KR CALLAHAN & COMPANY,
LLC,
an Illinois limited liability
company,
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Page
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BASIC LEASE
PROVISIONS
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1
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PREMISES; TERM;
RENT
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3
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USE AND
OCCUPANCY
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4
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CONDITION OF
THE PREMISES
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5
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ALTERATIONS
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5
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REPAIRS
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7
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TAXES AND
OPERATING EXPENSES
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8
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REQUIREMENTS OF
LAW
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13
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SUBORDINATION
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14
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SERVICES
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16
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INSURANCE;
PROPERTY LOSS OR DAMAGE
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19
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EMINENT
DOMAIN
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23
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ASSIGNMENT AND
SUBLETTING
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24
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ACCESS TO
PREMISES
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30
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DEFAULT
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31
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LANDLORD’S RIGHT TO CURE; FEES AND
EXPENSES
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35
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NO
REPRESENTATIONS BY LANDLORD; LANDLORD’S APPROVAL
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36
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END OF
TERM
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36
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QUIET
ENJOYMENT
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37
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NO SURRENDER;
NO WAIVER
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37
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WAIVER OF TRIAL
BY JURY; COUNTERCLAIM
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37
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NOTICES
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38
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RULES AND
REGULATIONS
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38
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BROKER
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38
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INDEMNITY
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39
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MISCELLANEOUS
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40
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LETTER OF
CREDIT
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43
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RENEWAL
OPTION
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47
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TENANT’S
EARLY TERMINATION RIGHT
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48
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Floor
Plan
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Definitions
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Workletter
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Design
Standards
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Cleaning
Specifications
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Rules and
Regulations
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Form of Letter
of Credit
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Form of
SNDA
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THIS LEASE is made
as of the 8 th day of May, 2006 (“Effective
Date”) , between 227 MONROE STREET, INC., a Delaware
corporation (“Landlord”) , and KR CALLAHAN &
COMPANY, LLC, an Illinois limited liability company
(“Tenant”) .
Landlord and
Tenant hereby agree as follows:
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A portion of
the thirty-eighth (38 th )
floor of the Building known as Suite 3880, as more particularly
shown on Exhibit A .
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The building,
fixtures, equipment and other improvements and appurtenances now
located or hereafter erected, located or placed upon the land known
as AT&T Corporate Center, 227 West Monroe Street, Chicago,
Illinois.
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The Building,
together with the plot of land upon which it stands.
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Franklin
Center, comprised of the buildings known as the AT&T Corporate
Center and the USG Building, as described in Exhibit B
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The date of
execution and delivery of this Lease by both Landlord and
Tenant.
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The earlier of:
(i) the date on which Tenant Substantially Completes the Initial
Installations and (ii) August 1, 2006.
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The last day of
the 120 th
full calendar month following the
Commencement Date, or the last day of any renewal or extended term,
if the Term of this Lease is extended in accordance with any
express provision hereof.
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The period
commencing on the Commencement Date and ending on the Expiration
Date.
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Executive and
general offices.
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TENANT’S PROPORTIONATE
SHARE
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0.2598%
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1,540,831
rentable square feet, as mutually agreed by Landlord and Tenant.
The agreed area of the Building and the agreed area of the Premises
have both been determined in accordance with the Standard Method
for Measuring Floor Area in Office Buildings, promulgated by BOMA,
ANSI/BOMA Z65.1 1996.
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4,003 rentable
square feet, as mutually agreed by Landlord and Tenant.
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Annual Base
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Monthly Base
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Lease Year
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Net Rent
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Rent
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Rent
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1
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8/1/2006
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$
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25.44
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$
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101,836.32
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$
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8,486.36
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2
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8/1/2007
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$
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26.18
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$
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104,802.54
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$
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8,733.55
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3
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8/1/2008
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$
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26.94
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$
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107,855.53
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$
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8,987.96
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4
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8/1/2009
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$
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27.73
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$
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110,997.83
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$
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9,249.82
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5
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8/1/2010
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$
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28.54
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$
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114,232.07
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$
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9,519.34
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6
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8/1/2011
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$
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29.37
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$
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117,560.94
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$
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9,796.74
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7
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8/1/2012
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$
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30.22
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$
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120,987.22
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$
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10,082.27
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8
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8/1/2013
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$
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31.11
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$
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124,513.78
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$
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10,376.15
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9
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8/1/2014
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$
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32.01
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$
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128,143.56
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$
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10,678.63
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10
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8/1/2015
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$
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32.95
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$
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131,879.59
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$
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10,989.97
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All sums other
than Fixed Rent payable by Tenant to Landlord under this Lease,
including Tenant’s Tax Payment, Tenant’s Operating
Payment, late charges, overtime or excess service charges, damages,
and interest and other costs related to Tenant’s failure to
perform any of its obligations under this Lease.
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Fixed Rent and
Additional Rent, collectively.
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The lesser of
(i) 4% per annum above the then-current Base Rate, and (ii) the
maximum rate permitted by applicable Requirements.
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$293,257.00,
subject to reduction as set forth in Section 27.5.
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TENANT’S ADDRESS FOR
NOTICES
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Until Tenant
commences business operations from the Premises:
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KR Callahan
& Company, LLC
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43 Kennilworth
Avenue
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Kennilworth, IL
60043
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Attn: Kevin
Callahan
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Thereafter:
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KR Callahan
& Company, LLC
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227 West Monroe
Street, Suite 3880
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Chicago,
Illinois 60661
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Attn: Kevin
Callahan
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With a copy
to:
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McDermott Will
& Emery LLP
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227 West Monroe
Street
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Chicago,
Illinois 60606
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Attn: David De
Yoe
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2
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227 Monroe
Street, Inc.
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c/o Tishman
Speyer Properties, L.P.
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227 West Monroe
Street
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Office of the
Building
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Chicago,
Illinois 60661
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Attn: Property
Manager
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Copies
to:
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Tishman Speyer
Properties, L.P.
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45 Rockefeller
Plaza
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New York, New
York 10111
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Attn: Chief
Legal Officer
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and:
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Tishman Speyer
Properties, L.P.
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45 Rockefeller
Plaza
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New York, New
York 10111
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Attn: Chief
Financial Officer
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Bradford Allen
Realty Services
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Tishman Speyer
Properties, L.P. or any other person or entity designated at any
time and from time to time by Landlord as Landlord’s
Agent.
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$320,240.00
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All
capitalized terms used in this Lease without definition are defined
in Exhibit B.
Section 2.1 Lease of Premises. Subject to the terms of
this Lease, Landlord leases to Tenant and Tenant leases from
Landlord the Premises for the Term. In addition, Landlord grants to
Tenant the right to use, on a non-exclusive basis and in common
with others, the Common Areas.
Section 2.2 Commencement Date. Upon the Effective Date,
the terms and provisions hereof shall be fully binding on Landlord
and Tenant prior to the occurrence of the Commencement Date. The
Term of this Lease shall commence on the Commencement Date. Unless
sooner terminated or extended as hereinafter provided, the Term
shall end on the Expiration Date. If Landlord does not tender
possession of the Premises to Tenant on or before the Delivery Date
or any other particular date, for any reason whatsoever, Landlord
shall not be liable for any damage thereby, this Lease shall not be
void or voidable thereby, and the Term shall not commence until the
Commencement Date. Notwithstanding the foregoing, the Commencement
Date shall be extended by one day for each day delivery of the
Premises is
3
delayed past
the Delivery Date. In addition, if the Delivery Date does not occur
on or before November 1, 2006 then Tenant shall have the right
to terminate this Lease effective upon delivery or written notice
thereof to Landlord on or before December 1, 2006, provided
further, however, that Tenant shall not be entitled to so terminate
this Lease if the Delivery Date occurs subsequent to
November 1, 2006 but prior to delivery of such notice by
Tenant. Landlord shall be deemed to have tendered possession of the
Premises to Tenant upon the giving of notice by Landlord to Tenant
stating that the Premises are vacant, in the condition required by
this Lease and available for Tenant’s occupancy. Except as
otherwise provided herein, no failure to tender possession of the
Premises to Tenant on or before the Delivery Date shall affect any
other obligations of Tenant hereunder. There shall be no
postponement of the Commencement Date for any delay in the tender
of possession to Tenant which results from any Tenant
Delay.
Section 2.3 Payment of Rent.
(a) Tenant shall pay to Landlord, without notice or
demand, and without any set-off, counterclaim, abatement or
deduction whatsoever, except as may be expressly set forth in this
Lease, in lawful money of the United States by wire transfer of
funds into any lockbox account or accounts as designated by
Landlord, (i) Fixed Rent in equal monthly installments, in
advance, on the first day of each month during the Term, commencing
on the Commencement Date, and (ii) Additional Rent, at the times
and in the manner set forth in this Lease. Landlord shall provide
the information for such lockbox account(s) pursuant to
instructions separate from this Lease.
(b) Notwithstanding anything contained herein to the
contrary, but provided no Event of Default exists hereunder,
Tenant’s obligations for Fixed Rent, Tenant’s Share of
Operating Expenses and Tenant’s Share of Taxes shall be
abated for a period of ten (10) full calendar months
commencing on the Commencement Date (the “Free Rent
Period”) . In the event that an Event of Default shall
occur prior to or during the Free Rent Period, then any current
abatement shall immediately cease, any further abatement during the
remainder of the Free Rent Period shall be null and void and Tenant
shall thereafter pay full Fixed Rent, Tenant’s Share of
Operating Expenses and Tenant’s Share of Taxes for the
remainder of the Term. In the event the Lease terminates or expires
at any time prior to the expiration of the Free Rent Period, Tenant
shall have no claim to any payment of any unutilized
abatement.
Section 2.4 First Month’s Rent. Tenant shall pay
one month’s Fixed Rent upon the execution of this Lease
(“Advance Rent”) which shall be credited towards
the first month’s Fixed Rent payment.
Tenant shall use
and occupy the Premises for the Permitted Uses and for no other
purpose. Tenant shall not use or occupy or permit the use or
occupancy of any part of the Premises in a manner constituting a
Prohibited Use. If Tenant uses the Premises for a purpose
constituting a Prohibited Use, violating any Requirement, or
causing the Building or Complex to be in violation of any
Requirement, then Tenant shall promptly discontinue such use upon
notice of such violation. Tenant, at its expense, shall procure and
at all times maintain and comply with the terms and conditions of
all licenses and permits required for the lawful conduct of the
Permitted Uses in the Premises.
4
CONDITION OF THE
PREMISES
Tenant has
inspected the Premises and agrees (a) to accept possession of
the Premises in the condition existing on the Delivery Date
“as is”, and (b) that except for Landlord’s
Contribution described in Exhibit C attached hereto,
Landlord has no obligation to perform any work, supply any
materials, incur any expense or make any alterations or
improvements to prepare the Premises for Tenant’s occupancy.
Any work to be performed by Tenant in connection with
Tenant’s initial occupancy of the Premises shall be
hereinafter referred to as the “Initial
Installations” . Tenant’s occupancy of any part of
the Premises shall be conclusive evidence, as against Tenant, that
Tenant has accepted possession of the Premises in its then current
condition and at the time such possession was taken, the Premises,
the Building and Complex were in a good and satisfactory condition
as required by this Lease.
Section 5.1 Tenant’s Alterations.
(a) Tenant shall not make any alterations, additions or
other physical changes in or about the Premises (collectively,
“Alterations” ) without Landlord’s prior
consent, which consent shall not be unreasonably withheld if such
Alterations (i) are non-structural and do not affect any
Building Systems, (ii) affect only the Premises and are not
visible from outside of the Premises, (iii) do not affect the
certificate of occupancy issued for the Building, the Complex or
the Premises, and (iv) do not violate any Requirement. In
addition, Tenant shall have the right to install, on notice to
Landlord but without Landlord’s consent, a waterfall or
fountain in the reception area of the Premises which may be visible
from the common corridors provided, however, that Landlord’s
reasonable prior approval will be required if such water feature
will be connected to a water supply. Notwithstanding the foregoing,
Tenant shall have the right to make decorative alterations, such as
painting, wall coverings, and floor coverings (collectively,
“Decorative Alterations” ) without first
obtaining Landlord’s consent.
(b) Plans and Specifications. Prior to making any
Alterations, Tenant, at its expense, shall (i) submit to
Landlord for its approval, detailed plans and specifications (
“Plans” ) of each proposed Alteration (other
than Decorative Alterations), and with respect to any Alteration
affecting any Building System, evidence that the Alteration has
been designed by, or reviewed and approved by, Landlord’s
designated engineer for the affected Building System,
(ii) obtain all permits, approvals and certificates required
by any Governmental Authorities, (iii) furnish to Landlord
duplicate original policies or certificates of worker’s
compensation (covering all persons to be employed by Tenant, and
Tenant’s contractors and subcontractors in connection with
such Alteration), commercial general liability (including property
damage coverage) and business auto insurance and Builder’s
Risk coverage (as described in Article 11) all in such form,
with such companies, for such periods and in such amounts as
Landlord may reasonably require, naming Landlord, Landlord’s
Agent, any Lessor and any Mortgagee as additional insureds, and
(iv) furnish to Landlord reasonably satisfactory evidence of
Tenant’s ability to complete and to fully pay for such
Alterations (other than Decorative Alterations). Tenant shall give
Landlord not less than 5 Business Days notice prior to performing
any Decorative Alteration, which notice shall contain a description
of such Decorative Alteration.
5
(c) Governmental Approvals. Tenant, at its expense,
shall, as and when required, promptly obtain certificates of
partial and final approval of such Alterations required by any
Governmental Authority and shall furnish Landlord with copies
thereof, together with “as-built” Plans for such
Alterations prepared on an AutoCAD Computer Assisted Drafting and
Design System (or such other system or medium as Landlord may
accept), using naming conventions issued by the American institute
of Architects in June, 1990 (or such other naming conventions as
Landlord may accept) and magnetic computer media of such record
drawings and specifications translated in DFX format or another
format acceptable to Landlord.
Section 5.2 Manner and Quality of Alterations. All
Alterations shall be performed (a) in a good and workmanlike
manner and free from defects, (b) substantially in accordance
with the Plans, and by contractors approved by Landlord,
(c) in compliance with all Requirements, the terms of this
Lease and all construction procedures and regulations then
prescribed by Landlord, and (d) at Tenant’s expense. All
materials and equipment shall be of first quality and at least
equal to the applicable standards for the Building and Complex then
established by Landlord, and no such materials or equipment (other
than Tenant’s Property) shall be subject to any lien or other
encumbrance. Upon completion of any Alterations hereunder, Tenant
shall provide Landlord with copies of all construction contracts,
proof of payment for all labor and materials, and final
unconditional waivers of lien from all contractors, subcontractors,
materialmen, suppliers and others having lien rights with respect
to such Alterations, in the form prescribed by Illinois
law.
Section 5.3 Removal of Tenant’s Property.
Tenant’s Properly shall remain the property of Tenant and
Tenant may remove the same at any time on or before the Expiration
Date. On or prior to the Expiration Date, Tenant shall, unless
otherwise directed by Landlord, at Tenant’s expense, remove
any Specialty Alterations and close up any slab penetrations in the
Premises. Tenant shall repair and restore, in a good and
workmanlike manner, any damage to the Premises, the Building or
Complex caused by Tenant’s removal of any Alterations or
Tenant’s Property or by the closing of any slab penetrations,
and upon default thereof, Tenant shall reimburse Landlord for
Landlord’s cost of repairing and restoring such damage. Any
Specialty Alterations or Tenant’s Property not so removed
shall be deemed abandoned and Landlord may retain or remove and
dispose of same, and repair and restore any damage caused thereby,
at Tenant’s cost and without accountability to Tenant. All
other Alterations shall become Landlord’s property upon
termination of this Lease.
Section 5.4 Mechanic’s Liens. Tenant, at its
expense, shall discharge any lien or charge recorded or filed
against the Real Property in connection with any work done or
claimed to have been done by or on behalf of, or materials
furnished or claimed to have been furnished to, Tenant, within
10 days after Tenant’s receipt of notice thereof by
payment, filing the bond required by law or otherwise in accordance
with law.
Section 5.5 Labor Relations. Tenant shall not employ,
or permit the employment of, any contractor, mechanic or laborer,
or permit any materials to be delivered to or used in the Building
or Complex, if, in Landlord’s sole reasonable judgment, such
employment, delivery or use will interfere or cause any conflict
with other contractors, mechanics or laborers engaged in the
construction, maintenance or operation of the Building or Complex
by Landlord, Tenant or others. If such interference or conflict
occurs, upon Landlord’s request, Tenant shall cause all
contractors, mechanics or laborers causing such interference or
conflict to leave the Building or Complex immediately.
6
Section 5.6 Tenant’s Costs. Tenant shall pay to
Landlord, upon demand, all reasonable out-of-pocket costs actually
incurred by Landlord in connection with Tenant’s Alterations,
including costs incurred in connection with
(a) Landlord’s review of the Alterations (including
review of requests for approval thereof) and (b) the provision
of Building or Complex personnel during the performance of any
Alteration, to operate elevators or otherwise to facilitate
Tenant’s Alterations. In addition, Tenant shall pay to
Landlord, upon demand, an administrative fee in an amount equal to
5% of the total cost of any Alterations. At Landlord’s
request, Tenant shall deliver to Landlord reasonable supporting
documentation evidencing the hard and soft costs incurred by Tenant
in designing and constructing any Alterations.
Section 5.7 Tenant’s Equipment. Tenant shall
provide notice to Landlord prior to moving any heavy machinery,
heavy equipment, freight, bulky matter or fixtures (collectively,
“Equipment”) into or out of the Building or
Complex and shall pay to Landlord any costs actually incurred by
Landlord in connection therewith. If such Equipment requires
special handling, Tenant agrees (a) to employ only persons holding
all necessary licenses to perform such work, (b) all work
performed in connection therewith shall comply with all applicable
Requirements and (c) such work shall be done only during hours
reasonably designated by Landlord.
Section 5.8 Legal Compliance. The approval of Plans, or
consent by Landlord to the making of any Alterations, does not
constitute Landlord’s representation that such Plans or
Alterations comply with any Requirements. Landlord shall not be
liable to Tenant or any other party in connection with
Landlord’s approval of any Plans, or Landlord’s consent
to Tenant’s performing any Alterations. If any Alterations
made by or on behalf of Tenant require Landlord to make any
alterations or improvements to any part of the Building or Complex
in order to comply with any Requirements, Tenant shall pay all
costs and expenses incurred by Landlord in connection with such
alterations or improvements.
Section 5.9 Floor Load. Tenant shall not place a load
upon any floor of the Premises that exceeds 50 pounds per square
foot “live load”. Landlord reserves the right to
reasonably designate the position of all Equipment which Tenant
wishes to place within the Premises, and to place limitations on
the weight thereof.
Section 6.1 Landlord’s Repair and Maintenance.
Landlord shall operate, maintain and, except as provided in
Section 6.2 hereof, make all necessary repairs (both
structural and nonstructural) to (i) the Building Systems and
(ii) the Common Areas, in conformance with standards
applicable to Comparable Buildings.
Section 6.2 Tenant’s Repair and Maintenance.
Tenant shall promptly, at its expense and in compliance with
Article 5 including, without limitation, the requirement that
any repairs affecting any Building System be reviewed and approved
by Landlord’s designated engineer for the affected Building
System, make all nonstructural repairs to the Premises and the
fixtures, equipment and appurtenances therein (including all
electrical, plumbing, heating, ventilation and air conditioning,
sprinklers and life safety systems in and serving the Premises from
the point of connection to the Building Systems) (collectively,
“Tenant Fixtures”) as and when needed to
preserve the Premises in good working order and condition, except
for reasonable wear and tear and damage which is Landlord’s
obligation to repair pursuant to the
7
express
provisions of this Lease. All damage to the Building or Complex or
to any portion thereof, or to any Tenant Fixtures, requiring
structural or nonstructural repair caused by or resulting from any
act, omission, neglect or improper conduct of a Tenant Party or the
moving of Tenant’s Property or Equipment into, within or out
of the Premises by a Tenant Party, shall be repaired at
Tenant’s expense by (i) Tenant, if the required repairs
are nonstructural in nature and do not affect any Building System,
or (ii) Landlord, if the required repairs are structural in
nature, involve replacement of exterior window glass or affect any
Building System. All Tenant repairs shall be of good quality
utilizing new construction materials.
Section 6.3 Reserved Rights. Landlord reserves the
right to make all changes, alterations, additions, improvements,
repairs or replacements to the Building, Complex and Building
Systems, including changing the arrangement or location of
entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets or other Common Areas (collectively, “
Work of Improvement ”), as Landlord deems necessary or
desirable, and to take all materials into the Premises required for
the performance of such Work of Improvement, provided that (a) the
level of any Building or Complex service shall not decrease in any
material respect from the level required of Landlord in this Lease
as a result thereof (other than temporary changes in the level of
such services during the performance of any such Work of
Improvement), (b) Tenant is not deprived of access to the
Premises and (c) Landlord gives Tenant not less than five
(5) days notice prior to commencing any Work of Improvement,
except in the event of an emergency in which case no notice shall
be required. Landlord shall use reasonable efforts to minimize
interference with Tenant’s use and occupancy of the Premises
during the performance of such Work of Improvement. There shall be
no Rent abatement or allowance to Tenant for a diminution of rental
value, no actual or constructive eviction of Tenant, in whole or in
part, no relief from any of Tenant’s other obligations under
this Lease, and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from
Landlord, Tenant or others performing, or failing to perform, any
Work of Improvement. Except in the event of an emergency (in which
event the following provision shall not apply) if the noise
generated during the conduct of (i) any Work of Improvement
performed by any Landlord Party in the Building, or (ii) any
work in Building premises immediately adjacent to or above or below
the Premises by any tenant or other occupant of the Building, is so
disruptive that as a result thereof, Tenant cannot, in the exercise
of its reasonable business judgment, operate its business and such
noise continues for more than one (1) Business Day following
written notice thereof from Tenant to Landlord, then, as of the
(2nd) Business Day, Rent and all other charges payable to Landlord
hereunder shall abate until such time as the noise has ceased, at
which time Tenant shall resume the payments required hereunder.
Further, in the event that any Landlord Party enters into the
Premises under non-emergency situations in order to perform Work of
Improvements and/or repairs thereto or to any other portion of the
Building and, as a result thereof, Tenant cannot, in the exercise
of its reasonable business judgment, operate its business therein,
Rent payable to Landlord hereunder shall abate in proportion to the
degree of interference from the date of such closure until such
time as the condition giving rise to said closure has been
corrected, at which time Tenant shall resume the payments required
hereunder.
TAXES AND OPERATING
EXPENSES
Section 7.1 Definitions. For the purposes of this
Article 7, the following terms shall have the meanings set
forth below:
8
(a) “Assessed Valuation” shall mean the
amount for which the Real Property is assessed by the County
Assessor of Cook County, Illinois for the purpose of imposition of
Taxes.
(b) “Operating Expenses” shall mean the
aggregate of all costs and expenses paid or incurred by or on
behalf of Landlord in connection with the ownership, operation,
repair and maintenance of the Real Property, including the rental
value of Landlord’s Building office and capital improvements
only if such capital improvement either (i) is reasonably
intended to result in a reduction in Operating Expenses (as for
example, a labor-saving improvement), provided the amount included
in Operating Expenses for any calendar year shall not exceed an
amount equal to the savings reasonably anticipated to result from
the installation and operation of such improvement, and/or
(ii) is made during any calendar year in compliance with
Requirements that were not in effect on the Effective Date. Such
capital improvements shall be amortized (with interest at the Base
Rate) on a straight-line basis over such period as Landlord shall
reasonably determine, and the amount included in Operating Expenses
for any calendar year shall be equal to the annual amortized
amount. Operating Expenses shall not include any Excluded Expenses.
If during the Term, Landlord shall not furnish any particular
item(s) of work or service (which would otherwise constitute an
Operating Expense) to any accruable portions of the Building for
any reason, then, for purposes of computing Operating Expenses for
such period, the amount included in Operating Expenses for such
period shall be increased by an amount equal to the costs and
expenses that would have been reasonably incurred by Landlord
during such period if Landlord had furnished such item(s) of work
or service to such portion of the Building. In determining the
amount of Operating Expenses for any calendar year, if less than
100% of the Building rentable area is occupied by tenants at any
time during any calendar year, Operating Expenses shall be
determined for such calendar year to be an amount equal to the like
expenses which would normally be expected to be incurred had such
occupancy been 100% throughout such calendar year.
(c) “Taxes” shall mean (i) all real
estate taxes, assessments, sewer and water rents, rates and charges
and other governmental levies, impositions or charges, whether
general, special, ordinary, extraordinary, foreseen or unforeseen,
which may be assessed, levied or imposed upon all or any part of
the Real Property, and (ii) all expenses (including reasonable
attorneys’ fees and disbursements and experts’ and
other witnesses’ fees) incurred in contesting any of the
foregoing or the Assessed Valuation of the Real Property. Taxes
shall not include (x) interest or penalties incurred by
Landlord as a result of Landlord’s late payment of Taxes, or
(y) franchise, transfer, gift, inheritance, estate or net
income taxes imposed upon Landlord. Whether or not Landlord elects
to pay any assessment in annual installments, (i) all such
assessment shall be deemed to have been so divided and to be
payable in the maximum number of installments permitted by law, and
(ii) there shall be deemed included in Taxes for each calendar
year of the Term the installments of such assessment becoming
payable during each such calendar year, together with interest
payable during such calendar year on such installments and on all
installments thereafter becoming due as provided by law, all as if
such assessment had been so divided. If at any time the methods of
taxation prevailing on the Effective Date shall be altered so that
in lieu of or as an addition to the whole or any part of Taxes,
there shall be assessed, levied or imposed (1) a tax,
assessment, levy, imposition or charge based on the income or rents
received from the Real Property whether or not wholly or partially
as a capital levy or otherwise, (2) a tax, assessment, levy,
imposition or charge measured by or based in whole or in part upon
all or any part of the Real Property and imposed upon Landlord,
(3) a license fee measured by the rents, or (4) any other
tax, assessment, levy, imposition, charge or license fee however
described or imposed, including business
9
improvement
district impositions, then all such taxes, assessments, levies,
impositions, charges or license fees or the part thereof so
measured or based shall be deemed to be Taxes.
Section 7.2 Tenant’s Tax Payment.
(a) Tenant shall pay to Landlord Tenant’s
Proportionate Share of Taxes (“ Tenant’s Tax
Payment ”). For each calendar year (or portion thereof)
during the Term, Landlord shall furnish to Tenant a statement
setting forth Landlord’s reasonable estimate of
Tenant’s Tax Payment for such calendar year (the “
Tax Estimate ”). Tenant shall pay to Landlord on the
1st day of each month during the Term an amount equal to 1/12 of
the Tax Estimate for such calendar year. If Landlord furnishes a
Tax Estimate for a calendar year subsequent to the commencement
thereof, then (i) until the 1 st day of the month following the month in which
the Tax Estimate is furnished to Tenant, Tenant shall pay to
Landlord on the 1 st day of each month an amount equal to the monthly
sum payable by Tenant to Landlord under this Section 7.2
during the last month of the preceding calendar year,
(ii) promptly after the Tax Estimate is furnished to Tenant or
together therewith, Landlord shall give notice to Tenant stating
whether the installments of Tenant’s Tax Estimate previously
made for such calendar year were greater or less than the
installments of Tenant’s Tax Estimate to be made for such
calendar year in accordance with the Tax Estimate, and (x) if
there shall be a deficiency, Tenant shall pay the amount thereof
within 30 days after demand there for, or (y) if there
shall have been an overpayment, Landlord shall credit the amount
thereof against subsequent payments of Rent due hereunder, and
(iii) on the 1 st day of the month following the month in which
the Tax Estimate is furnished to Tenant, and on the 1
st day of each month thereafter throughout the
remainder of such calendar year, Tenant shall pay to Landlord an
amount equal to 1/12 of the Tax Estimate. Landlord shall have the
right, upon not less than 30 days prior written notice to
Tenant, to reasonably adjust the Tax Estimate from time to time
during any calendar year.
(b) As soon as reasonably practicable after Landlord has
determined the Taxes for a calendar year, Landlord shall furnish to
Tenant a statement showing: (i) the amount of actual Taxes for
such calendar year, (ii) the actual amount of Tenant’s
Tax Payment for such calendar year, and (iii) the sums paid by
Tenant under Section 7.2(a). If the Statement shall show that
the sums paid by Tenant under Section 7.2(a) exceeded the
actual amount of Tenant’s Tax Payment for such calendar year,
Landlord shall credit the amount of such excess against subsequent
payments of Rent due hereunder (or, if a sufficient amount of Rent
to absorb the refund is not payable hereunder, Landlord shall pay
the refund to Tenant in cash). If the statement shall show that the
sums so paid by Tenant were less than Tenant’s Tax Payment
for such calendar year, Tenant shall pay the amount of such
deficiency within 30 days after delivery of the Statement to
Tenant.
(c) Only Landlord may institute proceedings to reduce the
Assessed Valuation of the Real Property and the filings of any such
proceeding by Tenant without Landlord’s consent shall
constitute an Event of Default. If Landlord receives a refund of
Taxes for any calendar year during the Term, Landlord shall credit
against subsequent payments of Rent due hereunder (or, if a
sufficient amount of Rent to absorb the refund is not payable
hereunder, Landlord shall pay the refund to Tenant in cash) an
amount equal to Tenant’s Proportionate Share of the refund,
net of any expenses incurred by Landlord in achieving such refund,
which amount shall not exceed Tenant’s Tax Payment paid for
such calendar year. Landlord shall not be obligated to file any
application or institute any proceeding seeking a reduction in
Taxes or the Assessed Valuation. The benefit of any exemption or
abatement relating to all or any part of the Real Property shall
accrue solely to the benefit of Landlord and Taxes shall be
computed without taking into account any such exemption or
abatement.
10
(d) Tenant shall be responsible for any applicable occupancy
or rent tax now in effect or hereafter enacted and, if such tax is
payable by Landlord, Tenant shall promptly pay such amounts to
Landlord, upon Landlord’s demand.
(e) Tenant shall be obligated to make Tenant’s Tax
Payment regardless of whether Tenant may be exempt from the payment
of any Taxes as the result of any reduction, abatement or exemption
from Taxes granted or agreed to by any Governmental Authority, or
by reason of Tenant’s diplomatic or other tax-exempt
status.
Section 7.3 Tenant’s Operating
Payment.
(a) Tenant shall pay to Landlord Tenant’s
Proportionate Share of Operating Expenses (“Tenant’s
Operating Payment”) . For each calendar year (or portion
thereof) during the Term, Landlord shall furnish to Tenant a
statement setting forth Landlord’s reasonable estimate of
Tenant’s Operating Payment for such calendar year (the
“ Expense Estimate ”). Tenant shall pay to
Landlord on the 1 st day of each month during the Term an amount
equal to 1/12 of the Expense Estimate for such calendar year. If
Landlord furnishes an Expense Estimate for a calendar year
subsequent to the commencement thereof, then (i) until the
1 st
day of the month following the month
in which the Expense Estimate is furnished to Tenant, Tenant shall
pay to Landlord on the 1 st day of each month an amount equal to the monthly
sum payable by Tenant to Landlord under this Section 7.3
during the last month of the preceding calendar year,
(ii) promptly after the Expense Estimate is furnished to
Tenant or together therewith, Landlord shall give notice to Tenant
stating whether the installments of Tenant’s Operating
Payment previously made for such calendar year were greater or less
than the installments of Tenant’s Operating Payment to be
made for such calendar year in accordance with the Expense
Estimate, and (x) if there shall be a deficiency, Tenant shall
pay the amount thereof within 30 days after demand therefor,
or (y) if there shall have been an overpayment, Landlord shall
credit the amount thereof against subsequent payments of Rent due
hereunder, and (iii) on the 1 st day of the month following the month in which
the Expense Estimate is furnished to Tenant, and on the 1
st day of each month thereafter throughout the
remainder of such calendar year, Tenant shall pay to Landlord an
amount equal to 1/12 of the Expense Estimate. Landlord shall have
the right, upon not less than 30 days prior written notice to
Tenant, to reasonably adjust the Expense Estimate from time to time
during any calendar year.
(b) As soon as reasonably practicable following the end of
each calendar year, Landlord shall furnish to Tenant a statement
for such calendar year showing: (i) the amount of Operating
Expenses for such calendar year, (ii) the actual amount of
Tenant’s Operating Payment for such calendar year, and
(iii) the same paid by Tenant under Section 7.3(a). If
the statement shows that the sums paid by Tenant under
Section 7.3(a) exceeded the actual amount of Tenant’s
Operating Payment for such calendar year, Landlord shall credit the
amount of such excess against subsequent payments of Rent due
hereunder (or, if a sufficient amount of Rent to absorb the refund
is not payable hereunder, Landlord shall pay the refund to Tenant
in cash). If the statement shows that the sums so paid by Tenant
were less than Tenant’s Operating Payment for such calendar
year, Tenant shall pay the amount of such deficiency within
30 days after delivery of the statement to Tenant.
Section 7.4 Non-Waiver; Disputes.
(a) Landlord’s failure to render any statement on a
timely basis with respect to any calendar year shall not prejudice
Landlord’s right to thereafter render a statement
with
11
respect to such
calendar year or any subsequent calendar year, nor shall the
rendering of a statement prejudice Landlord’s right to
thereafter render a corrected statement for that calendar
year.
(b) Each statement sent to Tenant shall be conclusively
binding upon Tenant unless Tenant (i) pays to Landlord when due the
amount set forth in such statement, without prejudice to
Tenant’s right to dispute such statement, and
(ii) within 90 days after such statement is sent, sends a
notice to Landlord objecting to such statement and specifying the
reasons therefor. Tenant agrees that Tenant will not employ, in
connection with any dispute under this Lease, any person or entity
who is to be compensated, in whole or in part, on a contingency fee
basis. If the parties are unable to resolve any dispute as to the
correctness of such statement within 30 days following such
notice of objection, either party may refer the issues raised to
one of the nationally recognized public accounting firms selected
by Landlord (but not employed by Landlord) and reasonably
acceptable to Tenant, and the decision of such accountants shall be
conclusively binding upon Landlord and Tenant. In connection
therewith, Tenant and such accountants shall execute and deliver to
Landlord a confidentiality agreement, in form and substance
reasonably satisfactory to Landlord, whereby such parties agree not
to disclose to any third party any of the information obtained in
connection with such review. Tenant shall pay the fees and expenses
relating to such procedure, unless such accountants determine that
Landlord overstated Operating Expenses by more than 5% for such
calendar year, in which case Landlord shall pay such fees and
expenses. Except as provided in this Section 7.4, Tenant shall
have no right whatsoever to dispute, by judicial proceeding or
otherwise, the accuracy of any statement.
Section 7.5 Proration. If the Commencement Date is not
January 1, Tenant’s Tax Payment and Tenant’s
Operating Payment for the calendar year in which the Commencement
Date occurs shall be apportioned on the basis of the number of days
in the year from the Commencement Date to the following
December 31. If the Expiration Date occurs on a date other
than December 31 st ,
Tenant’s Tax Payment and Tenant’s Operating Payment for
the calendar year in which such Expiration Date occurs shall be
apportioned on the basis of the number of days in the period from
January 1 st
to the Expiration Date. Upon the
expiration or earlier termination of this Lease, any Additional
Rent under this Article 7 shall be adjusted or paid within
30 days after submission of the statement for the last
calendar year of the Term. Landlord shall have the right, from time
to time, to equitably allocate some or all of the Taxes and/or
Operating Expenses for the Real Property among different portions
or occupants of the Real Property (the “Cost
Pools”), in Landlord’s reasonable discretion. Such
Cost Pools may include, but shall not be limited to, the office
space tenants of the Real Property and the retail space tenants of
the Real Property. The Taxes and/or Operating Expenses allocable to
each such Cost Pool shall be allocated to such Cost Pool and
charged to the tenants within such Cost Pool in an equitable
manner.
Section 7.6 No Reduction in Rent. In no event shall any
decrease in Operating Expenses or Taxes result in a reduction in
the Fixed Rent payable hereunder.
Section 7.7 Allocation Within the Complex. Landlord
shall separately determine Taxes and Expenses for the Real Property
and the adjoining property within the Complex. If any Taxes or
Expenses are imposed or incurred with respect to both the Real
Property and such adjoining property (including the cost of a
shared management office), Landlord shall allocate the same in
accordance with sound accounting and management practices and any
instruments or agreements pertaining to the sharing or allocation
of the same.
12
Section 8.1 Compliance with Requirements.
(a) Tenant’s Compliance. Tenant, at its expense,
shall comply with all Requirements applicable to the Premises
and/or Tenant’s use or occupancy thereof; provided, however,
that Tenant shall not be obligated to comply with any Requirements
requiring any structural alterations to the Building or Complex
unless the application of such Requirements arises from
(i) the specific manner and/or nature of Tenant’s use or
occupancy of the Premises, as distinct from general office use,
(ii) Alterations made by Tenant, or (iii) a breach by
Tenant of any provisions of this Lease. Any repairs or alterations
required for compliance with applicable Requirements shall be made
at Tenant’s expense (1) by Tenant in compliance with
Article 5 if such repairs or alterations are nonstructural and
do not affect any Building System, and to the extent such repairs
or alterations do not affect areas outside the Premises, or
(2) by Landlord if such repairs or alterations are structural
or affect any Building System, or to the extent such repairs or
alterations affect areas outside the Premises. If Tenant obtains
knowledge of any failure to comply with any Requirements applicable
to the Premises, Tenant shall give Landlord prompt notice
thereof.
(b) Hazardous Materials. Tenant shall not cause or
permit (i) any Hazardous Materials to be brought into the
Building or Complex, (ii) the storage or use of Hazardous
Materials in or about the Building, Complex or Premises (subject to
the second sentence of this Section 8.1(b)), or (iii) the
escape, disposal or release of any Hazardous Materials within or in
the vicinity of the Building or Complex. Nothing herein shall be
deemed to prevent Tenant’s use of any Hazardous Materials
customarily used in the ordinary course of office work, provided
such use is in accordance with all Requirements. Tenant shall be
responsible, at its expense, for all matters directly or indirectly
based on, or arising or resulting from the presence of Hazardous
Materials in the Building or Complex which is caused or permitted
by a Tenant Party. Tenant shall provide to Landlord copies of all
communications received by Tenant with respect to any Requirements
relating to Hazardous Materials, and/or any claims made in
connection therewith. Landlord or its agents may perform
environmental inspections of the Premises at any time.
(c) Landlord’s Compliance. Landlord shall comply
with (or cause to be complied with) all Requirements applicable to
the Building or Complex which are not the obligation of Tenant, to
the extent that non-compliance would materially impair
Tenant’s use and occupancy of the Premises for the Permitted
Uses. Landlord represents to Tenant that Landlord has not received
any written notice with respect to (i) the existence of any
Hazardous Materials in the Premises in violation of any
Requirements or (ii) the Premises’ failure to comply, in
any material respect, with any Requirements. Notwithstanding the
foregoing, in the event of a breach of the foregoing representation
by Landlord, Tenant’s sole remedy shall be to require
Landlord to remedy the cause of such breach.
(d) Landlord’s Insurance. Tenant shall not cause
or permit any action or condition that would (i) invalidate or
conflict with Landlord’s insurance policies,
(ii) violate applicable rules, regulations and guidelines of
the Fire Department, Fire Insurance Rating Organization or any
other authority having jurisdiction over the Building or Complex,
(iii) cause an increase in the premiums of insurance for the
Building or Complex over that payable with respect to Comparable
Buildings, or (iv) result in Landlord’s insurance
companies’ refusing to
13
insure the
Building, Complex or any property therein in amounts and against
risks as reasonably determined by Landlord. If insurance premiums
increase as a result of Tenant’s failure to comply with the
provisions of this Section 8.1, Tenant shall promptly cure
such failure and shall reimburse Landlord for the increased
insurance premiums paid by Landlord as a result of such failure by
Tenant.
Section 8.2 Fire and Life Safety. As of the date of
this Lease, the sprinkler, fire-alarm and life-safety system in the
Premises are in compliance with all Requirements. As of the date of
this Lease, it shall be the Tenant’s responsibility, at
Tenant’s sole cost, to comply with all Requirements and the
other obligations set forth in this Section 8.2. Tenant shall
maintain in good order and repair the sprinkler, fire-alarm and
life-safety system in the Premises in accordance with this Lease
including, without limitation, the provisions of Section 6.2
respecting any repairs affecting any Building System, the Rules and
Regulations and all Requirements. If the Fire Insurance Rating
Organization or any Governmental Authority or any of
Landlord’s insurers requires or recommends any modifications
and/or alterations be made or any additional equipment be supplied
in connection with the sprinkler system or fire alarm and
life-safety system serving the Building or Complex by reason of
Tenant’s business, any Alterations performed by Tenant or the
location of the partitions, Tenant’s Property, or other
contents of the Premises, Landlord (to the extent outside of the
Premises) or Tenant (to the extent within the Premises) shall make
such modifications and/or Alterations, and supply such additional
equipment, in either case at Tenant’s expense.
Section 9.1 Subordination and
Attornment.
(a) Provided that the Mortgagee or Lessor under any
Mortgages or Superior Leases enters into a Subordination,
Non-Disturbance and Attornment Agreement substantially in the form
of Exhibit H attached hereto and made a part hereof, this
Lease shall be subject and subordinate to all Mortgages and
Superior Leases and, at the request of such Mortgagee or Lessor,
Tenant shall attorn to any Mortgagee or Lessor, its successors in
interest or any purchaser in a foreclosure sale.
(b) If a Lessor or Mortgagee or any other person or entity
shall succeed to the rights of Landlord under this Lease, whether
through possession or foreclosure action or the delivery of a new
lease or deed, then at the request of the successor landlord and
upon such successor landlord’s written agreement to accept
Tenant’s attornment and to recognize Tenant’s interest
under this Lease, Tenant shall be deemed to have attorned to and
recognized such successor landlord as Landlord under this Lease.
The provisions of this Section 9.1 are self-operative and
require no further instruments to give effect hereto; provided,
however, that Tenant shall promptly execute and deliver any
instrument that such successor landlord may reasonably request
(i) evidencing such attornment, and (ii) setting forth
the terms and conditions of Tenant’s tenancy. Upon such
attornment this Lease shall continue in full force and effect as a
direct lease between such successor landlord and Tenant upon all of
the terms, conditions and covenants set forth in this Lease except
that such successor landlord shall not be
(i) liable for any act or omission of Landlord (except
to the extent such act or omission continues beyond the date when
such successor landlord succeeds to Landlord’s interest and
Tenant gives notice of such act or omission);
14
(ii) subject to any defense, claim, counterclaim,
set-off or offset which Tenant may have against
Landlord;
(iii) bound by any prepayment of more than one
month’s Rent to any prior landlord;
(iv) bound by any obligation to make any payment to
Tenant which was required to be made prior to the time such
successor landlord succeeded to Landlord’s
interest;
(v) bound by any obligation to perform any work or to
make improvements to the Premises except for (x) repairs and
maintenance required to be made by Landlord under this Lease, and
(y) repairs to the Premises as a result of damage by fire or other
casualty or a partial condemnation pursuant to the provisions of
this Lease, but only to the extent that such repairs can reasonably
be made from the net proceeds of any insurance or condemnation
awards, respectively, actually made available to such successor
landlord;
(vi) bound by any modification, amendment or renewal
of this Lease made without the consent of such successor landlord
or any previous Lessor or Mortgagee under the Superior Lease or
Mortgage in effect at the time of such modification, amendment or
renewal;
(vii) liable for the repayment of any security deposit
or surrender of any letter of credit, unless and until such
security deposit actually is paid or such letter of credit is
actually delivered to such successor landlord; or
(viii) liable for the payment of any unfunded tenant
improvement allowance, refurbishment allowance or similar
obligation.
(c) Tenant shall from time to time within 20 days of
request from Landlord execute and deliver any documents or
instruments that may be reasonably required by any Mortgagee or
Lessor to confirm any subordination.
Section 9.2 Mortgage or Superior Lease Defaults. Any
Mortgagee may elect that this Lease shall have priority over the
Mortgage and, upon notification to Tenant by such Mortgagee, this
Lease shall be deemed to have priority over such Mortgage,
regardless of the date of this Lease.
Section 9.3 Tenant’s Termination Right. As long
as any Superior Lease or Mortgage exists, Tenant shall not seek to
terminate this Lease by reason of any act or omission of Landlord
until (a) Tenant shall have given notice of such act or
omission to all Lessors and/or Mortgagees, and (b) a
reasonable period of time (but not longer than any applicable
period for cure provided to Landlord hereunder plus sixty
(60) days) shall have elapsed following the giving of notice
of such default and the expiration of any applicable notice or
grace periods (unless such act or omission is not capable of being
remedied within a reasonable period of time), during which period
such Lessors and/or Mortgagees shall have the right, but not the
obligation, to remedy such act or omission and thereafter
diligently proceed to so remedy such act or omission. If any Lessor
or Mortgagee elects to remedy such act or omission of Landlord,
Tenant shall not seek to terminate this Lease so long as such
Lessor or Mortgagee is proceeding with reasonable diligence to
affect such remedy.
15
Section 9.4 Provisions. The provisions of this
Article 9 shall (a) inure to the benefit of Landlord, any
future owner of the Building, Complex or the Real Property, Lessor
or Mortgagee and any sublessor thereof and (b) apply
notwithstanding that, as a matter of law, this Lease may terminate
upon the termination of any such Superior Lease or
Mortgage;
Section 9.5 Future Condominium Declaration. This Lease
and Tenant’s rights hereunder are and will be subject and
subordinate to any condominium declaration, by-laws and other
instruments (collectively, the “ Declaration ”)
which may be recorded regardless of the reason therefor, in order
to subject the Building or Complex to a condominium form of
ownership pursuant to the Illinois Condominium Property Act or any
successor Requirement, provided that the Declaration does not by
its terms increase the Rent, change Tenant’s non-Rent
obligations or adversely affect Tenant’s rights under this
Lease. At Landlord’s request, and subject to the foregoing
proviso, Tenant will execute and deliver to Landlord an amendment
of this Lease confirming such subordination and modifying this
Lease to conform to such condominium regime.
Section 10.1 Electricity. Landlord shall not furnish
electricity, but shall permit Tenant to make direct arrangements to
obtain electricity from Commonwealth Edison Company or another
utility approved by Landlord, and shall permit Landlord’s
electric cables, circuits, riser lines, feeders and related
Building Systems to be used for such purpose, but only to the
extent that: (i) all such Building Systems are suitable, and
the safe and lawful capacity thereof is not exceeded, (ii)
sufficient capacity remains at all times for other existing and
future tenants, as determined in Landlord’s discretion, and
(iii) Tenant uses only normal quantities and types of office
equipment and lighting in the Premises typical of average office
use. Tenant shall make all arrangements for metering and direct
payment for such electricity with such utility. Tenant shall pay
for all electricity consumed in the Premises when due (including
electricity during janitorial or other service, during any
alterations or repairs, and for any special HVAC and lighting
equipment serving the Premises). Landlord shall exclude such
electricity costs from Expenses (except Landlord may elect from
time to time to include electricity for separately metered building
standard overhead lights in Expenses, in lieu of requiring payment
by Tenant hereunder). Tenant’s connections, and installation
of new cables, circuits, feeders, meters or other equipment, shall
be at Tenant’s sole cost, and shall be subject to
Landlord’s prior written approval and the other provisions of
Article 5 respecting Alterations, and the Rules and
Regulations respecting access to the utility closets.
Section 10.2 Excess Electricity. Tenant shall at all
times comply with the rules and regulations of the utility company
supplying electricity to the Building or Complex. Tenant shall not
use any electrical equipment, which, in Landlord’s reasonable
judgment, would exceed the capacity of the electrical equipment
serving the Premises. If Landlord determines that Tenant’s
electrical requirements necessitate installation of any additional
risers, feeders or other electrical distribution equipment
(collectively, “ Electrical Equipment ”), or if
Tenant provides Landlord with evidence reasonably satisfactory to
Landlord of Tenant’s need for excess electricity and requests
that additional Electrical Equipment be installed, Landlord shall,
at Tenant’s expense, install such additional Electrical
Equipment, provided that Landlord, in its sole judgment, determines
that (a) such installation is practicable and necessary,
(b) such additional Electrical Equipment is permissible under
applicable Requirements, and (c) the installation of such
Electrical Equipment will not cause permanent damage to the
Building, Complex or the
16
Premises, cause
or create a hazardous condition, entail excessive or unreasonable
alterations, interfere with or limit electrical usage by other
tenants or occupants of the Building or Complex, or exceed the
limits of the switchgear or other facilities serving the Building
or Complex, or require power in excess of that available from the
utility company serving the Building or Complex.
Section 10.3 Elevators. Landlord shall provide
passenger elevator service to the Premises 24 hours per day,
7 days per week; provided, however. Landlord may limit
passenger elevator service during times other than Ordinary
Business Hours. Landlord shall provide at least one freight
elevator serving the Premises, available upon Tenant’s prior
request, on a nonexclusive “first come, first serve”
basis with other Building or Complex tenants, on all Business Days
from 7:00 a.m. to 3:30 p.m., which hours of operation are subject
to change.
Section 10.4 Heating. Ventilation and Air Conditioning.
Landlord shall furnish to the Premises heating, ventilation and
air-conditioning (“ HVAC ”) in accordance with
the Design Standards set forth in Exhibit D during
Ordinary Business Hours. Landlord shall have access to all
air-cooling, fan, ventilating and machine rooms and electrical
closets and all other mechanical installations of Landlord
(collectively, “ Mechanical Installations ”),
and Tenant shall not construct partitions or other obstructions
which may interfere with Landlord’s access thereto or the
moving of Landlord’s equipment to and from the Mechanical
Installations. No Tenant Party shall at any time enter the
Mechanical Installations or tamper with, adjust, or otherwise
affect such Mechanical Installations. Landlord shall not be
responsible if the HVAC System fails to provide cooled or heated
air, as the case may be, to the Premises in accordance with the
Design Standards by reason of (i) any equipment installed by,
for or on behalf of Tenant, which has an electrical load in excess
of the average electrical load and human occupancy factors for the
HVAC System as designed, or (ii) any rearrangement of
partitioning or other Alterations made or performed by, for or on
behalf of Tenant. Tenant shall install, if missing, blinds or
shades on all windows, which blinds and shades shall be subject to
Landlord’s reasonable approval, and shall keep operable
windows in the Premises closed, and lower the blinds when necessary
because of the sun’s position, whenever the HVAC System is in
operation or as and when required by any Requirement. Tenant shall
cooperate with Landlord and shall abide by the rules and
regulations which Landlord may reasonably prescribe for the proper
functioning and protection of the HVAC System.
Section 10.5 Overtime Freight Elevators and HVAC. The
Fixed Rent does not include any charge to Tenant for the furnishing
of any freight elevator service or HVAC to the Premises during any
periods other than as set forth in Section 10.3 and
Section 10.4 (“ Overtime Periods ”). If
Tenant desires any such services during Overtime Periods, Tenant
shall deliver notice to the Building or Complex office requesting
such services at least 24 hours prior to the time Tenant requests
such services to be provided; provided, however, that Landlord
shall use reasonable efforts to arrange such service on such
shorter notice as Tenant shall provide. If Landlord furnishes
freight elevator or HVAC service during Overtime Periods, Tenant
shall pay to Landlord the cost thereof at the established rates
from time to time for such services in the Building or Complex,
plus a fee equal to fifteen percent (15%) of such established
rates, along with Landlord’s reasonable out-of-pocket costs
for architects, engineers, consultants and other parties relating
to such extra utilities or services, plus a fee equal to fifteen
percent (15%) of such out-of-pocket costs.
Section 10.6 Cleaning. Landlord shall cause the
Premises (excluding any portions thereof used for the storage,
preparation, service or consumption of food or beverages, as an
exhibition area or classroom, for storage, as a shipping room, mail
room or similar purposes, for
17
private
bathrooms, showers or exercise facilities, as a trading floor, or
primarily for operation of computer, data processing, reproduction,
duplicating or similar equipment) to be cleaned, substantially in
accordance with the standards set forth in Exhibit E .
Any areas of the Premises which Landlord is not required to clean
hereunder or which require additional cleaning shall be cleaned, at
Tenant’s expense, by Landlord’s cleaning contractor, at
rates which shall be competitive with rates of other cleaning
contractors providing comparable services to Comparable Buildings.
Landlord’s cleaning contractor and its employees shall have
access to the Premises at all times except between 8;00 a.m. and
5:30 p.m. on weekdays which are not Observed Holidays.
Section 10.7 Water. Landlord shall provide water in the
core lavatories on each floor of the Building. If Tenant requires
water for any additional purposes, Tenant’ shall pay for the
cost of bringing water to the Premises and Landlord may install a
meter to measure the water. Tenant shall pay the cost of such
installation, and for all maintenance, repairs and replacements
thereto, and for the reasonable charges of Landlord for the water
consumed.
Section 10.8 Refuse Removal. Landlord shall provide
refuse removal services at the Building for ordinary office refuse
and rubbish. Tenant shall pay to Landlord, Landlord’s
reasonable charge for such removal to the extent that the refuse
generated by Tenant exceeds the refuse customarily generated by
general office tenants. Tenant shall not dispose of any refuse in
the Common Areas, and if Tenant does so, Tenant shall be liable for
Landlord’s reasonable charge for such removal.
Section 10.9 Directory. The lobby shall contain a
directory wherein the Building’s tenants shall be listed.
Tenant shall be entitled to a proportionate share of such listings,
based on the rentable square footage of the Premises.
Section 10.10 Telecommunications. If Tenant requests
that Landlord grant access to the Building or Complex to a
telecommunications service provider designated by Tenant for
purposes of providing telecommunications services to Tenant,
Landlord shall use its good faith efforts to respond to such
request within 7 days. Tenant acknowledges that nothing set
forth in this Section 10.10 shall impose any affirmative obligation
on Landlord to grant such request and that Landlord, in Its sole
discretion, shall have the right to determine which
telecommunications service providers shall have access to Building
or Complex facilities.
Section 10.11 Service interruptions. Landlord reserves
the right to suspend any service when necessary, by reason of
Unavoidable Delays, accidents or emergencies, or for any Work of
Improvement which, in Landlord’s reasonable judgment, is
necessary or appropriate, until such Unavoidable Delay, accident or
emergency shall cease or such Work of Improvement is completed and,
except as expressly provided in Section 6.3 above, or in this
Section 10.11, Landlord shall not be liable for any
interruption, curtailment or failure to supply services. Landlord
shall use reasonable efforts to minimize interference with
Tenant’s use and occupancy of the Premises as a result of any
such interruption, curtailment or failure of or defect in such
service, or change in the supply, character and/or quantity of,
electrical service, and to restore any such services, remedy such
situation and minimize any interference with Tenant’s
business. The exercise of any such right or the occurrence of any
such failure by Landlord shall not constitute an actual or
constructive eviction, in whole or in part, entitle Tenant to any
compensation, abatement or diminution of Rent, relieve Tenant from
any of its obligations under this Lease, or impose any liability
upon Landlord or any Indemnified Party by reason of inconvenience
to Tenant, or interruption of Tenant’s business, or
otherwise. Except as otherwise expressly provided herein, Landlord
shall not be liable in any way to Tenant for any
18
failure, defect
or interruption of, or change in the supply, character and/or
quantity of, electric service furnished to the Premises for any
reason except if attributable to the gross negligence or willful
misconduct of Landlord or any of the Landlord Parties. If any
service or utility to the Premises should become unavailable
(i) due to the negligence or willful misconduct of Landlord or
any of the Landlord Parties for a period in excess of twenty-four
(24) consecutive hours or (ii) for any other reason for a
period in excess of six (6) consecutive Business Days, and
Tenant, in its reasonable business judgment, elects to close the
Premises as a result thereof, all Rent and other charges shall
abate from the commencement of said unavailability of such service
or utility until such time as said service or utility is restored
to the Premises and Tenant is reasonably able to operate its
business within the Premises.
Section 10.12 Additional Services. Any service
requested of Landlord by Tenant (a) not specifically required
to be provided by Landlord as set forth in this Lease or
(b) beyond the regular scope or hours of such service required
to be provided by Landlord as set forth in this Lease shall be
provided by Landlord at the established rates from time to time for
such services in the Building or Complex, plus a fee equal to
fifteen percent (15%) of such established rates, along with
Landlord’s out-of-pocket costs for architects, engineers,
consultants and other parties relating to such extra services, plus
a fee equal to fifteen percent (15%) of such out-of-pocket
costs.
INSURANCE; PROPERTY LOSS OR
DAMAGE
Section 11.1 Tenant’s
Insurance.
(a) Tenant, at its expense, shall obtain and keep in full
force and effect during the Term:
(i) a policy of commercial general liability insurance
on an occurrence basis against claims for personal injury, bodily
injury, death and/or property damage occurring in or about the
Building, under which Tenant is named as the insured and Landlord,
Landlord’s Agent and any Lessors and any Mortgagees whose
names have been furnished to Tenant are named as additional
insureds (the “Insured Parties”). Such insurance
shall provide primary coverage without contribution from any other
insurance carried by or for the benefit of the Insured Parties, and
Tenant shall obtain blanket broad-form contractual liability
coverage to insure its indemnity obligations set forth in
Article 25. The minimum limits of liability applying
exclusively to the Premises shall be a combined single limit with
respect to each occurrence in an amount of not less than
$3,000,000; provided, however, that Landlord shall retain the right
to require Tenant to increase such coverage from time to time to
that amount of insurance which in Landlord’s reasonable
judgment is then being customarily required by landlords for
similar office space in Comparable Buildings. The self insured
retention for such policy shall not exceed $10,000. Tenant may
satisfy the limits of liability required herein with a combination
of umbrella and/or excess policies of insurance, provided that such
policies comply with all of the provisions hereof (including,
without limitation, with respect to scope of coverage and naming of
the Insured Parties);
(ii) insurance against loss or damage by fire, and
such other risks and hazards as are insurable under then available
standard forms of “Special Form Causes of Loss” or
“All Risk” property insurance policies, insuring
Tenant’s Property and all Alterations and improvements to the
Premises (including the Initial Installations) to the extent such
Alterations
19
and
improvements exceed the cost of the improvements typically
performed in connection with the initial occupancy of tenants in
the Building (“ Building Standard Installations
”), for the full insurable value thereof or replacement cost
thereof, having a deductible amount, if any, not in excess of
$25,000;
(iii) during the performance of any Alteration, until
completion thereof, Builder’s Risk insurance on an “all
risk” basis and on a completed value form including a
Permission to Complete and Occupy endorsement, for full replacement
value covering the interest of Landlord and Tenant (and their
respective contractors and subcontractors) in all work incorporated
in the Building and all materials and equipment in or about the
Premises;
(iv) Workers’ Compensation Insurance, as
required by law;
(v) Business Interruption Insurance covering a minimum
of one year of anticipated gross income;
(vi) if the Building, Complex or Real Property
includes a parking garage or surface parking lot that is utilized
by Tenant, Commercial Automobile Liability Insurance for any owned,
non-owned or hired vehicles with a combined single limit with
respect to each occurrence in an amount of not less than
$1,000,000; and
(vii) such other insurance in such amounts as the
insured Parties may reasonably require from time to
time.
(b) All insurance required to be carried by Tenant
(i) shall contain a provision that (x) no act or omission
of Tenant shall affect or limit the obligation of the insurance
company to pay the amount of any loss sustained, and (y) shall
be noncancellable and/or no material change in coverage shall be
made thereto unless the Insured Parties receive 30 days’
prior notice of the same, by certified mail, return receipt
requested, and (ii) shall be effected under valid and
enforceable policies issued by reputable insurers admitted to do
business in the State of Illinois and rated in Best’s
Insurance Guide, or any successor thereto as having a
“Best’s Rating” of “A-” or better and
a “Financial Size Category” of at least “X”
or better, or, if such ratings are not then in effect, the
equivalent thereof or such other financial rating as Landlord may
at any time consider appropriate.
(c) On or prior to the Commencement Date, Tenant shall
deliver to Landlord appropriate policies of insurance, including
evidence of waivers of subrogation required to be carried pursuant
to this Article 11 and that the Insured Parties are named as
additional insured’s (the “ Policies ”),
Evidence of each renewal or replacement of the Policies shall be
delivered by Tenant to Landlord at least 10 days prior to the
expiration of the Policies. In lieu of the Policies, Tenant may
deliver to Landlord a certification from Tenant’s insurance
company, on the form currently designated “Accord 27”
(Evidence of Property Insurance) and “Accord 25-S”
(Certificate of Liability Insurance), or the equivalent, provided
that attached thereto is an endorsement to Tenant’s
commercial general liability policy naming the Insured Parties as
additional insured’s, which endorsement is at least as broad
as ISO policy form “CG 20 11 Additional Insured - Managers or
Lessors of Premises” (pre-1999 edition) and which endorsement
expressly provides coverage for the negligence of the additional
insured’s, which certification shall be binding on
Tenant’s insurance company, and which shall expressly provide
that such certification (i) conveys to the Insured Parties all
the rights and privileges afforded under the Policies as primary
insurance, and (ii) contains an unconditional obligation of the
insurance company to advise all Insured Parties in writing by
certified mail, return receipt requested, at
20
least
30 days in advance of any termination or change to the
Policies that would affect the interest of any of the Insured
Parties.
Section 11.2 Waiver of Subrogation. Landlord and Tenant
shall each procure an appropriate clause in or endorsement to any
property insurance covering the Real Property and personal
property, fixtures and equipment located therein, wherein the
insurer waives subrogation or consents to a waiver of right of
recovery, and Landlord and Tenant agree not to make any claim
against, or seek to recover from, the other for any loss or damage
to its property or the property of others resulting from fire or
other hazards. Tenant acknowledges that Landlord shall not carry
insurance on, and shall not be responsible for, (i) damage to
any Above Building Standard Installations, (ii) Tenant’s
Property, and (iii) any loss suffered by Tenant due to interruption
of Tenant’s business.
Section 11.3 Restoration.
(a) If the Premises are damaged by fire or other casualty,
or if the Building is damaged such that Tenant is deprived of
reasonable access to the Premises, the damage shall be repaired by
Landlord, to substantially the condition of the Premises prior to
the damage, subject to the provisions of any Mortgage or Superior
Lease, but Landlord shall have no obligation to repair or restore
(i) Tenant’s Property or (ii) except as provided in
Section 11.3(b), any Alterations or improvements to the
Premises to the extent such Alterations or improvements exceed
Building Standard installations (“ Above Building Standard
Installations ”). So long as Tenant is not in default
beyond applicable grace or notice provisions in the payment or
performance of its obligations under this Section 11.3, and
provided Tenant timely delivers to Landlord either Tenant’s
Restoration Payment (as hereinafter defined) or the Restoration
Security (as hereinafter defined) or Tenant expressly waives any
obligation of Landlord to repair or restore any of Tenant’s
Above Building Standard Installations, then until the restoration
of the Premises is Substantially Completed or would have been
Substantially Completed but for Tenant Delay, Fixed Rent,
Tenant’s Tax Payment and Tenant’s Operating Payment
shall be reduced in the proportion by which the area of the part of
the Premises which is not usable (or accessible ) and is not used
by Tenant bears to the total area of the Premises.
(b) As a condition precedent to Landlord’s obligation
to repair or restore any Above Building Standard Installations,
Tenant shall (i) pay to Landlord upon demand a sum (“
Tenant’s Restoration Payment ”) equal to the
amount, if any, by which (A) the cost, as estimated by a
reputable independent contractor designated by Landlord, of
repairing and restoring all Alterations and Initial Installations
in the Premises to their condition prior to the damage, exceeds
(B) the cost of restoring the Premises with Building Standard
Installations, or (ii) furnish to Landlord security (the
“ Restoration Security ”) in form and amount
reasonably acceptable to Landlord to secure Tenant’s
obligation to pay all costs in excess of restoring the Premises
with Building Standard Installations. If Tenant shall fail to
deliver to Landlord either (1) Tenant’s Restoration
Payment or the Restoration Security, as applicable, or (2) a
waiver by Tenant, in form satisfactory to Landlord, of all of
Landlord’s obligations to repair or restore any of the Above
Building Standard Installations, in either case within 30 days
after Landlord’s demand therefor, Landlord shall have no
obligation to restore any Above Building Standard Installations and
Tenant’s abatement of Fixed Rent, Tenant’s Tax Payment
and Tenant’s Operating Payment shall cease when the
restoration of the Premises (other than any Above Building Standard
Installations) is Substantially Complete.
Section 11.4 Landlord’s Termination Right.
Notwithstanding anything to the contrary contained in
Section 11.3, (a) if the Premises are totally damaged or
are rendered wholly
21
untenantable,
(b) if the Building shall be so damaged that, in
Landlord’s reasonable opinion, substantial alteration,
demolition, or reconstruction of the Building shall be required
(whether or not the Premises are so damaged or rendered
untenantable), (c) if any Mortgagee shall require that the
insurance proceeds or any portion thereof be used to retire the
Mortgage debt or any Lessor shall terminate the Superior Lease, as
the case may be, or (d) if the damage is not fully covered,
except for deductible amounts, by Landlord’s insurance
policies, then in any of such events, Landlord may, not later than
60 days following the date of the damage, terminate this Lease
by notice to Tenant. If this Lease is so terminated, (a) the
Term shall expire upon the 30th day after such notice is given,
(b) Tenant shall vacate the Premises and surrender the same to
Landlord, (c) Tenant’s liability for Rent shall cease as
of the date of the damage, and (d) any prepaid Rent for any
period after the date of the damage shall be refunded by Landlord
to Tenant.
Section 11.5 Tenant’s Termination Right. If the
Premises are damaged or if the Building shall be so damaged that
Tenant is deprived of reasonable access to the Premises, and if
Landlord does not elect to terminate the Lease pursuant to
Section 11.4, Landlord shall, within 60 days following
the date of the damage, cause a contractor or architect selected by
Landlord to give notice (the “Restoration
Notice”) to Tenant of the date by which such contractor
or architect estimates the restoration of the Premises (excluding
any Above Building Standard Installations) shall be Substantially
Completed. If (i) such date, as set forth in the Restoration
Notice, is more than 12 months from the date of such damage,
then Tenant shall have the right to terminate this Lease by giving
notice to Landlord not later than 30 days following delivery
of the Restoration Notice to Tenant or (ii) Landlord fails to
Substantially Complete the repair or restoration of the Premises
within 120% of the number of days set forth in the Restoration
Notice, then Tenant, upon not less than 30 days’ prior
written notice, may elect to terminate this Lease (either such
notice in (i) or (ii) a “ Termination Notice
”). If Tenant delivers a Termination Notice, this Lease shall
be deemed to have terminated as of the date of the giving of the
Termination Notice, in the manner set forth in the second sentence
of Section 11.4; provided, however, than in the case of a
Termination Notice delivered pursuant to clause (ii) above,
such Termination Notice shall be null and void if Landlord
Substantially Completes such repair or restoration within such
30-day period.
Section 11.6 Final 18 Months. Notwithstanding anything
to the contrary in this Article 11, if any damage during the
final 18 months of the Term renders the Premises wholly
untenantable, either Landlord or Tenant may terminate this Lease by
notice to the other party within 30 days after the occurrence
of such damage and this Lease shall expire on the 30th day after
the date of such notice. For purposes of this Section 11.6,
the Premises shall be deemed wholly untenantable if Tenant shall be
precluded from using more than 50% of the Premises for the conduct
of its business and Tenant’s inability to so use the Premises
is reasonably expected to continue for more than 90
days.
Section 11.7 Landlord’s Liability. Any Building
or Complex employee to whom any property shall be entrusted by or
on behalf of Tenant shall be deemed to be acting as Tenant’s
agent with respect to such property and neither Landlord nor its
agents shall be liable for any damage to such property, or for the
loss of or damage to any property of Tenant by theft or otherwise.
None of the Insured Parties shall be liable for any injury or
damage to persons or property or interruption of Tenant’s
business resulting from fire or other casualty, any damage caused
by other tenants or persons in the Building or Complex, or by
construction of any private, public or quasi-public work, or any
latent defect in the Premises, in the Building or Complex (except
that Landlord shall be required to repair the same to the extent
provided in Article 6). No penalty shall accrue for delays
which may arise by reason of adjustment of
22
casually
insurance on the part of Landlord or Tenant, or for any Unavoidable
Delays arising from any repair or restoration of any portion of the
Building or Complex, provided that Landlord shall use reasonable
efforts to minimize interference with Tenant’s use and
occupancy of the Premises during the performance of any such repair
or restoration.
Section 11.8 Landlord’s Insurance. Landlord shall
maintain the following insurance (“Landlord’s
Insurance”), the premiums of which will be included in
Operating Expenses: (1) Commercial General Liability Insurance
applicable to the Real Property, Building and Common Areas
providing, on an occurrence basis, a minimum combined single limit
of at least $5,000,000.00; (2) all Risk Property insurance on the
Building at replacement cost value with a deductible not to exceed
$100,000.00; (3) Worker’s Compensation insurance as
required by the State of Illinois and in amounts as may be required
by applicable statute; and (4) Employer’s Liability
Coverage of at least $1,000,000.00 per occurrence.
(a) Total Taking. If all or substantially all of the Real
Property, the Building or the Premises shall be acquired or
condemned for any public or quasi-public purpose (a
“Taking” ), this Lease shall terminate and the
Term shall end as of the date of the vesting of title and Rent
shall be prorated and adjusted as of such date.
(b) Partial Taking. Upon a Taking of only a part of the Real
Property, the Building or the Premises then, except as hereinafter
provided in this Article 12, this Lease shall continue in full
force and effect, provided that from and after the date of the
vesting of title, Fixed Rent and Tenant’s Proportionate Share
shall be modified to reflect the reduction of the Premises and/or
the Building as a result of such Taking.
(c) Landlord’s Termination Right. Whether or not the
Premises are affected, Landlord may, by notice to Tenant, within
60 days following the date upon which Landlord receives notice
of the Taking of all or a portion of the Real Property, the
Building or the Premises, terminate this Lease. Landlord agrees
that it will not discriminate against Tenant vis a vis other
tenants in the Building with similar premises in electing to
terminate this Lease.
(d) Tenant’s Termination Right. If the part of the
Real Property so Taken contains more than 20% of the total area of
the Premises occupied by Tenant immediately prior to such Taking,
or if, by reason of such Taking, Tenant no longer has reasonable
means of access to the Premises or the remaining portion of the
Premises is no longer reasonably suitable for the conduct of
Tenant’s business therein, Tenant may terminate this Lease by
notice to Landlord given within 60 days following the date
upon which Tenant is given notice of such Taking. If Tenant so
notifies Landlord, this Lease shall end and expire upon the 30th
day following the giving of such notice. If a part of the Premises
shall be so Taken and this Lease is not terminated in accordance
with this Section 12.1 Landlord, without being required to
spend more than it collects as an award, shall, subject to the
provisions of any Mortgage or Superior Lease, restore that part of
the Premises not so Taken to a self-contained rental unit
substantially equivalent (with respect to character, quality,
appearance and services) to that which existed immediately prior to
such Taking, excluding Tenant’s Property and any Above
Building Standard Installations.
23
(e) Apportionment of Rent. Upon any termination of this
Lease pursuant to the provisions of this Article 12, Rent
shall be apportioned as of, and shall be paid or refunded up to and
including, the date of such termination.
Section 12.2 Awards. Upon any Taking, Landlord shall
receive the entire award for any such Taking, and Tenant shall have
no claim against Landlord or the condemning authority for the value
of any unexpired portion of the Term or Tenant’s Alterations;
and Tenant hereby assigns to Landlord all of its right in and to
such award. Nothing contained in this Article 12 shall be
deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant’s
Property or Above Building Standard Installations included in such
Taking and for any moving expenses, provided any such award is in
addition to, and does not result in a reduction of, the award made
to Landlord.
Section 12.3 Temporary Taking. If all or any part of
the Premises is Taken temporarily during the Term for any public or
quasi-public use or purpose, Tenant shall give prompt notice to
Landlord and the Term shall not be reduced or affected in any way
and Tenant shall continue to pay all Rent payable by Tenant without
reduction or abatement and to perform all of its other obligations
under this Lease, except to the extent prevented from doing so by
the condemning authority, and Tenant shall be entitled to receive
any award or payment from the condemning authority for such use,
which shall be received, held and applied by Tenant as a trust fund
for payment of the Rent falling due.
ASSIGNMENT AND
SUBLETTING
Section 13.1 Consent Requirements.
(a) No Transfers. Except as expressly set forth herein,
Tenant shall not assign, mortgage, pledge, encumber, or otherwise
transfer this Lease, whether by operation of law or otherwise, and
shall not sublet, or permit, or suffer the Premises or any part
thereof to be used or occupied by others (whether for desk space,
mailing privileges or otherwise), without Landlord’s prior
consent in each instance. Any assignment, sublease, mortgage,
pledge, encumbrance or transfer in contravention of the provisions
of this Article 13 shall be void and shall constitute an Event
of Default.
(b) Collection of Rent. If, without Landlord’s
consent, this Lease is assigned, or any part of the Premises is
sublet or occupied by anyone other than Tenant or this Lease is
encumbered (by operation of law or otherwise), Landlord may collect
rent from the assignee, subtenant or occupant, and apply the net
amount collected to the Rent herein reserved. No such collection
shall be deemed a waiver of the provisions of this Article 13,
an acceptance of the assignee, subtenant or occupant as tenant, or
a release of Tenant from the performance of Tenant’s
covenants hereunder, and in all cases Tenant shall remain fully
liable for its obligations under this Lease.
(c) Further Assignment/Subletting. Landlord’s
consent to any assignment or subletting shall not relieve Tenant
from the obligation to obtain Landlord’s consent to any
further assignment or subletting. In no event shall any permitted
subtenant assign or encumber its sublease or further sublet any
portion of its sublet space, or otherwise suffer or permit any
portion of the sublet space to be used or occupied by others
without Landlord’s prior consent, which consent shall not be
unreasonably withheld or delayed.
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Section 13.2 Tenant’s Notice. If Tenant desires
to assign this Lease or sublet all or any portion of the Premises
(sometimes referred to herein as a “Transfer” ),
Tenant shall give notice thereof to Landlord, which shall be
accompanied by (a) with respect to an assignment of this
Lease, the date Tenant desires the assignment to be effective, and
(b) with respect to a sublet of all or a part of the Premises,
a description of the portion of the Premises to be sublet, the
commencement date of such sublease and the rent per rentable square
foot Tenant will ask for such portion of the Premises (
“Tenant’s Asking Rate” ). Such notice
shall be deemed an irrevocable offer from Tenant to Landlord of the
right, at Landlord’s option, (1) to terminate this Lease
with respect to such space as Tenant proposes to sublease (the
“Partial Space” ), upon the terms and conditions
hereinafter set forth, or (2) if the proposed transaction is
an assignment of this Lease or a subletting of 50% or more of the
rentable square footage of the Premises, to terminate this Lease
with respect to the entire Premises. Such option may be exercised
by notice from Landlord to Tenant within 30 days after
delivery of Tenant’s notice. If Landlord exercises its option
to terminate this Lease with respect to all or a portion of the
Premises, (a) this Lease shall end and expire with respect to
all or a portion of the Premises, as the case may be, on the date
that such assignment or sublease was to commence, provided that
such date is in no event earlier than 90 days after the date
of the above notice unless Landlord agrees to such earlier date,
(b) Rent shall be apportioned, paid or refunded as of such
date, (c) Tenant, upon Landlord’s request, shall enter
into an amendment of this Lease ratifying and confirming such total
or partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and
(d) Landlord shall be free to lease the Premises (or any part
thereof) to Tenant’s prospective assignee or subtenant or to
any other party. Tenant shall pay all costs to make the Partial
Space a self-contained rental unit and to install any required
Building corridors.
Section 13.3 Intentionally Omitted.
Section 13.4 Conditions to
Assignment/Subletting.
(a) If Landlord does not exercise either of Landlord’s
options provided under Sections 13.2 and 13.3, and provided
that no Event of Default then exists, Landlord’s consent to
the proposed assignment or subletting shall not be unreasonably
withheld or delayed. Such consent shall be granted or denied within
15 Business Days after delivery to Landlord of (i) a true and
complete statement reasonably detailing the identity of the
proposed assignee or subtenant ( “Transferee” ),
the nature of its business and its proposed use of the Premises,
(ii) current financial information with respect to the
Transferee, including its most recent financial statements, (iii)
all of the terms of the proposed Transfer and the consideration
therefor, together with a copy of all existing executed and/or
proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to
evidence such Transfer or the agreements incidental or related to
such Transfer, and (iv) any other information Landlord may
reasonably request. The factors Landlord may consider in
determining whether to grant or withhold consent shall include, but
not be limited to, the following:
(i) the Transferee is engaged in a business or
activity, and the Premises will be used in a manner, which
(1) is in keeping with the then standards of the Building and
Complex, (2) is for the Permitted Uses, and (3) does not
violate any restrictions set forth in this Lease, any Mortgage or
Superior Lease or any negative covenant as to use of the Premises
other than for the Permitted Use required by any other lease in the
Building or Complex;
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(ii) the Transferee is reputable with sufficient
financial means to perform all of its obligations under this Lease
or the sublease, as the case may be;
(iii) the Transferee is not then an occupant of the
Building or Complex;
(iv) the Transferee is not a person or entity (or
affiliate of a person or entity) with whom Landlord is then or has
been within the prior 3 months negotiating a letter of intent
in connection with the rental of comparable space in the Building
or Complex;
(v) whether the granting of such consent shall result
in there being more than 2 subtenants in each floor of the
Premises;
(vi) the proposed Transfer is either a sublease or a
non-collateral complete assignment;
(vii) the proposed Transfer would not cause Landlord
to be in violation of any Requirements or any other lease,
Mortgage, Superior Lease or agreement to which Landlord is a party
and would not give a tenant of the Real Property a right to cancel
its lease; and
(viii) the Transferee shall not be either a
governmental agency or an instrumentality thereof, nor shall the
Transferee be entitled, directly or indirectly, to diplomatic or
sovereign immunity, regardless of whether the Transferee agrees to
waive such diplomatic or sovereign immunity, and shall be subject
to the service of process in, and the jurisdiction of the courts
of, the County of Cook and State of Illinois.
The
parties hereby agree, without limitation as to other reasonable
grounds for withholding consent, that it shall be reasonable under
this Lease and under applicable law for Landlord to withhold
consent to any proposed Transfer based upon failure of any of the
foregoing criteria.
(b) With respect to each and every subletting and/or
assignment approved by Landlord under the provisions of this
Lease:
(i) the form of the proposed assignment or sublease
shall be reasonably satisfactory to Landlord;
(ii) no sublease shall be for a term ending later than
one day prior to the Expiration Date;
(iii) no Transferee shall take possession of any part
of the Premises until an executed counterpart of such sublease or
assignment has been delivered to Landlord and approved by Landlord
as provided in Section 13.4(a);
(iv) if an Event of Default occurs prior to the
effective date of such assignment or subletting, then
Landlord’s consent thereto, if previously granted, shall be
immediately deemed revoked without further notice to Tenant, and if
such assignment or subletting would have been permitted without
Landlord’s consent pursuant to Section 13.8, such
permission shall be void and without force and effect, and in
either such case, any such assignment or subletting shall
constitute a further Event of Default hereunder; and
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(v) Tenant shall, upon demand, reimburse Landlord for
all reasonable out-of-pocket expenses incurred by Landlord in
connection with such assignment or sublease, including any
investigations as to the acceptability of the Transferee and all
legal costs reasonably incurred in connection with the granting of
any requested consent; and
(vi) each sublease shall be subject and subordinate to
this Lease and to the matters to which this Lease is or shall be
subordinate; and Tenant and each Transferee shall be deemed to have
agreed that upon the occurrence and during the continuation of an
Event of Default hereunder, Tenant has hereby assigned to Landlord,
and Landlord may, at its option, accept such assignment of, all
right, title and interest of Tenant as sublandlord under such
sublease, together with all modifications, extensions and renewals
thereof then in effect and such Transferee shall, at
Landlord’s option, attorn to Landlord pursuant to the then
executory provisions of such sublease, except that Landlord shall
not be (A) liable for any previous act or omission of Tenant
under such sublease, (B) subject to any counterclaim, offset
or defense not expressly provided in such sublease or which
theretofore accrued to such Transferee against Tenant,
(C) bound by any previous modification of such sublease not
consented to by Landlord or by any prepayment of more than one
month’s rent, (D) bound to return such
Transferee’s security deposit, if any, except to the extent
Landlord shall receive actual possession of such deposit and such
Transferee shall be entitled to the return of all or any portion of
such deposit under the terms of its sublease, or (E) obligated
to make any payment to or on behalf of such Transferee, or to
perform any work in the sublet space or the Building, or in any way
to prepare the subleased space for occupancy, beyond
Landlord’s obligations under this Lease. The provisions of
this Section 13.4{b)(v) shall be self-operative, and no
further instrument shall be required to give effect to this
provision, provided that the Transferee shall execute and deliver
to Landlord any instruments Landlord may reasonably request to
evidence and confirm such subordination and attornment
Section 13.5 Binding on Tenant; Indemnification of
Landlord. Notwithstanding any assignment or subletting or any
acceptance of rent by Landlord from any Transferee, Tenant and any
guarantor shall remain fully liable for the payment of all Rent due
and for the performance of all the covenants, terms and conditions
contained in this Lease on Tenant’s part to be observed and
performed, and any default under any term, covenant or condition of
this Lease by any Transferee or anyone claiming under or through
any Transferee shall be deemed to be a default under this Lease by
Tenant. Tenant shall indemnify, defend, protect and hold harmless
Landlord from and against any and all Losses resulting from any
claims that may be made against Landlord by the Transferee or
anyone claiming under or through any Transferee or by any brokers
or other persons or entities claiming a commission or similar
compensation in connection with the proposed assignment or
sublease, irrespective of whether Landlord shall give or decline to
give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under this
Article 13.
Section 13.6 Tenant’s Failure to Complete. If
Landlord consents to a proposed assignment or sublease and Tenant
fails to execute and deliver to Landlord such assignment or
sublease within 90 days after the giving of such consent, or the
amount of space subject to any such sublease varies by more than
10% from that specified in the notice given by Tenant to Landlord
pursuant to Section 13.2, or the net effective rent payable under
such sublease is less than 95% of Tenant’s Asking Rate, or if
there are any changes in the terms and conditions of the proposed
assignment or sublease such that Landlord would initially have been
entitled to refuse its consent to such Transfer under this
Article 13, then Tenant shall again comply with all of the
provisions and conditions of Sections 13.2 and 13.4 before
assigning this Lease or subletting all or part of the
Premises.
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Section 13.7 Profits. If Tenant enters into any
assignment or sublease permitted hereunder or consented to by
Landlord, Tenant shall, within 60 days of Landlord’s
consent to such assignment or sublease (or if such assignment or
sublease is permitted hereunder without Landlord’s prior
consent, within 60 days of the effective date of such
assignment or sublease), deliver to Landlord a list of
Tenant’s reasonable third-party brokerage fees, legal fees
and architectural fees paid or to be paid in connection with such
transaction and, in the case of any sublease, any actual costs
incurred by Tenant in separately demising the sublet space
(collectively, “Transaction Costs” ), together
with a list of all of Tenant’s Property to be transferred to
such Transferee. The Transaction Costs shall be amortized, on a
straight-line basis, over the term of any sublease. Tenant shall
deliver to Landlord evidence of the payment of such Transaction
Costs promptly after the same are paid. In consideration of such
assignment or subletting, Tenant shall pay to Landlord:
(a) In the case of an assignment, on the effective date of
the assignment, 50% of all sums and other consideration paid to
Tenant by the Transferee for or by reason of such assignment
(including key money, bonus money and any sums paid for services
rendered by Tenant to the Transferee in excess of fair market value
for such services and sums paid for the sale or rental of
Tenant’s Property, less the then fair market or rental value
thereof, as reasonably determined by Landlord) after first
deducting the Transaction Costs; or
(b) In the case of a sublease, 50% of any consideration
payable under the sublease to Tenant by the Transferee which
exceeds on a per square foot basis the Fixed Rent, Tenant’s
Tax Payment and Tenant’s Operating Payment accruing during
the term of the sublease in respect of the sublet space (together
with any sums paid for services rendered by Tenant to the
Transferee in excess of fair market value for such services and
sums paid for the sale or rental of Tenant’s Property, less
the then fair market or rental value thereof, as reasonably
determined by Landlord) after first deducting the monthly amortized
amount of Transaction Costs. The sums payable under this clause
shall be paid by Tenant to Landlord monthly as and when paid by the
subtenant to Tenant.
The amount payable
under this Section 13.7 with respect to any particular
Transfer is sometimes referred to herein as the “ Transfer
Premium.” Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books,
records and papers of Tenant relating to any Transfer, and shall
have the right to make copies thereof. If the Transfer Premium
respecting any Transfer shall be found understated, such event
shall, at Landlord’s option, be deemed to be an Event of
Default (as such term is defined in Section 15.1 below) and
Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%),
Tenant shall pay Landlord’s costs of such audit.
(a) Related Entities. If Tenant is a legal entity, the
transfer (by one or more transfers), directly or indirectly, by
operation of law or otherwise, of a majority of the stock or other
beneficial ownership interest in Tenant or of all or substantially
all of the assets of Tenant (collectively, “Ownership
Interests”) shall be deemed a voluntary assignment of
this Lease; provided, however, that the provisions of this
Article 13 shall not apply to the transfer of Ownership
Interests in Tenant if and so long as Tenant is publicly traded on
a nationally recognized stock exchange. For purposes of this
Article the term “transfers” shall be deemed to include
(x) the issuance of new Ownership Interests which results in a
majority of the Ownership Interests in Tenant being held by a
person or entity which does not hold a majority of the Ownership
interests in Tenant on the Effective Date (y) the sale,
mortgage, hypothecation or
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pledge of more
than an aggregate of fifty percent (50%) of Tenant’s net
assets, and (z) except as provided below, the sale or transfer
of all or substantially all of the assets of Tenant in one or more
transactions or the merger, consolidation or conversion of Tenant
into or with another business entity. The provisions of
Section 13.1 shall not apply to transactions with a business
entity into or with which Tenant is merged, consolidated or
converted or to which all or substantially all of Tenant’s
assets are transferred so long as (i) such transfer was made
for a legitimate independent business purpose and not for the
purpose of transferring this Lease, (ii) the successor to Tenant
has a tangible net worth computed in accordance with generally
accepted accounting principles consistently applied (and excluding
goodwill, organization costs and other intangible assets) that is
sufficient to meet the obligations of Tenant under this Lease and
is at least equal to the net worth of Tenant (1) immediately
prior to such merger, consolidation, conversion or transfer, or
(2) on the Effective Date, whichever is greater,
(iii) proof satisfactory to Landlord of such net worth is
delivered
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