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Lease Agreement

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ONE LIBERTY PROPERTIES INC | OFFICE DEPOT, INC

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Title: LEASE
Date: 11/7/2008
Industry: Real Estate Operations     Sector: Services

LEASE, Parties: one liberty properties inc , office depot  inc
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EXHIBIT 10.1

 

LEASE

 

Between

 

OLP ____________________ LLC, a Delaware limited liability company

 

Landlord

 

and

 

OFFICE DEPOT, INC., a Delaware corporation

 

Tenant

 

located at

 



 

September 26, 2008

 


 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Article 1 FUNDAMENTAL LEASE PROVISIONS; EXHIBITS; DEFINITIONS

1

Section 1.1

Fundamental Lease Provisions

1

Section 1.2

Exhibits

3

Section 1.3

Definitions

3

 

 

 

Article 2 LEASE OF PROPERTY; TERM

4

Section 2.1

Lease of Property

4

Section 2.2

Term

4

Section 2.3

Extension Options

5

Section 2.4

Net Lease

5

Section 2.5

Property Name

5

Section 2.6

Landlord’s Work

5

Section 2.7

Tenant's Work.

5

 

 

 

Article 3 RENT

6

Section 3.1

Fixed Rent

6

Section 3.2

Real Estate Taxes.

6

 

 

 

Article 4 MAINTENANCE

7

Section 4.1

Maintenance

7

 

 

 

Article 5 UTILITIES AND SERVICES

7

Section 5.1

Utilities in General

7

Section 5.2

Additional Utilities

7

 

 

 

Article 6 LANDLORD'S AFFIRMATIVE AND NEGATIVE COVENANTS

7

Section 6.1

Affirmative Covenants

7

Section 6.2

Negative Covenants

8

 

 

 

Article 7 LANDLORD'S REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

9

Section 7.1

Landlord's Representations, Warranties and Additional Covenants

9

 

 

 

Article 8 TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS

9

Section 8.1

Tenant’s Representations and Warranties

9

Section 8.2

Covenants

10

 

 

 

Article 9 ASSIGNMENT AND SUBLETTING

12

Section 9.1

Rights and Conditions

12

Section 9.2

Non-Disturbance

13

 

 

 

Article 10 DAMAGE AND DESTRUCTION; CONDEMNATION

14

Section 10.1

Fire or Other Casualty.

14

Section 10.2

Eminent Domain.

14

 

 

 

Article 11 DEFAULT AND REMEDIES

15

Section 11.1

Tenant's Default

15

Section 11.2

Cross-Default by Tenant

16

Section 11.3

Holdover by Tenant

17

 


 

Section 11.4

Effect of Waivers of Default by Landlord or Tenant

17

Section 11.5

Landlord's Default

17

Section 11.6

Breach of a Covenant

17

Section 11.7

Interest on Late Payments

18

 

 

 

Article 12 MISCELLANEOUS PROVISIONS

18

Section 12.1

Notices from One Party to the Other

18

Section 12.2

Brokerage

18

Section 12.3

Brokerage Indemnities

18

Section 12.4

Relationship of the Parties

18

Section 12.5

Subordination, Non-Disturbance and Attornment.

19

Section 12.6

Estoppel Certificates

19

Section 12.7

Applicable Law and Construction

19

Section 12.8

Binding Effect of Lease

20

Section 12.9

Memorandum of Lease

20

Section 12.10

Effect of Unavoidable Delays.

20

Section 12.11

Waiver of Claims and Subrogation

20

Section 12.12

No Construction Against Preparer

20

Section 12.13

Number and Gender

20

Section 12.14

Waiver of Landlord's Lien

21

Section 12.15

No Express or Implied Covenant of Continuous Operation

21

Section 12.16

Exterior and Interior Signage.

21

Section 12.17

Covenants

21

Section 12.18

Entire Agreement

21

Section 12.19

Legal Expenses

21

Section 12.20

Counterparts

22

Section 12.21

Investment Tax Credits

22

Section 12.22

Financial Statements

22

Section 12.23

Confidentiality

22

Section 12.24

Waiver of Trial by Jury

22

Section 12.25

Radon Disclosure

22

 

 

 

Article 13 LEASEHOLD MORTGAGES

23

Section 13.1

Leasehold Mortgages.

23

Section 13.2

Event of Default.

23

Section 13.3

Exercise of Remedies. .

23

Section 13.4

Termination of Lease..

24

Section 13.5

Limited Liability.

24

 


 

E X H I B I T S

 

EXHIBIT A

PROPERTY LEGAL DESCRIPTION

 

 

EXHIBIT B

SITE PLAN

 

 

EXHIBIT C

[Reserved]

 

 

EXHIBIT D

[Reserved]

 

 

EXHIBIT E

[Reserved]

 

 

EXHIBIT F

[Reserved]

 

 

EXHIBIT G

[Reserved]

 

 

EXHIBIT H

PERMITTED EXCEPTIONS

 

 

EXHIBIT I

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

 

EXHIBIT J

MEMORANDUM OF LEASE

 

 

EXHIBIT K

RECIPROCAL EASEMENT AGREEMENT

 

 

EXHIBIT L

RELATED LEASES

 


 

L E A S E

 

ARTICLE 1

FUNDAMENTAL LEASE PROVISIONS; EXHIBITS; DEFINITIONS

 

Section 1.1   Fundamental Lease Provisions. These are the provisions of this Lease, except as they may be modified hereafter.

 

1.1.1

DATE OF LEASE.

September 26, 2008, being the date that both this Lease and the Memorandum of Lease attached hereto as EXHIBIT J  have been executed by both parties and returned to the first to execute, sometimes referred to herein as the “Effective Date”.

 

 

 

1.1.2

LANDLORD:

OLP __________________ LLC, a Delaware limited liability company

 

 

 

1.1.3

ADDRESS OF LANDLORD FOR THE PAYMENT OF RENT HEREUNDER:

60 Cutter Mill Road, Suite 303

Great Neck, NY 11021

Attention: Alysa Block

Tax I.D. # 13-3147497

 

 

 

1.1.4

TENANT:

OFFICE DEPOT, INC.,

a Delaware corporation

 

 

 

1.1.5

ADDRESS OF TENANT:

2200 Old Germantown Road

Delray Beach, Florida 33445

(561) 438-4000

 

 

 

1.1.6

TENANT'S INITIAL TRADE NAME:

OFFICE DEPOT

 

 

 

1.1.7

LEASE TERM:

Subject to Section 2.2, the Expiration Date of the “Lease Term” (as defined in Section 2.2 below) shall be the date which is one hundred twenty (120) full calendar months from and after the Lease Term Commencement Date (as defined in Section 2.2 below) (the “Initial Term”), unless extended (the “Extended Lease Term(s)”) pursuant to the provisions of Section 2.3 hereof, or unless sooner terminated in accordance with the terms and provisions of this Lease

 

 

 

1.1.8

FIXED RENT:

Annual Total

Fixed Rent

 

 

 

 

Years of Lease Term

 

 

 

 

 

1-5

$__________

 

 

 

 

6-10

$__________

 

1


 

 

11-15

$__________

 

 

 

 

16-20

$__________

 

 

 

 

21-25

$__________

 

 

 

 

26-30

$__________

 

 

 

Annual Total Fixed Rent will be adjusted prorata for any partial year during the term.

 

1.1.9

NUMBER OF SUCCESSIVE FIVE (5) YEAR RENEWAL OPTIONS:

Four (4)

 

 

 

1.1.10

PROPERTY LOCATION:

 

 

 

 

1.1.11

NAME OF CENTER:

 

 

 

 

1.1.12

BROKER(S):

None.

 

1.1.13   PERMITTED USES; NATURE OF TENANT'S BUSINESS. The Property (as later defined) may be used for the operation of an office and consumer supply, furniture, equipment and products and service store as is now or in the future being operated by Tenant for any one (1) or more of the following sales and services: office and consumer supplies, furniture, machines, storage supplies and products, and other related equipment used in offices, home offices and homes; school supplies and products; computer hardware, software and related equipment and supplies; educational and entertainment supplies, software and goods, including, but not limited to, books, newspapers, magazines, periodicals, records, audio and video tapes, DVD's, games, digital technology, Internet products and services; consumer and business electronics; cellular telephones, and telecommunications equipment and devices; art, architectural and engineering supplies; photocopy, facsimile, printing, shipping and related services; business services (including, without limitation, tax and financial services); gifts, novelties and related items; any technological evolution or replacement of any of the foregoing; the sale of goods and the provision of such other services customarily sold or provided now or in the future in office and consumer supply and product and service stores or in other stores of Tenant, and for any other lawful retail purpose (the “Permitted Use”).

 

1.1.14

MINIMUM GENERAL LIABILITY INSURANCE COVERAGE:

Two Million Dollars ($2,000,000.00) Combined Single Limit Coverage, or such additional amount as Landlord’s mortgagees may require.

 

 

 

1.1.15

TENANT ALLOWANCE:

None.

 

 

 

1.1.16

CRITICAL DATES:

 

 

 

 

 

Estimated Delivery Date:

September 26, 2008

 

 

 

 

Outside Delivery Date:

October 1, 2008

 

2


 

1.1.17

ARTICLE 12 INFORMATION:

 

Notices to Landlord shall be sent to:

 

60 Cutter Mill Road, Suite 303

Great Neck, NY 11021

 

Attention: Alysa Block

Telephone: (561) 773-2746

Facsimile:      

 

 

 

With a copy to:

 

60 Cutter Mill Road, Suite 303

Great Neck, NY 11021

 

Attention: Lawrence Ricketts

 

Section 1.2   Exhibits . The exhibits attached to this Lease are incorporated into this Lease by this reference and are to be construed as an integral part of this Lease.

 

Section 1.3   Definitions . Certain terms used in this Lease with an initial capital letter are defined within the text of those Sections in which the same are mentioned. For convenience, certain other terms are defined in this Section 1.3 as follows:

 

1.3.1   The term “Additional Charges” shall mean all payments required to be made hereunder by Tenant, other than “Fixed Rent.”

 

1.3.2   The term “Building Permits” shall mean all necessary building permits and other governmental approvals for the performance of “Tenant's Work” (including without limitation the installation of its exterior building and pylon signage as set forth in Section 12.15 hereof).

 

1.3.3   The term “Delivery Date” shall mean the date that exclusive actual possession of the entire Property is delivered to Tenant.

 

1.3.4   The term the “Floor Area” shall mean the number of square feet of ground floor space in all areas constructed on the Property within the exterior faces of exterior walls, store fronts, corridors and service areas (except party and interior walls, as to which the center thereof shall be used), including, by way of illustration and not by limitation, sales areas, warehousing or storage areas, office or clerical areas and employee facilities. Floor Area shall exclude any truck wells and loading dock areas, unless fully enclosed within the exterior walls of the building, any non-sales mezzanine space and any basement space. 

 

1.3.5   The term “Hazardous Substances” shall mean any hazardous or toxic materials, substances or wastes, such as (a) substances defined as “hazardous substances,” “hazardous materials,” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the Resource Conservation and Recovery Act of 1976 (“RCRA”), and/or the Hazardous Materials Transportation Act (49 USC Section 1801, et seq.), as any of such acts are amended from time to time; (b) any materials, substances or wastes which are toxic, ignitable, corrosive or reactive and which are regulated by any local governmental authority, any agency of any State in which the Property is located or any agency of the United States of America; (c) asbestos, petroleum and petroleum based products, urea formaldehyde foam insulation, polychlorinated biphenyls (PCBs), and freon and other chlorofluorocarbons; and (d) those substances defined as any of the foregoing in the regulations adopted and publications promulgated pursuant to each of the aforesaid laws.

 

1.3.6   The term “Institutional Mortgagee” shall mean any commercial bank, federal or state savings and loan association, life insurance company, pension fund, real estate investment trust, nationally recognized credit company or investment bank, any affiliate, subsidiary, successor or assignee of any of the foregoing, or any other legal entity (not affiliated with Landlord) holding a mortgage on the Property.

 

3


 

1.3.7   The term “Interest Rate” shall mean that rate of interest which is the lesser of (a) the maximum interest rate permitted under applicable usury laws; or (b) the “prime rate” as published from time to time in the Money Section of The Wall Street Journal or, if The Wall Street Journal should at any time cease to be published or should The Wall Street Journal cease to publish a “prime rate,” the term “prime rate” shall mean the reference rate as charged from time to time by Bank of America.

 

1.3.8   The term “Permitted Exceptions” shall mean all those certain title exceptions, which in Tenant's reasonable judgment will not impair Tenant's rights and entitlements under this Lease or its use and enjoyment of the Property. The Permitted Exceptions are listed on EXHIBIT H attached hereto.

 

1.3.9   The term “Premises” shall mean, in aggregate, all vertical improvements to the Property including without limitation the building containing Tenant’s retail store.

 

1.3.10   The “Property” shall mean the real property legally described on EXHIBIT A hereto, together with the improvements now or hereafter constructed thereon.

 

1.3.11   The term “Tenant’s Unamortized Improvements” shall mean the unamortized portion (as of the date of such termination) of the total sums expended by Tenant as set forth in Tenant's books and records in the performance of Tenant's Work and any subsequent leasehold improvements, with amortization to be on a straight-line basis over the useful life of such improvements, commencing upon the date of each applicable expenditure. The total sums expended by Tenant in the performance of Tenant's Work and any subsequent leasehold improvements shall be reflected in a written itemization provided by Tenant.

 

1.3.12   The term “REA” as used herein shall mean that certain __________________ dated __________ by and between ________________ and ____________________, filed ____________, recorded under County Clerk's File No. _____________ County, ______________. The Property is subject to the REA, attached hereto as EXHIBIT K . Landlord hereby grants and warrants to Tenant, its successors and assigns, for the Lease Term, the non-exclusive right and easement appurtenant to and for the benefit of the Property and any occupant thereof and its customers, employees, and invitees, to use, for purposes of access, ingress and egress, and parking all those certain access, ingress and egress, and parking easement areas granted to or established under the REA.

 

ARTICLE 2

LEASE OF PROPERTY; TERM

 

Section 2.1   Lease of Property . Landlord is the fee simple owner of the Property. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, subject to and with the benefit of the terms, covenants, conditions and provisions of this Lease, the Property, together with all appurtenant rights and easements.

 

Section 2.2   Term . The term of this Lease (the “Lease Term”) shall begin (the “Lease Term Commencement Date”) on September 26, 2008. The Lease Term shall end on the Expiration Date set forth in Section 1.1.7 hereof, unless extended or sooner terminated, as hereinafter provided. Provided no Event of Default has occurred and is continuing at the time of exercise, at the option of Tenant exercised by Tenant delivering written notice to Landlord at least nine (9) months prior to what otherwise would be the last day of the Lease Term, the Lease Term shall be extended to and shall include the next February 28 th if the last day of the Lease Term would otherwise occur between the dates of August 1 and February 27. In the event Tenant elects to extend the Lease Term to February 28 as permitted by this Section, it shall be deemed to have waived any additional extension options, if any, that Tenant may have at that time.

 

4


 

Section 2.3   Extension Options . Provided no Event of Default has occurred and is continuing at the time of exercise, Tenant shall have the number of successive five (5) year options of extension as set forth in Section 1.1.9 (each of which periods is referred to herein as an “Extended Term”), provided written notice of the election of such options shall be sent to Landlord not less than nine (9) months prior to the expiration of the then expiring term (Initial Term or Extended Term, as applicable). Notwithstanding the foregoing, if Tenant does not exercise any option of extension in the time period or in the manner provided in this Section, such option of extension shall nevertheless continue in full force and effect, shall not lapse and may be exercised by Tenant until fifteen (15) days after Tenant has received written notice from Landlord that such deadline has passed and that Landlord has not received such notice. If said options are duly exercised, the Lease Term shall be automatically extended for the period of the next ensuing option, without the requirement of any further instrument, upon all of the same terms, provisions and conditions set forth in this Lease, except that Fixed Rent during the option periods shall be as set forth in Section 1.1.8.

 

Section 2.4   Net Lease . The Fixed Rent reserved herein shall be net to the Landlord so that this Lease shall yield net to the Landlord the Fixed Rent specified, and all costs, expense and obligations pertaining to the Property (including, without limitation, any rent tax or tax on rental income), shall, except as provided otherwise in this Lease, be the obligation of and paid by the Tenant

 

Section 2.5   Property Name . The name of the Property shall be as set forth in Section 1.1.11. Landlord shall not have the right to change the name or address of the Property without the prior written consent of Tenant, which consent shall not be unreasonably withheld, conditioned or delayed.

 

Section 2.6   Landlord’s Work . Tenant acknowledges and agrees that the Premises are existing and that it shall lease the Premises in their “as is, where is” condition. Accordingly, there is no “Landlord’s Work” required in connection with the delivery of the Premises to Tenant.

 

Section 2.7   Tenant's Work.

 

(a)   Tenant shall be solely responsible for the construction, at its cost, of any improvements to the Property that it elects to make during the Term (“Tenant’s Work”). Tenant shall have the right to complete Tenant’s Work without the prior consent of Landlord provided that (i) no Event of Default has occurred and is then continuing, (ii) Tenant constructs the Tenant’s Work in accordance with the Site Plan, the Permitted Exceptions and all applicable governmental approvals and permits, (iii) the Tenant’s Work does not involve any structural alteration of the existing Premises, and (iv) except in case of the emergency, Tenant delivers written notice of the planned Tenant’s Work at least thirty (30) days prior to commencing the Tenant’s Work including with such notice a copy of any and all relevant plans, specifications and working drawings.

 

(b)   In the event Tenant performs any Tenant’s Work hereunder, Landlord shall cooperate with Tenant and assist Tenant in Tenant’s efforts to obtain Tenant’s Building Permits (including signing any applications) and an unconditional permanent certificate of occupancy, or the local equivalent thereof (the “Certificate of Occupancy”), provided Tenant reimburses Landlord for the reasonable out-of-pocket costs and expenses incurred by Landlord in connection with such cooperation, and provided, further, any applications or other documents to be signed by Landlord are in form and substances reasonably acceptable to Landlord.

 

(c)   So long as Tenant makes payments of Fixed Rent and Additional Charges required under this Lease the failure to perform or complete any Tenant’s Work within any specified period of time shall not be deemed an Event of Default hereunder. Notwithstanding the foregoing, any Tenant’s Work undertaken by Tenant shall be diligently pursued to completion by Tenant, and in any event shall be completed before the expiration of the Lease Term.

 

5


 

(d)   Tenant shall indemnify, protect, defend and hold Landlord and its agents, contractors, and employees harmless from and against all damages, suits, losses, costs, expenses, claims, and causes of action relating to any liens for labor and materials for any work on the Property undertaken by or for Tenant. Tenant shall, at its own expense, defend all actions brought against Landlord, its contractors, agents or employees, for which Tenant is or may be responsible for indemnification hereunder, with legal counsel reasonably acceptable to Landlord and if Tenant fails to do so, Landlord (at its option, but without being obligated to do so) may, at the expense of Tenant and upon notice to Tenant, defend such actions, and Tenant shall pay and discharge any and all judgments that arise therefrom. This Section shall survive the expiration or earlier termination of this Lease.

 

ARTICLE 3

RENT

 

Section 3.1   Fixed Rent . Commencing on the Delivery Date (the “Rent Commencement Date”), Fixed Rent shall be payable in advance, in equal monthly installments, on or before the first (1 st ) day of each calendar month included in the Lease Term; and, for any portion of a calendar month included at the beginning or end of the Lease Term, one-thirtieth (1/30 th ) of such a monthly installment for each day of such portion, payable on the first (1 st ) day of the month at the beginning (or end as the case may be) of the Lease Term. At Tenant’s election, Fixed Rent, Additional Charges and any other sums due hereunder may be paid by Tenant to Landlord by electronic wire or funds transfer or by other means of payment generally accepted and customarily used by Tenant. The Fixed Rent provided for in this Lease is acknowledged by the parties to be sufficient consideration for the leasehold estate granted hereby.

 

Section 3.2   Real Estate Taxes.

 

(a)   The Property constitutes a separate tax parcel for purposes of real property taxes. Commencing on the Rent Commencement Date, Tenant shall be solely responsible for payment of Taxes (as defined below) accruing during the Lease Term solely with respect to the land and improvements comprising the Property.

 

(b)   The term “Taxes” shall mean and include all general ad valorem real estate taxes (both real and personal), assessments (both general and special) and other governmental impositions, including (i) any form of tax or assessment, license fee, license tax, excise or tax on rent which may be imposed in lieu of (but not in addition to) ad valorem real estate taxes, and (ii) any levy, charge, expense or imposition (individually and collectively, "Impositions") imposed by any Federal, state, county or city authority having jurisdiction, or any political subdivision thereof, or any school, agricultural, lighting, drainage or other improvement or special assessment district (individually and collectively, "Governmental Agencies"), upon any interest of Landlord or Tenant (including any legal or equitable interest of Landlord or its mortgagee, if any) in the Property, including but not limited to: (A) any Impositions (whether or not such Impositions constitute tax receipts to Governmental Agencies) in substitution, partially or totally, of any Impositions now or previously included within the definition of real estate taxes including those imposed or required by Governmental Agencies to increase tax increments to Governmental Agencies, and for services such as fire protection, street, sidewalk and road maintenance, refuse removal or other governmental services formerly provided without charge to Premises owners or occupants; (B) any Impositions allocable to or measured by the area of the Property or the sales generated from the Property, and (C) any Impositions upon this Lease transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Property. Landlord shall provide to Tenant a copy of each tax bill received with respect to the Property and Tenant shall pay directly, prior to delinquency, all Taxes levied or assessed against the Property. Nothing contained in this Lease shall require Tenant to pay any estate, inheritance, succession, capital levy, corporate franchise, taxes on rentals, transfer or income tax of Landlord, nor shall Tenant be liable for any real estate tax attributable to a revaluation of the tax parcel arising out of a sale or other change in the ownership thereof or of any interest therein. If any assessment may be paid in installments, only the installment coming due during the term hereof shall be included within Taxes when due (assuming Landlord had paid the assessment over the longest installment period permitted).

 

6


 

(c)   Any rebates, refunds or abatements of Taxes received by Landlord with respect to the Property subsequent to payment of the Taxes by Tenant shall be refunded to Tenant within ten (10) days of receipt thereof by Landlord.

 

(d)   In the event Tenant’s tangible net worth is less than Five Hundred Million Dollars ($500,000,000.00), Landlord may, by written notice to Tenant, require Tenant to pay the Taxes directly to Landlord in advance, in twelve equal monthly installments on the first calendar day of each month commencing after delivery of Landlord’s notice, with a final payment from Tenant or credit from Landlord due within thirty (30) days following receipt by Tenant of a billing therefor from Landlord containing the calculation for the actual Taxes and evidence (e.g., the tax bill from the taxing authority) of the amount of the Taxes due and payable for the applicable year. In the event Landlord collects the Taxes from Tenant as provided in this Section 3.2(d), Landlord shall be solely responsible for the timely payment of the Taxes due with respect to the Property to the taxing authority.

 

Section 3.3   Sales Tax . With each installment of Fixed Rent or Additional Charges paid by Tenant to Landlord hereunder, Tenant shall pay to Landlord all sales taxes due thereon.

 

ARTICLE 4

MAINTENANCE

 

Section 4.1   Maintenance . Tenant shall be solely responsible for maintaining, at its sole cost, the Property. The Property shall be operated, repaired, replaced and maintained for their intended purposes in compliance with all laws and in such manner as is consistent with the operation and maintenance of a first-class or well maintained retail store center similar in nature to and within the same metropolitan area as the Property. Tenant shall be solely responsible for performing any obligations required to comply with the terms of the REA, including without limitation any contributions to shared expenses pursuant to the REA.

 

ARTICLE 5

UTILITIES AND SERVICES

 

Section 5.1   Utilities in General . Tenant acknowledges that, as of the Delivery Date, the utilities required to operate the Premises for the Permitted Use are existing and adequate. Tenant or the applicable utility authority shall be solely responsible for the performance of any and all repairs to all utility lines (or to cause the utility company to do the same), pipes and other facilities leading to the Property. Tenant shall select and pay the utility companies directly for all charges incurred for the use and connection of utility services to the Property including, without limitation, sanitary sewer, storm sewer, water, gas, electric, telephone and other utilities consumed by Tenant on the Property.

 

Section 5.2   Additional Utilities . Tenant shall have the right throughout the Lease Term, with the consent of Landlord (such consent not to be unreasonably withheld, conditioned or delayed), to install, replace, maintain and use such additional utility lines, conduits and facilities on the Property as Tenant may deem necessary. In the event any such utilities at the Property must be installed through, over or under the Property, Landlord hereby agrees to grant the utility companies (public or private) providing said utility lines, facilities and/or service to the Property, perpetual, non-exclusive rights and easements to install, replace, relocate, repair, operate and maintain lines, pipes, wires, conduits and other facilities (together with the right of ingress and egress and other rights appurtenant thereto), on, under, across and within the Property, as may from time to time be necessary or desirable to supply the Property with adequate utility service.

 

ARTICLE 6

LANDLORD'S AFFIRMATIVE AND NEGATIVE COVENANTS

 

Section 6.1   Affirmative Covenants . Landlord covenants and agrees throughout the Term of this Lease, as follows:

 

7


 

6.1.1   To permit Tenant to lawfully, peaceably and quietly have, hold, occupy and enjoy the Property for the Permitted Use and any appurtenant rights granted to Tenant under this Lease during the Lease Term without hindrance or ejection by Landlord or the successors or assigns of Landlord or anyone acting by, through or under Landlord (including without limitation any mortgagee of Landlord).

 

6.1.2   To indemnify, protect, defend and hold Tenant and its agents and employees harmless from and against all damages, suits, loss, costs, expenses, claims, causes of action, liabilities, and injuries, including without limitation reasonable attorney's, consultant's and expert's fees and costs and litigation expenses relating or resulting from personal injuries, bodily injuries (including death) and from injury or destruction to tangible property (i) occurring on the Property as a result of the acts or omissions of Landlord, its contractors, agents or employees, or (ii) occurring as a result of a breach by Landlord of any of its obligations hereunder; provided, however, such indemnification shall not extend to any suit, claim, or damage to the extent caused by the willful misconduct or gross negligence of Tenant, its directors, officers, agents and employees. Landlord shall, at its own expense, defend all actions brought against Tenant, its agents or employees, for which Landlord is or may be responsible for indemnification hereunder, with legal counsel reasonably acceptable to Tenant and if Landlord fails to do so, Tenant (at its option, but without being obligated to do so) may, at the expense of Landlord and upon notice to Landlord, defend such actions, and Landlord shall pay and discharge any and all judgments that arise therefrom. The provisions of this Section 6.1.2 shall survive the expiration or earlier termination of this Lease.

 

6.1.3   To indemnify, protect, defend and hold Tenant and its agents, contractors and employees harmless from and against all damages, suits, losses, costs, expenses, claims, and causes of action relating to any liens for labor and materials for any work on the Property undertaken by or for Landlord. Landlord shall, at its own expense, defend all actions brought against Tenant, its contractors, agents or employees, for which Landlord is or may be responsible for indemnification hereunder, with legal counsel reasonably acceptable to Tenant and if Landlord fails to do so, Tenant (at its option, but without being obligated to do so) may, at the expense of Landlord and upon notice to Landlord, defend such actions, and Landlord shall pay and discharge any and all judgments that arise therefrom. This Section shall survive the expiration or earlier termination of this Lease.

 

6.1.4   (a)   To defend and indemnify Tenant, and hold Tenant harmless, from and against any and all claims, demands, causes of action, suits, damages, liabilities and expenses (including reasonable attorneys' fees and litigation expenses) of any nature whatsoever arising out of or in connection with a breach of the REA by Landlord (except for breaches caused solely by Tenant’s failure to perform its obligations under Section 8.2.7(a) hereof);

 

(b) On notice from Tenant, to enforce the provisions of the REA against all parties and other persons that are subject thereto (which enforcement may be satisfied by Landlord’s assignment of its enforcement rights with respect to any particular matter, to Tenant). In the event that Landlord fails to make a diligent effort to enforce the REA as provided in this subparagraph, Tenant shall have the right, after fifteen (15) days notice to Landlord requesting enforcement of the REA, to enforce the REA on Landlord's behalf. Any costs incurred in the enforcement of the REA, together with interest at the Interest Rate, will be payable by Tenant to Landlord as Additional Charges within ten (10) days of Landlord’s demand therefor; and

 

(c) To provide Tenant copies of all notices (including, without limitation, default notices) received by it or which are sent by it (concurrently with the sending thereof) in connection with the REA.

 

Section 6.2   Negative Covenants . Landlord covenants and agrees throughout the Term of this Lease, as follows:

 

6.2.1   Except as expressly set forth herein and except in the case of emergency, not to enter the Property or conduct work therein without the prior written consent of Tenant.

 

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6.2.2   Except as expressly authorized by Tenant, not to permit any encumbrance to Landlord’s title to the Property to exist other than the Permitted Exceptions or in connection with a financing of the Property by Landlord.

 

6.2.3   Whenever, pursuant to the REA, consent shall be required by or requested from Landlord, or an election made by Landlord, not to grant such consent or make such election without the prior consent of Tenant (which shall not be unreasonably withheld).

 

6.2.4   Not to materially amend, modify or terminate the REA without the prior consent of Tenant (which shall not be unreasonably withheld).

 

ARTICLE 7

LANDLORD'S REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

 

Section 7.1   Landlord's Representations, Warranties and Additional Covenants . Landlord, in order to induce Tenant to enter into this Lease, hereby represents, warrants and covenants:

 

7.1.1   That Landlord is duly organized and validly existing, is authorized to transact business in the state in which the Property is located and has full power and authority to enter into this Lease, without the consent, joinder or approval of any other person or entity, including, without limitation, any mortgagee(s).

 

7.1.2   That Landlord is not a party to any agreement or litigation which could adversely affect the ability of Landlord to perform its obligations under this Lease or which would constitute a default on the part of Landlord under this Lease, or otherwise adversely affect Tenant's rights or entitlements under this Lease.

 

7.1.3   Landlord is the sole fee simple owner of the Property and has good and marketable title thereto, subject only to the Permitted Exceptions.

 

7.1.4   That any construction activities being conducted by, through or under Landlord on or around the Property shall be performed in a manner having as little adverse effect as possible (under the circumstances) on Tenant's operations in the Premises, and in no event shall any portion of the Property be used for the staging of trucks or equipment or the storage of materials, nor shall access to the Property be adversely affected. Landlord shall notify Tenant in writing at least ten (10) days prior to the commencement of any reconstruction, repairing or repaving of the Property and/or any restriction or closure of any access roads or entrances to the Property in respect of any construction activities being conducted by, through or under Landlord. If such reconstruction, repairing, repaving, restriction, and/or closure substantially impedes or interferes with normal access to the Property in a manner which interferes with Tenant’s business therein, and such condition continues in excess of two (2) business days after notice to Landlord from Tenant, then until such work no longer substantially impedes or interferes with normal access to the Premises, Fixed Rent shall be equitably abated during the period subsequent to such two (2) day period until such condition ceases. Except in the event of an emergency, in no event shall such reconstruction, repaving or repairing activities occur during the period from August 1, through September 15 or November 20 through January 7 of any calendar year

 

ARTICLE 8

TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 8.1   Tenant’s Representations and Warranties .

 

8.1.1   That Tenant is duly organized and validly existing, is authorized to transact business in the state in which the Property is located and has full power and authority to enter into this Lease, without the consent, joinder or approval of any other person or entity, including, without limitation, any mortgagee(s).

 

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8.1.2   That Tenant is not a party to any agreement or litigation which could adversely affect the ability of Tenant to perform its obligations under this Lease or which would constitute a default on the part of Tenant under this Lease, or otherwise adversely affect Landlord's rights or entitlements under this Lease.

 

8.1.3   Except as disclosed in that certain Environmental Site Assessment dated _______ prepared by _______________ (the “Environmental Report”), (i) no Hazardous Substances have been installed, used, generated, manufactured, treated, handled, refined, produced, processed, stored or disposed of, or otherwise present in, on or under the Property by Tenant or, to Tenant’s knowledge, by any third party, except in such amounts and of such types as are permitted by the Environmental Laws for the operation of Tenant’s business; (ii) no activity has been undertaken with respect to the Property by Tenant or, to Tenant’s knowledge, any third party which would cause a violation or support a claim under Environmental Laws, (iii) no investigation, administrative order, litigation or settlement with respect to any Hazardous Substances is in existence with respect to the Property, nor, to Tenant’s knowledge, is any of the foregoing threatened, (iv) no written notice has been received by Tenant from any entity, governmental body or individual claiming any violation of any Environmental Law, or requiring compliance with any Environmental Law, or demanding payment or contribution for environmental damage or injury to natural resources; and (v) Tenant has not obtained and, to Tenant’s knowledge, is not required to obtain, and Tenant has no knowledge of any reason Landlord will be required to obtain, any permits, licenses, or similar authorizations to occupy, operate or use the Improvements or any part of the Property by reason of any Environmental Law.

 

8.1.4   That a certificate of occupancy has been issued for the Property and remains in effect, unless a certificate of occupancy is not required by law. [INCLUDED FOR PALO ALTO, EL PASO AND CHICAGO ONLY]

 

Section 8.2   Covenants . Tenant covenants and agrees throughout the Term of this Lease, as follows:

 

8.2.1   To maintain and keep the Property in a good condition and state of repair, including all equipment, facilities and fixtures therein, and to return the Property to the Landlord upon the expiration or prior termination of the Lease Term in the same or better state of repair and condition as existed on the Delivery Date, subject to normal wear and tear, alterations and additions permitted hereunder and/or Approved Subleases to the extent permitted hereunder. This provision shall expressly survive the expiration or prior termination of this Lease.

 

8.2.2   To cause the Property to be free of liens for labor and materials for any work on the Property undertaken by Tenant and to indemnify, protect, defend and hold Landlord harmless from and against all damages, suits, losses, costs, expenses, claims, and causes of action relating to any liens for labor and materials for any work in the Property undertaken by Tenant.

 

8.2.3   To save Landlord harmless and indemnified from all injury, loss, claims or damage to any person or property while on the Property after the Delivery Date, unless caused by the gross negligence or willful misconduct of Landlord, its agents and employees; and, subject to Section 12 hereof, to save Landlord harmless and indemnified from all injury, loss, claims or damage to any person or property occasioned by any negligent act or omission of Tenant, its agents, employees or contractors; and to save Landlord harmless and indemnified, from and against any and all claims, demands, causes of action, suits, damages, liabilities and expenses (including reasonable attorneys' fees and litigation expenses) arising as a result of Tenant’s failure to have a certificate of occupancy for the Property, unless a certificate of occupancy is not required by law or the failure to have a certificate of occupancy does not have a material and adverse effect on Tenant’s ability to operate the Premises for the Permitted Use. [DELETE LAST PHRASE FOR ALL BUT PALO ALTO, EL PASO AND CHICAGO]

 

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8.2.4   To maintain, with responsible companies qualified to do business in the state in which the Property is located, (i) general or commercial public liability insurance covering the Property, naming Landlord as an additional insured, with limits at least equal to those set forth in Section 1.1.14 and commercially reasonable deductibles, (ii) casualty insurance insuring the full replacement value of the Premises with a commercially reasonable deductible and (iii) workers' compensation insurance (with the limits required by applicable law) covering all of Tenant's employees working in the Premises, and to deposit with Landlord certificates for such insurance bearing the endorsement that the policies will not be canceled or reduced in scope of coverage or amount of coverage until thirty (30) days after written notice to Landlord, which policies will, in any event, be reasonably satisfactory to any mortgagee of Landlord. Tenant agrees to name Landlord and its mortgagee, if any, as additional insureds on the policies required to be maintained by Tenant hereunder. Tenant may maintain the general or commercial public liability insurance referred to in (i) above on a blanket basis and/or may self-insure the general or commercial public liability insurance referred to in (i) above so long as Tenant's net worth (or that of its parent company to the extent such parent shall guarantee the Tenant's obligations under this Lease) is in excess of One Hundred Million Dollars ($100,000,000.00), as increased by the percentage increase in the National Consumer Price Index (CPI) (all items 1982-84 equals 100) as published by the Bureau of Labor Statistics of the U.S. Department of Labor, as evidenced by annual financial statements provided to Landlord by Tenant's accountants or by reports published in accordance with the Securities Exchange Commission's reporting requirements for publicly traded companies, as computed in accordance with generally-accepted accounting principles. Notwithstanding the foregoing, in the event an Institutional Mortgagee objects to Tenant maintaining any of the foregoing coverages through self-insurance, Tenant and such Institutional Mortgagee shall negotiate in good faith to satisfy the concerns of the Institutional Mortgagee and cause such Institutional Mortgagee to accept Tenant’s program of insurance (including obtaining the insurance coverages required above in lieu of self-insurance if required by such Institutional Mortgagee).

 

8.2.5   Tenant shall, as its own cost and expense, obtain any and all licenses and permits necessary for any Permitted Use. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the premises including without limitation The Americans with Disabilities Act, all requirements of the Occupational Safety and Health Administration, and Environmental Law as defined herein, and shall promptly comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in or upon, or connected with, the premises, all at Tenant’s sole expense. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas noise or vibrations to emanate from the premises, nor take any other action which would constitute a nuisance. Tenant shall not receive, store or otherwise handle any product, material or merchandise which is explosive or highly inflammable (other than Permitted Materials handled in compliance with Environmental Law), without Landlord’s prior written consent. Tenant will not permit the Premises to be used for any purpose or in any manner (including without limitation any method of storage) which would render the insurance thereon void.

 

8.2.6   (a) As used in this lease, “Environmental Law” shall mean all federal, state and local laws, statutes, ordinances, regulations, rules, judicial and administrative orders and decrees, permits, licenses, approvals, authorizations and similar requirements of all federal, state and local governmental agencies or other governmental authorities pertaining to the protection of human health and safety or the environment, now existing or later adopted during the term of this lease. As used in this lease, “Permitted Materials” shall mean the materials handled by Tenant in the ordinary course of conducting Permitted Uses.

 

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(b)   Tenant hereby agrees that: (a) Tenant shall not conduct, or permit to be conducted, on the Premises any activity which is not a Permitted Use; (b) Tenant shall not use, store or otherwise handle, or permit any use, storage or other handling of, any Hazardous Substance which is not a Permitted Material on or about the Premises; (c) Tenant shall obtain and maintain in effect all permits and licenses required pursuant to any Environmental Law for Tenant’s activities on the Premises, and Tenant shall at all times comply with all applicable Environmental Laws; (d) Tenant shall not engage in the storage, treatment or disposal on or about the Premises of any Hazardous Substance except for any temporary accumulation of waste generated in the course of Permitted Use; (e) Tenant shall not install any aboveground or underground storage tank or any subsurface lines for the storage or transfer of any Hazardous Substance, except for the lawful discharge of waste to the sanitary sewer, and Tenant shall store all Hazardous Substances in a manner that protects the Premises and the environment from accidental spills and releases; (f) Tenant shall not cause or permit to occur any release of any Hazardous Substance other than Permitted Materials, or any condition of pollution or nuisance on or about the Premises in violation of Environmental Law, whether affecting surface water or groundwater, air, the land or the subsurface environment; (g) Tenant shall promptly remove from the Premises any Hazardous Substance introduced, or permitted to be introduced, onto the premises by Tenant which is not a Permitted Material and, on or before the date Tenant ceases to occupy the Premises, Tenant shall remove from the Premises all Hazardous Substances and all Permitted Materials handled by or permitted on the Premises by Tenant; (h) if any release of a Hazardous Substance to the environment, or any condition of pollution or nuisance, occurs on or about or beneath the Premises in violation of Environmental Law as a result of any act or omission of Tenant or its agents, officers, employees, contractors, invitees of licensees, Tenant shall, at Tenant’s sole cost and expense, promptly undertake all remedial measures required to clean up and abate or otherwise respond to the release, pollution or nuisance in accordance with all applicable Environmental Laws. Landlord and Landlord’s representatives shall have the right, but not the obligation, to enter the Premises at any reasonable time for the purpose of inspecting the storage, use and handling of any Hazardous Substance on the Premises in order to determine Tenant’s compliance with the requirements of this lease and applicable Environmental Law. If Landlord gives written notice to Tenant that Tenant’s use, storage or handling of any Hazardous Substance may not comply with this lease or applicable Environmental Law, Tenant shall correct any such violation within five (5) days after Tenant’s receipt of such notice from Landlord. Tenant shall indemnify and defend Landlord against and hold Landlord harmless from all claims, demands, actions, judgments, liabilities, costs, expenses, losses, damages, penalties, fines and obligations of any nature (including, reasonable attorneys


 
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