’s management agent, if any, and if Landlord so
appoints such a management agent, the " Agent "), or
pursuant to such other directions as Landlord shall designate in
this Lease or otherwise in writing.
2.3.
Covenants Concerning Rental Payments; Initial and Final Rent
Payments . Tenant shall pay the Rent promptly when due,
without notice or demand, and without any abatement, deduction or
setoff. No payment by Tenant, or receipt or acceptance by Agent or
Landlord, of a lesser amount than the correct Rent shall be deemed
to be other than a payment on account, nor shall any endorsement or
statement on any check or letter accompanying any payment be deemed
an accord or satisfaction, and Agent or Landlord may accept such
payment without prejudice to its right to recover the balance due
or to pursue any other remedy available to Landlord.
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2.4.
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Net Lease;
Nonterminability .
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2.4.1.
This Lease is a complete
"bond net lease," and Tenant’s obligations arising or
accruing during the Term of this Lease to pay all Base Rent,
Additional Rent, and all other payments hereunder required to be
made by Tenant shall be absolute and unconditional, and Tenant
shall pay all Base Rent, Additional Rent and all other payments
required to be made by Tenant under this Lease without notice
(except as otherwise expressly and specifically set forth herein),
demand, counterclaim, set-off, deduction, or defense and without
abatement, suspension, deferment, diminution or reduction, free
from any charges, assessments, impositions, expenses or deductions
of any and every kind of and nature whatsoever. All costs, expenses
and obligations of every kind and nature whatsoever relating to the
Premises and the appurtenances thereto and the use and occupancy
thereof that may arise or become due prior to or during the Term
(including Operating Expenses related to the period prior to the
Term and payable during the Term) shall be paid by Tenant, and
Landlord is not responsible for any costs, charges, expenses or
outlays of any nature whatsoever arising during the Term from or
relating to the Premises or the use or occupancy thereof; and
Landlord, Landlord’s mortgagee or lender and their respective
employees, shareholders, officers, directors, members, managers,
trustees, partners or principals, disclosed or undisclosed, and all
of their respective successors and assigns (hereinafter
collectively referred to as the " Indemnitees " and each
individually as an " Indemnitee "), shall be indemnified and
saved harmless as provided below. The willful misconduct or
negligence of Landlord and the Indemnitee parties of Landlord shall
not be imputed to Landlord’s mortgagee or lender and the
Indemnitee parties of such mortgagee or lender. Tenant assumes the
sole responsibility during the Term for the condition, use,
operation, repair, maintenance, replacement of any and all
components and systems of, and the underletting and management of,
the Premises. Tenant shall and hereby does indemnify, defend and
hold the Indemnitees harmless from and against any and all Losses
(defined below) actually incurred by any or all of the Indemnitees
with respect to, and to the extent of, matters that arise or accrue
with respect to the Term of this Lease and in connection with any
or all of the maintenance, repair and operation of the Premises
(whether or not the same shall become payable during the Term); and
the Indemnitees shall have no (a) responsibility in respect thereof
and (b) liability for damage to the property of Tenant or any
subtenant of Tenant on any account or for any reason whatsoever,
except in the event of (and then only to the extent of) such
Indemnitee’s respective willful misconduct or negligence. It
is the purpose and intention of the parties to this Lease that the
Base Rent due hereunder shall be absolutely net to the Landlord and
Landlord shall have no obligation or responsibility, of any nature
whatsoever, to perform any tenant improvements; to provide any
services; or to perform any repairs, maintenance or replacements
in, to, at, on or under the Premises, whether for the benefit of
Tenant or any other party, and that Tenant has the authority to
operate, maintain and repair the Premises as it deems appropriate,
in its sole discretion, subject to the terms of the Lease.
2.4.2.
Except as otherwise
expressly provided in Sections 18 and 21 of this
Lease, this Lease shall not terminate, nor shall Tenant have any
right to terminate this Lease or to be released or discharged from
any obligations or liabilities hereunder for any reason, including,
without limitation: (i) any damage to or destruction of the
Premises; (ii) any restriction, deprivation (including eviction) or
prevention of, or any interference with, any use or the occupancy
of the Premises (whether due to any default in, or failure of,
Landlord’s title to the Premises or otherwise); (iii) any
condemnation, requisition or other taking or sale of the use,
occupancy or title of or to the Premises; (iv) any action, omission
or breach on the part of Landlord under this Lease or any other
agreement between Landlord and Tenant; (v) the inadequacy or
failure of the description of the Premises to
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demise and let to Tenant the
property intended to be leased hereby; (vi) any sale or other
disposition of the Premises by Landlord; (vii) the impossibility or
illegality of performance by Landlord or Tenant or both; (viii) any
action of any court, administrative agency or other governmental
authority; or (ix) any other cause, whether similar or dissimilar
to the foregoing, any present or future law notwithstanding.
Nothing in this paragraph shall be construed as an agreement by
Tenant to perform any illegal act or to violate the order of any
court, administrative agency or other governmental
authority.
2.4.3.
Tenant will remain
obligated under this Lease in accordance with its terms, and will
not take any action to terminate (except in accordance with the
provisions of Section 18 of this Lease), rescind or avoid
this Lease for any reason, notwithstanding any bankruptcy,
insolvency, reorganization, liquidation, dissolution or other
proceeding affecting Landlord or any assignee of Landlord, or any
action with respect to this Lease that may be taken by any
receiver, trustee or liquidator or by any court. Tenant waives all
rights at any time conferred by statute or otherwise to quit,
terminate or surrender this Lease or the Premises, or to any
abatement or deferment of any amount payable by Tenant hereunder,
or for claims against any Indemnitee for any Losses suffered by
Tenant on account of any cause referred to in this Section
2.4 or otherwise (except claims directly arising out of the
negligence or willful misconduct by such Indemnitee).
2.5.1.
Tenant shall have the
option (" Renewal Option ") to renew this Lease for three (3)
consecutive terms of five (5) years each (each, a " Renewal
Term "), on all the same terms and conditions set forth in this
Lease, except that initial Base Rent during any Renewal Term shall
be equal to Fair Market Rent (as defined in Section 2.5.2
below), and as of the first anniversary of the commencement of each
Renewal Term and continuing on each anniversary thereof through the
remainder of that Renewal Term, the Base Rent shall increase at the
rate of two percent (2.0%), per annum, on a compounded basis.
Tenant shall deliver written notice to Landlord of Tenant’s
election to exercise the Renewal Option (" Renewal Notice ")
not less than twelve (12) months, nor more than eighteen (18)
months, prior to the expiration date of the original Term or the
then-current Renewal Term, as applicable; and if Tenant fails to
timely deliver a Renewal Notice to Landlord, then Tenant shall
automatically be deemed to have irrevocably waived and relinquished
the Renewal Option.
2.5.2.
For the purposes of this
Lease, " Fair Market Rent " shall be determined by Landlord,
in good faith, based upon the annual base rental rates then being
charged in the industrial market sector of the geographic area
where the Building is situated for comparable space and for a lease
term commencing on or about the commencement date of the applicable
Renewal Term and equal in duration to the applicable Renewal Term,
taking into consideration: the geographic location, quality and age
of the Building; the location and configuration of the relevant
space within the Building; the extent of service to be provided to
the proposed tenant thereunder; applicable distinctions between
"gross" and "net" leases; the creditworthiness and quality of
Tenant; leasing commissions; and any other relevant term or
condition in making such evaluation, all as reasonably determined
by Landlord. In no event, however (and notwithstanding any
provision to the contrary in this Section 2.5) , shall the
Fair Market Rent be less than an amount equal to the Base Rent in
effect during the one (1) year period immediately preceding the
expiration date of the then-applicable term (the " Renewal Rent
Floor "). Landlord shall notify Tenant of Landlord’s
determination of Fair Market Rent for any Renewal Term, in writing
(the " Base Rent Notice ") within sixty (60) days after
receiving the applicable Renewal Notice.
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2.5.3.
Tenant shall then have
sixty (60) days after Landlord’s delivery of the Base Rent
Notice in which to advise Landlord, in writing (the " Base Rent
Response Notice "), whether Tenant (i) is prepared to accept
the Fair Market Rent established by Landlord in the Base Rent
Notice and proceed to lease the Premises, during the Renewal Term,
at that Fair Market Rent; or (ii) elects to withdraw and revoke its
Renewal Notice, whereupon the Renewal Option shall automatically be
rendered null and void; or (iii) elects to contest Landlord’s
determination of Fair Market Rent. In the event that Tenant fails
to timely deliver the Base Rent Response Notice, then Tenant shall
automatically be deemed to have elected (i) above. Alternatively,
if Tenant timely elects (ii), then this Lease shall expire on the
original expiry date of the initial Term or the then current
Renewal Term, as applicable. If, however, Tenant timely elects
(iii), then the following provisions shall apply:
2.5.3.1.
The
Fair Market Rent shall be determined by either the Independent
Brokers or the Determining Broker, as provided and defined below,
but in no event shall the Fair Market Rent be less than the Renewal
Rent Floor.
2.5.3.2.
Within
thirty (30) days after Tenant timely delivers its Base Rent
Response Notice electing to contest Landlord’s determination
of Fair Market Rent, each of Landlord and Tenant shall advise the
other, in writing (the " Arbitration Notice "), of both (i)
the identity of the individual that each of Landlord and Tenant,
respectively, is designating to act as Landlord’s or
Tenant’s, as the case may be, duly authorized representative
for purposes of the determination of Fair Market Rent pursuant to
this Section 2.5.3 (the " Representatives "); and
(ii) a list of three (3) proposed licensed real estate brokers, any
of which may serve as one of the Independent Brokers (collectively,
the " Broker Candidates "). Each Broker Candidate:
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(i)
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shall be duly licensed in the
jurisdiction in which the Premises is located; and
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(ii)
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shall have at least five (5)
years’ experience, on a full-time basis, leasing industrial
space (warehouse/distribution/ancillary office) in the same general
geographic area as that in which the Premises is located, and at
least three (3) of those five (5) years of experience shall have
been consecutive and shall have elapsed immediately preceding the
date on which Tenant delivers the Renewal Notice.
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2.5.3.3.
Within
fourteen (14) days after each of Landlord and Tenant delivers its
Arbitration Notice to the other, Landlord and Tenant shall cause
their respective Representatives to conduct a meeting at a mutually
convenient time and location. At that meeting, the two (2)
Representatives shall examine the list of six (6) Broker Candidates
and shall each eliminate two (2) names from the list on a
peremptory basis. In order to eliminate four (4) names, first, the
Tenant’s Representative shall eliminate a name from the list
and then the Landlord’s Representative shall eliminate a name
therefrom. The two (2) Representatives shall alternate in
eliminating names from the list of six (6) Broker Candidates in
this manner until each of them has eliminated two (2) names. The
two (2) Representatives shall immediately contact the remaining two
(2) Broker Candidates (the " Independent Brokers "), and engage
them, on behalf of Landlord and Tenant, to determine the Fair
Market Rent in accordance with the provisions of this Section
2.5.3 .
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2.5.3.4.
The
Independent Brokers shall determine the Fair Market Rent within
thirty (30) days of their appointment. Within ten (10) days after
appointment of the Independent Brokers, Landlord and Tenant shall
each make a written submission to the Independent Brokers advising
of the rate that the submitting party believes should be the Fair
Market Rate, together with whatever written evidence or supporting
data that the submitting party desires in order to justify its
desired rate of Fair Market Rent; provided, in all events, however,
that the aggregate maximum length of each party’s submission
shall not exceed ten (10) pages (each such submission package, a
" FMR Submission "). The Independent Brokers shall be obligated
to choose one (1) of the parties’ specific proposed rates of
Fair Market Rent, without being permitted to effectuate any
compromise position.
2.5.3.5.
In
the event, however, that the Independent Brokers fail to reach
agreement, within twenty (20) days after the date on which both
Landlord and Tenant deliver the FMR Submissions to the Independent
Brokers (the " Decision Period "), as to which of the two
(2) proposed rates of Fair Market Rent should be selected, then,
within five (5) days after the expiration of the Decision Period,
the Independent Brokers shall jointly select a real estate broker
who (x) meets all of the qualifications of a Broker Candidate, but
was not included in the original list of six (6) Broker Candidates;
and (y) is not affiliated with any or all of (A) either or both of
the Independent Brokers and (B) the real estate brokerage companies
with which either or both of the Independent Brokers is affiliated
(the " Determining Broker "). The Independent Brokers shall
engage the Determining Broker on behalf of Landlord and Tenant (but
without expense to the Independent Brokers), and shall deliver the
FMR Submissions to the Determining Broker within five (5) days
after the date on which the Independent Brokers select the
Determining Broker pursuant to the preceding sentence (the "
Submission Period ").
2.5.3.6.
The
Determining Broker shall make a determination of the Fair Market
Rent within twenty (20) days after the date on which the Submission
Period expires. The Determining Broker shall be required to select
one of the parties’ specific proposed rates of Fair Market
Rent, without being permitted to effectuate any compromise
position.
2.5.3.7.
The
decision of the Independent Brokers or the Determining Broker, as
the case may be, shall be conclusive and binding on Landlord and
Tenant, and neither party shall have any right to contest or appeal
such decision, except in case of fraud.
2.5.3.8.
In
the event that the initial Term or the then current Renewal Term,
as applicable, expires and the subject Renewal Term commences prior
to the date on which the Independent Brokers or the Determining
Broker, as the case may be, renders their/its decision as to the
Fair Market Rent, then from the commencement date of the subject
Renewal Term through the date on which the Fair Market Rent is
determined under this Section 2.5.3 (the " Determination
Date "), Tenant shall pay monthly Base Rent to Landlord at a
rate equal to 102% of the most recent rate of monthly Base Rent in
effect on the expiration date of the initial Term or the
immediately preceding Renewal Term, as applicable (the "
Temporary Base Rent "). Within ten (10) business days after
the Determination Date, Landlord shall pay to Tenant, or Tenant
shall pay to Landlord, depending on whether the Fair Market Rent is
less than or greater than the Temporary Base Rent, whatever sum
that Landlord or Tenant, as the case may be, owes the other (the "
Catch-Up Payment "), based on the Temporary Base Rent
actually paid and the Fair Market Rent due (as determined by the
Independent Brokers or the Determining Broker, as the case may be)
during that
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portion of the Renewal Term that
elapses before the Catch-Up Payment is paid, in full (together with
interest thereon, as provided below). The Catch-Up Payment shall
bear interest at the rate of Prime (defined below), plus two
percent (2.0%) per annum, from the date each monthly component of
the Catch-Up Payment would have been due, had the Fair Market Rent
been determined prior to the commencement of the Renewal Term,
through the date on which the Catch-Up Payment is paid, in full
(inclusive of interest thereon). For purposes hereof, "
Prime " shall mean the per annum rate of interest publicly
announced by JPMorgan Chase Bank NA (or its successor), from time
to time, as its " prime " or " base " or "
reference " rate of interest.
2.5.3.9.
The
party whose proposed rate of Fair Market Rent is not selected by
the Independent Brokers or the Determining Broker, as the case may
be, shall bear all costs of all counsel, experts or other
representatives that are retained by both parties, together with
all other costs of the arbitration proceeding described in this
Section 2.5.3 , including, without limitation, the
fees, costs and expenses imposed or incurred by any or all of the
Independent Brokers and the Determining Broker.
2.5.3.10.
Unless
otherwise expressly agreed in writing, during the period of time
that any arbitration proceeding is pending under this
Section 2.5.3 , Landlord and Tenant shall continue to
comply with all those terms and provisions of this Lease that are
not the subject of their dispute and arbitration proceeding under
this Section 2.5.3 , most specifically including, but not
limited to, Tenant’s monetary obligations under this Lease;
and, with respect to the payment of Base Rent during that portion
of the Renewal Term that elapses during the pendency of any
arbitration proceeding under this Section 2.5.3 , the
provisions of Section 2.5.3.8 shall apply.
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2.5.4.
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The Renewal Option is granted
subject to all of the following conditions:
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2.5.4.1.
As
of the date on which Tenant delivers any Renewal Notice and
continuing through the commencement date of the applicable Renewal
Term, there shall not exist any uncured Default by Tenant under
this Lease.
2.5.4.2.
There
shall be no further right of renewal after the expiration of the
third Renewal Term.
2.5.4.3.
The
Renewal Option is personal to Tenant and may only be exercised by
Tenant or any assignee of Tenant (provided such assignment was made
with Landlord’s prior written consent and otherwise in
accordance with the requirements of Section 8 or made
without Landlord’s consent but in accordance with Section
8 ).
2.5.4.4.
The
Premises shall be delivered to Tenant during the Renewal Term(s) on
an "as-is" "where-is" basis, with no obligation on the part of
Landlord to perform any tenant improvements to the Premises.
2.6.
Guaranty . Simultaneously with the execution and
delivery of this Lease, Guarantor has executed and entered into the
Guaranty Agreement in the form attached hereto as Exhibit
E (the " Guaranty "), for the benefit of
Landlord pursuant to which Guarantor has absolutely and
unconditionally guaranteed the payment and performance of
Tenant’s obligations hereunder.
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3.1.
Definitional Terms Relating to Additional Rent . For
purposes of this Section and other relevant provisions of the
Lease:
3.1.1.
Operating
Expenses . The term " Operating Expenses " shall
mean all costs, expenses and charges of every kind or nature
relating to, or incurred in connection with, the maintenance and
operation of the Premises, including, but not limited to the
following: (i) Taxes, as hereinafter defined in Section
3.1.2 ; (ii) dues, fees or other costs and expenses, of any
nature, due and payable to any association or comparable entity to
which Landlord, as owner of the Premises, is a member or otherwise
belongs and that governs or controls any aspect of the operation of
the Premises; (iii) any so called "rent" or "revenue" taxes imposed
on the Rent payable hereunder; and (iv) any real estate taxes and
common area maintenance expenses due and payable under any
declaration of covenants, conditions and restrictions, reciprocal
easement agreement or comparable arrangement that encumbers and
benefits the Premises and other real property (e.g. a business
park). Under no circumstances, however, shall Operating Expenses
include: (i) depreciation or amortization on the Premises or any
fixtures or equipment installed therein, (ii) federal, state, or
local income, margin, franchise, gift, transfer, excise, capital
stock, estate, succession, or inheritance taxes, (iii) interest on
debt or amortization payments on mortgages or deeds of trust or any
other debt for borrowed money and costs or any expenses incurred by
Landlord in connection with such debt and liens, (iv) costs
incurred because Landlord violated any governmental rule or
authority or as a result of Landlord’s negligence or willful
misconduct; (v) costs or expenses of a partnership, or other
entity, which constitutes Landlord, which costs or expenses are not
directly related to the Premises (such as accounting fees, tax
returns, and income taxes of such entity), (vi) any sums that
Landlord is required to pay Tenant pursuant to any other written
agreement between Landlord and Tenant, (vii) sums reimbursed to
Landlord by a third party, (viii) remediation of Hazardous
Materials if such remediation is necessitated by Landlord’s
acts or neglect; (ix) expenses for services provided by Landlord to
the extent such expenses exceed those that would be charged by an
unrelated third party charging competitive market rates, and (x)
expenses incurred by Landlord that are not directly related to the
Premises or its operations including, without limitation,
compensation paid to employees of Landlord; however, Operating
Expenses shall include those expenses, if any, incurred by Landlord
in order to perform or provide any services required of Landlord
under this Lease or to provide any services specifically requested
by Tenant (including a portion of the compensation paid to
employees performing or providing such services, pro-rated to
reflect the extent of the employee’s time spent performing or
providing such services), subject to the limitation set forth in
clause (ix) above.
3.1.2.1.
The
term " Taxes " shall mean (i) all governmental taxes,
assessments, fees and charges of every kind or nature (other than
Landlord’s federal, state, or local income, margin,
franchise, gift, transfer, excise, capital stock, estate,
succession, or inheritance taxes income taxes), whether general,
special, ordinary or extraordinary, due at any time or from time to
time, during the Term and any extensions thereof, in connection
with the ownership, leasing, or operation of the Premises, or of
the personal property and equipment located therein or used in
connection therewith; and (ii) any reasonable expenses incurred by
Landlord in contesting such taxes or assessments and/or the
assessed value of the Premises, if Landlord participates in a tax
contest at Tenant’s request. For purposes hereof, Tenant
shall be responsible for any Taxes that are due and
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payable at any time or from time
to time during the Term (including, but not limited to, those Taxes
that accrued prior to the Commencement Date), and for its pro rata
share of any Taxes that are assessed, become a lien, or accrue
during any Operating Year but are not payable until after the
Expiration Date, which obligation shall survive the termination or
expiration of this Lease. Without in any way limiting
Tenant’s obligation to pay any and all Taxes, Tenant hereby
acknowledges that Tenant shall be solely responsible for any
increase in Taxes which is the result of the loss of any tax
abatement owed to, or expected by, Tenant pursuant to any tax
abatement agreement to which Tenant is a party. To the extent that
any retroactive tax liability arises pursuant to any tax abatement
agreement to which Tenant is a party, Tenant shall be and remain
liable for such retroactive liability, regardless of whether said
liability relates to a period of time or accrued prior to, or
following, the Commencement Date. Notwithstanding the foregoing or
anything to the contrary herein, Tenant shall be entitled to the
benefits of all existing and future reduction or abatement of Taxes
to the extent such reductions and abatements are granted by the
applicable taxing authority and relate to the Term.
3.1.2.2.
Tenant
shall have the right to contest the amount or validity, in whole or
in part, of any Tax or to seek a reduction in the valuation of the
Premises as assessed for real estate property tax purposes by
appropriate proceedings diligently conducted in good faith (but
only after the deposit or payment, whether under protest or
otherwise, of any amounts required by applicable law to stay or
prevent collection activities). No additional deposit shall be
payable to Landlord in connection with any contest. If Tenant
elects to initiate any proceeding referred to in this Section
3.1.2.2 , Tenant shall promptly so advise Landlord, but
Landlord shall not be required to join such proceeding, except to
the extent required by law, in which event Landlord shall, upon
written request by Tenant, join in such proceedings or permit the
same to be brought in its name, all at Tenant’s sole expense.
Landlord agrees to provide, at Tenant’s expense, whatever
assistance Tenant may reasonably require in connection with any
such contest initiated by Tenant. Tenant covenants that Landlord
shall not suffer or sustain any costs or expenses (including
attorneys’ fees) or any liability in connection with any such
proceeding initiated by Tenant. No such contest initiated by Tenant
shall subject Landlord to any civil liability or the risk of any
criminal liability or forfeiture.
3.1.3.
Operating
Year . The term " Operating Year " shall mean the
calendar year commencing January 1st of each year during the Term.
The first Operating Year under this Lease shall begin on January 1,
2007 and end on December 31, 2007.
3.2.
Payment of Operating Expenses . Tenant shall directly
pay, on a timely basis and to the appropriate entity, all Operating
Expenses and Taxes.
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4.
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USE OF PREMISES AND COMMON
AREAS .
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4.1.
Use of Premises . The Premises shall be used by the Tenant
for the purpose(s) set forth in Section 1.7 above and for no
other purpose whatsoever. Tenant shall not, at any time, use or
occupy, or suffer or permit anyone to use or occupy, the Premises,
or do or permit anything to be done in the Premises, in any manner
that may (a) violate any Certificate of Occupancy for the Premises;
(b) cause, or be likely to cause, injury to, or in any way impair
the value or proper utilization of, all or any portion of the
Premises (including, but not limited to, the structural elements of
the Premises); (c) constitute a violation of the laws and
requirements of any public authority or the requirements of
insurance bodies, or any covenant, condition or restriction
affecting the Premises; (d) exceed the load bearing capacity of the
floor of the Premises; (e) materially impair the appearance of
9
the Premises; or (f) have any
detrimental environmental effect on the Premises which (i) arises
out of a violation or violations of Environmental Laws or (ii)
results in any material increased risk of liability to Landlord. On
or prior to the date hereof, Tenant has completed and delivered for
the benefit of Landlord a "Tenant Operations Inquiry Form" in the
form attached hereto as Exhibit B describing the nature of
Tenant’s proposed business operations at the Premises, which
form is intended to, and shall be, relied upon by Landlord. From
time to time during the Term (but no more often than once in any
twelve month period unless Tenant is in default hereunder beyond
applicable notice and cure periods or unless Tenant assigns this
Lease or subleases all or any portion of the Premises, whether or
not in accordance with Section 8) , Tenant shall provide an
updated and current Tenant Operations Inquiry Form within twenty
(20) days after Landlord’s request therefor.
4.2.
Signage . Any and all signage must at all times fully
comply with all applicable laws, regulations and ordinances. Tenant
shall remove all signs of Tenant upon the expiration or earlier
termination of this Lease and immediately repair any damage to the
Premises caused by, or resulting from, such removal.
4.3.
Liens . During the Term, Tenant will promptly, but no
later than forty-five (45) days after the date Tenant first has
knowledge of the filing thereof, or such shorter period as shall
prevent the forfeiture of the Premises, remove and discharge of
record, by bond or otherwise, any charge, lien, security interest
or encumbrance upon any of the Premises, Base Rent and Additional
Rent which charge, lien, security interest or encumbrance arises
for any reason (other than a result of Landlord’s act),
including, but not limited to, all liens that arise out of the
possession, use, occupancy, construction, repair or rebuilding of
the Premises or by reason of labor or materials furnished, or
claimed to have been furnished, to Tenant for the Premises, but not
including any encumbrances expressly permitted under this Lease or
any mechanics liens created by Landlord. Nothing contained in this
Lease shall be construed as constituting the consent or request of
Landlord, express or implied, by inference or otherwise, to or for
the performance of any contractor, laborer, materialman, or vendor
of any labor or services or for the furnishing of any materials for
any construction, alteration, addition, repair or demolition of or
to the Premises or any part thereof. Notice is hereby given that,
during the Term, Landlord will not be liable for any labor,
services or materials furnished or to be furnished to Tenant, or to
anyone holding an interest in the Premises or any part thereof
through or under Tenant, and that no mechanics or other liens for
any such labor, services or materials shall attach to or affect the
interest of Landlord in and to the Premises, unless such labor,
services or materials were placed in the Premises pursuant to a
written agreement entered into by Landlord. In the event of the
failure of Tenant to discharge any charge, lien, security interest
or encumbrances as aforesaid, Landlord may, if not discharged by
Tenant within ten (10) business days after written notice to
Tenant, discharge such items by payment or bond or both, and
Section 23.4 hereof shall apply. Provided
Tenant is diligently contesting any such lien or encumbrance in
accordance with applicable law, in lieu of a bond Tenant shall have
the option to deposit cash (or an irrevocable, standby letter of
credit in form reasonably acceptable to Landlord) with Landlord in
an amount sufficient to fully discharge such lien or encumbrance
(as reasonably determined by Landlord, the " Lien Deposit
"), which Lien Deposit may be used by Landlord to discharge, settle
or otherwise satisfy the applicable lien or encumbrance at any time
after the commencement of foreclosure proceedings or before
forfeiture of the Premises or any portion thereof.
10
5.
CONDITION AND DELIVERY OF PREMISES . Tenant agrees that
Tenant (or an affiliate thereof) is the former owner of the
Premises; as a result, Tenant is familiar with the condition of the
Premises, and Tenant hereby accepts the foregoing on an "AS-IS,"
"WHERE-IS" basis. Tenant acknowledges that neither Landlord nor
Agent, nor any representative of Landlord, has made any
representation as to the condition of the foregoing or the
suitability of the foregoing for Tenant’s intended use.
Tenant represents and warrants that Tenant has made its own
inspection of the foregoing. Neither Landlord nor Agent shall be
obligated to make any repairs, replacements or improvements
(whether structural or otherwise) of any kind or nature to the
foregoing in connection with, or in consideration of, this
Lease.
6.
SUBORDINATION; ESTOPPEL CERTIFICATES; ATTORNMENT
.
6.1.
Subordination and Attornment . This Lease is and
shall be subject and subordinate at all times to (a) all ground
leases or underlying leases that may now exist or hereafter be
executed affecting the Premises and (b) any mortgage or deed of
trust that may now exist or hereafter be placed upon, and encumber,
any or all of (x) the Premises; (y) any ground leases or underlying
leases for the benefit of the Premises; and (z) all or any portion
of Landlord’s interest or estate in any of said items;
provided, however, that the foregoing provision shall only be
applicable with respect to those mortgages, deeds of trust, and
leases as to which Tenant has been provided a reasonable, normal
and customary Subordination, Non Disturbance and Attornment
Agreement (the " SNDA "). No SNDA shall impose any economic
obligations on Tenant in addition to those economic obligations
imposed under this Lease, nor may any SNDA require any change in,
or modification of, this Lease that shall impose any obligation or
responsibility on Tenant. Tenant shall join with any such lessor,
mortgagee or trustee and execute promptly (and, in any event,
within ten (10) business days after receipt of a written request
therefor) an SNDA.
6.2.
Estoppel Certificate . Tenant agrees, from time to
time and within 10 business days after request by the Landlord, to
deliver to the Landlord, or the Landlord’s designee, an
estoppel certificate in reasonable, normal and customary form, as
requested by Landlord, with such modifications as may be necessary
to make such certificate factually accurate. Failure by Tenant to
timely execute and deliver such certificate shall automatically
constitute an acceptance of the Premises and acknowledgment by
Tenant that the statements included therein are true and correct
without exception.
6.3.
Transfer by Landlord . In the event of a sale or
conveyance by Landlord of the Premises, the same shall operate to
release Landlord from any future liability for any of the covenants
or conditions, express or implied, herein contained in favor of
Tenant, and in such event Tenant agrees to look solely to
Landlord’s successor in interest (" Successor Landlord
") with respect thereto and agrees to attorn to such successor.
7.
QUIET ENJOYMENT; COVENANTS OF LANDLORD . Subject to
the provisions of this Lease, so long as Tenant pays all of the
Rent and performs all of its other obligations hereunder, subject
to applicable notice and cure periods and the other provisions
hereof, Tenant shall not be disturbed in its possession of the
Premises by Landlord, Agent, Successor Landlord or any other person
lawfully claiming through or under Landlord. Landlord hereby
covenants and agrees not to subdivide the Premises, construct
additional improvements thereon, or add on to the Building without
the prior written consent of Tenant, which may be granted or
withheld in Tenant’s sole discretion.
11
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8.
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ASSIGNMENT AND SUBLETTING;
LEASEHOLD MORTGAGE .
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8.1.
Prohibition . Tenant acknowledges that this Lease and the
Rent due under this Lease have been agreed to by Landlord in
reliance upon Tenant’s reputation and creditworthiness and
upon the continued operation of the Premises by Tenant for the
particular use set forth in Section 1.7 above; therefore,
Tenant shall not, whether voluntarily, or by operation of law, or
otherwise: (a) assign or otherwise transfer this Lease;
(b) sublet the Premises or any part thereof, other than
subleases to any party controlling, controlled by or under common
control with Tenant, or allow the same to be used or occupied by
anyone other than Tenant (or any other party controlling,
controlled by or under common control with Tenant); or
(c) mortgage, pledge, encumber, or otherwise hypothecate this
Lease or the Premises, or any part thereof, in any manner
whatsoever, without in each instance obtaining the prior written
consent of Landlord, which consent as to assignments and subleases
shall not be unreasonably withheld, conditioned or delayed, and as
to mortgages and other matters described in clause (c) above may be
given or withheld in Landlord’s sole, but reasonable,
discretion. Any purported assignment, mortgage, transfer, pledge or
sublease made without the prior written consent of Landlord shall
be absolutely null and void. No assignment of this Lease shall be
effective and valid unless and until the assignee executes and
delivers to Landlord any and all documentation reasonably required
by Landlord in order to evidence assignee’s assumption of all
obligations of Tenant hereunder. Any consent by Landlord to a
particular assignment, sublease or mortgage shall not constitute
consent or approval of any subsequent assignment, sublease or
mortgage, and Landlord’s written approval shall be required
in all such instances. No consent by Landlord to any assignment or
sublease shall be deemed to release Tenant from its obligations
hereunder and Tenant shall remain fully liable for performance of
all obligations under this Lease.
8.2.
Rights of Landlord . If this Lease is assigned, or if
the Premises (or any part thereof) are sublet or used or occupied
by anyone other than Tenant, whether or not in violation of this
Lease, Landlord or Agent may (without prejudice to, or waiver of
its rights), after default by Tenant under this Lease which
continues beyond applicable notice and cure periods, collect Rent
from the assignee or, from the subtenant or occupant, and all
amounts so collected shall be credited to any amounts due from
Tenant hereunder.
8.3.
Permitted Transfers . Notwithstanding anything in
this Section 8 to the contrary, Tenant shall have the right,
without Landlord’s consent and without causing a default of
Tenant under this Lease, to assign this Lease to any parent entity
or wholly-owned or substantially wholly-owned direct or indirect
subsidiary entity of Tenant or Guarantor, in each of which events
Tenant shall give prompt written notice of such fact to Landlord
and, further, Tenant shall remain fully liable for performance of
all obligations and liabilities under this Lease and the assignee
shall be automatically deemed to have assumed all of Tenant’s
obligations and liabilities under this Lease for the benefit of
Landlord. Tenant may also assign this Lease, without
Landlord’s consent and without causing a default hereunder to
any entity acquiring a majority of the voting stock of Tenant, or
to any other change in voting control of Tenant (if Tenant is a
corporation), or to a transfer of a majority (i.e., greater than
50% interest) of the general partnership or membership interests in
Tenant (if Tenant is a partnership or a limited liability company)
or managerial control of Tenant, or to any comparable transaction
involving any other form of business entity, whether effectuated in
one (1) or more transactions; or to any entity in
connection with the sale of substantially all the Tenant’s
assets (where such sale of assets is for a bona fide business
purpose and not primarily to transfer Tenant’s interest in
this Lease), and, in the case of a sale of all or substantially all
of Tenant assets only, Tenant shall no
12
longer be liable for the
obligations under this Lease arising from and after the date of
transfer (such assigning Tenant remaining liable for all
obligations arising prior to the date of transfer), provided, in
any of such events, the successor to Tenant (or any party remaining
liable for the obligations of Tenant hereunder): (i) has a net
worth at least equal to the net worth of Tenant as of the
Commencement Date, or (ii) if (i) above is not satisfied, such
successor is capable of satisfying Tenant’s obligations
hereunder, in Landlord’s reasonable judgment. Any such
permitted transferee shall execute and deliver to Landlord any and
all documentation reasonably required by Landlord in order to
evidence assignee’s assumption of all obligations of Tenant
hereunder. Notwithstanding anything to the contrary contained in
this Section 8.3 , in no event may Tenant assign, mortgage,
transfer, pledge or sublease this Lease to any entity whatsoever
if, at the time of such assignment, mortgage, transfer, pledge or
sublease, Tenant is in default under this Lease beyond applicable
notice and cure periods, without the prior written consent of
Landlord, which may be granted or withheld in Landlord’s sole
discretion for as long as such default remains uncured.
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9.
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COMPLIANCE WITH
LAWS .
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9.1.
Compliance with Laws . During the Term, Tenant shall, at its
sole expense (regardless of the cost thereof), comply with all
local, state and federal laws, rules, regulations and requirements
now or hereafter in force, and all judicial and administrative
decisions in connection with the enforcement thereof pertaining to
either or both of the Premises and Tenant’s use and occupancy
thereof (collectively, " Laws "), whether such Laws (a)
concern or address matters of an environmental nature; (b) require
the making of any structural, unforeseen or extraordinary changes;
and (c) involve a change of policy on the part of the body enacting
the same, including, in all instances described in (a) through (c),
but not limited to, the Americans With Disabilities Act of 1990 (42
U.S.C. Section 12101 et seq .). If any license or permit is
required for the conduct of Tenant’s business in the
Premises, Tenant, at its expense, shall procure such license prior
to the Commencement Date, and shall maintain such license or permit
in good standing throughout the Term. Tenant shall give prompt
notice to Landlord of any written notice it receives of the alleged
violation of any Law or requirement of any governmental or
administrative authority with respect to either or both of the
Premises and the use or occupation thereof.
9.2.
Hazardous Materials . If, at any time or from time to
time prior to or during the Term (or any extension thereof), any
Hazardous Material (defined below) is (or was, as the case may be)
generated, transported, stored, used, treated or disposed of at,
to, from, on or in the Premises: (i) Tenant shall, at its own cost,
at all times comply (and cause Tenant’s Parties to comply)
with all Laws relating to Hazardous Materials, and Tenant shall
further, at its own cost, obtain and maintain in full force and
effect at all times all permits and other approvals required in
connection therewith; (ii) Tenant shall promptly provide Landlord
or Agent with complete copies of all communications, permits or
agreements with, from or issued by any governmental authority or
agency (federal, state or local) or any private entity relating in
any way to the past or current (from time to time throughout the
Term) presence, release, threat of release, or placement of
Hazardous Materials on or in the Premises or any portion of the
Premises, or the generation, transportation, storage, use,
treatment, or disposal at, on, in or from the Premises, of any
Hazardous Materials; (iii) Landlord, Agent and their respective
agents and employees shall have the right to either or both (x)
enter the Premises (with such notice as may be required under
Section 16 , except in the event of an emergency presenting
an imminent threat of bodily injury, death, or destruction of
property) and (y) conduct appropriate tests for the purposes of
ascertaining Tenant’s compliance with all applicable Laws or
permits relating in any way to the
13
generation, transport, storage,
use, treatment, disposal or presence of Hazardous Materials on, at,
in or from all or any portion of the Premises; and (iv) upon
written request by Landlord or Agent if Landlord or Agent has
reasonable reason to believe that Tenant is in violation of this
Section 9.2 , Tenant shall provide Landlord with the results
of reasonably appropriate tests of air, water or soil to
demonstrate that Tenant complies with all applicable Laws or
permits relating in any way to the generation, transport, storage,
use, treatment, disposal or presence of Hazardous Materials on, at,
in or from all or any portion of the Premises. This Section
9.2 does not authorize the generation, transportation, storage,
use, treatment or disposal of any Hazardous Materials at, to, from,
on or in the Premises in contravention of this Section 9 .
Nothing herein is intended to or shall be deemed to prohibit Tenant
from using Hazardous Materials on the Premises in quantities
reasonably necessary for Tenant to conduct its business therein in
compliance with Laws. Tenant covenants to investigate, clean up and
otherwise remediate, at Tenant’s sole expense, any release of
Hazardous Materials occurring in, at, on and under the Premises
during the Term, as well as any release of Hazardous Materials that
occurred in, at, on and under the Premises prior to the Term, but
which release is identified, cited, or determined to exist at any
time during the Term, unless caused by Landlord or a third party
who has been determined to be responsible for such contamination by
agreement or governing authority. Such investigation and
remediation shall be performed only after Tenant has obtained
Landlord’s prior written consent, which consent shall not be
unreasonably withheld. All remediation shall be performed in
material compliance with Laws and to the reasonable satisfaction of
Landlord (provided Landlord shall not require any remediation that
is not required by applicable Laws). Tenant shall not enter into
any settlement agreement, consent decree or other compromise with
respect to any claims relating to any Hazardous Materials in any
way connected to the Premises without first obtaining
Landlord’s written consent (which consent shall not be
unreasonably withheld) and affording Landlord the reasonable
opportunity to participate in any such proceedings. As used herein,
the term, " Hazardous Materials ," shall mean any waste,
material or substance (whether in the form of liquids, solids or
gases, and whether or not airborne) that is or may be deemed to be
or include a pesticide, petroleum, asbestos, polychlorinated
biphenyl, radioactive material, urea formaldehyde or any other
pollutant or contaminant that is or may hereafter be deemed to be
hazardous, toxic, ignitable, reactive, corrosive, dangerous,
harmful or injurious, or that presents a risk to public health or
to the environment and that is or becomes regulated by any Law. The
undertakings, covenants and obligations imposed on Tenant under
this Section 9.2 shall survive the termination or expiration
of this Lease for events arising during the Term.
10.1.
Policies . Tenant shall purchase, at its own expense, and
keep in force at all times during this Lease the policies of
insurance set forth below (collectively, " Tenant’s
Policies "). All Tenant’s Policies shall (a) be issued by
an insurance company with a Best rating of A or better and
otherwise reasonably acceptable to Landlord and shall be licensed
to do business in the state in which the Premises is located; (b)
provide that said insurance shall not be canceled or materially
modified unless 30 days’ prior written notice shall have been
given to Landlord; (c) provide for deductible amounts that are
reasonably acceptable to Landlord (and its lender, if applicable);
and (d) otherwise be in such form, and include such coverages, as
Landlord may reasonably require provided the same are normally and
customarily required by prudent owners of industrial property or
their lenders. The Tenant’s Policies described in Sections
10.2(i) and 10.2(ii) below shall (1) provide coverage on an
occurrence basis; (2) except as otherwise specifically provided
below, name Landlord and First Industrial, L.P. (and
Landlord’s lender, if applicable) as additional insureds; (3)
provide coverage, to
14
the extent insurable, for the
indemnity obligations of Tenant under this Lease; (4) contain a
separation of insured parties provision (under Tenant’s
commercial general or excess liability policy, but not under
Tenant’s commercial property insurance policy); (5) be
primary, not contributing with, and not in excess of, coverage that
Landlord may carry; and (6) provide coverage with no exclusion for
a pollution incident arising from a hostile fire. All
Tenant’s Policies (or, at Landlord’s option,
Certificates of Insurance and applicable endorsements, including,
without limitation, an "Additional Insured-Managers or Landlords of
Premises" endorsement) shall be delivered to Landlord prior to the
Commencement Date and renewals thereof shall be delivered to
Landlord’s Corporate and Regional Notice Addresses at least
30 days prior to the applicable expiration date of each
Tenant’s Policy. In the event that Tenant fails, at any time
or from time to time, to comply with the requirements of the
preceding sentence, Landlord may (i) order such insurance and
charge the cost thereof to Tenant, which amount shall be payable by
Tenant to Landlord upon demand, as Additional Rent or (ii) impose
on Tenant, as Additional Rent, a monthly delinquency fee, for each
month during which Tenant fails to comply with the foregoing
obligation, in an amount equal to three percent (3%) of the Base
Rent then in effect. Tenant shall give prompt notice to Landlord
and Agent of any bodily injury, death, personal injury, advertising
injury or property damage occurring in and about the
Premises.
10.2.
Coverages . Tenant shall purchase and maintain
throughout the Term, a Tenant’s Policy(ies) of:
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(i)
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commercial property insurance
covering the improvements constructed, installed or located on the
Premises (but excluding Tenant’s personal property). Such
property insurance policy: (A) shall name Landlord (and its
lender(s), if applicable) as mortgagee/loss payee, as its (their
respective) interest(s) may appear; (B) shall, at a minimum, cover
both (x) the Building and (y) all other improvements, of any
nature, situated on the Premises at any time, or from time to time
during the Term, including, but not limited to, parking areas and
landscaping (collectively, the " Insured Improvements "),
against direct physical loss, as would be insured against under a
standard ISO Special Form ("all risk" coverage); (C) shall be for
no less than 100% of the full replacement cost value of the
Building and the Insured Improvements, with an "agreed amount"
endorsement; (D) shall include, at a minimum, the following
extensions of coverage; building ordinance, inclusive of demolition
and increased cost of construction; terrorism; earthquake/earth
movement; wind; flood; and boiler and machinery/equipment
breakdown; (E) shall include rental interruption insurance for
twelve (12) months of rent and operating expense reimbursement for
that same twelve (12) month period; and (F) shall provide for a per
occurrence deductible that is no greater than $100,000.00. The
policy limits and sublimits shall be acceptable to Landlord, in its
reasonable discretion. For purposes of this Section 10.2 ,
"full replacement cost value" shall be interpreted to mean the cost
of replacing the Premises without deduction for depreciation or
wear and tear, less the cost of footings, foundations and other
structures below grade, which value shall be memorialized in a
letter agreement (including an ACORD Certificate evidencing such
required insurance), to be executed by Landlord and Tenant not
later than thirty (30) days after the Commencement Date, and which
value shall be trended-forward on each anniversary of the
Commencement Date using the trending criteria generally applied by
Factory Mutual or other recognized insurance
consultants;
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15
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(ii)
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commercial general or excess
liability insurance, including personal injury and property damage,
in the amount of not less than $2,000,000.00 per occurrence, and
$5,000,000.00 annual general aggregate;
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(iii)
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comprehensive automobile
liability insurance covering Tenant against any personal injuries
or deaths of persons and property damage based upon or arising out
of the ownership, use, occupancy or maintenance of a motor vehicle
at the Premises and all areas appurtenant thereto in the amount of
not less than $1,000,000, combined single limit;
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(iv)
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commercial property insurance
covering Tenant’s personal property in amounts reasonably
determined by Tenant;
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(v)
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workers’ compensation
insurance per the applicable state statutes covering all employees
of Tenant (it being agreed that Tenant shall have the right to
self-insure its obligations under this item (v));
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(vi)
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if Tenant handles, stores or
utilizes Hazardous Materials in its business operations, pollution
legal liability insurance; and
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(vii)
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during any period of construction
or during which any Alterations costing in excess of $150,000.00
are being made, builder’s risk coverage in an amount
sufficient for such Alterations or other work or improvements
performed on the Premises by Tenant; provided, however, that in the
event that such builder’s risk coverage is required, such
coverage may be provided through the so-called "course of
construction" coverage provided in the property insurance policy
described in Section 10.2(i) above, and Tenant shall cause such
"course of construction" coverage to provide coverage in an amount
equal to or greater than $3,000,000.00.
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Notwithstanding anything to the
contrary contained in this Section 10 , upon the occurrence
of a Default, Landlord shall have the right to, upon written notice
to Tenant, purchase the aforementioned Tenant’s Policies on
Tenant’s behalf and charge the cost thereof to Tenant, which
amounts shall be payable by Tenant to Landlord, upon demand as
Additional Rent.
10.3.
Blanket
Policies . Notwithstanding anything to the contrary
contained in this Section 10, Tenant’s obligation to
carry insurance may be satisfied by coverage under a so-called
"blanket policy" or policies of insurance; provided, however, that
all insurance certificates provided by Tenant to Landlord pursuant
to Section 10.1 above shall reflect that Tenant has been
afforded coverage specifically with respect to the Premises. At
Tenant’s option but no more than once per calendar year,
Tenant may request that Landlord carry, for the benefit of Tenant,
the casualty insurance required by
16
this Section 10 at Tenant’s
expense for the following calendar year provided such request is
made not later than October 1 of the preceding calendar year. If
Tenant makes such request, Landlord shall promptly increase its
coverage accordingly, and Tenant shall pay the premiums
attributable to the coverage required hereby within thirty (30)
days after demand therefor.
11.1.
Non-Structural Alterations . Tenant may, from time to time
at its sole expense, make alterations or improvements in and to the
Premises (hereinafter collectively referred to as "
Alterations ") provided that:
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(i)
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such Alterations are
non-structural and, if the cost of such Alterations (whether on a
single occurrence basis, or a series of two or more related
occurrences or items occurring within a six (6) month period)
exceeds $150,000.00, Tenant delivers prior written notice thereof
to Landlord (except that notice of de minimus Alterations (costing
less than $50,000.00) will not be required); and
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(ii)
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Tenant, in every instance,
complies with the terms and conditions of Section
11.3 below .
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11.2.
Consent to
Alterations . Landlord’s consent to Alterations, when
required, shall not be unreasonably withheld, conditioned or
delayed, provided that: (a) the structural integrity of the
Premises shall not be adversely affected; (b) the proper
functioning of the mechanical, electrical, heating, ventilating,
air-conditioning (" HVAC "), sanitary and other service
systems of the Premises shall not be adversely affected and the
usage of such systems by Tenant shall not be materially increased;
(c) Tenant shall have appropriate insurance coverage, reasonably
satisfactory to Landlord, regarding the performance and
installation of the Alterations; and (d) Tenant shall have provided
Landlord with reasonably detailed plans for such Alterations in
advance of requesting Landlord’s consent. Additionally, but
subject to (a) through (d) above, Landlord shall not unreasonably
withhold its consent to any Alterations: (i) reasonably required in
order to accommodate a sublease or an assignment of this Lease
(provided such assignment or sublease is executed in compliance
with Section 8 ); or (ii) reasonably required in order to
accommodate Tenant’s business operations at the Premises. In
each and every instance involving Alterations, the performance of
the Alterations in question shall not have a material, adverse
effect on the value of the Premises.
11.3.
Other
Requirements . Before proceeding with any Alterations,
Tenant shall (i) at Tenant’s expense, obtain all necessary
governmental permits and certificates for the commencement and
prosecution of Alterations; (ii) if Landlord’s consent is
required for the planned Alteration, submit to Landlord, for its
written approval, working drawings, preliminary plans and
specifications and all permits for the work to be done and Tenant
shall not proceed with such Alterations until it has received
Landlord’s approval (if required), which must be delivered or
specifically denied within ten (10) business days after request
therefor, or will be deemed granted if Landlord’s consent is
not expressly denied within five (5) business days after an
additional written request from Tenant; and (iii) cause those
contractors, materialmen and suppliers engaged to perform the
Alterations to deliver to Landlord certificates of insurance (in a
form reasonably acceptable to Landlord) evidencing policies of
builders risk (but only if the cost of such Alterations exceeds
$150,000), commercial general liability insurance
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(providing the same coverages as
required in Section 10 above) and workers’
compensation insurance. Such insurance policies shall satisfy the
obligations imposed under Section 10 . Tenant shall cause
the Alterations to be performed in compliance with all applicable
permits, Laws and requirements of public authorities. Tenant shall
cause the Alterations to be diligently performed in a good and
workmanlike manner, using new materials and equipment at least
equal in quality and class to those existing as of the date of this
Agreement. Upon the substantial completion of any Alterations,
Tenant shall provide Landlord with "as built" plans, copies of all
construction contracts, governmental permits and certificates and
proof of payment for all labor and materials, including, without
limitation, copies of paid invoices and final lien waivers, subject
to Tenant’s right to contest any liens as provided above.
Landlord shall have the right to require that Tenant remove from
the Premises, at the expiration or termination of this Lease, and
at Tenant’s sole cost and expense, any Alterations for which
Landlord’s consent is required under this Section 11 ,
provided that Landlord advises Tenant, in writing, of this
requirement at the time that Landlord consents to the applicable
Alteration. The parties do not intend that the making of
Alterations shall: (A) constitute income to Landlord; or (B) result
in a deferral or denial of some or all of the federal, state or
municipal income tax deductions that Landlord would otherwise be
permitted to report with respect to the Premises or this Lease; or
(C) cause this Lease not to be a true lease for federal income tax
purposes.
12.
LANDLORD’S AND TENANT’S PREMISES . All
trade fixtures, machinery and equipment (collectively, the "
Tenant’s Property ") attached to, or built into, the
Premises at the commencement of, or during the Term, whether or not
placed there by or at the expense of Tenant, shall remain
Tenant’s Property and shall be removed by Tenant at the
Expiration Date. At or before the Expiration Date, or the date of
any earlier termination, Tenant, at its expense, shall remove from
the Premises all of Tenant’s personal property,
Tenant’s Property and any Alterations that Landlord requires
be removed pursuant to Section 11, and Tenant shall repair
(to Landlord’s reasonable satisfaction) any damage to the
Premises resulting from such installation and/or removal. Any other
items of Tenant’s personal property that shall remain in the
Premises for more than ten (10) days after the Expiration Date, or
following an earlier termination date, may, at the option of
Landlord, be deemed to have been abandoned, and in such case, such
items may be retained by Landlord as its property or be disposed of
by Landlord, in Landlord’s sole and absolute discretion and
without accountability, at Tenant’s expense. Notwithstanding
the foregoing provisions of this Section 12 or any other
provision of this Lease to the contrary (including, without
limitation, Section 21.2 ), if Landlord or Tenant terminates
this Lease prior to the Expiration Date, then, provided that Tenant
has paid and continues to pay, on a timely basis, all Rent due
under this Lease (if any), Tenant shall have thirty (30) days from
the accelerated termination date in which to remove Tenant’s
personal property and any Alterations that Landlord requires be
removed pursuant to Section 11 . If the foregoing sentence
is applicable, then none of Tenant’s personal property and
equipment may be considered abandoned, nor may Landlord retain and
dispose of any of such personal property and equipment until such
thirty (30) day period expires.
13.
REPAIRS AND MAINTENANCE . Tenant acknowledges that,
with full awareness of its obligations under this Lease, and in
light of the fact that Landlord acquired the Premises from Tenant
(or an affiliate of Tenant) as of the Commencement Date, Tenant has
accepted the condition, state of repair and appearance of the
Premises. Except for normal wear and tear and events of damage,
destruction or casualty to the Premises (as addressed in Section
18 below), Tenant agrees that, at its sole expense and
throughout the Term, it shall put, keep and maintain the Premises,
including any Alterations and any altered, rebuilt, additional or
substituted building, structures and other
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improvements thereto or thereon,
in good order, condition, repair and appearance (allowing for
normal wear and tear), and in a safe condition, repair and
appearance (collectively, the " Required Condition ") and
shall make all repairs and replacements necessary to ensure
compliance with the Required Condition. Without limiting the
foregoing, Tenant shall promptly make all structural and
nonstructural, foreseen and unforeseen, ordinary and extraordinary
changes, replacements and repairs of every kind and nature, and
correct any patent or latent defects in the Premises, which may be
required to put, keep and maintain the Premises in the Required
Condition. Tenant will keep the Premises orderly and free and clear
of rubbish. Tenant covenants to perform or observe all terms,
covenants and conditions of any easement, restriction, covenant,
declaration or maintenance covenants of record (collectively, "
Easements ") to which the Premises are currently subject or
become subject pursuant to this Lease (it being agreed that
Landlord shall not amend any Easement or agree to any additional
Easement in any manner that will either limit, in any adverse
respect, Tenant’s rights under this Lease or impose any new
or increased burden, economic or otherwise, on Tenant, without
Tenant’s prior written consent, which consent may be withheld
in Tenant’s sole, but reasonable, discretion), whether or not
such performance is required of Landlord under such Easements,
including, without limitation, payment of all amounts due from
Landlord or Tenant (whether as assessments, service fees or other
charges) under such Easements. Tenant shall deliver to Landlord
promptly, but in no event later than five (5) business days after
receipt thereof, copies of all written notices received from any
party thereto regarding the non-compliance of the Premises or
Landlord’s or Tenant’s performance of obligations under
any Easements. Tenant shall, at its expense, use reasonable efforts
to enforce compliance with any Easements benefiting the Premises by
any other person or entity or property subject to such Easements.
Landlord shall not be required to maintain, repair or rebuild, or
to make any alterations, replacements or renewals of any nature to
the Premises, or any part thereof, whether ordinary or
extraordinary, structural or nonstructural, foreseen or not
foreseen, or to maintain the Premises or any part thereof in any
way or to correct any patent or latent defect therein except to the
extent such action is necessitated by Landlord’s or
Agent’s negligence or willful misconduct or by actions taken
by or on behalf of Landlord in connection with Landlord’s
inspection of the Premises prior to Landlord’s acquisition of
title thereto. Tenant hereby expressly waives any right to make
repairs at the expense of Landlord which may be provided for in any
Law in effect at the Commencement Date or that may thereafter be
enacted. If Tenant shall abandon the Premises, it shall give
Landlord immediate written notice thereof.
14.
UTILITIES . Tenant shall purchase all utility
services and shall provide for garbage, cleaning and extermination
services for service to the Premises. Tenant shall pay the utility
charges for the Premises directly to the utility or municipality
providing such service, all charges shall be paid by Tenant before
they become delinquent. Tenant shall be solely responsible for the
repair and maintenance of any meters necessary in connection with
such services.
15.
INVOLUNTARY CESSATION OF SERVICES . If and to the
extent Landlord directly provides any such services to Tenant,
Landlord reserves the right, without any liability to Tenant and
without affecting Tenant’s covenants and obligations
hereunder, to stop service of any or all of the HVAC, electric,
sanitary, elevator (if any), and other systems serving the
Premises, or to stop any other services provided by Landlord under
this Lease, whenever and for so long as may be necessary by reason
of (i) accidents, emergencies, strikes, or (ii) any other cause
beyond Landlord’s reasonable control. Further, it is also
understood and agreed that Landlord or Agent shall have no
liability or responsibility for a cessation of any services to the
Premises that occurs as a result of causes beyond Landlord’s
or Agent’s reasonable control. No such interruption of any
service shall be deemed an eviction or disturbance of
Tenant’s use and possession of the Premises or any part
thereof, or render Landlord or Agent liable to Tenant for damages,
or relieve Tenant from performance of Tenant’s obligations
under this Lease, including, but not limited to, the obligation to
pay Rent.
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16.
LANDLORD’S RIGHTS . Upon reasonable prior notice to
Tenant (which may be delivered telephonically), and as long as
Landlord does not unreasonably interfere with Tenant’s
operations, Landlord, Agent and their respective agents, employees
and representatives shall have the right to enter and/or pass
through the Premises at any time or times (except in the event of
emergency for which no prior notice is required) to examine and
inspect the Premises and to show it to actual and prospective
lenders, prospective purchasers or mortgagees of the Premises or
providers of capital to Landlord and its affiliates; and in
connection with the foregoing, to install a sign at or on the
Premises to advertise the Premises for sale. During the period of
six months prior to the Expiration Date, unless a Renewal Option
has been exercised (or at any time, if Tenant has abandoned the
Premises or is otherwise in default beyond applicable notice and
cure periods under this Lease), Landlord and its agents may exhibit
the Premises to prospective tenants. Additionally, Landlord and
Agent shall have the following rights with respect to the Premises,
without being deemed an eviction or disturbance of Tenant’s
use or possession of the Premises or giving rise to any claim for
setoff or abatement of Rent: (i) to have pass keys, access cards,
or both, to the Premises; and (ii) to decorate, remodel, repair,
alter or otherwise prepare the Premises for reoccupancy at any time
after Tenant abandons the Premises for more than 30 consecutive
days.
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17.
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NON-LIABILITY AND
INDEMNIFICATION .
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17.1.
Non-Liability . Except (and only if and) to the extent
caused by the willful misconduct or negligence of Landlord or
Agent, Landlord and Agent shall not be liable to Tenant for any
loss, injury, or damage, to Tenant or to any other person, or to
its or their property, irrespective of the cause of such injury,
damage or loss and, in no event shall any affiliates, owners,
partners, directors, officers, agents or employees of Landlord or
Agent ever be liable hereunder. Further, except (and only if and)
to the extent caused by the willful misconduct or negligence of
Landlord or Agent, none of Landlord, Agent, any other managing
agent, or their respective affiliates, owners, partners, directors,
officers, agents and employees shall be liable to Tenant (a) for
any damage caused by other persons in, upon or about the Premises,
or caused by operations in construction of any public or
quasi-public work; (b) with respect to matters for which Landlord
is liable, for consequential or indirect damages purportedly
arising out of any loss of use of the Premises or any equipment or
facilities therein by Tenant or any person claiming through or
under Tenant; (c) for any defect in the Premises; (d) for injury or
damage to person or property caused by fire, or theft, or resulting
from the operation of heating or air conditioning or lighting
apparatus, or from falling plaster, or from steam, gas,
electricity, water, rain, snow, ice, or dampness, that may leak or
flow from any part of the Premises, or from the pipes, appliances
or plumbing work of the same.
17.2.
Tenant
Indemnification . Except (and only if and to the extent of)
Landlord’s or Agent’s negligence or willful misconduct,
Tenant hereby indemnifies, defends, and holds Landlord, Agent and
the Indemnitees (collectively, " Landlord Indemnified
Parties ") harmless from and against any and all Losses arising
from or in connection with any or all of: (a) Tenant’s
operation of the Premises during the Term; (b) Tenant’s
conduct or management of the Premises or any business therein, or
any work or Alterations done, or any condition created by any or
all of Tenant and any or all of its member, partners, officers,
directors, employees, invitees, managers, contractors, and
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representatives (collectively, "
Tenant’s Parties "), in or about the Premises during
the Term; (c) any act, omission or negligence during the Term of
any or all of Tenant and Tenant’s Parties; (d) any accident,
injury or damage whatsoever occurring during the Term in, at or
upon the Premises and caused by any or all of Tenant and
Tenant’s Parties; (e) any breach by Tenant of any or all of
its warranties, representations and covenants under this Lease; (f)
any actions necessary to protect Landlord’s interest under
this Lease in a bankruptcy proceeding or other proceeding under the
Bankruptcy Code relating to this Lease or Tenant; (g)
Tenant’s failure to comply with Section 9.2 ; and (h)
any violation or alleged violation by any or all of Tenant and
Tenant’s Parties of any Law; and (i) any claims made against
Landlord by any third party contractor engaged by Tenant
(collectively, " Tenant’s Indemnified Matters "). In
case any action or proceeding is brought against any or all of
Landlord and the Landlord Indemnified Parties by reason of any of
Tenant’s Indemnified Matters, Tenant, upon notice from any or
all of Landlord, Agent or any Superior Party (defined below), shall
resist and defend such action or proceeding by counsel reasonably
satisfactory to Landlord. The term " Losses " shall mean all
claims, demands, expenses, actions, judgments, damages (actual, but
not consequential or punitive), penalties or fines imposed by any
Law, liabilities, losses of every kind and nature (other than
consequential or punitive damages), suits, administrative
proceedings, costs and fees, including, without limitation,
attorneys’ and consultants’ reasonable fees and
expenses, and the costs of cleanup, remediation, removal and
restoration, that are in any way related to any matter covered by
the foregoing indemnity. The provisions of this Section 17.2
shall survive the expiration or termination of this
Lease.
17.3.
Landlord
Indemnification . Landlord hereby indemnifies, defends, and
holds Tenant, Guarantor, and any of their affiliates (collectively,
" Tenant Indemnified Parties ") harmless from and against
any and all Losses arising from or in connection with any
negligence or willful misconduct of Landlord and any or all of its
member, partners, officers, directors, employees, invitees,
managers, contractors, and representatives (collectively, "
Landlord’s Parties "), in or about the Premises during
the Term (collectively, " Landlord’s Indemnified
Matters "). In case any action or proceeding is brought against
any or all of Tenant and the Tenant Indemnified Parties by reason
of any of Landlord’s Indemnified Matters, Landlord, upon
notice from any or all of Tenant, shall resist and defend such
action or proceeding by counsel reasonably satisfactory to Tenant.
Notwithstanding anything to the contrary set forth in this Lease,
however, in all events and under all circumstances, the liability
of Landlord to Tenant, whether under this Section 17.3 or
any other provision of this Lease, shall be limited to the interest
of Landlord in the Premises, and Tenant agrees to look solely to
Landlord’s interest in the Premises (and the profits and
proceeds thereof) for the recovery of any judgment or award against
Landlord, it being intended that Landlord shall not be personally
liable for any judgment or deficiency. The provisions of this
Section 17.3 shall survive the expiration or termination of
this Lease.
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18.
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CASUALTY AND
CONDEMNATION .
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18.1.
Casualty . If the Building and/or other improvements on the
Premises shall be damaged or destroyed by fire or other casualty
(each, a " Casualty "), Tenant, at Tenant’s sole cost
and expense, shall promptly and diligently repair, rebuild or
replace such Building and other improvements, so as to restore the
Premises to the condition in which they were immediately prior to
such damage or destruction, irrespective of whether any insurance
proceeds are adequate or available to repair, rebuild or replace
such Building. The net proceeds of any insurance (other than rent
loss insurance) recovered by reason of such damage to, or such
destruction of, the Building and/or other
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improvements on the Premises in
excess of the cost of adjusting the insurance claim and collecting
the insurance proceeds (such excess
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