EXHIBIT 10.5
LEASE
BETWEEN
LSAC OMAHA L.P., LANDLORD
AND
(i)STRUCTURE, LLC, TENANT
DATED: NOVEMBER 30, 2005
PROPERTY:
11707 MIRACLE HILLS DRIVE
OMAHA, NEBRASKA
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INDEX
Page
ARTICLE 1
PROPERTY AND TERM......................................6
ARTICLE 2
FIXED RENT AND ADDITIONAL RENT.........................9
ARTICLE 3
IMPOSITIONS...........................................11
ARTICLE 4
USE OF PROPERTY.......................................13
ARTICLE 5
CONDITION OF PROPERTY, ALTERATIONS
AND REPAIRS...........................................14
ARTICLE 6
INSURANCE.............................................18
ARTICLE 7
DAMAGE OR DESTRUCTION.................................21
ARTICLE 8
CONDEMNATION..........................................24
ARTICLE 9
ASSIGNMENT AND SUBLETTING.............................26
ARTICLE 10
SUBORDINATION.........................................30
ARTICLE 11
OBLIGATIONS OF TENANT.................................32
ARTICLE 12
DEFAULT; REMEDIES.....................................35
ARTICLE 13
NO WAIVER.............................................41
ARTICLE 14
ESTOPPEL CERTIFICATE..................................42
ARTICLE 15
QUIET ENJOYMENT.......................................42
ARTICLE 16
SURRENDER.............................................42
ARTICLE 17
ACCESS................................................43
ARTICLE 18
ENVIRONMENTAL MATTERS.................................44
ARTICLE 19
FINANCIAL STATEMENTS..................................49
ARTICLE 20
MISCELLANEOUS PROVISIONS..............................49
ARTICLE 21
LEASE GUARANTY........................................52
ARTICLE 22
MEMORANDUM OF LEASE...................................52
ARTICLE 23
LIMITATION OF LIABILITY...............................52
ARTICLE 24
RIGHT OF FIRST OFFER..................................53
Exhibits
Exhibit "A" -
Description of the Land
57
Exhibit "B" - Schedule of
Removable Personal Property
58
Exhibit "C" - Form
of Memorandum of Lease
59
Exhibit "D" - Form
of Lease Guaranty
63
<PAGE>
LEASE
THIS LEASE (the "Lease") is made as of the 30th day of
November, 2005 between LSAC OMAHA L.P., a
Delaware limited partnership
("Landlord"), having an office for the
conduct of business at One Penn Plaza,
Suite 4015, New York, New York 10119-4015,
and (i)STRUCTURE, LLC, a Delaware
limited liability company ("Tenant"),
having an office for the conduct of
business at 11707 Miracle Hill Drive,
Omaha, Nebraska.
W I T N E S S E T H:
The parties hereto, for themselves, their
heirs, distributees, executors,
administrators, legal representatives,
successors and assigns, hereby covenant
as follows:
ARTICLE A
CERTAIN LEASE PROVISIONS
1.
Address for
11707 Miracle Hill Drive
the Property:
Omaha, Nebraska
2.
(a) Term: (i) A Primary Term of
approximately Twenty (20) years, beginning
on the Commencement Date, and ending on the
Expiration Date.
(ii) Option to Extend Term: Two (2) renewal
options of ten (10) years each.
(b) Commencement
Date: November 30, 2005
(c) Expiration Date:
Twenty (20) years after the last day in the
calendar month in which the Commencement
Date occurs, unless sooner terminated or
extended pursuant to this Lease.
3.
Fixed Rent
During the
Primary Term:
$1,166,780.00 per annum in equal monthly
installments of $97,231.67
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4. Use
of the
Property:
Data center and general office and uses
incidental thereto.
5.
Address for Notice:
For Landlord:
LSAC Operating Partnership L.P.
c/o Lexington Corporate Properties Trust
One Penn Plaza
Suite 4015
New York, New York 10119-4015
Attention: Mr. John Vander Zwaag
With a copy of
any notices of
default only, to:
Crowe Deegan LLP
535 Fifth Avenue, Suite 611
New York, New York
10017
Attention: Richard C.
Hamlin, Esq.
For Tenant:
(i)Structure, LLC
c/o Infocrossing, Inc.
2 Christie Heights Street
Leonia, NJ 07605
Attention: President and General Counsel
With a copy of
any notices of
default only, to:
Gibson Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: D. Eric Remensperger , Esq.
6.
Guarantor:
Infocrossing, Inc.
2 Christie Heights Street
Leonia, NJ 07605
Attention:
President
<PAGE>
ARTICLE B
CERTAIN DEFINITIONS
"Additional Rent" is defined in Section 2.2.
"Alterations" is defined in Section 5.4.
"Bankruptcy Code" means the provisions of 11 U.S.C. Section
101 et seq. or any statute of similar purpose or nature as
more particularly set forth in Section 9.9.
"Building" means collectively the buildings, building,
equipment and improvements now or
hereinafter erected on the Land.
"Business Day" is every day which most large banks based in
New York, New York are open for the
ordinary conduct of business.
"Claims" is defined in Section 11.3.
"Commencement Date" is defined in Article A, Section 2(b).
"Corporate Transfer" is defined in Section 9.7(b).
"Default" means an event has occurred which constitutes an
Event of Default or which, with the giving
of notice, the lapse of time or both
would constitute an Event of Default.
"Default Rate" means three percent (3%) over the prime
reference rate announced from time to time
by Citibank, N.A. in New York, New
York, as such prime reference rate may be
adjusted and announced from time to
time, or if unavailable, the parties shall
use the prime reference rate for
major New York banks as reported in the
Wall Street Journal.
"Deficiency" is defined in Section 12.4(c).
"De Minimis Hazardous Substances" is defined in Section 18.1.
"Environmental Laws" is defined in Section 18.10.
"Event of Default" is defined in Section 12.1.
"Expiration Date is defined in Article A, Section 2(c).
"Extension Term" is defined in Section 1.3.
"Fixed Rent" is defined in Article A, Section 3.
"Guarantor" means Infocrossing, Inc. and its permitted
successors and assigns.
"Guaranty" means that certain Lease Guaranty given by
Guarantor in accordance with Section
21.
"Hazardous Substances" is defined in Section 18.11.
"Impositions" is defined in Section 3.1.
"Indemnified Parties" is defined in Section 11.3.
"Land" means that certain real property described on Exhibit
"A", attached hereto and incorporated
herein by this reference.
"Landlord" is defined in the introductory paragraph to this
Lease.
"Lease" means this lease made between Landlord, as landlord,
and Tenant, as tenant.
"Lease Year" shall mean each twelve month period during the
Primary Term and each Extended Term. The
first Lease Year shall commence on the
Commencement Date and continue until and
include the last day of the calendar
month in which the first anniversary of the
Commencement Date occurs, unless the
Commencement Date is on the first day of
the month, in which case it shall end
on the day immediately preceding such first
anniversary.
"Mortgage" is defined in Section 3.2.
"Mortgagee" is defined in Section 3.2.
"Non-Disturbance Agreement" is defined in Section 10.1.
"Offer" is defined in Section 24.1.
"Permitted Encumbrances" shall mean those certain liens,
easements, rights of way and other
encumbrances now or hereafter encumbering the
Property.
"Property" means collectively the Land and the Building.
"Purchase Date" is defined in Section 24.1.
"Purchase Price" is defined in Section 24.6.
"Remedial Work" is defined in Section 18.7.
"Rent" is defined in Section 2.3.
"Report" is defined in Section 18.1.
"Requirements" is defined in Section 11.1.
"Restoration" is defined in Section 7.1.
"ROFO Notice" is defined in Section 24.2.
"Sale Agreement" means the Agreement for Sale and Leaseback
dated as of November 30, 2005 between
Landlord, as buyer, and Tenant, as seller.
"Sublease" is defined in Section 9.1.
"Tenant" is defined in the introductory paragraph to this
Lease.
"Tenant's Knowledge" is defined in Section 18.13 and Section
20.15.
"Term" is defined in Article A, Section 2(a).
"Third Party" means any third party other than Tenant,
Landlord, any affiliate of Landlord and/or
any Mortgagee.
"Third Party Contract" is defined in Section 24.3.
"Third Party Price" is defined in Section 24.3.
"Threshold Amount" is defined in Section 5.4.
"Transfer" is defined in Section 9.1.
"Work" is defined in Section 5.5.
ARTICLE 1
PROPERTY AND TERM
Section 1.1. During the Term, Landlord, in consideration of
the rents herein reserved and of the terms,
provisions, covenants and agreements
on the part of Tenant to be kept, observed
and performed, does hereby lease and
demise the Property unto Tenant, and Tenant
does hereby hire and take the
Property from Landlord, subject to each and
every matter affecting title to the
Property including, without limitation, all
of the following which are in effect
as of the Commencement Date: all easements,
rights of way, declarations,
covenants, conditions and restrictions,
liens, encumbrances, encroachments,
licenses, notices of pendency, charges,
zoning laws, ordinances, regulations,
building codes and other governmental laws,
rules and orders affecting the
Property, and other exceptions to
Landlord's title, whether or not the same are
of public record.
Section 1.2. Tenant shall lease the Property for the Term,
unless sooner terminated as hereinafter
provided or pursuant to law.
Section 1.3. (a) Provided there is no then uncured Event of
Default, Tenant shall have the right, at
its option, to extend the Term for two
(2) additional ten (10) year periods,
(each, an "Extension Term") in the manner,
and subject to the conditions, set forth
below. The first Extension Term shall
commence on the day after the Expiration
Date and shall expire on the day
immediately preceding the tenth anniversary
of the Expiration Date unless the
Extension Term shall sooner end pursuant to
any of the terms, covenants or
conditions of this Lease or pursuant to
law. The second Extension Term shall
commence on the day after the first
Extension Term shall expire and shall expire
on the tenth anniversary of the day the
second Extension Term commenced, unless
such second Extension Term shall sooner end
pursuant to any of the terms,
covenants or conditions of this Lease or
pursuant to law. Provided this Lease
shall then be in full force and effect and
there is then no uncured Event of
Default hereunder, Tenant may exercise its
option to extend the Term by giving
Landlord written notice of such election no
sooner than two (2) years prior to
the Expiration Date or the expiration of
the then current Extension Term, as the
case may be, and no later than eighteen
(18) months prior to the Expiration Date
or the expiration of the then current
Extension Term, as the case may be, the
time of exercise being of the essence, and
upon the giving of such notice, this
Lease and the Term shall be extended
without execution or delivery of any other
or further documents, with the same force
and effect as if such Extension Term
had originally been included in the Term
and the Expiration Date shall thereupon
be deemed to be the last day of such
Extension Term. Notwithstanding Tenant's
exercise of its option under this Section
1.3, if there shall then be an uncured
Event of Default hereunder as of the
Expiration Date, as such Expiration Date
may have been extended, Landlord shall have
the right to cancel such exercise by
Tenant, in which event the Term shall
expire on the Expiration Date or the
expiration date of the then current
Extension Term, as the case may be and the
provisions of this Section 1.3 shall be
deemed null and void and of no further
force or effect. Except as provided in
subsections (b) and (c) below, all of the
terms, covenants and conditions of this
Lease shall continue in full force and
effect during each Extension Term,
including items of Additional Rent which
shall remain payable on the terms herein
set forth.
(b) Fixed Rent during each Extension Term shall be equal to
one hundred (100%) percent of the fair
market rent (the "Fair Market Rent") as
determined in accordance with the procedure
set forth below.
(c) The Fair Market Rent for the purpose of
this Section 1.3 shall be determined
in the following manner:
(i) The Fair Market Rent shall be the "triple net" rent
generally
payable in the market area in which the
Property is located for equivalent space
in a single-tenant Class-A building of
approximately the same quality, size and
condition as the Building, giving due
consideration to the quality of the design
of the Building, the type of improvements,
the condition of the Property as
improved, the location of the Property and
the Building, the length of the
extended Term, the credit-worthiness of the
Tenant and all other factors that
would be relevant to a willing landlord and
a willing tenant unaffiliated with
the Landlord desiring to enter into a lease
of the Property for the Term.
Landlord and Tenant shall attempt to reach
an agreement as to the determination
of the Fair Market Rent within thirty (30)
days after the date of Landlord's
receipt of Tenant's election to renew the
Term of the Lease. Tenant shall
specify the name and address of its
designated appraiser with each election made
by Tenant to extend the Term of this Lease
pursuant to Section 1.3(a). If,
within thirty (30) days after Landlord's
receipt of Tenant's election to renew
the Term of the Lease, the parties have not
agreed upon the Fair Market Rent,
Landlord shall give written notice to
Tenant specifying the name and address of
its designated appraiser within three (3)
business days from the last day of
such 30-day period. Such two appraisers
shall, within thirty (30) days after the
designation of the Landlord's appraiser,
each make their determination of the
Fair Market Rent in writing and
simultaneously shall give written notice thereof
to each other and to Landlord and Tenant.
Such two appraisers shall have twenty
(20) days after the receipt of notice of
each other's determinations to confer
with each other and to attempt to reach
agreement as to the determination of the
Fair Market Rent. If such appraisers shall
fail to concur as to such
determination within said twenty (20) day
period, they shall give written notice
thereof to Landlord and Tenant and shall
designate a third appraiser within
three (3) business days from the last day
of such 30-day period. If the two
appraisers shall fail to agree upon the
designation of such third appraiser
within five (5) days after said twenty (20)
day period, either or both of them
shall give written notice of such failure
to agree to Landlord and Tenant and,
if Landlord and Tenant fail to agree upon
the selection of such third appraiser
within five (5) days after the appraisers
appointed by the Landlord and Tenant
give notice as aforesaid, then either party
on behalf of both may apply to the
American Arbitration Association or any
successor thereto, or on its failure,
refusal, or inability to act, to a court of
competent jurisdiction, for the
designation of such third appraiser.
(ii) All appraisers shall be independent MAI real estate
appraisers who shall have had at least
fifteen (15) years' continuous experience
in the business of appraising leased real
estate in the metropolitan area in
which the Property is located.
(iii) The third appraiser shall conduct such investigations as
he or she may deem appropriate and shall,
within twenty (20) days after the date
of his or her designation, make an
independent determination of the Fair Market
Rent.
(iv) If none of the determinations of the appraisers varies
from the mean of the determinations of the
other appraisers by more than ten
percent (10%), the mean of the
determinations of the three appraisers shall be
the Fair Market Rent. If, on the other
hand, the determination of any single
appraiser varies from the mean of the
determinations of the other two appraisers
by more than ten percent (10%), the mean of
the determination of the two
appraisers whose determinations are closest
shall be the Fair Market Rent.
(v) The determination of the appraisers, as provided above,
shall be conclusive upon Landlord and
Tenant and shall have the same force and
effect as a judgment made in a court of
competent jurisdiction.
(vi) Each party shall pay fees, costs and expenses of the
appraiser selected by it and its own
counsel fees and one-half (1/2) of all
other expenses and fees of any such
appraisal, including, but not limited to,
the fees, costs and expenses of the third
appraiser.
(d) If for any reason the Fair Market Rent
has not been determined by the date
on which it shall become effective, then,
until such Fair Market Rent has been
determined in accordance herewith, the
Fixed Rent shall continue to be the Fixed
Rent in effect at the end of current Term,
and there shall be an adjustment of
Fixed Rent promptly after determination of
Fair Market Rent in accordance with
this Section 1.3.
ARTICLE 2
FIXED RENT AND ADDITIONAL RENT
Section 2.1. Tenant shall pay to Landlord as Fixed Rent for
the Property during the (a) Primary Term
the amounts stated in Article A,
Section 3, and (b) each Extension Term the
amounts determined in accordance with
Section 1.3(b). Fixed Rent shall be payable
in equal monthly installments in
advance on the first day of each and every
month during the Term, without
previous demand therefor and without offset
or deduction of any kind whatsoever.
Notwithstanding the foregoing, Tenant shall
pay the partial month's installment
of Fixed Rent (with respect to the
remaining days of the month in which
Commencement Date occurs) on the
Commencement Date.
Section 2.2. Tenant shall also pay and discharge as additional
rent (the "Additional Rent") all other
amounts, liabilities and obligations of
whatsoever nature relating to the Property,
including, without limitation, all
Impositions (as defined in Section 3.1),
insurance premiums (as contemplated by
Sections 6.1 and 6.10), and any obligations
arising under any declarations,
easements, restrictions, or other similar
agreements affecting the Property or
any adjoining property thereto, and all
interest and penalties that may accrue
thereon in the event of Tenant's failure to
pay such amounts when due, and all
damages, costs and expenses which Landlord
may incur by reason of any default of
Tenant or failure on Tenant's part to
comply with the terms of this Lease, all
of which Tenant hereby agrees to pay upon
demand or as is otherwise provided
herein. Upon any failure by Tenant to pay
any of the Additional Rent, Landlord
shall have all legal, equitable and
contractual rights, powers and remedies
provided either in this Lease or by statute
or otherwise in the case of
nonpayment of the Fixed Rent. The term
Additional Rent shall be deemed rent for
all purposes hereunder.
Section 2.3. All Fixed Rent and all Additional Rent payable to
Landlord hereunder (collectively, "Rent")
shall be made payable to Landlord and
sent to Landlord's address set forth in
Article A, or to such other person or
persons or at such other place as may be
designated by notice from Landlord to
Tenant made in accordance with Section
20.8, from time to time, and shall be
made in United States currency which shall
be legal tender for all debts, public
and private. At Landlord's request, Rent
shall be payable when due by wire
transfer of immediately available funds to
an account designated from time to
time by Landlord. Notwithstanding the
foregoing, Impositions shall be payable to
the parties to whom they are due, except as
otherwise provided herein.
Section 2.4. This Lease shall be deemed and construed to be a
"net lease", and Tenant shall pay to
Landlord, absolutely net throughout the
Term, the Rent, free of any charges,
assessments, impositions or deductions of
any kind and without abatement, deduction
or set-off whatsoever, except as
otherwise expressly provided herein. Under
no circumstances or conditions,
whether now existing or hereafter arising,
or whether beyond the present
contemplation of the parties, shall
Landlord be expected or required to make any
payment of any kind whatsoever or be under
any other obligation or liability
hereunder, except as herein otherwise
expressly set forth. Tenant shall pay all
costs, expenses and charges of every kind
and nature relating to the Property,
except debt service on any Mortgage or any
other indebtedness of Landlord, which
may arise or become due or payable prior
to, during or after (but attributable
to a period falling prior to or within) the
Term, as may be extended. Except as
otherwise specifically provided in this
Lease, Tenant's obligation to pay Rent
hereunder shall not terminate prior to the
date definitely fixed for the
expiration of the Term (as may be extended)
notwithstanding the exercise by
Landlord of any or all of its rights under
Article 12 hereof or otherwise, and
the obligations of Tenant hereunder shall
not be affected (except as is
otherwise specifically provided herein to
the contrary) by reason of: any damage
to or destruction of the Property or any
part thereof, any taking of the
Property or any part thereof or interest
therein by condemnation or otherwise,
any prohibition, limitation, restriction or
prevention of Tenant's use,
occupancy or enjoyment of the Property or
any part thereof, or any interference
with such use, occupancy or enjoyment by
any person or for any reason, any
matter affecting title to the Property any
eviction by paramount title or
otherwise, any default by Landlord
hereunder, the impossibility,
impracticability or illegality of
performance by Landlord, Tenant or both, any
action of any governmental authority,
Tenant's acquisition of ownership of all
or part of the Property (unless this Lease
shall be terminated by a writing
signed by all persons, including any
mortgagee, having an interest in the
Property), any breach of warranty or
misrepresentation, or any other cause
whether similar or dissimilar to the
foregoing and whether or not Tenant shall,
have notice or knowledge hereof and whether
or not such cause shall now be
foreseeable. The parties intend that the
obligations of Tenant under this Lease
shall be separate and independent covenants
and agreements and shall continue
unaffected unless such obligations have
modified or terminated pursuant to an
express provision of this Lease.
Section 2.5. If Tenant shall fail to make payment of any
installment of Fixed Rent or Additional
Rent payable to Landlord hereunder
within five (5) business days from the date
upon which the same shall first have
been due hereunder then and in each such
event Tenant shall pay Landlord on
demand, in addition to the installment or
other payment due, as Additional Rent
hereunder, a late payment fee to compensate
Landlord for legal, accounting and
other expenses incurred by Landlord in
administering the delinquent account by
reason of such late payment an additional
sum of four (4%) percent of the amount
due as a late charge. For the purposes of
this Section 2.5, payments shall be
deemed made upon the date of actual receipt
by Landlord at the place specified
in or pursuant to Article A, Section 5
hereof. The late payment fee required to
be paid by Tenant pursuant to this Section
2.5 shall be in addition to all other
rights and remedies provided herein or by
Law to Landlord for such nonpayment.
ARTICLE 3
IMPOSITIONS
Section 3.1. From and after the Commencement Date and
throughout the Term, Tenant shall pay and
discharge not later than fifteen (15)
days before any fine, penalty, interest or
cost may be added thereto for the
non-payment thereof, all taxes,
assessments, water rents, sewer rents and
charges, duties, impositions, license and
permit fees, charges for public
utilities of any kind, common area
maintenance charges with respect to any
Permitted Encumbrances, payments and other
charges of every kind and nature
whatsoever, foreseen or unforeseen, general
or special, in said categories,
together with any interest or penalties
imposed upon the late payment thereof,
which, pursuant to past, present or future
law, during, prior to or after (but
attributable to a period falling prior to
or within) the Term, shall have been
or shall be levied, charged, assessed,
imposed upon or become due and payable
out of or for or have become a lien on the
Property or any part thereof, any
improvements or personal property in or on
the Property, the Rents and income
payable by Tenant or on account of any use
of the Property and such franchises
as may be appurtenant to the use and
occupation of the Property (all of the
foregoing being hereinafter referred to as
"Impositions"). Tenant shall submit
to Landlord the proper and sufficient
receipts or other evidence of payment and
discharge of the same promptly after
payment thereof. If any Impositions are not
paid when due under this Lease, Landlord
shall have the right but shall not be
obligated to pay the same, provided Tenant
does not contest the same as herein
provided. If Landlord shall make such
payment, Landlord shall thereupon be
entitled to repayment by Tenant on demand
as Additional Rent hereunder.
Section 3.2. Tenant shall have the right to protest and
contest any Impositions imposed against the
Property or any part thereof,
provided (a) the same is done at Tenant's
sole cost and expense, (b) nonpayment
will not subject the Property or any part
thereof to sale or other liability by
reason of such nonpayment, (c) Landlord
shall have the right to require Tenant
to post a bond or other reasonable security
with Landlord in order to assure
timely and complete performance by Tenant
of its obligations hereunder and (d)
such contest shall not subject Landlord or
the holder (the "Mortgagee") of any
mortgage or deed of trust (a "Mortgage")
encumbering all or any part of the
Property to the risk of any criminal or
civil liability.
Section 3.3. To the extent permitted by law, Tenant shall have
the right to apply for the conversion of
any Impositions to make the same
payable in annual installments over a
period of years, and upon such conversion
Tenant shall pay and discharge said annual
installments as they shall become due
and payable. If such Impositions either (a)
are initially imposed prior to the
last three years of the Term (as the same
may be extended) or (b) reflect
assessments for public improvements
initiated or requested by Tenant, Tenant
shall pay all such deferred installments
prior to the expiration or sooner
termination of the Term, notwithstanding
that such installments shall not then
be due and payable; provided, however, that
(x) any Impositions other than one
converted by Tenant so as to be payable in
annual installments as aforesaid or
(y) Impositions which are converted by
Tenant so as to be payable in annual
installments during the last three years of
the Term and which in either event,
relate to a fiscal period of the taxing
authority, a part of which is included
in a period of time after the Expiration
Date, shall (whether or not such
Impositions shall be assessed, levied,
confirmed, imposed or become payable,
during the Term) be adjusted between
Landlord and Tenant as of the Expiration
Date, so that Landlord shall pay that
portion of such Impositions which relate
to that part of such fiscal period included
in the period of time after the
Expiration Date, and Tenant shall pay the
remainder thereof.
Section 3.4. If at any time during the Term, a tax or excise
on Rents or other tax, however described,
is levied or assessed with respect to
the Rent or any part thereof (as opposed to
the income of Landlord) or against
Landlord as a substitute in whole or in
part for any Impositions theretofore
payable by Tenant, other than taxes
referenced in Section 3.5 below, Tenant
shall pay and discharge such tax or excise
on Rents or other tax before it
becomes delinquent, and the same shall be
deemed to be an Imposition levied
against the Property.
Section 3.5. Except as set forth in Section 3.4 above, Tenant
shall not be obligated to pay any
franchise, excise, corporate, estate,
inheritance, succession, capital, levy or
transfer tax of Landlord or any
income, profits or revenue tax upon the
income of Landlord.
Section 3.6. In the event that Landlord is required pursuant
to the terms of any Mortgage to make
monthly or other tax escrow payments to any
Mortgagee, or in the event that a Default
occurs, Tenant agrees that, on demand
made by Landlord, it shall: (a) deposit
with Mortgagee (or with Landlord if
there is no Mortgage), on the day of demand
and on the same day each month
thereafter until thirty (30) days prior to
the date when the next installment of
impositions is due to the authority or
other person to whom the same is paid, an
amount equal to said next installment of
Impositions divided by the number of
months over which such deposits are to be
made; and (b) thereafter during the
Term deposit with Mortgagee (but not
Landlord) an amount each month estimated by
Mortgagee to be adequate to create a fund
which, as each succeeding installment
of Impositions becomes due, will be
sufficient, thirty (30) days prior to such
due date, to pay such installment in full;
provided that the amount and other
terms pertaining to such deposits shall
otherwise be consistent with the terms
and provisions of this Article 3. If at any
time the amount of any Imposition is
increased or Mortgagee believes that it
will be, said monthly deposits shall be
increased upon demand by Mortgagee so that,
thirty (30) days prior to the due
date for each installment of Impositions,
there will be deposits on hand with
Mortgagee (but not Landlord) sufficient to
pay such installments in full. To the
extent permitted by applicable law,
Mortgagee shall not be required to deposit
any such amounts in an interest bearing
account. For the purpose of determining
whether Mortgagee has on hand sufficient
moneys to pay any particular Imposition
at least thirty (30) days prior to the due
date therefor, deposits for each
category of Imposition shall be treated
separately, it being the intention that
Mortgagee shall not be obligated to use
moneys deposited for the payment of an
item not yet due and payable to the payment
of an item that is due and payable.
Notwithstanding the foregoing, it is
understood and agreed that to the extent
permitted by applicable law, deposits
provided for hereunder may be held by
Mortgagee in a single bank account and
commingled with other funds of Mortgagee.
Upon a transfer of the Property, the
transferor shall be deemed to be released
from all liability with respect to the
deposits made hereunder to the extent
that the transferor has transferred
deposits of Impositions made hereunder to
the transferee and Tenant agrees to look to
the transferee solely with respect
thereto, and the provisions hereof shall
apply to each successive transfer of
the said deposits. At such time as any
Mortgage is released as a lien on the
Property, any deposit made hereunder shall
be transferred to a new Mortgagee, or
if there is no Mortgage, to Landlord to be
returned to Tenant.
Section 3.7. Landlord shall not be required to join in any
proceedings referred to in this Article
unless the provisions of any law, rule
or regulation at the time in effect shall
require that such proceedings be
brought by and/or in the name of Landlord,
in which event, Landlord, at Tenant's
sole risk and expense, shall join and
cooperate in such proceedings or permit
the same to be brought in its name but
shall not be liable for the payment of
any costs or expenses in connection with
any such proceedings.
Section 3.8. The provisions of this Article 3 shall survive
the expiration or earlier termination of
this Lease.
ARTICLE 4
USE OF PROPERTY
Section 4.1. The Property may be used and occupied only for
the purposes set forth in Article A,
Section 4. In addition, Landlord agrees not
to unreasonably withhold, condition or
delay its consent to any other lawful use
requested in writing by Tenant provided
that: (a) at the time of such request,
Tenant has a tangible net worth at least
equal to or better than its tangible
net worth on the Commencement Date, (b)
such use will not result in the
production, storage, use or release of
Hazardous Materials in violation of
Article 18, (c) such use will not diminish
the fair market value of the
Property, and (d) such use will comply with
all Permitted Encumbrances and all
other terms of this Lease. Tenant shall not
create or suffer to exist any public
or private nuisance, hazardous or illegal
condition or waste on or with respect
to the Property.
Section 4.2. Tenant hereby represents and warrants to Landlord
that all necessary certificates of
occupancy, permits, licenses and consents
from any or all appropriate governmental
authorities have been obtained by or on
behalf of Tenant and are in full force and
effect as may be required by law for
Tenant to occupy the Property and conduct
business thereon.
<PAGE>
ARTICLE 5
CONDITION OF PROPERTY, ALTERATIONS AND REPAIRS
Section 5.1. Tenant has examined the Property, is familiar
with the physical condition, expenses,
operation and maintenance, zoning, status
of title and use that may be made of the
Property and every other matter or
thing affecting or related to the Property,
and is leasing the same in its "As
Is" condition. Landlord has not made and
does not make any representations or
warranties whatsoever with respect to the
Property or otherwise with respect to
this Lease. Tenant assumes all risks
resulting from any defects (patent or
latent) in the Property or from any failure
of the same to comply with any
governmental law or regulation applicable
to the Property or the uses or
purposes for which the same may be
occupied.
Section 5.2. During the Primary Term and each Extended Term,
at Tenant's sole cost and expense, Tenant
shall keep the Property and the
adjoining sidewalks and curbs (unless third
parties are responsible for the
cleaning and maintenance of such adjoining
sidewalks and curbs), if any, clean
and in good condition and repair, free of
accumulations of dirt, rubbish, snow
and ice, and Tenant shall make all repairs
and replacements, structural and
non-structural, foreseen and unforeseen,
and shall perform all maintenance,
necessary to maintain the Property and any
sidewalks and curbs adjacent thereto
in good condition and repair (unless third
parties are responsible for the
cleaning and maintenance of such adjoining
sidewalks and curbs). When used in
this Section 5.2, the term "repairs" shall
include all necessary additions,
alterations, improvements, replacements,
renewals and substitutions. All repairs
made by Tenant shall be not less than equal
in quality and class to the original
Alteration and shall be made in compliance
with all Requirements (hereinafter
defined). Landlord shall not be required to
furnish any services or facilities
or to make any repairs or alterations to
the Property, and Tenant hereby assumes
the full and sole responsibility for the
condition, operation, repair,
replacement, maintenance and management of
the Property, and all costs and
expenses incidental thereto.
Section 5.3. Landlord shall not be responsible for the cost of
any alterations of or repairs to the
Property of any nature whatsoever,
structural or otherwise, whether or not now
in the contemplation of the parties.
To the extent not prohibited by law, Tenant
hereby waives and releases all
rights now or hereinafter conferred by
statute or otherwise which would have the
effect of limiting or modifying any of the
provisions of this Article 5.
Section 5.4. Tenant shall have the right at any time and from
time to time during the Term to make, at
its sole cost and expense, changes,
alterations, additions or improvements
(collectively, "Alterations") in or to
the Property subject, in each case, to all
of the following:
(a) No Alteration shall be undertaken except after fifteen
(15) days' prior notice to Landlord,
provided that no such notice shall be
required with respect to any nonstructural
Alteration involving an estimated
cost of less than the Threshold Amount
(hereinafter defined) (as estimated by a
licensed architect or engineer reasonably
approved by Landlord) or involving an
actual cost (based on a lump sum or
guaranteed maximum price contract) less than
the Threshold Amount.
(b) No structural Alteration, and no other Alteration
involving an estimated cost of more than
the Threshold Amount (as estimated by a
licensed architect or engineer reasonably
approved by Landlord) shall be made
without the prior written consent of
Landlord, which consent shall not be
unreasonably withheld, delayed or
conditioned. Notwithstanding the foregoing,
Tenant may make Alterations consisting of
normal painting, carpeting, wall
coverings, installation, removal or
reconfiguration of cubicles, demountable
wall partitions or other similar office
installations and office decorations
without Landlord's prior written
consent.
(c) Any Alteration when completed shall be of such a character
as not to reduce the value of the Property
below its value immediately before
such Alteration.
(d) No Alteration shall be performed by Tenant if the same
would materially reduce the cubic content
of the usable area of the Building, or
weaken, temporarily or permanently, the
structure of the Building or any part
thereof, or impair any zoning or materially
impair other amenities of the
Property.
(e) The reasonable cost and expense of Landlord's, and the
cost and expense of Mortgagee's review of
any plans and specifications required
to be furnished pursuant to Section 5.5
below shall be paid by Tenant to
Landlord, within ten (10) days after
demand, or, at the option of Landlord, as
Additional Rent.
(f) For purposes of Sections 5.4 and 5.5,the "Threshold
Amount" shall mean an amount equal to
$250,000.00, exclusive of equipment. For
purposes of determining the Threshold
Amount, an Alteration shall include any
series of related improvements (exclusive
of equipment) whose cost, in the
aggregate equals or exceeds
$250,000.00.
(g) The provisions and conditions of Section 5.5 shall apply
to any work performed by Tenant under this
Article.
Section 5.5. Tenant agrees that all Alterations, repairs,
Restoration and other work that Tenant
shall be required or permitted to do
under the provisions of this Lease (each
hereinafter called the "Work") shall be
(i) performed in a first-class, workmanlike
manner, and in accordance with all
Requirements, as well as any plans and
specifications therefor which shall have
been approved by Landlord to the extent
that such approval is required
hereunder, (ii) commenced and completed
promptly and (iii) done in accordance
with all of the following terms and
conditions:
(a) If the Work shall (i) involve any structural repair,
Alterations, Restoration or other Work, or
(ii) cost in excess of the Threshold
Amount, then the Work shall not be
commenced until detailed plans and
specifications (including layout,
architectural, mechanical and structural
drawings), prepared by a licensed architect
or engineer reasonably approved by
Landlord shall have been submitted to and
approved by Landlord, which approval
shall not be unreasonably withheld,
conditioned or delayed.
(b) All Work shall be commenced only after all required
municipal and other governmental permits,
authorizations and approvals shall
have been obtained by Tenant, at its own
cost and expense, and the originals or
certified copies thereof delivered to
Landlord. Landlord will, on Tenant's
written request, promptly execute any
documents necessary to be signed by
Landlord to obtain any such permits,
authorizations and approvals, provided that
Tenant shall bear any expense or liability
of Landlord in connection therewith.
(c) No Work costing more than $500,000.00 or affecting the
structure of the Improvements shall be
undertaken except under the supervision
of a licensed architect or engineer
approved by Landlord, which approval shall
not be unreasonably withheld.
(d) If the Work will cost more than the $1,000,000.00 (as
estimated in writing by a licensed
architect or engineer reasonably approved by
Landlord or based upon the actual cost of
the Work based on a lump sum or
guaranteed maximum price contract for the
Work), it shall not be commenced until
Tenant shall have obtained from its general
contractor and delivered to
Landlord, a performance bond and a labor
and materials payment bond (issued by a
corporate surety licensed to do business in
the state in which the Property is
located and reasonably satisfactory to
Landlord), each in an amount equal to the
estimated cost of such Work and in form
otherwise reasonably satisfactory to
Landlord.
(e) Subject to Tenant's contest rights pursuant to Section
11.4, the cost of all Work shall be paid
promptly so that the Property and
Tenant's leasehold estate therein shall at
all times be free from (i) liens for
labor or materials supplied or claimed to
have been supplied to the Property or
Tenant, and (ii) chattel mortgages,
conditional sales contracts, title retention
agreements, security interests and
agreements, and financing agreements and
statements.
(f) At all times when any Work is in progress, Tenant shall
maintain or cause to be maintained with
such companies and for such periods as
Landlord may require (i) workmen's
compensation insurance covering all persons
employed in connection with the Work, in an
amount at least equal to the minimum
amount of such insurance required by law;
and (ii) for the mutual protection of
Landlord, Tenant and any Mortgagee, (1)
builder's risk insurance, completed
value form, covering all physical loss, in
an amount reasonable satisfactory to
Landlord, and (2) commercial general
liability insurance against all hazards,
with limits for bodily injury or death to
any one person, for bodily injury or
death to any number of persons in respect
of any one accident or occurrence, and
for Property damage in respect of one
accident or occurrence in such amounts as
Landlord may reasonably require. Such
commercial general liability insurance may
be satisfied by the insurance required
under Section 6.1(a), but may be effected
by an endorsement, if obtainable, upon the
insurance policy referred to in said
Section. The provisions and conditions of
Article 6 hereof shall apply to any
insurance which Tenant shall be required to
maintain or cause to be maintained
under this subsection.
(g) Upon completion of any Work, Tenant, at Tenant's expense,
shall obtain certificates of final approval
of such Work required by any
governmental or quasi-governmental
authority and shall furnish Landlord with
copies thereof, together with "as-built"
plans and specifications for such Work
(if the Work undertaken by Tenant required
the filing of any plans with any
governmental authority).
(h) The
conditions of Section 5.4 shall have been
complied with, to the extent applicable to
the Work.
Section 5.6. Any Work shall be subject to inspection at any
reasonable time and from time to time and
when accompanied by a representative
of Tenant (except in the event of an
emergency), by Landlord, its architect and
Mortgagee, or their duly authorized
representatives, and if Landlord's architect
or Mortgagee upon any such inspection shall
be of the opinion, which opinion
shall not be unreasonable, that the Work is
not being performed substantially in
accordance with the provisions of this
Article 5 or the plans and
specifications, or that any of the
materials or Workmanship are not first-class
or are unsound or improper, Tenant shall
correct any such failure and shall
replace any unsound or improper materials
or workmanship.
Section 5.7. For purposes of this Lease, the word "structural"
when used in connection with any Work shall
mean Work affecting the load bearing
walls, support beams, structural components
of the roof, any replacement of the
roof (whether or not of structural
components), foundation of the Building or
that affects the proper functioning of the
Building's mechanical, electrical,
sanitary, plumbing, heating,
air-conditioning, ventilating, utility or any other
service systems.
Section 5.8. All fixtures, structures and other improvements
shall become the property of Landlord and
shall remain upon and be surrendered
with the Property other than (a) trade
fixtures (including, without limitation,
process equipment and compressors), (b)
de-mountable wall partitions, and (c)
those items listed on Exhibit "B", whether
now installed or installed in or upon
the Property at any time during the Term.
Prior to the commencement of any Work,
Landlord will, upon written request by
Tenant, notify Tenant whether Landlord
will require such Work to be removed from
the Property prior to the Expiration
Date or earlier termination of this Lease.
If Tenant fails to request such
determination at the time of any such Work,
Landlord may notify Tenant no later
than one hundred twenty (120) days prior to
the Expiration Date, that Landlord
elects to have the same removed by the
Expiration Date at Tenant's expense. All
property permitted or required to be
removed by Tenant at the end of the Term
remaining in the Property after Tenant's
removal shall be deemed transferred and
assigned to Landlord and may, at the
election of Landlord, either be retained as
Landlord's property or may be removed from
the Property by Landlord at Tenant's
expense. Tenant shall be responsible for,
and shall reimburse Landlord within
three (3) business days after written
demand therefor, any damage to the
Property caused in whole or in part by the
removal or demolition of Tenant's
fixtures, structures or other improvements
which Tenant is required to remove
pursuant to this Section 5.8 or which
Tenant elects under the provisions of this
Lease to remove. The provisions of this
Section 5.8 shall survive the expiration
or earlier termination of this Lease.
<PAGE>
ARTICLE 6
INSURANCE
Section 6.1. Throughout the Primary Term and each Extended
Term, Tenant shall, at its own cost and
expense, provide and keep in force, for
the benefit of Landlord, Tenant and any
Mortgagee:
(a) broad form commercial general liability insurance
(including protective liability coverage on
operations of independent
contractors engaged in construction and
blanket contractual liability insurance
and certified and non-certified acts of
terrorism if reasonably available)
protecting Landlord, Tenant and any
Mortgagee against all claims for damages to
person or property or for loss of life or
of property occurring upon, in, or
about the Property, if any, written on a
per-occurrence basis with limits of
liability of not less than $5,000,000.00
with respect to bodily injury and
property damage arising from any one
occurrence and $10,000,000.00 in general
aggregate limit and an umbrella policy in
an amount not less than $10,000,000.00
in excess coverage, or such greater limits
as may be reasonably required from
time to time by any Mortgagee or as may be
reasonably required from time to time
by Landlord consistent with insurance
coverage on properties similarly
constructed, occupied and maintained. Such
coverage shall waive the insurer's
rights of subrogation against Landlord;
(b) a standard all-risk property insurance policy in respect
of the Property and all installations,
additions and improvements which may now
or hereafter be erected thereon, including,
without limitation, Broad Form Flood
(including back-up of sewers and drains,
seepage and surface water), ICC,
demolition coverage of not less than
$5,000,000 and full coverage for Contingent
Operation of Building Laws, and, to the
extent required by any Mortgagee,
Earthquake (if located within a seismic
area), and certified and uncertified
terrorism coverage in an amount equal to
the full replacement value of the
Property for non-certified terrorism and no
reduction of limits for certified
terrorism, all of the foregoing coverages
shall be in an amount sufficient to
prevent Landlord and Tenant from becoming
co-insurers and in any event in an
amount not less than one hundred percent
(100%) of the actual replacement value
thereof (i.e., including the cost of debris
removal but excluding foundations
and excavations) as reasonably determined
by Landlord from time to time;
(c) business interruption insurance covering risk of loss due
to the occurrence of any of the hazards
covered by the insurance to be
maintained by Tenant described in Section
6.1(b) with coverage, for a period of
at least eighteen (18) months following the
insured-against peril plus six (6)
months extended period of indemnity
coverage, of 100% of all Rent to be paid by
Tenant under this Lease. Coverage under
this section (c) arising out of an act
of terrorism shall be limited to a period
of twelve (12) months;
(d) Worker's compensation insurance (including employers,
liability insurance) covering all persons
employed at the Property by Tenant to
the extent required by the laws and
statutes of the state in which the Property
is located, including, without limitation,
during the course of Work to the
Property;
(e) boiler insurance, if applicable, in an amount not less
than one hundred percent (100%) of the
actual replacement value thereof and of
any improvements in which any such boiler
is located (including the cost of
debris removal but excluding foundations
and excavations) as reasonably
determined by Landlord from time to time
which insurance includes combined
direct damage and business interruption on
a comprehensive basis subject to a
deductible of no greater than $ 25,000;
(f) if a sprinkler system is located in the Building,
sprinkler leakage insurance in amounts
reasonably approved by Landlord; and
(g) such other or further insurance, in such amounts and in
such form, as is customarily obtained by
owners of properties similarly located,
constructed, occupied and maintained and is
available at commercially reasonable
rates, or as otherwise reasonably required
by any Mortgagee.
Section 6.2. Whenever under the terms of this Lease Tenant is
required to maintain insurance for the
benefit of Landlord, Landlord shall be
(a) an additional insured in all such
liability insurance policies and (b) an
additional named insured and as loss payee
in all such property policies. In the
event that the Property shall be subject to
any Mortgage, the commercial general
liability insurance shall, if required by
such Mortgage, name the Mortgagee as
an additional insured and all other
insurance provided hereunder shall name the
Mortgagee as an additional insured under a
standard "non-contributory mortgagee"
endorsement or its equivalent. All policies
of insurance shall provide that such
coverage shall be primary and that any
insurance maintained separately by
Landlord or the Mortgagee shall be excess
insurance only, except as otherwise
provided in Section 6.10 below. The
original certificates of insurance and
endorsements for all policies required to
be maintained by Tenant under this
Lease and legible copies of the original
property policies shall be delivered to
Landlord and any Mortgagee.
Section 6.3. The amounts payable under any and all insurance
policies insuring against property damage
to the Building shall, subject to
Article 7, be made available or "paid over"
to Mortgagee or, if there is none,
to Landlord. All property insurance
policies required by this Lease shall
provide that all adjustments for claims
with the insurers in excess of Fifty
Thousand Dollars ($50,000.00) (exclusive of
any deductible) shall be made with
Landlord, Tenant and any Mortgagee. Subject
to the terms of any Mortgage, any
adjustments for claims with the insurers
involving sums of Fifty Thousand
Dollars ($50,000.00) (exclusive of any
deductible) or less shall be made with
Tenant.
Section 6.4. All of the above-mentioned insurance policies
and/or certificates shall be obtained by
Tenant and delivered to Landlord on or
prior to the date hereof, and thereafter as
provided for herein, and shall be
written by insurance companies: (a) rated
A:X or better in "Best's Insurance
Guide" (or any substitute guide acceptable
to Landlord); (b) authorized to do
business in the state where the Property is
located; and (c) of recognized
responsibility and which are satisfactory
to Landlord and any Mortgagee. Any
deductible amounts shall not exceed $25,000
per occurrence under any property
insurance policy and liability insurance
policy hereunder. In the event any of
Tenant's insurance policies contain
deductible amounts, Tenant agrees to pay the
amount of such deductibles in the event of
a claim.
Section 6.5. At least thirty (30) days prior to the expiration
of any policy or policies of such
insurance, Tenant shall renew such insurance,
by delivering to Landlord or Mortgagee,
within the said period of time,
certificates of insurance (followed by
copies of original policies within a
reasonable period of time) evidencing the
coverage described in this Article 6.
All coverage described in this Article 6
shall provide Landlord and Mortgagee
with thirty (30) days' notice of
cancellation or change in terms. If Tenant
shall fail to procure the insurance
required under this Article 6 in a timely
fashion or to deliver certificates of
insurance and the original policies as
required hereunder, Landlord may, at its
option and in addition to Landlord's
other remedies in the event of a Default by
Tenant, upon not less than three (3)
business days written notice to Tenant
(unless Tenant's insurance will expire
prior thereto, in which event no such prior
notice shall be required), procure
the same for the account of Tenant, and the
cost thereof shall be paid to
Landlord as Additional Rent.
Section 6.6. Tenant shall not violate, or permit to be
violated, any of the conditions of any of
the said policies of insurance, and
Tenant shall perform and satisfy the
requirements of the companies writing such
policies so that companies of good
standing, reasonably satisfactory to
Landlord, shall be willing to write and/or
continue such insurance.
Section 6.7. Tenant shall not carry separate or additional
insurance effecting the coverage described
in Section 6.1 (b) and (c),
concurrent in form and contributing in the
event of any loss or damage to the
Property with any insurance required to be
obtained by Tenant under this Lease,
unless such separate or additional
insurance shall comply with and conform to
all of the provisions and conditions of
this Article. Tenant shall promptly give
notice to Landlord of such separate or
additional insurance.
Section 6.8. The insurance required by this Lease, at the
option of Tenant, may be effected by
blanket and/or umbrella policies issued to
Tenant covering the Property and other
properties owned or leased by Tenant,
provided that the policies otherwise comply
with the provisions of this Lease
and allocate to the Property the specified
coverage, without possibility of
reduction or coinsurance by reason of, or
damage to, any other premises named
therein, and if the insurance required by
this Lease shall be effected by any
such blanket or umbrella policies, Tenant
shall furnish to Landlord or Mortgagee
certified copies or duplicate originals of
such policies in place of the
originals, with schedules thereto attached
showing the amount of insurance
afforded by such policies applicable to the
Property.
Section 6.9. Landlord shall not be limited in the proof of any
damages which Landlord may claim against
Tenant arising out of or by reason of
Tenant's failure to provide and keep in
force insurance, as aforesaid, to the
amount of the insurance premium or premiums
not paid or incurred by Tenant and
which would have been payable under such
insurance, but Landlord shall also be
entitled to recover as damages for such
breach, the uninsured amount of any
loss, to the extent of any deficiency in
the insurance required by the
provisions of this Lease and damages, costs
and expenses of suit suffered or
incurred by reason of damage to, or
destruction of, the Property, occurring
during any period when Tenant shall have
failed or neglected to provide
insurance as aforesaid.
Section 6.10. Anything is this Article 6 to the contrary
notwithstanding, Landlord shall on the
Commencement Date obtain and maintain the
insurance coverages provided for in Section
6.1 in accordance with the
requirements of this Article 6. Landlord
shall submit to Tenant, and Tenant
shall pay as Additional Rent, the invoices
for the premiums for such insurance
which shall be payable within ten (10) days
of delivery to Tenant. In the event
that after the Commencement Date, Landlord
elects to no longer obtain and
maintain the insurance coverages provided
for in Section 6.1, Landlord shall
give Tenant not less than thirty (30) days
notice thereof in which event Tenant
shall obtain and maintain the insurance
coverages provided for in Section 6.1 in
accordance with the requirements of this
Article 6 with Landlord retaining the
right to thereafter obtain and maintain
such insurance coverages on not less
than thirty (30) days notice to Tenant in
which event the provisions of this
Section 6.1 shall apply.
ARTICLE 7
DAMAGE OR DESTRUCTION
Section 7.1. (a) If the Property or any part thereof shall be
damaged or destroyed by fire or other
casualty (including any casualty for which
insurance was not obtained or obtainable)
of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, (i)
Landlord shall, subject to Sections
7.2 and 7.3, pay over to Tenant, upon the
terms set forth in Section 7.2, any
moneys which may be recovered by Landlord
from property insurance, (ii) this
Lease shall be unaffected thereby and shall
continue in full force and effect,
and (iii) Tenant shall, at Tenant's sole
cost and expense, expeditiously and in
a good and workmanlike manner, cause such
damage or destruction to be remedied
or repaired (the "Restoration") by
restoring the Property to its condition
immediately prior to such damage, or
destruction. All Restoration Work shall be
performed in accordance with the provisions
of this Lease, including, without
limitation, the provisions of Sections 5.4
and 5.5 hereof. Tenant hereby waives
the provisions of any law or statute to the
contrary and agrees that the
provisions of this Article shall govern and
control in lieu thereof. If Tenant
shall fail or neglect to restore the
Property with reasonable diligence, or
having so commenced such Restoration, shall
fail to complete the same with
reasonable diligence, or if prior to the
completion of any such Restoration by
Tenant, this Lease shall expire or be
terminated for any reason, Landlord shall
have the right, but not the obligation, to
complete such Restoration at Tenant's
cost and expense and the cost thereof shall
be payable on demand as Additional
Rent, together with interest thereon at the
Default Rate. In addition, if
Landlord so completes the Restoration as
provided hereunder, Landlord shall be
entitled to a supervision fee in the amount
equal to two and one-half percent (2
1/2 %) of the cost of the Restoration Work
from Tenant to compensate Landlord
for administering the Restoration.
(b) Notwithstanding anything contained herein to the contrary,
provided (i) a material portion of the
Property is damaged or destroyed by fire
or other casualty and such damage is of
such a nature that the Restoration
cannot be substantially completed within
eighteen (18) months after the
occurrence of the casualty (it being agreed
that substantial completion means
that the Property can then be lawfully
occupied by Tenant no later than the end
of such period), as estimated by a licensed
architect or engineer retained by
Tenant and reasonably approved by Landlord
(for purposes of such estimate, such
Restoration shall not include Alterations
made by Tenant and installation of
personal property, equipment and trade
fixtures of Tenant), (ii) there is then
no Event of Default (including without
limitation any uncured Event of Default
with respect to the matters set forth in
Article 6), (iii) the insurance
proceeds actually available to Landlord for
Restoration, together with any other
funds Tenant may elect to contribute, equal
or exceed the cost of such
Restoration (as estimated in writing by a
licensed architect retained by
Landlord), and (iv) such amounts are paid
to Landlord, Tenant may terminate this
Lease in which event this Lease shall be of
no further force and effect as of
the date of such termination, except that
any obligation or liability of Tenant,
actual or contingent, under this Lease
which has accrued on or prior to such
termination date shall survive.
Section 7.2. Subject to the provisions of this Article 7,
Landlord shall pay over to Tenant from time
to time, upon the following terms,
any moneys which may be received by
Landlord from property insurance provided by
Tenant but, in no event, to any extent or
in any sum exceeding the amount
actually collected by Landlord upon the
loss; provided, however, that Landlord,
before paying such moneys over to Tenant,
shall be entitled to reimburse itself
therefrom to the extent, if any, of the
reasonable out-of-pocket expenses
actually paid or incurred by Landlord in
collection of such moneys. Landlord
shall pay to Tenant, as herein provided,
the aforesaid insurance proceeds, for
the purpose of Restoration to be made by
Tenant to restore the Property to a
value which shall be not less than their
value prior to such fire or other
casualty. Prior to making any Restoration,
Tenant shall furnish Landlord with an
estimate of the cost of such Restoration,
prepared by a licensed architect or
engineer reasonably approved by Landlord.
Such insurance proceeds shall be paid
to Tenant from time to time thereafter in
installments as the Restoration
progresses, upon application to be
submitted by Tenant to Landlord showing the
cost of labor and material incorporated in
the Restoration, or incorporated
therein since the last previous
application, and paid for by Tenant. If any
vendor's, mechanic's, laborer's, or
materialman's lien is filed against the
Property or any part thereof, or if any
public improvement lien is created or
permitted to be created by Tenant and is
filed against Landlord, or any assets
of, or funds appropriated to, Landlord,
Tenant shall not be entitled to receive
any further installment until such lien is
satisfied or otherwise discharged,
unless such lien is contested by Tenant in
good faith and Tenant has obtained
and delivered a bond issued by a surety, in
an amount equal to the lien amount
and in form otherwise reasonably
satisfactory to Landlord. The amount of any
installment to be paid to Tenant shall be
such proportion of the total insurance
moneys received by Landlord as the cost of
labor and materials theretofore
incorporated by Tenant in the Restoration
bears to the total estimated cost of
the Restoration by Tenant, less (a) all
payments theretofore made to Tenant out
of said insurance proceeds, and (b) ten
percent (10%) of the amount so
determined, provided that Landlord shall
release the ten percent (10%) retention
with respect to any contractor,
subcontractor, trade or supplier which (x) has
completed its work as certified by Tenant
and Tenant's architect, if one is
required pursuant hereto and (y) such
contractor, subcontractor, trade or
supplier has delivered an unconditional
lien waiver with respect to its work or
materials if the value thereof is in excess
of $100,000. Upon completion of and
payment for the Restoration by Tenant,
including reimbursement to Tenant of such
ten percent (10%) retention, to the extent
not previously released, the balance
of any and all insurance proceeds held by
Landlord shall be paid to Landlord. In
the event that the insurance proceeds are
insufficient for the purpose of paying
for the Restoration, Tenant shall
nevertheless be required to make the
Restoration and pay any additional sums
required for the Restoration in
accordance with the provisions of Section
7.4 hereof. Notwithstanding the
foregoing, if Landlord makes the
Restoration at Tenant's expense, as provided in
Section 7.1 hereof, then Landlord shall use
any amounts held by Landlord to pay
for the cost of such Restoration.
Notwithstanding anything contained herein to
the contrary, Tenant may retain insurance
proceeds for any Restoration the
estimated cost of which is less than
$100,000, provided Tenant uses such
proceeds for such Restoration.
Section 7.3. When insurance proceeds are retained by Landlord
pursuant to Section 7.2 above, Landlord may
impose reasonable conditions
precedent to the disbursement of each
payment made to Tenant as provided in
Section 7.2 above, including the
following:
(a) there shall be submitted to Landlord the certificate from
Tenant or if the restoration amount equals
or exceeds $1,000,000, a certificate
of the aforesaid architect, stating (i)
that the sum then requested to be
withdrawn either has been paid by Tenant
and/or is justly due to contractors,
subcontractors, materialmen, engineers,
architects or other persons (whose names
and addresses shall be stated) who have
rendered or furnished certain services
or materials for the Work and giving a
brief description of such services and
materials and the principal subdivisions or
categories thereof and the several
amounts so paid or due to each of such
persons in respect thereof, and stating
in reasonable detail the progress of the
Work up to the date of said
certificate, (ii) that no part of such
expenditures has been or is being made
the basis, in any previous or then pending
request, for the withdrawal of
insurance money or has been made out of the
proceeds of insurance received by
Tenant, (iii) that the sum then requested
does not exceed ninety (90%) percent
of the cost of the services and materials
described in the certificate, except
with respect to such contractors or
subcontractors who have completed their
portion of the Work (as certified by the
architect, or if there is no architect,
Tenant) and provided final lien waivers and
(iv) that the balance of any
insurance proceeds held by Landlord,
together with such other sums, if any,
which Tenant has made or will (for which
evidence of Tenant's intention and
ability shall be to Landlord's reasonable
satisfaction) make available for the
Restoration in accordance with Section 7.4
hereof and to Landlord's satisfaction
will be sufficient upon completion of the
Restoration to pay for the same in
full, and stating in reasonable detail an
estimate of the cost of such
completion;
(b) there shall be furnished to Landlord an official search,
or a certificate of a title insurance
company satisfactory to Landlord, or other
evidence satisfactory to Landlord, showing
that there has not been filed any
vendor's, mechanic's, laborer's or
materialman's statutory or other similar lien
affecting the Property or any part thereof,
or any public improvement lien
created or permitted to be created by
Tenant affecting Landlord, or the assets
of, or funds appropriated to, Landlord,
which has not been discharged of record,
except such as will be discharged upon
payment of the amount then requested to
be withdrawn, or unless any such lien is
contested by Tenant in good faith and
Tenant has obtained and delivered a bond
issued by a surety, in an amount equal
to the lien amount and in form otherwise
reasonably satisfactory to Landlord;
and
(c) at the time of making such payment, no Default shall have
occurred and be continuing.
Section 7.4. If the estimated cost of any Restoration,
determined as provided in Section 7.2
hereof, exceeds the net insurance proceeds
then, prior to the commencement of any
Restoration, Tenant hereby covenants to
obtain from its general contractor and
deliver to Landlord a bond, or other
security satisfactory to Landlord in the
amount of such excess, to be held and
applied by Landlord in accordance with the
provisions of Section 7.2 hereof, as
security for the completion of the Work,
free of public improvement, vendor's,
mechanic's, laborer's or materialman's
statutory or other similar liens.
Section 7.5. As material consideration to Landlord for its
agreement to enter into this Lease, the
parties agree that, except as expressly
set forth in the provisions of this Article
7, (i) this Lease shall not
terminate or be forfeited or be affected in
any manner, and there shall be no
reduction or abatement of the Rent payable
hereunder, by reason of damage to or
total, substantial or partial destruction
of the Property or any part thereof or
by reason of the untenantability of the
same or any part thereof, for or due to
any damage or destruction to the Property
from any cause whatsoever, and, (ii)
notwithstanding any law or statute, present
or future, Tenant waives any and all
rights to quit or surrender the Property or
any part thereof on account of any
damage or destruction of the Property.
Tenant expressly agrees that its
obligations hereunder, including the
payment of Rent payable by Tenant
hereunder, shall continue as though the
Property had not been damaged or
destroyed and without abatement,
suspension, diminution or reduction of any
kind.
ARTICLE 8
CONDEMNATION
Section 8.1. If the whole or substantially all of the Property
shall be taken by condemnation or other
eminent domain proceedings pursuant to
any law, general or special, then at
Tenant's option, this Lease and the Term
shall terminate and expire on the date of
such taking and the Rent
