Exhibit 10.26
LEASE AGREEMENT
BETWEEN
PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P. ,
a Delaware limited partnership
(“Landlord”)
AND
DEERFIELD & COMPANY LLC ,
an Illinois limited liability company
(“Tenant”)
One
O’Hare Centre
Rosemont, Illinois
Dated:
July 1, 2005
TABLE OF CONTENTS
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ARTICLE |
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1 BASIC LEASE
INFORMATION AND CERTAIN DEFINITIONS
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2 PREMISES AND
QUIET ENJOYMENT
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3 TERM;
COMMENCEMENT DATE; DELIVERY AND ACCEPTANCE OF PREMISES
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4 RENT
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5 OPERATING
COSTS
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6 SERVICES OF
LANDLORD
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7 ASSIGNMENT AND
SUBLETTING
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8 REPAIRS
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9
ALTERATIONS
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10 LIENS
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11 USE AND
COMPLIANCE; HAZARDOUS SUBSTANCES
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12 DEFAULT AND
REMEDIES
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13 INSURANCE
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14 DAMAGE BY FIRE
OR OTHER CAUSE
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15
CONDEMNATION
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16
INDEMNIFICATION
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17
SUBORDINATION
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18 SURRENDER OF
THE PREMISES AND HOLDOVER
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19 SECURITY
DEPOSIT
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20
MISCELLANEOUS
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21 INTENTIONALLY
OMITTED
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22 PARKING
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ARTICLE |
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23 RIGHT OF FIRST
REFUSAL
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24 RENEWAL
OPTION
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25 CANCELLATION
OPTION
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26 SIGNAGE
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27 SPECIFIC
IMPROVEMENTS
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28 SATELLITE
DISH
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29 RIGHT OF FIRST
OFFER
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EXHIBITS AND RIDERS
The
following Exhibits and Riders are attached hereto and by this
reference made a part of this Lease:
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SCHEDULE 1.1
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DEFINITIONS |
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SCHEDULE 1.2
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LETTER OF CREDIT AMOUNTS |
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EXHIBIT A
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FLOOR PLAN OF THE PREMISES |
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EXHIBIT B
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THE LAND |
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EXHIBIT C
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RENT SCHEDULE |
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EXHIBIT D
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LEASEHOLD IMPROVEMENTS |
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EXHIBIT E
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FORM OF COMMENCEMENT NOTICE |
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EXHIBIT F
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FORM OF IRREVOCABLE STANDBY LETTER OF
CREDIT |
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EXHIBIT G
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LOCATION OF FAÇADE
SIGNAGE |
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EXHIBIT H
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ELEVATOR LOBBY SIGNAGE |
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EXHIBIT I
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MONUMENT SIGNAGE |
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EXHIBIT J
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EXISTING RIGHTS TO FIRST REFUSAL
SPACE |
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EXHIBIT K
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FORM OF SNDA |
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EXHIBIT L
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LOCATION OF ASSIGNED PARKING
SPACES |
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EXHIBIT M
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PERMITTED LOCATION FOR ADDITIONAL
ASSIGNED PARKING SPACES |
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EXHIBIT N
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RELOCATION AREA FOR ASSIGNED PARKING
SPACES |
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EXHIBIT O
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STORAGE SPACE |
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EXHIBIT P
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EXISTING EXCLUSIVES |
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RIDER NO. 1
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RULES AND REGULATIONS |
ii
BASIC LEASE INFORMATION
(“Basic Lease Information”)
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A.
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Additional Rent : |
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The Additional Rent shall be all
other sums due and payable by Tenant under the Lease, including,
but not limited to, Tenant’s Share of Operating Costs. |
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B.
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Base Rent : |
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The Base Rent shall be the amounts
set forth on the Base Rent Schedule attached hereto as
Exhibit C, subject to such increases as may be provided
herein. |
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C.
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Broker : |
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Prentiss Properties Limited, Inc and
CBIZ - Gibraltar Real Estate Services Corporation. |
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D.
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Building : |
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The building commonly known as One
O’Hare Centre, 6250 North River Road, Rosemont,
Illinois. |
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E.
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Commencement Date
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March 1, 2006 |
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F.
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Expiration Date : |
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February 28, 2021 |
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G.
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Land : |
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That certain parcel of real estate
described in Exhibit B attached hereto. |
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H.
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Landlord’s Address for
Notice : |
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Prentiss Properties Acquisition
Partners, L.P.
3890 W. Northwest Highway, Suite 400 |
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Dallas, Texas 75220 |
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Attention: President |
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With a copy to: |
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Prentiss Properties Limited,
Inc. |
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One O’Hare Centre |
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6250 North River Road,
Suite 1010 |
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Rosemont, Illinois 60018 |
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Attention: Managing Director |
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and |
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Prentiss Properties Management,
L.P. |
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6250 North River Road,
Suite 1010 |
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Rosemont, Illinois 60018 |
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Attention: Property Manager |
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I.
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Landlord’s Address for
Payment : |
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Prentiss Properties Acquisition
Partners, L.P. |
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21049 Network Place |
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Chicago, Illinois 60673-1210 |
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J.
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Landlord’s
Contribution : |
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$3,009,504.00. |
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K.
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Lease Year : |
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The first “Lease Year”
shall be the period from the Commencement Date to the last day of
the twelfth (12th) full calendar month following the calendar month
in which the Commencement Date occurs. Thereafter, each consecutive
twelve (12) calendar month period shall constitute one
(1) Lease Year. Notwithstanding anything contained herein to
the contrary, if the Commencement Date occurs on the first (1st)
day of a calendar month, the first Lease Year shall be twelve (12)
full calendar months. |
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L.
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Parking Facility : |
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The multi-level parking garage which
is located adjacent to the Building. |
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M.
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Parking Permits : |
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Subject to the terms of
Article 22 herein, Tenant shall have, during the initial Term,
203 Parking Permits, to be used in common with others in the
Parking Facility and 5 assigned parking spaces with the right to
convert 12 of the 203 unassigned Parking Permits into assigned
spaces as set forth in Article 22 herein. |
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N.
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Premises : |
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69,184 rentable square feet
consisting of the entire eighth (8 th ) floor and the
entire ninth (9 th ) floor of the
Building, as said space is identified by diagonal lines or shaded
area on the floor plans attached hereto as Exhibit A. |
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O.
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Project : |
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The Land and all improvements
thereon, including the Building, the Parking Facility and all
Common Areas. |
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P.
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Rent : |
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The Base Rent and the Additional
Rent. |
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Q.
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Rentable Area of the
Building : |
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Landlord and Tenant agree that for
all purposes of this Lease the Rentable Area of the Building shall
be deemed to be 370,593 square feet. |
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R.
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Rentable Area of the
Premises : |
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Landlord and Tenant agree that for
all purposes of this Lease, the Rentable Area of the Premises shall
be deemed to be 69,184 square feet. |
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S.
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Security Deposit : |
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$3,000,000.00 in the form of a letter
of credit subject to and in accordance with the terms of
Article 19 herein, including the reductions thereto set forth
in Schedule 1.2 hereof. |
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T.
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Tenant’s Address for
Notice : |
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Deerfield & Company LLC |
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8700 West Bryn Mawr Avenue |
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Chicago, Illinois 60631 |
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Attention: General Counsel |
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With a copy to: |
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Gardner Carton & Douglas |
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191 North Wacker Drive,
Suite 3700 |
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Chicago, Illinois 60606 |
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Attention: Valerie A. Haugh |
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U.
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Tenant’s Permitted
Use : |
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General office purposes and other
uses ancillary to Tenant’s business (including the use of a
portion of the Premises for a fitness center for Tenant’s
officers, directors and employees) and no other purpose. |
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V.
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Tenant’s Share
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18.6685%. |
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W.
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Term : |
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Fifteen (15) Lease Years. |
3
LEASE AGREEMENT
THIS LEASE AGREEMENT (this
“Lease”) is made as of July 1, 2005 by and between
Prentiss Properties Acquisition Partners, L.P., a Delaware limited
partnership (“Landlord”) and Deerfield & Company
LLC, an Illinois limited liability company (“Tenant”),
upon all the terms set forth in this Lease as follows:
ARTICLE 1
BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS
Section 1.1 The Basic Lease
Information is made a part of this Lease, but the provisions of
this Lease addressing such matters in detail shall control over any
inconsistent provisions in the Basic Lease Information. All terms
capitalized but not otherwise defined herein shall have the
respective meanings given to them in the Basic Lease Information or
Schedule 1.1 attached hereto.
ARTICLE 2
PREMISES AND QUIET ENJOYMENT
Section 2.1 Tenant hereby leases
the Premises from Landlord upon the terms and conditions set forth
herein. During the Term, Tenant shall have the non-exclusive right
to use the Common Areas in accordance with the rules and
regulations set forth on Rider No. 1 attached hereto (the
“Rules and Regulations”).
Section 2.2 Provided Tenant
fully and timely performs all the terms of this Lease on
Tenant’s part to be performed, including payment by Tenant of
all Rent, Tenant shall have, hold and enjoy the Premises during the
Term without disturbance from or by Landlord or those claiming
through Landlord, subject to the terms of this Lease.
ARTICLE 3
TERM; COMMENCEMENT DATE;
DELIVERY AND ACCEPTANCE OF PREMISES
Section 3.1 The Commencement
Date shall be March 1, 2006. The Commencement Date shall be
confirmed, along with other matters, by written notice sent by
Landlord substantially in the form of Exhibit E attached
hereto (the “Commencement Notice”). Landlord’s
failure to deliver the Commencement Notice to Tenant shall not
effect the determination of the Commencement Date. Upon the full
execution and delivery of this Lease by Landlord to Tenant,
Landlord shall provide Tenant access to the Premises to perform the
Leasehold Improvements and to otherwise prepare the Premises for
Tenant’s occupancy (including the installation of furniture,
fixtures and Tenant’s telecommunications system). Such early
access shall be subject to all of the terms, restrictions and
conditions set forth in this Lease (other than the payment of Base
Rent and Tenant’s Operating Costs Payment) and shall be
conditioned upon Tenant furnishing Landlord evidence of insurance
required in Article 13 of this Lease and in Article 7
of
Exhibit D. Landlord shall contribute Landlord’s
Contribution towards the cost of the Leasehold Improvements
pursuant to and in accordance with the terms of Exhibit D
attached hereto and made a part hereof.
Section 3.2 Tenant’s
occupancy of any portion of the Premises shall be conclusive
evidence that Tenant (a) has accepted the Premises as suitable
for Tenant’s purposes, in its “as is, where is”
condition without any representations or warranties except as
specifically set forth herein, and (b) has waived any defects
in the Premises and the Project except for (i) any latent
defects in the Building (including the Central systems of the
Building, the mechanical, plumbing, electrical and heating and
ventilation systems in the Premises or other common systems of the
Building, the exterior of the Building and exterior windows of the
Building), excluding items of damage caused by Tenant or the Tenant
Parties (as such term is defined in Article 16 below) and
excluding items installed at the Premises as part of or in
connection with the performance of the Leasehold Improvements
and/or any Alterations, and (ii) a breach of Landlord’s
representations set forth in Section 8.2 hereof and/or
Section 11.5 hereof.
Section 3.3 Provided Tenant has
not exercised Tenant’s option to cancel as set forth in
Article 25 herein, Landlord shall (i) shampoo the carpet
throughout the Premises; and (ii) re-paint the walls of the
Premises using Building Standard paint in a color reasonably
acceptable to Tenant. The work described in the immediately
preceding sentence shall be referred to herein as the
“Refurbishment Work”. Landlord shall perform the
Refurbishment Work on or before November 30, 2015. Tenant
hereby acknowledges that the Refurbishment Work will occur during
the Term of this Lease and during Tenant’s occupancy of the
Premises; provided that Landlord will use its commercially
reasonable efforts not to interfere with Tenant’s business
and/or occupancy of the Premises during the performance of the
Refurbishment Work but in no event shall Landlord be obligated to
perform the Refurbishment Work after Business Hours. In connection
therewith, but subject to Landlord’s obligation set forth
above, Tenant hereby acknowledges that the Refurbishment Work shall
not be deemed a constructive eviction or shall not be deemed to
affect Tenant’s quiet enjoyment of the Premises and thus, in
no event shall Tenant be entitled to any abatement of rent as a
result thereof.
ARTICLE 4
RENT
Section 4.1 Tenant shall pay to
Landlord, without notice, demand, offset or deduction, in lawful
money of the United States of America, at Landlord’s Address
for Payment, or at such other place or in such other manner as
Landlord shall designate in writing from time to time: (a) the
Base Rent in equal monthly installments, in advance, on the first
day of each calendar month during the Term, and (b) the
Additional Rent, at the respective times required hereunder. If the
Commencement Date falls on a date other than the first day of a
calendar month, the Rent due for such fractional month shall be
prorated on a per diem basis for the portion of such fractional
month falling within the Term. Notwithstanding anything contained
in this Lease to the contrary and provided no monetary or material
non-monetary Event of Default exists hereunder, Tenant shall not be
obligated to pay Base Rent or Tenant’s Operating Costs
Payment due for the period beginning on March 1, 2006 and
continuing through June 30, 2007. The total amount of Base
Rent and Tenant’s Operating Costs Payment abated hereunder is
collectively
2
referred
to herein as the “Abated Rent”. If at any time during
the forgoing abatement period, a monetary or material non-monetary
Event of Default has occurred under this Lease, then in addition to
all other rights, powers and remedies available to Landlord under
this Lease, the abatement of Base Rent and Tenant’s Operating
Cost Payment provided to Tenant in this Section 4.1 shall
terminate upon written notice from Landlord and Tenant shall pay
all Base Rent and Tenant’s Operating Cost Payment which would
have accrued and been paid after such termination of the abatement
(but for the abatement herein permitted) as and when they become
due. Notwithstanding the foregoing, in the event that such monetary
or material non-monetary Event of Default is thereafter cured in
accordance with the terms of this Lease, the foregoing abatement
shall resume such that Tenant receives (when added to any abatement
already received hereunder) a full sixteen (16) months of
abatement of Base Rent and Tenant’s Operating Cost Payment.
If Landlord fails to review and approve the Plans or Tenant’s
Contractors within the timeframes specified in Exhibit D
and/or if Landlord fails to deliver possession of the Premises to
Tenant on the date Landlord and Tenant execute this Lease and/or
Landlord fails to otherwise fulfill its obligations specified in
Exhibit D and such failure or failures result in a delay in
the completion of the Leasehold Improvements beyond March 1,
2006, the Commencement Date shall be delayed one day for each day
of delay caused by Landlord and the Abated Rent shall be revised to
begin on the Commencement Date and continue for sixteen
(16) full months thereafter.
Section 4.2 All installments of
Rent not paid within five (5) days after their due date shall
be subject to a late charge of five percent (5%) of the amount of
the late payment and, in addition, all installments of Rent not
paid on their due date shall bear interest from the date due until
paid at a rate per annum (the “Interest Rate”) equal to
the greater of (i) twelve percent (12%) or (ii) four
percent (4%) above the prime rate of interest (the “Prime
Rate”) from time to time publicly announced by BankOne, a
national banking association, or any successor thereof; provided,
in no event shall the Interest Rate exceed the maximum rate of
interest then permitted by applicable law. Notwithstanding the
foregoing, the first time Tenant fails to pay Rent within five
(5) days of the date such payment is due during any twelve
(12) month period during the Term, Landlord shall provide
Tenant with one (1) Business Day prior written notice before
imposing the late charge and interest provided in this
Section 4.2.
Section 4.3 Tenant shall pay to
Landlord, at the same time as Tenant is required to pay Base Rent,
an amount equal to all federal, state and local gross proceed
taxes, privileges taxes, sales taxes, value added taxes, or similar
taxes (collectively, “Rent Taxes”) now or hereafter
levied or assessed upon any Rent or other payment, or the payment
or receipt thereof, or which Landlord will be required to pay as a
result of its receipt of Tenant’s payment thereof, except
that, notwithstanding any provision in this Lease to the contrary,
Tenant shall not be obligated to pay to Landlord any amount on
account of any franchise, corporation, income or net profits,
excess profits, transfer, sale, gift, capital stock, inheritance,
succession, estate or similar taxes if any, payable by
Landlord.
3
ARTICLE 5
OPERATING COSTS
Section 5.1 A. Beginning on the Commencement Date, Tenant
shall pay to Landlord at the same time as it is required to make
payment of Base Rent, an amount (the “Operating Costs
Payment”) equal to one twelfth (1/12 th ) of the
estimated Tenant’s Share of Operating Costs attributable to
the Project for any full or partial year during the Term. Tenant
shall be responsible for and shall pay before delinquent all
municipal, county, state and federal taxes assessed during the Term
against any leasehold interest of Tenant or any property owned by
Tenant and located in the Premises.
B. Prior to any year (or as soon
thereafter as is reasonably practicable) and from time to time
during any year, Landlord shall notify Tenant as to monthly
installments of the Operating Costs Payment payable by Tenant based
on Landlord’s reasonable estimate of Operating Costs for such
year. Until such time as Landlord notifies Tenant of such estimate,
Tenant shall continue to make its Operating Costs Payment in the
same monthly amount as the prior year. On the first day of the
calendar month after Landlord’s notice of any revised
estimate in such installments (provided such first day is at least
thirty (30) days after receipt of such notice), Tenant shall pay to
Landlord (in addition to the revised monthly estimate) a lump sum
payment in an amount so that Tenant’s total payments for the
year will equal Landlord’s revised estimate of Tenant’s
aggregate Operating Costs Payment for such year. The Operating
Costs Payment for the first calendar year in which the Term falls
(if the Commencement Date is other than January 1) and the last
calendar year in which the Term falls (if the Term ends on a date
other than December 31) shall be prorated based upon the
number of days in the Term falling within the year in
question.
As soon as reasonably practicable
after the end of each calendar year, but in no event later than
sixty (60) days after Landlord’s receipt of the tax bill
for such year, Landlord shall notify Tenant as to the amount of
such Operating Costs and the Operating Costs Payment resulting
therefrom (an “Annual Adjustment Notice”). If the
Operating Costs Payment actually due exceeds total estimated
payments made by Tenant on account of Tenant’s Share of
Operating Costs for such year, then Tenant shall pay Landlord the
full amount of any such deficiency within thirty (30) days
after receiving the Annual Adjustment Notice. If the Operating
Costs Payment actually due is less than the total estimated
payments made by Tenant on account of Tenant’s Share of
Operating Costs for such year, then Landlord shall, at its option,
credit any such excess to Rent next owing by Tenant or refund such
excess to Tenant within thirty (30) days after Landlord
delivers the Annual Adjustment Notice to Tenant. If there is no
further installment of Rent due by Tenant, Landlord shall remit
such overpayment directly to Tenant within thirty (30) days
after the delivery of the Annual Adjustment Notice. The provisions
of this Section 5.1 shall survive the expiration or
termination of this Lease.
Section 5.2 If the Building is
not fully occupied (meaning one-hundred percent (100%) of the
Rentable Area of the Building) during any full or partial year of
the Term, those Operating Costs which vary with the level of
occupancy shall be adjusted for such year to an amount which
Landlord reasonably estimates would have been incurred had the
Building been fully occupied. In no event shall Landlord collect
from the tenants of the Building more than the actual Operating
Costs for such year.
4
Section 5.3 Tenant shall have
the right upon the delivery of written notice to Landlord
(“Tenant’s Review Notice”) and at reasonable
times to review and audit the books and records of Landlord
relating to the Operating Costs. Such review shall take place at
the office of Landlord’s managing agent. Tenant must deliver
Tenant’s Review Notice to Landlord within ninety (90) days
after Tenant has received the Annual Adjustment Notice (or if
Landlord fails to provide such Annual Adjustment Notice as provided
herein, at any time during the Lease Year) and, provided Landlord
has made the books and records relating to Operating Costs
reasonably available to Tenant, Tenant must complete its review
within one hundred fifty (150) days after receipt of such
statement. If Landlord provides the Annual Adjustment Notice to
Tenant and Tenant fails to deliver Tenant’s Review Notice to
Landlord within ninety (90) days of receipt of such statement
or if Tenant fails to perform its review and audit within one
hundred fifty (150) day of receipt of such statement and
provided Landlord has made the books and records relating to
Operating Costs reasonably available to Tenant, it shall constitute
a waiver of Tenant’s rights to contest the amount paid by
Tenant pursuant to the Operating Costs Payment and the Annual
Adjustment Notice for the prior year. Tenant shall pay the full
amount of the Operating Costs Payment shown to be due on the Annual
Adjustment Notice without delay, but by doing so shall not waive
its rights to review Landlord’s books and records or to
dispute the accuracy or appropriateness of any such statement or
any items thereon as provided in this Section 5.3. If such
review discloses a discrepancy in Landlord’s calculation of
the Operating Costs, Landlord shall promptly pay to Tenant the
amount of any overpayment of Operating Costs Payment or Tenant
shall promptly pay to Landlord the amount of any underpayment by
Tenant, as the case may be. If the discrepancy in Landlord’s
calculation of the Operating Costs is in excess of 5%, then
Landlord shall reimburse Tenant for the reasonable costs of such
review and audit. If the discrepancy in Landlord’s
calculation of the Operating Costs is less than 5%, Tenant shall
pay for all costs incurred in connection with the review and audit.
Tenant hereby agrees that all information disclosed in the books
and records shall be kept confidential and shall not be disclosed
to any other party, including, but not limited to, any other tenant
in the Building. Notwithstanding the foregoing to the contrary,
Tenant shall be permitted to disclose the information in
Landlord’s books and records with respect to Operating Costs
to Tenant’s agents, employees, accountants, attorneys,
investors and other representatives who need to know such
information to perform the duties for which they were employed.
Tenant shall cause its agents, employees, accountants, attorneys,
investors and representatives who have access to Landlord’s
books and records pursuant to this Section 5.3 to keep the
information disclosed therein confidential. Tenant further agrees
to cause any third party engaged by Tenant to review said books and
records to execute and deliver a commercially reasonable
confidentiality agreement in a form reasonably acceptable to
Landlord and such other party prior to its performing any such
review. In addition, any accountants or other professional retained
by Tenant to review Landlord’s statement pursuant to this
Section 5.3 shall be subject to Landlord’s approval, not
to be unreasonably withheld, and shall be paid by Tenant on a fixed
hourly basis, and not on a contingency fee based upon a percentage
of the recovery of any discrepancy discovered in Landlord’s
statement. Landlord agrees that any independent nationally
recognized public accounting firm hired by Tenant to perform such
review and audit shall be acceptable to Landlord (provided such
firm is retained on an hourly basis as required herein).
5
ARTICLE 6
SERVICES OF LANDLORD
Section 6.1 A. During the Term and subject to the other terms
of this Lease, Landlord shall furnish Tenant with the following
services: (a) hot and cold water in Building Standard (as
defined in Exhibit D) bathrooms and chilled water in Building
Standard drinking fountains and in Tenant’s kitchen or
lunchroom area (in no event shall Landlord be obligated to furnish
hot water to any area other than the Building Standard bathrooms);
(b) electrical power from the utility supplier sufficient for
Building Standard lighting and for business equipment in the
Premises which consume, in the aggregate, less than six
(6) watts per square foot of Rentable Area of the Premises and
require a voltage of 120 volt single phase or less;
(c) heating, ventilating or air-conditioning, as appropriate,
to the Premises and the Common Areas of the Project, during
Business Hours at such temperatures and in such amounts as
customarily and seasonally provided to tenants occupying comparable
space in Class A office buildings of similar age and size in
the suburban Chicago area (“Class A Buildings”);
(d) electric lighting for the Common Areas of the Project;
(e) non-exclusive passenger elevator service for access to and
from the Premises twenty-four (24) hours per day, seven
(7) day per week; provided, however, that Landlord shall have
the right to limit the number of (but not cease to operate all)
elevators to be operated after Business Hours and on Saturdays,
Sundays and Holidays; (f) janitorial cleaning services Monday
through Friday, excluding Holidays; (g) non-exclusive
facilities for Tenant’s loading and unloading activities
during Business Hours; and (h) replacement, as necessary, of
all Building Standard lamps and ballasts in Building Standard light
fixtures within the Premises, with Tenant to pay for all bulbs and
ballasts and to purchase such bulbs and ballasts solely from
Landlord at the price generally charged by Landlord for such items
from time to time, provided such price shall not exceed the price
then customarily being charged by landlords of other similar
buildings in the Chicago Metropolitan area. All services referred
to in this Section 6.1A shall be provided by Landlord and paid
for by Tenant as part of the Operating Costs Payment, other than
the costs of bulbs and ballasts which are paid by Tenant directly
to Landlord.
B. If Tenant requires services in
addition to those set forth above and such services are routinely
supplied by Landlord to other tenants of the Building or if Tenant
requires electricity, water, heating, ventilating or air
conditioning at hours and days not specified in Section 6.1A
above, Landlord shall provide such additional service within a
reasonable time after Tenant’s written request. Tenant shall
pay to Landlord the cost of such additional service, such cost to
be equitably allocated among all tenants concurrently requesting
such service. Tenant shall pay the charges for any additional
service, including, but not limited to, hoisting services or after
hours heating or air conditioning, at the same time as the
installment of Base Rent with which they are billed, or if billed
separately, within thirty (30) days after such billing. Tenant
shall not use in the Premises any machinery or equipment which
generates abnormal heat or otherwise creates unusual demands on the
electrical, air-conditioning or heating, or any other system
serving the Premises or the Building. Landlord’s current
charge for after-hours HVAC is $55.00/hour which rate may be
increased by Landlord from time to time. Other than the hourly rate
charged by Landlord, Tenant shall not be required to pay any
other
6
fee in
connection with after-hours HVAC service (including, but not
limited to, the administrative fee described in Section 20.2
herein).
Section 6.2 Except as provided
above in Section 6.1(A), Landlord shall not be obligated to
furnish utility services to the Premises. If Landlord elects not to
supply utility services to the Premises but contracts with an
electric service provider to supply such service, Landlord shall
notify Tenant of the same and Tenant shall make all necessary
arrangements with the provider or alternative utility service
suppliers (“Suppliers”) selected by Landlord to service
the Building, and shall be subject to the rules and regulations of
such Suppliers and any municipal or other governmental authority
regulating the business of providing such services. No change in
Suppliers, or change in service from any Supplier, shall cause
(1) any disruption in the provision of electric current, or
(2) Tenant to incur any charges for such change or
(3) Tenant to incur charges for electricity service which are
in excess of market competitive rates. Tenant shall cooperate with
Landlord and the Suppliers at all times and, as reasonably
necessary, allow Landlord and the Suppliers reasonable access to
the lines, feeders, risers, wiring, pipes, meters and any other
machinery within the Premises. The Premises are and will continue
to be separately metered for electricity.
Section 6.3 Except as
specifically provided in this Section 6.3, no change, failure,
defect, unavailability, or unsuitability in the supply or character
of the utility services furnished to the Premises, whether by
Landlord or the Suppliers, shall constitute an actual or
constructive eviction, in whole or in part or entitle Tenant to any
abatement or diminution of Rent or other claim for damages, nor
relieve Tenant from any of its obligations under this Lease. Should
any malfunction of any systems or facilities occur within the
Project or should maintenance or alterations of such systems or
facilities become necessary, Landlord shall repair the same
promptly and with reasonable diligence, and except as specifically
provided otherwise in this Section 6.3 with respect to
abatement of Rent, Tenant shall have no claim for rebate, abatement
of Rent, or damages because of malfunctions or any such
interruptions in service. Landlord may, at its option, make all
repairs, in and about the Building and the Premises during Business
Hours, so long as (except in case of an emergency) the performance
of such work during Business Hours does not materially interfere
with Tenant’s access to the Premises or materially interfere
with Tenant’s ability to conduct its business in the
Premises. If Landlord performs repairs within the Premises or in
the Building during Business Hours that materially affect
Tenant’s access to or ability to conduct business in the
Premises and Tenant in fact ceases doing business in the Premises
(or a material portion thereof) as the result of such work for a
period in excess of four (4) consecutive Business Days after
written notice to Landlord, Tenant shall be entitled to an
equitable abatement of Rent (as to the Premises or to such material
portion thereof). Notwithstanding anything contained herein to the
contrary, the foregoing sentence shall not apply to Tenant’s
inability to conduct business in the Premises due to (i) a
fire or other casualty which shall be governed by Article 14
hereof; (ii) a condemnation which shall be governed by
Article 15 hereof; or (iii) any entry and/or repair by
Landlord if such entry and/or repair is necessitated by the
negligence or willful misconduct of Tenant or the Tenant Parties or
Landlord is exercising its rights to make repairs or perform
maintenance on Tenant’s behalf as provided in
Section 8.1 of this Lease. The abatement described herein
shall begin on the fourth (4 th ) consecutive
Business Day of such interference and continue until the earlier of
(a) the date Landlord completes the repairs; or (b) the
date Tenant actually resumes use of the Premises (or material
portion thereof). Upon completion of such repairs to the Premises
or the Building,
7
Landlord
shall remove any and all construction debris and materials from the
Premises and leave the Premises in a condition substantially
similar to the condition that existed prior to the commencement of
such repairs. In no event shall such repairs, (i) materially
change the size, shape or configuration of the Premises, and/or
(ii) be made within the Secured Area unless Tenant
specifically requests Landlord to make repairs and/or perform
maintenance in the Secured Area and has provided Landlord with
access thereto (Tenant hereby releases Landlord from any obligation
of Landlord specifically set forth in this Lease or implied by the
terms hereof to make any repairs, provide janitorial service and/or
perform any maintenance in the Secured Area unless Tenant has
specifically requested that such repairs be made or that such
janitorial service and/or maintenance be performed and has provided
Landlord access to the Secured Area to make such repairs and/or
maintenance). In no event shall the immediately preceding sentence
require Landlord to make any repairs and/or perform any maintenance
within the Secured Area that is not specifically required of
Landlord with respect to the Premises as set forth in this Lease
nor shall the immediately preceding sentence require Landlord to
make such repairs and/or perform such maintenance in a manner which
is not customarily done.
Notwithstanding the foregoing, if:
(i) Landlord ceases to furnish any service in the Building as
a result of a condition which affects only the Building (that is,
which does not affect buildings in general in the vicinity of the
Building or effects more than the Building but is within the
reasonable control of Landlord) and (ii) Tenant notifies
Landlord of such cessation in writing within three
(3) Business Days after such cessation begins and
(iii) such cessation has not arisen as a result of the
negligence or willful misconduct of Tenant or the Tenant Parties
and (iv) as a result of such cessation, the Premises (or a
material portion thereof) is rendered untenantable and Tenant in
fact ceases to occupy such space in the manner used prior to such
cessation, then, as Tenant’s sole and exclusive remedy for
such cessation, on the fourth (4 th ) consecutive
Business Day after the cessation (or, in the event that such
cessation was caused by Force Majeure, on the tenth (10 th ) consecutive
day after the cessation), the Rent payable hereunder shall be
equitably abated based on the percentage of the Premises so
rendered untenantable and in fact not used by Tenant. Such
abatement shall begin on the fourth (4 th ) consecutive
Business Day of such cessation (or, in the event that such
cessation was caused by Force Majeure, on the tenth (10 th ) consecutive
day after the cessation) and continue until the earlier of
(a) the date the Premises (or such material portion thereof)
becomes tenantable again by the removal of such cessation of
services or (b) the date Tenant actually resumes use of such
Premises (or such material portion thereof).
ARTICLE 7
ASSIGNMENT AND SUBLETTING
Section 7.1 Tenant shall not, by
operation of law or otherwise, (i) assign, pledge, encumber or
otherwise transfer this Lease or any part hereof, or the interest
of Tenant under this Lease, (ii) sublease all or any portion
of the Premises, or (iii) allow the Premises or any part
thereof to be occupied or used for any purpose by anyone other than
Tenant (individually or collectively, a “Transfer”),
without first obtaining in each instance the prior written consent
of Landlord. Landlord’s consent shall not be unreasonably
withheld or delayed.
8
Section 7.2 A Transfer shall
also be deemed to have occurred if (a) in a single transaction
or in a series of transactions more than 49% of the economic,
ownership or voting interests (whether stock, partnership interest,
membership interest or otherwise) in any of (i) Tenant, or any
party directly or indirectly owing or controlling Tenant,
(ii) any guarantor of this Lease, or (iii) any subtenant
is transferred, diluted, reduced, or otherwise affected with the
result that the holder or owners as of the date of this Lease of
such parties, have less than a 51% economic, ownership and voting
interest in such parties, or (b) Tenant’s obligations
under this Lease are taken over or assumed in consideration of
Tenant leasing space in another office building. The transfer of
the publicly traded outstanding capital stock of any such parties
through the “over-the-counter” market or any recognized
national securities exchange shall not constitute a Transfer.
Notwithstanding the foregoing or anything contained herein to the
contrary, a Transfer shall not be deemed to have occurred if the
economic, ownership or voting interests of Triarc Companies, Inc.
or any of its subsidiaries (other than Tenant) are transferred,
traded or sold and/or if Tenant (including any successor tenant or
any entity that controls Tenant) becomes a publicly traded company
that is listed on a national stock exchange.
Section 7.3 Notwithstanding
anything to the contrary in Section 7.1 or 7.4 Tenant may,
upon ten (10) days’ prior written notice to Landlord,
(a) sublet all or part of the Premises, or assign this Lease,
to any entity which controls Tenant, is controlled by Tenant or is
under common control with Tenant; or (b) assign this Lease to
a successor corporation or other entity into which or with which
Tenant is merged or consolidated or which acquired substantially
all of Tenant’s assets and property (the activities described
in clauses (a) and (b) are referred to herein as
“Permitted Transfers” and the entities which meet the
criteria set forth in this Section 7.3 are referred to herein
as “Permitted Transferees”); provided that
(i) such successor entity assumes all of the obligations and
liabilities of Tenant and has a net worth (excluding good will)
reasonably equivalent to the average net worth (excluding good
will) of Tenant during the twelve (12) months preceding the
date of the Permitted Transfer as determined by Landlord in
accordance with generally accepted accounting principles, and
(ii) Tenant shall provide in its notice to Landlord the
information required in Section 7.4. For purposes hereof,
“control” shall mean possession of the power to direct
or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities or
otherwise.
Section 7.4 If Tenant desires to
engage in a Transfer, Tenant shall give Landlord written notice no
later than thirty (30) days in advance of the proposed
effective date of the Transfer specifying the name and business of
the proposed transferee or subtenant (the
“Transferee”), the amount and location of the space (if
the proposed space is to be subleased), the proposed
Transferee’s financial statements, the proposed terms of the
Transfer and other information as Landlord may reasonably request
to evaluate the proposed Transfer. Landlord may condition its
consent to any Transfer on its receipt of fifty percent (50%) of
any excess Rent generated by any Transfer after deducting therefrom
Tenant’s reasonable expenses incurred in connection with such
Transfer, including advertising expenses, brokerage commissions,
rent concessions, tenant improvement allowances, other financial
concessions, and legal fees, and may, instead of granting its
consent, recapture and terminate this Lease with respect to, any
space that is the subject of the Transfer. Notwithstanding the
foregoing, in the event Landlord exercises the foregoing recapture
right, Tenant shall have the right to rescind the proposed transfer
thereby invalidating such recapture by providing written notice
thereof to Landlord within five (5) Business Days following
its receipt of Landlord’s recapture notice. In the
event
9
that
Landlord recaptures the Premises or applicable portion thereof,
Landlord shall be responsible for any and all costs to fully demise
such areas.
Landlord’s refusal to consent
to a Transfer shall not be considered unreasonably withheld if
(a) the proposed Transferee is not financially creditworthy,
is a governmental authority or agency, an organization or person
enjoying sovereign or diplomatic immunity, a school or university,
a call-center, a medical or dental practice, a so-called
“telecommunication service provider” for housing
equipment rather than general office use or is a user that will
impose an excessive demand on or use of the facilities or services
of the Building (except to the extent Tenant or such transferee
pays for increasing the capacity of such facilities or services to
the extent required in connection with such increased use and the
consumption of same), is a current tenant or subtenant of the
Project (unless Landlord is unable to provide such tenant or
subtenant with adequate space in the Project due to lack of
available space) or is a prospective tenant to whom Landlord has
provided a written proposal to lease space in the Project within
the last three (3) months, (b) an Event of Default by
Tenant then exists under this Lease, (c) such assignment or
subletting would violate the existing exclusives set forth on
Exhibit P attached hereto and made a part hereof or any future
exclusives granted by Landlord to bona fide third parties, provided
Tenant has received written notice of same prior to the date Tenant
markets all or a portion of the Premises for the proposed Transfer,
or (d) any portion of the Building or Premises would likely
become subject to additional or different Requirements as a
consequence of the proposed assignment or subletting, (except to
the extent that Tenant or such transferee pays for the costs to
comply which such additional or different Requirements).
For Transfers that are not Permitted
Transfers, Landlord shall have fifteen (15) days following
receipt of such notice and other information requested by Landlord
to notify Tenant in writing that Landlord elects to:
(i) terminate this Lease as to the space so affected as of the
proposed effective date set forth in Tenant’s notice (unless
Tenant rescinds its transfer notice as set forth above), in which
event Tenant shall be relieved of all further obligations hereunder
as to such space, except for provisions of this Lease which
expressly survive the termination hereof; or (ii) permit
Tenant to engage in such Transfer which permission may be
conditioned on Landlord’s receipt of fifty percent (50%) of
any excess rent or other consideration generated by a Transfer
after deducting therefrom Tenant’s reasonable expenses
incurred in connection with such Transfer, including advertising
expenses, brokerage commissions, rent concessions, tenant
improvement allowances, other financial concessions, and legal
fees; or (iii) reasonably withhold consent to such Transfer.
If Landlord fails to respond to Tenant’s request for consent
to a Transfer within fifteen (15) days of receipt of all
information required to be delivered by Tenant pursuant to this
Section 7.4, then Tenant shall send written notice to Landlord
stating that Landlord’s failure to respond within five
(5) additional Business Days from the date of such second
notice shall be deemed to be consent to the Transfer. If Landlord
fails to respond to Tenant’s notice described in the
immediately preceding sentence within five (5) Business Days
of receipt thereof, Landlord shall be deemed to have elected to
permit Tenant to engage in such Transfer subject to the condition
that Tenant shall pay Landlord 50% of any excess rent and other
consideration as set forth in (ii) above.
Tenant shall deliver to Landlord
copies of all documents executed in connection with any permitted
Transfer, which documents shall be in form and substance reasonably
satisfactory to Landlord and which shall require any Transferee to
assume performance of all terms of this
10
Lease.
Any sublease shall be in form and substance acceptable to Landlord
and shall contain the agreement of such subtenant to attorn to
Landlord, at Landlord’s option and written request, in the
event this Lease terminates before the expiration of the
sublease.
No Transfer shall relieve Tenant from
any covenant, liability or obligation hereunder (whether past,
present or future) and Tenant shall remain liable under this Lease
as a principal and not as a surety; provided, however, in the case
of an assignment of this Lease, if the transferee has a net income
of at least $15,000,000.00 (after debt service payments but without
deduction therefrom for rental expenses due under this Lease) and
has provided reasonable evidence of same to Landlord and such
transferee has assumed all of the liability and obligations under
this Lease as of the date of the Transfer, then Tenant shall be
released from all liability arising under this Lease from and after
the date of such Transfer. If requested in writing by Tenant,
Landlord shall provide written acknowledgement of such release to
Tenant. Landlord’s consent to a Transfer shall not be deemed
a consent to any subsequent Transfer. No acceptance by Landlord of
any Rent or any other sum of money from any Transferee shall be
deemed to constitute Landlord’s consent to any Transfer. Any
attempted Transfer by Tenant in violation of this Article 7 shall
be void. Tenant shall pay to Landlord, as Additional Rent,
reasonable and customary legal fees, a reasonable administrative
fee and any other reasonable costs incurred by Landlord in
connection with any proposed Transfer (including a Permitted
Transfer) requested or made. Notwithstanding the foregoing to the
contrary, the administrative fee charged by Landlord in connection
with Landlord’s review of a proposed Transfer shall not
exceed (i) $2,000.00 during Lease Years 1 through 5; (ii) $3,000.00
during Lease Years 6 through 10; and (iii) $4,000.00 during Lease
Years 11 through 15.
Section 7.5 Tenant acknowledges
that this Lease is a lease of nonresidential real property and
therefore Tenant, as the debtor in possession, or the trustee for
Tenant (collectively the “Trustee”) in any proceeding
under Title 11 of the United State Bankruptcy Code relating to
Bankruptcy, as amended (the “Bankruptcy Code”), shall
not seek or request any extension of time to assume or reject this
Lease or to perform any obligations of this Lease which arise from
or after the order of relief.
ARTICLE 8
REPAIRS
Section 8.1 Tenant shall keep
the Premises (including the Leasehold Improvements and any
Alterations) in good order and in a safe, neat and clean condition.
If Tenant fails to promptly commence and diligently pursue the
performance of such maintenance or the making of such repairs or
replacements, then Landlord may, at its option, perform such
maintenance or make such repairs and Tenant shall pay as Additional
Rent to Landlord, on demand, the cost thereof. All maintenance and
repairs made by Tenant shall be performed in a good and workmanlike
manner and in accordance with the alteration provisions of
Article 9.
Section 8.2 Subject to the
provisions of Article 14 and Article 15, Landlord shall
keep the Building, Central building systems and the Common Areas in
good order and in a safe, neat and clean condition. Without
limiting the foregoing, Landlord shall maintain and make all
necessary repairs to the foundations, roof, exterior walls and
structural elements of the Building,
11
the
electrical, plumbing, heating, ventilation and air-conditioning
systems comprising the Central systems of the Building and the
Common Areas of the Building, and the costs of such maintenance and
repair shall be included in Operating Costs (subject to limitations
set forth in the definition of Operating Costs). Landlord
represents and warrants that, to Landlord’s actual knowledge,
the Building (excluding the improvements which currently exist
within the Premises) and the Central systems which service the
Premises are in compliance with all applicable Requirements as of
the date of execution of this Lease. Landlord shall make any and
all repairs, replacements and improvements required due to a breach
of the foregoing representation and warranty, the cost of which
shall not be included in Operating Costs. Landlord shall indemnify,
defend and hold Tenant harmless from the actual damages suffered by
Tenant (other than consequential damages) arising from or
attributable to the breach by Landlord of the foregoing
representation and warranty contained in this
Section 8.2.
ARTICLE 9
ALTERATIONS
Section 9.1 Tenant shall not
make any alterations, improvements, additions or repairs (including
without limitation, Major Alterations and Specialty Alterations,
collectively “Alterations”) to the Premises without
first obtaining Landlord’s written consent thereto, which
consent shall not be unreasonably withheld or delayed; provided,
however, (1) that Landlord may withhold its consent in its
sole discretion to any Alterations which (a) are visible from
the exterior of the Building or the Project, (b) may affect
the Central systems or any structural components of the Building,
or (c) are prohibited by any Requirements (individually and
collectively, a “Major Alteration”) and
(2) Landlord’s consent is not required for Permitted
Alterations. As used herein, “Permitted Alterations”
means Alterations (a) that are neither Major Alterations nor
Specialty Alterations, (b) that cost less than Two Dollars
($2.00) per square foot of the Rentable Area of the Premises for
each project (and Three Dollars ($3.00) per square foot of the
Rentable Area of the Premises in the aggregate for any twelve
(12) month period) and (c) that are cosmetic in nature.
Tenant may perform Permitted Alterations so long as Tenant informs
Landlord in reasonable detail of the nature of the Permitted
Alteration and otherwise complies with the provisions of this
Article 9. Landlord may elect, in its sole discretion, to
perform any Major Alteration or Specialty Alteration which affect
the Central systems, the Common Areas or the exterior of the
Building.
Section 9.2 Prior to commencing
any Alteration, Tenant shall submit detailed plans and
specifications for Landlord’s review and approval. Landlord
shall notify Tenant of its approval or disapproval of such plans
and specification and the work described therein within ten
(10) Business Days of receipt thereof. Landlord shall state in
writing and in reasonable detail any objection to such Alteration.
Tenant may revise its plans and specifications to incorporate such
comments and, if Tenant does so, it may again request
Landlord’s consent pursuant to the process described above.
Neither approval of the plans and specifications nor supervision of
the Alteration by Landlord shall constitute a representation or
warranty by Landlord as to the accuracy, adequacy, sufficiency or
propriety of such plans and specifications or the quality of
workmanship or the compliance of such Alteration with Requirements.
If Tenant desires to revise any plans and specifications after
obtaining Landlord’s approval thereof, Tenant shall re-submit
such plans and specifications to Landlord for its approval as
provided above.
12
Section 9.3 All Alterations
shall (a) be performed by union labor; (b) not adversely
affect the safety of the Project, the Building or the Premises or
the Central systems; (c) comply with all applicable
Requirements; (d) not result in any usage in excess of
Building Standard capacity for water, electricity, gas, or other
utilities or of heating, ventilating or air-conditioning (either
during or after such Alteration); (e) be completed promptly
and in a good and workmanlike manner and in accordance with the
plans and specifications approved by Landlord; (f) not disturb
Landlord or other tenants in the Building; (g) be performed at
Tenant’s sole cost and expense; and (h) be performed
pursuant to all required building and construction permits; and
(i) be performed by contractors and subcontractors reasonably
approved by Landlord prior to the commencement of such work. After
completion of any Alterations, Tenant will deliver to Landlord
(1) if applicable, a copy of “as built” plans and
specifications depicting and describing such Alterations and
(2) final sworn owners and contractors’ statements and
full and final waivers of lien covering all labor and materials
included in such Alteration. During the performance of any
Alterations, Tenant shall maintain, and shall cause its contractors
to maintain, the insurance coverage described in
Section 13.1A(e).
Section 9.4 Each Alteration and
the Leasehold Improvements made by Tenant in or upon the Premises
(excepting only Tenant’s personal property, furniture,
equipment and trade fixtures hereinafter referred to as
“Tenant’s Property”), whether temporary or
permanent in character, shall become Landlord’s property upon
its attachment to the Premises and shall remain upon the Premises
at the expiration or termination of this Lease without compensation
to Tenant; provided, however, upon the expiration or earlier
termination of the Term: (i) Landlord shall have the right to
require Tenant to remove any Alteration made to the Premises (other
than the Leasehold Improvements) if Landlord informs Tenant in
writing at the time Landlord consents to any Alteration that
Landlord shall require removal of such Alteration at the expiration
or termination of this Lease. (If Landlord fails to notify Tenant
in writing that an Alteration must be removed at the expiration or
earlier termination of the Lease, then Landlord shall be deemed to
have waived its right to require such removal); (ii) Tenant
shall remove (with no further notice to Tenant required with
respect thereto) all telephone and telecommunications wiring and
cabling installed in the Premises whether installed as part of the
Leasehold Improvements or as part of any Alterations) and all
bathrooms, showers and locker rooms and related fixtures in any
fitness center located in the Premises; and (iii) if Tenant
failed to obtain Landlord’s prior consent to any Alteration
which consent is required pursuant to Section 9.1 above,
Landlord may require Tenant to remove such Alteration if Landlord
informs Tenant in writing that Landlord requires such removal at
any time prior to the expiration or earlier termination of the
Term. Tenant shall, at its cost and expense, remove all Premises
Improvements specifically required to be removed by Tenant under
this Lease and all of Tenant’s Property and repair any and
all damage to the Premises and the Building caused by such removal
on or before the expiration or termination of this Lease. In no
event (including in the event of a termination of this Lease by
Tenant pursuant to Article 25 herein) shall Tenant be required
to remove any improvements, Alterations or Specialty Alterations
that exist within the Premises as of the date of execution of this
Lease. The provisions of this Section 9.4 shall survive the
expiration or any earlier termination of this Lease. In addition to
the removal obligations set forth herein, Tenant shall also be
subject to (i) the removal obligations set forth in
Article 25 of this Lease if Tenant exercises its right to
cancel the Lease provided therein; and (ii) the additional
removal obligations set forth in Articles 26, 27 and 28.
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ARTICLE 10
LIENS
Tenant shall keep the Project free
from any liens arising from any work performed, materials
furnished, or obligations incurred by, or on behalf of Tenant. If
any lien is filed, such lien shall encumber only Tenant’s
interest in the Leasehold Improvements and Alterations on the
Premises. Within ten (10) days after the filing of any such
lien, Tenant shall notify Landlord of such lien. Tenant shall,
within twenty five (25) days of the filing of such lien,
either (i) discharge and cancel such lien of record,
(ii) contest the same with diligence, in good faith and in
accordance with applicable Requirements and post a bond sufficient
under the laws of the State of Illinois to cover the amount of the
lien claim plus any penalties, interest, attorneys’ fees,
court costs, and other legal expenses in connection with such lien,
or (iii) contest the same with diligence, in good standing and
in accordance with applicable Requirements and obtain a title
insurance endorsement for the Project insuring over the lien
(together with the costs of defense) in a form and from a title
insurance company acceptable to Landlord. If Tenant fails to timely
satisfy its obligations set forth in the previous sentence,
Landlord may, upon five (5) days prior notice to Tenant, pay
the full amount of such lien without inquiry into the validity
thereof, and Tenant shall reimburse Landlord within ten
(10) days after notice to Tenant, as Additional Rent, for all
amounts so paid by Landlord, including expenses and
attorneys’ fees, together with interest thereon until paid at
the Interest Rate.
ARTICLE 11
USE AND COMPLIANCE; HAZARDOUS SUBSTANCES
Section 11.1 The Premises shall
be used only for Tenant’s Permitted Use and for no other
purposes whatsoever.
Section 11.2 Tenant shall, at
Tenant’s sole expense, comply with all Requirements
applicable to Tenant or the Premises and the use thereof and
indemnify and hold Landlord and the Landlord Parties harmless from
any losses, damages, costs, claims or expenses including all
attorneys’ fees and consultant fees (collectively,
“Claims”) which the Landlord Parties incur or suffer by
reason of Tenant’s failure to comply with such Requirements
applicable to Tenant or the Premises. If Tenant receives written
notice from any governmental agency of any violation of any
Requirements, Tenant shall promptly notify Landlord in writing of
such alleged violation and furnish Landlord with a copy of such
notice. Tenant shall comply with all requirements, rules, orders,
codes and regulations of any board of insurance regulators or
underwriters with respect to Tenant’s use and occupancy of
the Premises.
Section 11.3 Except for de
minimis amounts of Hazardous Substances (as hereinafter defined)
which are a part of or contained in customary office supplies
and/or equipment, and then only if used, stored and disposed of in
accordance with the manufacturer’s instructions and all
applicable Requirements, Tenant shall not, nor shall Tenant permit
the Tenant Parties or any other party to, use, store, generate,
treat, release or dispose of any Hazardous Substance at or on the
Project. Tenant shall indemnify, defend and hold the Landlord
Parties harmless from all Claims arising from or attributable to
any breach by Tenant of the covenants contained in this
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Section 11.3, as well as the use of any Hazardous Substances
as permitted by this Section 11.3. Tenant’s
indemnification obligations under this Section 11.3 shall
survive the termination or expiration of this Lease.
Section 11.4 Tenant shall
observe and comply with the Rules and Regulations and shall use
reasonable business efforts to make the Tenant Parties observe and
comply with the Rules and Regulations. Landlord shall at all times
have the right to make reasonable changes and additions to such
Rules and Regulations provided Landlord delivers written notice of
such changes and additions to Tenant. Any failure by Landlord to
enforce any of the Rules and Regulations now or hereafter in
effect, either against Tenant or any other tenant in the Building,
shall not constitute a waiver of any such Rules and Regulations.
Landlord shall not be liable to Tenant for the failure or refusal
by any other tenant, guest, invitee, visitor, or occupant of the
Building to comply with any of the Rules and Regulations; provided,
however, Landlord agrees to use commercially reasonable efforts to
cause all tenants at the Building to abide by the Rules and
Regulations. In the event of a conflict between the Rules and
Regulations and the provisions of this Lease, the provisions of
this Lease shall prevail.
Section 11.5 Landlord represents
and warrants that, to Landlord’s actual knowledge, the
Project is in compliance with all Requirements including those
regulating and/or relating to Hazardous Substances as of the date
of this Lease. Landlord shall indemnify, defend and hold Tenant
harmless from the actual damages suffered by Tenant (other than
consequential damages) arising from or attributable to the breach
by Landlord of the foregoing representation and warranty contained
in this Section 11.5, as well as any Claims arising out of the
use of any Hazardous Substances in the Project by Landlord or the
Landlord Parties. Landlord’s indemnification obligations
under this Section 11.5 shall survive the termination or
expiration of this Lease.
ARTICLE 12
DEFAULT AND REMEDIES
Section 12.1 The occurrence of
any one or more of the following events shall constitute an
“Event of Default” under this Lease: (a) Tenant
fails to pay any Rent hereunder as and when such Rent becomes due
and such failure shall continue for more than five
(5) Business Days after the date due; (b) Tenant fails to
take possession of the Premises for the performance of the
Leasehold Improvements within four (4) months after the
execution of this Lease and the delivery of possession of the
Premises to Tenant; (c) Tenant permits to be done anything
which creates a lien upon the Premises and fails to satisfy its
obligations as and when required by Article 10; (d) Tenant
violates the provisions of Article 7 by making an unpermitted
Transfer; (e) Tenant fails to maintain in force all policies
of insurance required by this Lease and such failure shall continue
beyond the earlier to occur of (i) the lapse of such policy
and (ii) ten (10) days after Landlord gives Tenant notice
of such failure; (f) any petition is filed by or against
Tenant under any present or future section or chapter of the
Bankruptcy Code, or under any similar law or statute of the United
States or any state thereof (which, in the case of an involuntary
proceeding, is not permanently discharged, dismissed, stayed, or
vacated, as the case may be, within ninety (90) days of
commencement), or if any order for relief shall be entered against
Tenant or any guarantor of this Lease in any such proceedings;
(g) Tenant becomes
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insolvent or makes a transfer in fraud of creditors or makes an
assignment for the benefit of creditors; (h) a receiver,
custodian, or trustee is appointed for the Premises or for all or
substantially all of the assets of Tenant or of any guarantor of
this Lease, which appointment is not vacated within ninety
(90) days following the date of such appointment;
(i) Tenant fails to originally post the Security Deposit as
required pursuant to Article 19 hereof within twenty
(20) Business Days after the full execution and delivery of
this Lease or thereafter restore the Security Deposit as required
pursuant to Article 19 hereof within five (5) Business
Days after receipt of written notice from Landlord; or
(j) Tenant fails to perform or observe any other terms of this
Lease (other than those specified above in this Section 12.1)
and such failure continues for more than thirty (30) days
after Landlord gives Tenant written notice of such failure in the
case of a non-emergency, or immediately in the case of an
emergency, or, if such non-emergency failure cannot be corrected
within such thirty (30) day period, if Tenant does not
commence to correct such failure within said thirty (30) day
period and thereafter diligently prosecute the correction of same
to completion within an additional period of time reasonably
necessary to correct such failure, but not to exceed an additional
ninety (90) days.
Section 12.2 During the
continuance of any Event of Default, Landlord may pursue at its
option any one or more of the following without further notice or
demand to Tenant, Tenant hereby expressly waiving the requirement
of service of any statutory notice or demand as a condition
precedent to Landlord’s exercising any of the following
rights:
A. Terminate this Lease and Tenant
shall pay to Landlord, upon demand, an accelerated lump sum amount
equal to the amount, if any, by which Landlord’s commercially
reasonable estimate of the aggregate amount of Base Rent and
Tenant’s Operating Costs Payment owing from the date of such
termination through the scheduled expiration date of the Term, plus
Landlord’s commercially reasonable estimate of the aggregate
expenses of reletting the Premises (which expenses shall include,
without limitation, brokerage fees, leasing commissions, legal fees
and tenant concessions incurred or estimated to be incurred by
Landlord and costs of removing and storing Tenant’s or any
other occupants’ property, repairing, altering, remodeling or
otherwise putting the Premises into condition acceptable to a new
tenant or tenants, and all reasonable expenses incurred by Landlord
in pursuing its remedies, including reasonable attorneys’
fees and court costs [collectively, “Reletting Costs"]),
exceeds Landlord’s commercially reasonable estimate of the
fair rental value of the Premises for the same period (after giving
effect to the time needed to relet the Premises) both discounted to
present value at the rate at which U.S. Treasuries are then
yielding for a term closest to the scheduled expiration date of the
Term; or
B. Terminate Tenant’s right of
possession of the Premises without termination of this Lease,
re-enter the Premises by summary proceedings or otherwise, expel
Tenant and remove all property therefrom, using commercially
reasonable efforts to relet the Premises at market rent and receive
the rent therefrom, provided, however, Tenant shall not be entitled
to receive any such rent and shall remain liable for the equivalent
of the amount of all Rent reserved herein less the avails of
reletting, if any, after deducting therefrom the Reletting Costs.
Any and all monthly deficiencies so payable by Tenant pursuant to
this clause shall be paid monthly on the date herein provided for
the payment of Base Rent. (Notwithstanding anything contained
herein to
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the contrary,
the parties agree that using commercially reasonable efforts to
relet the Premises shall not require Landlord to (i) relet the
Premises in preference to any other space in the Building;
(ii) relet the Premises to any party or entity that Landlord
could reasonably reject as an assignee or sublessee pursuant to
Article 7 hereof; or (iii) offer rent, length of terms or
other terms for the Premises which would be less favorable to
Landlord than what is being offered for comparable space in the
Building. The parties further agree that the immediately preceding
sentence sets forth only examples of circumstances when Landlord
will not be deemed to have failed to use reasonable efforts to
relet the Premises and is not intended to be an exhaustive list of
all such situations.); or
C. Apply against any amounts owed by
Landlord to Tenant, any amounts then due and payable by Tenant to
Landlord; or
D. At its option, but without any
obligation, perform any obligation of Tenant under this Lease and,
if Landlord so elects, all costs and expenses incurred by Landlord
in performing such obligations, together with interest thereon at
the Interest Rate from the date incurred until paid in full, shall
be reimbursed by Tenant to Landlord on demand and shall be
considered Rent for purposes of this Lease; or
E. Re-enter, seize and take
possession of Tenant’s Property located at the Premises, all
of which shall be deemed abandoned by Tenant and to sell such
property at public or private sale or otherwise discard or dispose
of such property, without being liable for prosecution or any claim
for damages thereof. Landlord shall apply the amounts received from
the sale of Tenant’s Property against amounts due Landlord by
Tenant hereunder (after deducting therefrom Landlord’s
expenses incurred in connection with the storage and sale of such
items); or
F. Immediately cease providing Tenant
with any additional services that are provided pursuant to
Section 6.1B hereof.
Section 12.3 No agreement to
accept a surrender of the Premises and no act or omission by
Landlord or Landlord’s agents during the Term shall
constitute an acceptance or surrender of the Premises unless made
in writing and signed by Landlord. No re-entry or taking possession
of the Premises by Landlord shall constitute an election by
Landlord to terminate this Lease unless a written notice of such
intention is given to Tenant. Except as specifically provided above
with respect to Landlord’s obligation to use commercially
reasonable efforts to relet the Premises, no provision of this
Lease shall be construed as an obligation upon Landlord to mitigate
Landlord’s damages under the Lease, except to the extent
required by applicable Requirements.
Section 12.4 No provision of
this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing and signed by Landlord. Landlord’s
acceptance of Rent following an Event of Default hereunder shall
not be construed as a waiver of such Event of Default. No custom or
practice between the parties in connection with the terms of this
Lease shall be construed to waive or lessen Landlord’s right
to insist upon strict performance of the terms of this Lease,
without a written notice thereof to Tenant from Landlord.
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Section 12.5 The rights granted
to Landlord in this Article 12 shall be cumulative of every
other right or remedy provided in this Lease or which Landlord may
otherwise have at law or in equity or by statute, and the exercise
of one or more rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of other rights or remedies or
constitute a forfeiture or waiver of Rent or damages accruing to
Landlord by reason of any Event of Default under this Lease. Tenant
agrees to pay to Landlord all costs and expenses incurred by
Landlord in connection with an Event of Default and the enforcement
of this Lease, including all attorneys’ fees incurred in
connection with the collection of any sums due hereunder or the
enforcement of any right or remedy of Landlord.
ARTICLE 13
INSURANCE
Section 13.1 A. Tenant shall obtain and keep in force during
the Term the following insurance: (a) “All Risk”
insurance insuring the Leasehold Improvements, all Alterations and
any other improvements existing in the Premises (collectively, with
all Alterations and the Leasehold Improvements the “Premises
Improvements”), Tenant’s interest in the Premises and
all Tenant’s Property in an amount equal to the full
replacement value; (b) Business Interruption Insurance in an
amount, when combined with the extra expense coverage set forth
below, is sufficient to reimburse Tenant for direct or indirect
loss of earnings attributable to all perils insured against under
Section 13.1A(a) or attributable to the prevention of access
to the Premises by civil authority, and sufficient to reimburse
Tenant for Rent for a period of at least six (6) months in the
event of a casualty to, or temporary taking of, the Building or the
Premises; (c) Commercial General Public Liability insurance
including personal injury, bodily injury, broad form property
damage, products and completed operations liability, contractual
liability, coverage to include contractors and subcontractors
performing any work at the Building, with a cross liability clause
and a severability of interests clause, in limits not less than
$5,000,000.00, inclusive, per occurrence (with extra expense
coverage of at least $1,000,000.00 which when combined with the
Business Interruption Insurance set forth above, is sufficient to
reimburse Tenant for direct or indirect loss of earnings
attributable to all perils insured against under Section 13.1A(a)
or attributable to the prevention of access to the Premises by
civil authority, and sufficient to reimburse Tenant for Rent for a
period of at least six (6) months in the event of a casualty
to, or temporary taking of, the Building or the Premises);
(d) Workers’ Compensation, in form and amount as
required by applicable Requirements, including Employer’s
Liability insurance of not less than $1,000,000.00; and
(e) during the time Tenant, or its contractor, performs any
Alterations in the Premises, Builder’s Risk insurance on an
“All Risk” basis (including collapse) on a completed
value (non-reporting) form for full replacement value covering all
work incorporated in the Building and all materials and equipment
in or about the Premises; (f) Automobile Liability covering
all owned, leased, non-owned, hired, rented or borrowed vehicles
and related equipment with limits of no less than $1,000,000.00 for
bodily injury and property damage combined; and (g) any other form
or forms of insurance or any changes or endorsements to the
insurance required herein as Landlord, or
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any mortgagee
or lessor of Landlord, may reasonably require, from time to time,
in form or in amount. For the purposes of this Section 13.1A,
“non-owned” vehicles shall mean vehicles and related
equipment that are not owned by Tenant, but which are used or
operated in the course of Tenant’s business by Tenant or
Tenant’s employees or agents under Tenant’s direction
and control.
B. All such policies of insurance
shall name Tenant as the insured thereunder and (except for the
insurance described in Section 13.1A(d)) shall name Landlord,
the Building’s property manager and other parties identified
by Landlord such as mortgagees and ground lessors (herein, such
mortgages and ground lessors are collectively referred to as
“Secured Parties” or individually as “Secured
Party”), as additional insureds, all as their respective
interests may appear. All such policies as well as the insurers and
deductibles shall be subject to Landlord’s prior approval,
not to be unreasonably withheld. Notwithstanding the foregoing to
the contrary, Tenant (or any Permitted Transferee) need not obtain
Landlord’s approval for deductibles of $100,000.00 or less
for Tenant’s “All-Risk” property coverage and
$50,000.00 or less for Tenant’s Commercial General Public
Liability insurance provided Tenant (or the Permitted Transferee)
has a net income of at least $15,000,000.00 (after debt service
payments but without deduction therefrom for rental expenses due
under this Lease) and has provided reasonable evidence of same to
Landlord. Tenant shall deliver to Landlord certificates of the
insurance required hereunder by the Commencement Date and, with
respect to renewals of such policies, not later than ten (10) days
prior to the end of the expiring term of coverage. All policies of
insurance shall be primary and Tenant shall not carry any separate
or additional insurance concurrent in form or requiring
contribution in the event of any loss or damage with any insurance
maintained by Landlord. All such policies and certificates shall
contain an agreement by the insurers (i) that the policies
will not be invalidated as they affect the interests of Landlord,
the Building’s property manager and the Secured Parties by
reason of any breach or violation of warranties, representations,
declarations or conditions contained in the policies and (ii) that
the insurers shall provide Landlord with not less than thirty
(30) days prior written notice of any termination or
cancellation (ten (10) days for non-payment of premium) of
such policies and (iii) waiving any rights of subrogation for
the insurance required hereunder (except for Automobile Liability
insurance). The Tenant named in this Lease or a Permitted
Transferee may self-insure any of the insurance coverage
obligations hereunder so long as Tenant (or a Permitted Transferee)
has provided evidence reasonably satisfactory to Landlord that
Tenant (or a Permitted Transferee) has a net income of at least
$15,000,000.00 (after debt service payments but without deduction
therefrom for rental expenses due under this Lease). If Tenant (or
a Permitted Transferee) elects to self-insure as provided herein,
Tenant (or the Permitted Transferee) shall be deemed to be its own
insurance carrier for purposes of this Lease and, in no less than
thirty (30) days prior to the effective date of
self-insurance, Tenant shall provide to Landlord a
“Certificate of Insurance” evidencing such
self-insurance.
Section 13.2 Landlord shall
obtain “All Risk” property insurance on the Project
(exclusive of Premises Improvements and Alterations) against
damages or loss in an amount equal to the full replacement value,
as well as commercial general public liability insurance and such
other insurance as is customarily maintained by prudent owners of
Class A Buildings, all in
19
such
amounts with such deductibles and insurers as is customary for
prudent owners of Class A Buildings. Landlord’s
insurance policies shall contain an agreement by the insurer
waiving rights of subrogation.
Section 13.3 Tenant shall not
conduct or knowingly permit to be conducted in the Premises any
activity, or place any equipment in or about the Premises or the
Building, which will invalidate the insurance coverage in effect or
increase the rate of “All Risk” property insurance or
other insurance on the Premises or the Building, and Tenant shall
comply with all commercially reasonable requirements and
regulations of Landlord’s casualty and liability insurer of
which Tenant has received written notice. If any increase in the
rate of property insurance or other insurance carried by Landlord
occurs due to any act or omission by any Tenant Parties (as defined
below), Tenant shall pay for the portion of such increase which is
attributable to the acts or omissions of Tenant or the Tenant
Parties as Additional Rent payable with the next monthly
installment of Base Rent due under this Lease.
Section 13.4 Landlord and
Tenant, in the exercise of their commercial business judgment,
acknowledge that the use of insurance is the best way to protect
against the risk of loss to their respective properties and
economic interests in the Project and the Premises. Accordingly,
each agree that in the event of loss or damage to their respective
properties or interests, such loss will be satisfied first by the
insurance proceeds paid to the party suffering the loss, next such
loss will be deemed satisfied by the insurance proceeds that would
have been paid to the party suffering the loss had the insurance
required hereunder been carried by such party, and finally, such
loss will be satisfied by the party causing the loss or damage.
Without limiting the waiver of subrogation required in
Section 13.1B and 13.2, if and to the extent that applicable
Requirements permit a full waiver of claims between landlords and
tenants in leases such as this Lease, then Landlord and Tenant
waive all claims against the other and the Tenant Parties and the
Landlord Parties, respectively, for any loss, damage or injury,
notwithstanding the negligence of either party in causing a loss or
the availability of insurance proceeds.
ARTICLE 14
DAMAGE BY FIRE OR OTHER CAUSE
Section 14.1 Except as otherwise
expressly provided in this Article 14, if the Building (or any
portion thereof) or the Premises is damaged or destroyed during the
Term, Landlord shall diligently repair and restore the Building
and, if applicable, the Premises (exclusive of the Premises
Improvements and Tenant’s Property), as the case may be, as
soon as reasonably possible to substantially the condition in which
the Building and, if applicable, the Premises, existed immediately
prior to such damage or destruction (exclusive of the Premises
Improvements and Tenant’s Property). Except as otherwise
expressly provided in this Article 14, if the Premises
Improvements and Tenant’s Property (or any portion thereof)
are damaged or destroyed during the Term, Tenant shall diligently
repair or restore, in accordance with the provisions governing
Alterations as set forth in Section 9, the Premises
Improvements and Tenant’s Property in the Premises as soon as
reasonably possible to substantially the condition in which such
items existed immediately prior to such damage or
destruction.
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Section 14.2 Except as provided
in this Section 14.2, Landlord shall have no liability to
Tenant for inconvenience, loss of business or annoyance arising
from any casualty or any restoration. If the Premises (or any
portion thereof) is not tenantable pending reconstruction as
provided in Section 14.1, and in fact is not occupied by
Tenant, Rent due and payable hereunder shall equitably abate for
the portion of the Premises which is untenantable and not so
occupied for the period commencing with the date of such casualty
until the earlier of the date (i) that reconstruction of the
Building and, if applicable, the Premises is substantially
completed by Landlord to the extent required to be completed by
Landlord as provided in Section 14.1 and the restoration of
the Premises Improvements in the Premises has been substantially
completed by Tenant (provided, however, in no event shall Tenant be
entitled to more than six (6) months from the date Landlord
substantially completes the repairs to the Premises to complete the
restoration of the Premises Improvements) or (ii) that Tenant
resumes the conduct of its business from such portion of the
Premises.
Section 14.3 If there is damage
or destruction to the Building (whether or not such damage affects
the Premises) or to the Premises, to the extent that Landlord
reasonably determines that the Building or the Premises (exclusive
of the Premises Improvements and Tenant’s Property), as the
case may be, cannot be fully repaired or restored within
(i) one hundred eighty (180) days from the date of the
casualty and occurs at any time during the Term or (ii) if the
casualty occurs during the last Lease Year of the Term, then,
Landlord and (solely in the event that a material portion of the
Premises is damaged or access to the Premises is materially damaged
or destroyed and Landlord has not provided substitute access to the
Premises which is reasonably acceptable to Tenant) Tenant shall
have the option, upon written notice delivered to the other party
within fifteen (15) days of Tenant’s receipt of
Landlord’s written notice of the length of such restoration
(such notice to be provided within sixty (60) days of such
casualty), to terminate this Lease. It shall be deemed to be a
casualty of a “material portion of the Premises” if
(i) any portion of the Secured Area is destroyed or damaged
and, as a result thereof, Tenant is unable to operate the functions
performed in the Secured Area from the Secured Area or elsewhere in
the Premises and Tenant is unable to perform such functions from a
remote location at no material additional cost to Tenant; or
(ii) a material portion of the parking provided to Tenant
hereunder is destroyed and Landlord has not provided reasonable
substitute parking to Tenant at no additional actual out-of-pocket
cost to Tenant. If the restoration to the Project is prohibited by
any Requirements or prohibited by any future or existing mortgage
or deed to secure debt made for the benefit of a third party
institutional lender or other matter of record which is made for
the benefit of a third party (hereafter,
“Encumbrances”) then, Tenant or Landlord may elect to
terminate this Lease upon giving written notice of such election to
the other within sixty (60) days after the date of such
casualty. If the insurance proceeds are insufficient or otherwise
not available (unless such insufficiency or unavailability is due
to Landlord’s failure to maintain the insurance required
hereunder), then Landlord may elect to terminate this Lease upon
giving written notice of such election to Tenant within sixty
(60) days after such casualty. In addition to the foregoing,
if the insurance proceeds are insufficient or otherwise not
available, then Tenant may elect to terminate this Lease upon
giving written notice of such election to Landlord within sixty
(60) days after such casualty; provided, however, if, upon
thirty (30) days after receipt of Tenant’s termination
notice, Landlord informs Tenant in writing that Landlord will use
other funds for the restoration of the Project, then Tenant’s
termination of the Lease shall be of no force and effect. Landlord
and Tenant hereby agree that Landlord shall be deemed to have
delivered “reasonable substitute parking” to Tenant (as
such
21
phrase
is used throughout this Lease) if such parking is located within
the following boundaries: Oakton Avenue on the north to Lawrence
Avenue on the south and Cumberland Avenue on the east to Manheim
Road on the west.
Section 14.4 In the event of
termination of this Lease pursuant to this Article 14, then
(1) all Rent shall be apportioned and paid to the later of the date
on which possession is relinquished or the date of such damage,
(2) Tenant shall immediately vacate the Premises as required
herein and (3) Tenant shall pay to Landlord that amount of
Tenant’s insurance proceeds that Tenant receives (or the
amount which would have been received by Tenant if Tenant was
carrying the insurance required by this Lease) that is attributable
to the Premises Improvements. Tenant shall be permitted to any
port
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