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INDUSTRIAL BUILDING LEASE (BUILD-TO-SUIT/TRIPLE NET)

Lease Agreement

INDUSTRIAL BUILDING LEASE (BUILD-TO-SUIT/TRIPLE NET) | Document Parties: Cybex International, Inc | First Industrial Development Services, Inc You are currently viewing:
This Lease Agreement involves

Cybex International, Inc | First Industrial Development Services, Inc

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Title: INDUSTRIAL BUILDING LEASE (BUILD-TO-SUIT/TRIPLE NET)
Date: 11/13/2006
Industry: Recreational Products     Law Firm: Barack Ferrazzano;Archer Greiner     Sector: Consumer Cyclical

INDUSTRIAL BUILDING LEASE (BUILD-TO-SUIT/TRIPLE NET), Parties: cybex international  inc , first industrial development services  inc
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Exhibit 10.1

INDUSTRIAL BUILDING LEASE

(BUILD-TO-SUIT/TRIPLE NET)

1. BASIC TERMS . This Section 1 contains the Basic Terms of this 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.

 

  1.1. Effective Date of Lease: August 22, 2006

 

  1.2. Landlord: First Industrial Development Services, Inc.

 

  1.3. Tenant: Cybex International, Inc.

 

  1.4. Premises: Approximately 340,478 rentable square feet included in the Improvements (as defined on Exhibit B attached hereto) to be constructed pursuant to the terms of this Lease on land legally described on Exhibit A attached hereto.

 

  1.5. Lease Term: fifteen (15) years (the “ Initial Term ”), commencing on the Commencement Date (as defined in Exhibit B attached hereto) and ending fifteen (15) Lease Years (as hereinafter defined) thereafter unless sooner terminated as provided in this Lease (the “ Expiration Date ”). The Initial Term, as the same may be extended pursuant to Addendum No. 1 for any Renewal Term provided therein, is hereinafter referred to as the “ Term .” The term, “ Lease Year ,” refers to a period of twelve (12) consecutive calendar months, the first of which twelve (12) month periods is referred to as the “ Initial Lease Year ;” such Initial Lease Year is the period from the Commencement Date to the last day of the calendar month in which the first annual anniversary of the Commencement Date occurs.

 

  1.6. Permitted Uses: (See Section 4.1 ) Warehousing, assembly manufacturing distribution and ancillary office

 

  1.7. Tenant’s Guarantor: NONE

 

  1.8. Brokers: (See Section 23 ; if none, so state): (A) Tenant’s Broker: NONE; and (B) Landlord’s Broker: NONE

 

  1.9. Security/Damage Deposit: (See Section 4.3 ) $300,000.00

 

  1.10. Exhibits to Lease: The following exhibits are attached to and made a part of this Lease: A (legal description); B (Construction of Improvements, inclusive of B-1 (Landlord Improvements), B-2 (Tenant Improvements), B-3 (Acceptance Agreement) and B-4 (Allowances); C (Tenant Operations Inquiry Form); D (Broom Clean Condition and Repair Requirements); Addendum No. 1 (Renewal Option); and E (Agreement of Purchase and Sale)

2. LEASE OF PREMISES; RENT .

2.1. Lease of Premises for 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:

Rental Payments

 

Lease Period

   Annual Base Rent    Monthly Base Rent

Year 1

   $ 1,298,460    $ 108,205

Year 2

   $ 1,298,460    $ 108,205

Year 3

   $ 1,298,460    $ 108,205

Year 4

   $ 1,377,936    $ 114,828

Year 5

   $ 1,405,500    $ 117,125

Year 6

   $ 1,433,616    $ 119,468

Year 7

   $ 1,462,284    $ 121,857

Year 8

   $ 1,491,528    $ 124,294

Year 9

   $ 1,521,360    $ 126,780

Year 10

   $ 1,551,792    $ 129,316

Year 11

   $ 1,582,824    $ 131,902

Year 12

   $ 1,614,480    $ 134,540

Year 13

   $ 1,646,772    $ 137,231

Year 14

   $ 1,679,712    $ 139,976

Year 15

   $ 1,711,104    $ 142,592

 


Tenant shall also pay all Operating Expenses (defined below) and any other amounts owed by Tenant hereunder, including amounts owed by Tenant pursuant to the Tri-Party Agreement (defined in Section 4.4 below) (collectively, “Additional Rent” ). In the event any monthly installment of Base Rent or Additional Rent, or both, is not paid within 10 days of the date when due, a late charge in an amount equal to 5% of the then delinquent installment of Base Rent and/or Additional Rent (the “ Late Charge ”; the Late Charge, Default Interest, as defined in Section 22.3 below, Base Rent and Additional Rent are collectively be referred to as “ Rent ”), shall be paid by Tenant to Landlord, c/o First Industrial, L.P., 75 Remittance Drive, Suite 1066, Chicago, IL 60675-1066 or if sent by overnight courier, The Northern Trust Company, 350 North Orleans Street, 8 th Floor Receipt and Dispatch, Chicago, IL 60654 Attn: First Industrial Development Services, Inc., Suite 1066 (or 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, except as specifically provided herein. 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. If the Commencement Date occurs on a day other than the first day of a calendar month, the Rent due for the first partial calendar month of the Term shall be prorated on a per diem basis (based on a 360 day, 12 month year) and paid to Landlord on the Commencement Date.

2.4. Net Lease . This is an absolutely net lease to Landlord. It is the intent of the parties hereto that the Base Rent payable under this Lease shall be an absolutely net return to Landlord and that Tenant shall pay all costs and expenses relating to the ownership and operation of the Premises and the business carried on therein, unless otherwise expressly provided to the contrary in this Lease. Any amount or obligation relating to the Premises that is not expressly declared (under this Lease) to be that of Landlord shall be deemed to be an obligation of Tenant, to be performed by Tenant, at Tenant’s expense. It is the intention of the parties hereto that the obligations of Tenant hereunder shall be separate and independent covenants and agreements, that the Base Rent and the Additional Rent shall continue to be payable in all events, and that the obligations of Tenant hereunder shall continue unaffected in all events, unless the requirement to pay or perform the same shall have been specifically terminated pursuant to an express provision of this Lease.

 

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3. OPERATING EXPENSES .

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 of the following: (i) all market-based premiums for commercial property, casualty, general liability, boiler, flood, earthquake, terrorism and all other types of insurance provided by Landlord and relating to the Premises, all reasonable administrative costs incurred in connection with the procurement and implementation of such insurance policies, and all deductibles paid by Landlord pursuant to insurance policies required to be maintained by Landlord under this Lease , provided at any time during the Term, upon forty-five (45) days prior written notice to Landlord, Tenant may obtain directly property insurance required by the terms of this Lease pursuant to the terms of Section 10.2.2 below, in which event, after such notice period has lapsed and Tenant has provided to Landlord evidence of such insurance, no future administrative costs or premiums shall be payable to Landlord, subject to the terms of Section 10 below; (ii) Taxes, as hereinafter defined in Section 3.1.2 (subject, however, to the last sentence of Section 3.1.2 ); (iii) 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 ownership and operation of the Premises; and (iv) any real estate taxes and common area maintenance expenses levied against, or attributable to, the Premises 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).

3.1.2. Taxes . The term “ Taxes ,” as referred to in Section 3.1.1(iii) above shall mean (i) all governmental taxes, assessments, fees and charges of every kind or nature (other than Landlord’s income taxes and any taxes in substitution therefor), 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. For purposes hereof, Tenant shall be responsible for any Taxes that are due and payable at any time or from time to time during the Term and for any Taxes that are assessed, become a lien, or accrue during any Operating Year, which obligation shall survive the termination or expiration of this Lease. If Landlord so elects, by delivery of written notice to Tenant at any time during the Term, Tenant shall pay the Taxes directly to the taxing authority(ies), rather than to Landlord for payment to the taxing authority(ies), whereupon Tenant shall be required to pay all Taxes prior to the date on which they become delinquent and Tenant shall deliver to Landlord, promptly after Tenant’s payment of same, reasonable evidence of such payments. So long as Tenant is not in default under the Lease, Landlord shall not contest Taxes due during the Term without the prior consent of Tenant, not to be unreasonably withheld, conditioned or delayed. Landlord shall cooperate with Tenant (at no cost or expense to Landlord) in connection with any such contest which Tenant may choose to bring, provided, however, that as to any period for which the Development Agreement (defined below) prohibits or restricts any contest of Taxes, Tenant shall not contest any Taxes. Notwithstanding the foregoing, Tenant shall take no action, and Landlord shall not be required to take any action, which would cause or allow the taxing authority to take any enforcement action with respect to the Property or subject Landlord to any liability and Tenant shall be responsible for any interest or penalty arising in connection with Tenant’s failure to pay such Taxes in a timely manner in connection with Tenant’s contest of Taxes. Notwithstanding the foregoing or anything else herein to the contrary, the defined term “Taxes” shall be deemed to include (i) for so long as the Development Agreement by and between the Landlord and the City of Owatonna (the “ City ”), Minnesota (as amended, modified, or supplemented, the “ Development Agreement ”) is in effect, all ad valorum real estate taxes paid by Landlord, whether on not Landlord could have contested such Taxes or otherwise obtained relief in relation to such Taxes, and (ii) any and all amounts that are required to be paid by the Landlord pursuant to the Development Agreement in order to fund the tax increment required to be funded by the City of Owatonna therein. The Tenant agrees that prior to the termination date of the Development Agreement: (1) it will not seek administrative review or judicial review of the applicability of any tax statute relating to the taxation of real property contained on the Premises determined by any tax official to be applicable to the Premises or the Landlord or Tenant or raise the inapplicability of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, “tax statute” does not include any local ordinance or resolution levying a tax; (2) it will not seek administrative review or judicial review of the constitutionality of any tax statute relating to the taxation of real property contained on the Premises determined by any tax official to be applicable to the Premises or the Landlord or Tenant or raise the unconstitutionality of any such tax statute as a defense in any proceedings, including delinquent tax proceedings; provided, however, “tax statute” does not include any local ordinance or resolution levying a tax; (3) it will not seek any tax deferral or abatement, either presently or prospectively authorized under any other State or federal law, of the taxation of real property contained in the Premises between the date of the Development Agreement and the termination date of the Development Agreement.

 

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3.1.3. Operating Year . The term “ Operating Year ” shall mean the calendar year commencing January 1st of each year (including the calendar year within which the Commencement Date occurs) during the Term.

3.2. Payment of Operating Expenses . Tenant shall pay, as Additional Rent and in accordance with the requirements of Section 3.3 , all of the Operating Expenses, as set forth in Section 3.3 . Additional Rent commences to accrue upon the Commencement Date. The Operating Expenses payable hereunder for the Operating Years in which the Term begins and ends shall be prorated to correspond to that portion of said Operating Years occurring within the Term. The Operating Expenses and any other sums due and payable under this Lease shall be adjusted upon receipt of the actual bills therefor, and the obligations of this Section 3 shall survive the termination or expiration of the Lease.

3.3. Payment of Additional Rent . Landlord shall have the right to reasonably estimate the Operating Expenses for each Operating Year. Upon Landlord’s or Agent’s notice to Tenant of such estimated amount, Tenant shall pay, on the first day of each month during that Operating Year, an amount (the “ Estimated Additional Rent ”) equal to the estimate of the Operating Expenses divided by 12 (or the fractional portion of the Operating Year remaining at the time Landlord delivers its notice of the estimated amounts due from Tenant for that Operating Year). If the aggregate amount of Estimated Additional Rent actually paid by Tenant during any Operating Year is less than Tenant’s actual ultimate liability for Operating Expenses for that particular Operating Year, Tenant shall pay the deficiency within 30 days of Landlord’s written demand therefor. If the aggregate amount of Estimated Additional Rent actually paid by Tenant during a given Operating Year exceeds Tenant’s actual liability for such Operating Year, the excess shall be credited against the Estimated Additional Rent next due from Tenant during the immediately subsequent Operating Year, except that in the event that such excess is paid by Tenant during the final Lease Year, then upon the expiration of the Term, Landlord or Agent shall pay Tenant the then-applicable excess promptly after determination thereof.

3.4. Audit . Tenant shall have the right, at Tenant’s sole cost and expense, to review and audit Landlord’s records with respect to any Operating Expenses. If such audit discloses discrepancies in the amounts paid, the appropriate adjustments shall be made.

4. USE OF PREMISES; SIGNAGE; SECURITY DEPOSIT .

4.1. Use of Premises . The Premises shall be used by the Tenant for the purpose(s) set forth in Section 1.6 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 liable 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) or any equipment, facilities or systems therein; (c) constitute a violation of the laws and requirements of any public authority or the requirements of insurance bodies or the rules and regulations of the Premises, including any covenant, condition or restriction affecting the Premises; and (d) exceed the load bearing capacity of the floor of the Premises. 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 C 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 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 upon Landlord’s request.

4.2. Signage . Tenant may affix any sign of any size or character to any portion of the Premises, without prior written approval of Landlord, subject to and as permitted by the requirements of any governmental code or authority and/or park association rules. 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. Security/Damage Deposit . Simultaneously with the execution and delivery of this Lease, Tenant shall deposit with Landlord or Agent the sum set forth in Section 1.9 above, in cash (the “ Security ”), representing security for the performance by Tenant of the covenants and obligations hereunder. The Security shall be held by Landlord or Agent, without interest, in favor of Tenant; provided, however, that no trust relationship shall be deemed created thereby; the Security may be commingled with other assets of Landlord; and Landlord shall not be required to pay any interest on the Security. If Tenant defaults in the performance of any of its covenants hereunder, Landlord or Agent may, without notice to Tenant, apply all or any part of the Security to the cure of such default or the payment of any sums then due from Tenant under this Lease (including, but not limited to, amounts due under Section 22.2 of this Lease as a consequence of termination of this Lease or Tenant’s right to possession), in addition to any other remedies available to Landlord. In the event the Security is so applied, Tenant shall, upon demand, immediately deposit with

 

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Landlord or Agent a sum equal to the amount so used. If Tenant fully and faithfully complies with all the covenants and obligations hereunder, the Security (or any balance thereof) shall be returned to Tenant within 30 days after the last to occur of (i) the date the Term expires or terminates or (ii) delivery to Landlord of possession of the Premises. Landlord may deliver the Security to any lender with a mortgage lien encumbering the Premises or to any Successor Landlord (defined below), and thereupon Landlord and Agent shall be discharged from any further liability with respect to the Security.

4.4. TIF Obligations . Tenant shall timely and duly perform all of its obligations pursuant to the Tri-Party Agreement (the “ Tri-Party Agreement ”), as amended, by and among the City, the Landlord and the Tenant, and the Business Subsidy Agreement, as amended, by and between Tenant and the City. Tenant shall not have caused, through any action or any failure to act by Tenant when and as required hereunder, Landlord to be in non-compliance with the Development Agreement by and between the Landlord and the City.

5. CONDITION AND DELIVERY OF PREMISES .

5.1. Condition of Premises . Landlord shall deliver the Premises in accordance with the requirements in Exhibit B hereto. Except as otherwise expressly provided in Exhibit B , Landlord shall not be obligated to make any repairs, replacements or improvements (whether structural or otherwise) of any kind or nature to the Premises in connection with, or in consideration of, this Lease.

5.2. Commencement Date . The Commencement Date shall be determined pursuant to Exhibit B .

6. SUBORDINATION; ESTOPPEL CERTIFICATES; ATTORNMENT .

6.1. Subordination and Attornment . Provided that Tenant is provided with a reasonable and customary subordination, nondisturbance and attornment agreement from the holder of any mortgage or deed of trust, 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. Tenant shall execute and deliver, within ten (10) days of Landlord’s request, and in the form reasonably requested by Landlord (or its lender), any documents evidencing the subordination of this Lease. Tenant hereby covenants and agrees that Tenant shall attorn to any successor to Landlord.

6.2. Estoppel Certificate . Tenant agrees, from time to time and within 10 days after request by Landlord, to deliver to Landlord, or Landlord’s designee, an estoppel certificate stating such matters pertaining to this Lease as may be reasonably requested by Landlord. Failure by Tenant to timely execute and deliver such certificate shall constitute a Default, as defined below (without any obligation to provide any notice thereof or any opportunity to cure such failure to timely perform).

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 liability for any of the covenants or conditions, express or implied, herein contained in favor of Tenant and first arising or accruing after the effective date of Landlord’s transfer of its interest in the Premises, provided such successor assumes in writing the obligations of Landlord arising after such assignment or conveyance 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; provided further that in the event of an assignment by Landlord of its interest in this Lease prior to the Commencement Date, Landlord shall nonetheless remain responsible for causing the Substantial Completion Date to occur and to provide the warranty pursuant to Section 7 of Exhibit B .

7. QUIET ENJOYMENT . Subject to the provisions of this Lease, so long as Tenant pays all of the Rent and performs all of its other obligations hereunder, Tenant shall not be disturbed in its possession of the Premises by Landlord, Agent or any other person lawfully claiming through or under Landlord.

8. ASSIGNMENT AND SUBLETTING . Tenant shall not (a) assign (whether directly or indirectly), in whole or in part, this Lease, or (b) allow this Lease to be assigned, in whole or in part, by operation of law or otherwise, including, without limitation, by transfer of a controlling interest ( i.e. greater than a 25% interest) of stock, membership interests or partnership interests, or by merger or dissolution, which transfer of a controlling interest, merger or dissolution shall be deemed an assignment for purposes of this Lease, or (c) mortgage or pledge the Lease, or (d) sublet the Premises, in whole or in part, without (in the case of any or all of (a) through (d) above) the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Upon ten

 

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(10) days prior written notice to Landlord, Tenant may, without Landlord’s prior written consent, assign this Lease or sublease a portion of the Premises (i) to an entity in which Tenant is merged or consolidated or to an entity to which all or substantially all of Tenant’s assets are transferred, provided such merger, consolidation or transfer of assets is for a bona fide business purpose and not principally for the purpose of transferring Tenant’s leasehold estate or (ii) to any entity controlling Tenant, controlled by Tenant or under common control of Tenant. In no event shall any assignment or sublease ever release Tenant or any guarantor from any obligation or liability hereunder; and in the case of any assignment, Landlord shall retain all rights with respect to the Security. 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. Regardless of whether or not an assignee or sublessee executes and delivers any documentation to Landlord pursuant to the preceding sentence, any assignee or sublessee shall be deemed to have automatically attorned to Landlord in the event of any termination of this Lease. 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), collect Rent from the assignee, subtenant or occupant.

9. COMPLIANCE WITH LAWS .

9.1. Compliance with Laws . Landlord shall deliver the Premises to Tenant in accordance with the terms of Exhibit B hereto. After the Premises are delivered to Tenant, 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 (collectively, “ Laws ”), whether such Laws (a) pertain to either or both of the Premises and Tenant’s use and occupancy thereof; (b) concern or address matters of an environmental nature; (c) require the making of any structural, unforeseen or extraordinary changes; and (d) involve a change of policy on the part of the body enacting the same, including, in all instances described in (a) through (d), 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 during the Term (or any extension thereof), any Hazardous Material (defined below) is generated, transported, stored, used, treated or disposed of at, to, from, on or in the Premises by, or as a result of any act or omission of, any or all of Tenant and any or all of Tenant Parties (defined below): (i) Tenant shall, at its own cost, at all times comply (and cause all others 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 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) at any time after Landlord has a reasonable basis to believe that Tenant is not in compliance with this Section 9 or if any claim is made or threatened by any governmental authority or agency, Landlord, Agent and their respective agents and employees shall have the right to either or both (x) enter the Premises and (y) conduct appropriate tests, at Tenant’s expense, for the purposes of ascertaining Tenant’s compliance 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; and (iv) upon written request by Landlord or Agent, Tenant shall cause to be performed, and 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 . Tenant covenants to investigate, clean up and otherwise remediate, at Tenant’s sole expense, any release of Hazardous Materials caused, contributed to, or created by any or all of (A) Tenant and (B) any or all of Tenant’s officers, directors, members, managers, partners, invitees, agents, employees, contractors or representatives (“ Tenant Parties ”) during the Term. Such investigation and remediation shall be performed only after Tenant has obtained Landlord’s prior written consent; provided, however, that Tenant shall be entitled to respond (in a reasonably appropriate manner) immediately to an emergency without first obtaining such consent. All remediation shall be performed in strict compliance with Laws and to the reasonable satisfaction of Landlord. 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

 

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obtaining Landlord’s written consent (which consent may be given or withheld in Landlord’s sole, but reasonable, discretion) 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 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.

10. INSURANCE .

10.1. Insurance to be Maintained by Landlord . Landlord shall maintain: (a) a commercial property insurance policy covering the Premises (at its full replacement cost), but excluding Tenant’s personal property; (b) commercial general public liability insurance covering Landlord for claims arising out of liability for bodily injury, death, personal injury, advertising injury and property damage occurring in and about the Premises and otherwise resulting from any acts and operations of Landlord, its agents and employees; (c) rent loss insurance; (d) any other insurance coverage required by Landlord’s lender; and (e) or cause the General Contractor to maintain during the course of construction through Substantial Completion of the Improvements, Builder’s Risk insurance. All of the coverages described in (a) through (e) shall be reasonably determined from time to time by Landlord, as would be made by a prudent owner of similar property as the Premises. All insurance maintained by Landlord shall be in addition to and not in lieu of the insurance required to be maintained by the Tenant.

10.2. Insurance to be Maintained by Tenant . Tenant shall purchase, at its own expense, and keep in force at all times from and after the date of 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’s 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. The Tenant’s Policies described in (i) and (ii) below shall (1) provide coverage on an occurrence basis; (2) name Landlord (and its lender, if applicable) as an additional insured; (3) provide coverage, to the extent insurable, for the indemnity obligations of Tenant under this Lease; (4) contain a separation of insured parties provision; (5) be primary, not contributing with, and not in excess of, coverage that Landlord may carry; and (6) provide coverage with no exclusion for a pollution incident arising from a hostile fire. All Tenant’s Policies or Certificates of Insurance shall be delivered to Landlord prior to the Commencement Date and renewals thereof shall be delivered to Landlord’s notice addresses at least 30 days prior to the applicable expiration date of each Tenant’s Policy. In the event that Tenant fails, at any time or from time to time, to comply with the requirements of the preceding sentence, Landlord may following notice to Tenant order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand, as Additional Rent. Tenant shall give prompt notice to Landlord and Agent of any known bodily injury, death, personal injury, advertising injury or property damage occurring in and about the Premises.

10.2.1. Tenant shall purchase and maintain, throughout the Term, a Tenant’s Policy(ies) of (i) commercial general or excess liability insurance, including personal injury and property damage, in the amount of not less than $1,000,000.00 per occurrence, $2,000,000.00 annual general aggregate, and $4,000,000 umbrella per location; (ii) comprehensive automobile liability insurance covering Tenant against any personal injuries or deaths of persons and property damage based upon or arising out of the ownership, use, occupancy or maintenance of a motor vehicle at the Premises and all areas appurtenant thereto in the amount of not less than $1,000,000, combined single limit; (iii) commercial property insurance covering Tenant’s personal property (at its full replacement cost); and (iv) workers’ compensation insurance per the applicable state statutes covering all employees of Tenant.

10.2.2. Provided Tenant is not in default under this Lease and has not assigned its interest in this Lease to Landlord, to procure and pay directly for the commercial property insurance covering the Property. Tenant’s property insurance policy shall name Landlord (and its lender, if applicable) as mortgagee loss payee as its interest may appear, and cover all improvements at any time situated upon the Premises, including, without limitation, the Improvements, the parking areas, against loss or damage by fire, lighting, wind storm, hail storm, aircraft, vehicles, smoke, explosion, riot or civil commotion as provided by the Standard Fire and Extended Coverage Policy and all other risks of direct physical loss as insured against under Special Form (“all risk” coverage). The insurance coverage shall be for not less than 100% of the full replacement cost of such improvements with agreed amount endorsement and building ordinance coverage and shall include rental interruption insurance for twelve (12) months of rent and operating expenses reimbursement.

 

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10.3. Waiver of Subrogation . Notwithstanding anything to the contrary in this Lease, Landlord and Tenant mutually waive their respective rights of recovery against each other and each other’s officers, directors, constituent partners, members, agents and employees, and Tenant further waives such rights against (a) each lessor under any ground or underlying lease encumbering the Premises and (b) each lender under any mortgage or deed of trust or other lien encumbering the Premises (or any portion thereof or interest therein), to the extent any loss is insured against or required to be insured against under this Lease, including, but not limited to, losses, deductibles or self-insured retentions covered by Landlord’s or Tenant’s commercial property policies described above. This provision is intended to waive, fully and for the benefit of each party to this Lease, any and all rights and claims that might give rise to a right of subrogation by any insurance carrier. Each party shall cause its respective insurance policy(ies) to be endorsed to evidence compliance with such waiver.

11. ALTERATIONS . From and after the Commencement Date, Tenant may, from time to time, at its expense, make alterations or improvements in and to the Premises (hereinafter collectively referred to as “ Alterations ”), provided that Tenant first obtains the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Tenant may make any interior, non-structural Alterations costing less than $50,000 per Alteration and less than $150,000 in the aggregate for all Alterations occurring during a particular calendar year without obtaining Landlord’s consent, provided that Tenant shall provide Landlord with 5 days written notice prior to the commencement of any such Alterations for which Landlord’s consent is not required and Tenant complies with the requirements set forth below in this Section 11 . All of the following shall apply with respect to all Alterations: (a) the Alterations are non-structural and the structural integrity of the Premises shall not be affected; (b) the Alterations are to the interior of the Premises; (c) the proper functioning of the mechanical, electrical, heating, ventilating, air-conditioning (“ HVAC ”), sanitary and other service systems of the Premises shall not be affected and the usage of such systems by Tenant shall not be increased; and (d) Tenant shall have appropriate insurance coverage, reasonably satisfactory to Landlord, regarding the performance and installation of the Alterations. Additionally, 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, 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); 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 commercial general liability insurance (providing the same coverages as required in Section 10.2 above) and workers’ compensation insurance. Such insurance policies shall satisfy the obligations imposed under Section 10.2 . Tenant shall cause the Alterations to be performed in compliance with all applicable permits, Laws and requirements of public authorities, and with Landlord’s reasonable rules and regulations or any other restrictions that Landlord may impose on the Alterations. 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 the standards for the Premises established by Landlord. With respect to any and all Alterations for which Landlord’s consent is required, 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. If Landlord’s consent to any Alterations is required, and Landlord provides that consent, then at the time Landlord so consents, Landlord shall also advise Tenant whether or not Landlord shall require that Tenant remove such Alterations at the expiration or termination of this Lease. If Landlord requires Tenant to remove the Alterations, then, during the remainder of the Term, Tenant shall be responsible for the maintenance of appropriate commercial property insurance (pursuant to Section 10.2 ) therefor; however, if Landlord shall not require that Tenant remove the Alterations, such Alterations shall constitute Landlord’s Property and Landlord shall be responsible for the insurance thereof, pursuant to Section 10.1 .

12. LANDLORD’S AND TENANT’S PROPERTY . All fixtures, machinery, equipment, improvements and appurtenances 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, but excluding all machinery, equipment and such fixtures purchased by Tenant not pertaining to the operating systems of the Building and pertaining to Tenant’s business, shall become and remain a part of the Premises; shall be deemed the property of Landlord (the “ Landlord’s Property ”), without compensation or credit to Tenant; and shall not be removed by Tenant at the Expiration Date unless Landlord requires their removal (including, but not limited to, Alterations pursuant to Section 11 ). Further, any personal property in the Premises on the Commencement Date, movable or otherwise, unless installed and paid for by Tenant, shall also constitute Landlord’s Property and shall not be removed by Tenant. In no event shall Tenant remove any of the following materials or equipment without Landlord’s prior written consent (which consent may be given or withheld in Landlord’s sole discretion): any power wiring or power panels, lighting or lighting fixtures, wall or window coverings, carpets or other floor coverings, heaters, air conditioners or any other HVAC equipment, fencing or security gates, or other similar building operating equipment and decorations. 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 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 either or both

 

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such installation and removal. Without respect to the portion of Tenant’s Property that is described as collateral pursuant to any third party financing for Tenant’s Property, Landlord agrees to waive any lien, statutory or otherwise, that Landlord may have with respect to such Tenant’s Property for the duration of such third party financing, provided, however, that such waiver shall not relieve Tenant of the obligation to remove Tenant’s Property from the Premises on a timely basis and provided further that Landlord’s waiver of lien shall not apply to any of Tenant’s Property that is not subject to or that is released from the lien created by the third party financing obtained by Tenant. Landlord agrees to execute a Landlord’s waiver in a form reasonably acceptable to Landlord, provided that Tenant’s Property is specifically described thereon and does not include any of Landlord’s Property and subject to the other terms and conditions of this Lease. Any other items of Tenant’s personal property that remain in the Premises 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.

13. REPAIRS AND MAINTENANCE .

13.1. Tenant Responsibilities . Tenant acknowledges that, with full awareness of its obligations under this Lease, Tenant has accepted the condition, state of repair and appearance of the Premises, subject to the obligations of Landlord pursuant to Exhibit B . Except for (a) Landlord’s obligations under Exhibit B and (b) events of damage, destruction or casualty to the Premises (as addressed in Section 18 below), Tenant agrees that, at its sole expense, it shall put, keep and maintain the Premises, including any Alterations and any altered, rebuilt, additional or substituted buildings, structures and other improvements thereto or thereon, in the same condition that exists on the Commencement Date (reasonable wear and tear excepted), and in a safe condition, repair and appearance (collectively, the “ Required Condition ”) and shall make all repairs and replacements necessary therefor. 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 agreement (collectively, “ Easements ”) to which the Premises are currently subject or become subject pursuant to this Lease, 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 expenses, use reasonable efforts to enforce compliance with any Easements benefiting the Premises by any other person or entity or property subject to such Easement. Except with respect to Landlord’s obligations under Exhibit B , 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. 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 vacate or abandon the Premises, it shall give Landlord immediate written notice thereof.

13.2. HVAC Maintenance Contract . Tenant shall also maintain, in full force and effect, a preventative maintenance and service contract with a reputable service provider for maintenance of the HVAC systems of the Premises (the “ HVAC Maintenance Contract ”). Such HVAC Maintenance Contract may commence immediately following the expiration of the one-year warranty relating to the HVAC system, as described in Exhibit B hereto. The terms and provisions of any such HVAC Maintenance Contract shall require that the service provider maintain the Premises’ HVAC system in accordance with the manufacturer’s recommendations and otherwise in accordance with normal, customary and reasonable practices in the geographic area in which the Premises is located and for HVAC systems comparable to the Premises’ HVAC system. Within 30 days following the Commencement Date, Tenant shall procure and deliver to Landlord the HVAC Maintenance Contract. Thereafter, upon written request, Tenant shall provide to Landlord a copy of renewals or replacements of such HVAC Maintenance Contract no later than 30 days prior to the then-applicable expiry date of the existing HVAC Maintenance Contract. If Tenant fails to timely deliver to Landlord the HVAC Maintenance Contract (or any applicable renewal or replacement thereof), then Landlord shall have the right to contract directly for the periodic maintenance of the HVAC systems in the Premises and to charge the cost thereof back to Tenant as Additional Rent.

14. UTILITIES . Tenant shall purchase all utility services and shall provide for scavenger, cleaning and extermination services. 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

 

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meters necessary in connection with such services. Tenant’s use of electrical energy in the Premises shall not, at any time, exceed the capacity of either or both of (x) any of the electrical conductors and equipment in or otherwise servicing the Premises; and (y) the HVAC systems of the Premises.

15. INVOLUNTARY CESSATION OF SERVICES . 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 required 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 services to the Premises that occurs as a result of causes beyond Landlord’s or Agent’s reasonable control. No such interruption of 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; provided, however, that if any interruption of services persists for a period in excess of five (5) consecutive business days Tenant shall, as Tenant’s sole remedy, be entitled to a proportionate abatement of Rent to the extent, if any, of any actual loss of use of the Premises by Tenant.

16. LANDLORD’S RIGHTS . 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 upon reasonable prior notice and with the accompaniment of a representative of Tenant (except in the event of emergency) to examine and inspect the Premises and to show them 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 lease or sale; during the period of six months prior to the Expiration Date (or at any time, if Tenant has abandoned the Premises), Landlord and its agents may exhibit the Premises to prospective tenants. Additionally, Landlord and Agent shall have the following right with respect to the Premises, exercisable without notice to Tenant, without liability to Tenant, and 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: to have pass keys, access cards, or both, to the Premises.

17. NON-LIABILITY AND INDEMNIFICATION .

17.1. Non-Liability . Except as otherwise expressly set forth in this Lease, none of Landlord, Agent, any other managing agent, or their respective affiliates, owners, partners, directors, officers, agents and employees shall be liable under this Lease to Tenant for any loss, injury, or damage, to Tenant or to any other person, or to its or their property. Further, except as otherwise expressly set forth in this Lease, none of Landlord, Agent, any other managing agent, or their respective affiliates, owners, partners, directors, officers, agents and employees shall be liable to Tenant under this Lease (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) for consequential or indirect damages, including those 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 in the event of, and to the extent of, Landlord’s gross negligence or willful misconduct, Tenant hereby indemnifies, defends, and holds Landlord, Agent, Landlord’s members and their respective affiliates, owners, partners, members, directors, officers, agents and employees (collectively, “ Landlord Indemnified Parties ”) harmless from and against any and all Losses (defined below) arising from or in connection with any or all of: (a) the 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 Tenant Parties in or about the Premises during the Term or during the period of time, if any, prior to the Commencement Date that Tenant has possession of, or is given access to the Premises; (b) any act, omission or negligence of any or all of Tenant and Tenant Parties; (c) any accident, injury or damage whatsoever occurring in, at or upon the Premises and caused by any or all of Tenant and Tenant Parties; (d) any breach by Tenant of any or all of its warranties, representations and covenants under this Lease; (e) any actions necessary to protect Landlord’s interest under this Lease in a bankruptcy proceeding or other proceeding under the Bankruptcy Code; (f) the creation or existence of any Hazardous Materials in, at, on or under the Premises, if and to the extent brought to the Premises or caused by Tenant or any party within Tenant’s control; and (g) any violation or alleged violation by any or all of Tenant and Tenant Parties of any Law (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

 

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satisfactory to, or selected by, Landlord. The term “ Losses ” shall mean all claims, demands, expenses, actions, judgments, damages (actual, but not consequential), penalties, fines, liabilities, losses of every kind and nature, 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 harmless from and against any and all Losses actually suffered or incurred by Tenant as the result of any gross negligence, willful or intentional acts or omissions of any or all of Landlord, Agent and any parties within the control of either or both of Landlord and Agent and from the existence of any Hazardous Materials in violation of Environmental Laws to the extent brought to the Premises or due to a violation caused by Landlord or Agent or any parties within the control of either or both of Landlord and Agent. 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 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.

17.4. Force Majeure . From and after the Commencement Date, neither the obligations of Tenant (except the obligation to pay Rent and the obligation to maintain insurance, and provide evidence thereof, in accordance with Section 10.2 ) nor those of Landlord (except as otherwise specifically provided in Exhibit B ) shall be affected, impaired or excused, and neither Landlord nor Tenant shall have any liability whatsoever to the other, with respect to any act, event or circumstance arising out of either or both (a) Landlord’s or Tenant’s, as the case may be, failure to fulfill, or delay in fulfilling any of its obligations under this Lease (except, with respect to Tenant, the obligation to pay Rent and the obligation to maintain insurance, and provide evidence thereof, in accordance with Section 10.2 ) by reason of labor dispute, governmental preemption of property in connection with a public emergency or shortages of fuel, supplies, or labor, or any other cause, whether similar or dissimilar, beyond Landlord’s or Tenant’s, as the case may be, reasonable control; or (b) any failure or defect in the supply, quantity or character of utilities furnished to the Premises, or by reason of any requirement, act or omission of any public utility or others serving the Premises, beyond Landlord’s or Tenant’s, as the case may be, reasonable control.

18. DAMAGE OR DESTRUCTION .

18.1. Notification and Repair; Rent Abatement . Tenant shall give prompt notice to Landlord and Agent of (a) any fire or other casualty to the Premises, and (b) any damage to, or defect in, any part or appurtenance of the Premises’ sanitary, electrical, HVAC, elevator or other systems. In the event that, as a result of Tenant’s failure to promptly notify Landlord pursuant to the preceding sentence, Landlord’s insurance coverage is compromised or adversely affected, then Tenant is and shall be responsible for the payment to Landlord of any insurance proceeds that Landlord’s insurer fails or refuses to pay to Landlord as a result of the delayed notification. Subject to the provisions of Section 18.2 below, if the Premises is damaged by fire or other insured casualty, Landlord shall repair (or cause Agent to repair) the damage and restore and rebuild the Premises (except Tenant’s personal property) with reasonable dispatch after the adjustment of the insurance proceeds attributable to such damage. Landlord (or Agent, as the case may be) shall use its diligent, good faith efforts to make such repair or restoration promptly and in such manner as not to unreasonably interfere with Tenant’s use and occupancy of the Premises, but Landlord or Agent shall not be required to do such repair or restoration work except during normal business hours of business days. If the Premises are partially damaged by fire or other casualty, the Rent shall be proportionally abated to the extent of any actual loss of use of the Premises by Tenant.

18.2. Total Destruction . If, after the Commencement Date, the Premises shall be totally destroyed by fire or other casualty, or, after the Commencement Date, if the Premises shall be so damaged by fire or other casualty that (in the reasonable opinion of a reputable contractor or architect designated by Landlord): (i) its repair or restoration requires more than 180 days or (ii) such repair or restoration requires the expenditure of more than 50% of the full insurable value of the Premises immediately prior to the casualty, Landlord and Tenant shall each have the option to terminate this Lease (by so advising the other, in writing) within 10 days after said contractor or architect delivers written notice of its opinion to Landlord and Tenant, but in all events prior to the commencement of any restoration of the Premises by Landlord. Additionally, if the damage (x) is less than the amount stated in (ii) above, but more than 10% of the full insurable value of the Premises; and (y) occurs during the last two years of Lease Term, then Landlord, but not Tenant, shall have the option to terminate this Lease pursuant to the notice and within the time period established pursuant to the im


 
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