<PAGE>
Exhibit 10.39
OFFICE LEASE
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ARTICLE 1 - PARTIES AND REFERENCE DATA
--------------------------------------
As used in this Lease the following terms shall have the
following
meanings:
1.1. Landlord: CORTEX WEST DEVELOPMENT I, LLC, a Missouri
limited
--------
liability company, having as its address
for notice purposes c/o CORTEX,
1401 South Brentwood Boulevard, Suite 675,
St. Louis, Missouri 63144.
1.2. Tenant: Stereotaxis, Inc., a Delaware corporation, having
as
------
its address for notice purposes prior to
the Commencement Date 4041 Forest
Park Boulevard, St. Louis, Missouri 63108,
Attn: Chief Financial Officer and
from and after the Commencement Date 4320
Forest Park Boulevard, St. Louis,
Missouri 63108, Attn: Chief Financial
Officer.
1.3. Date of this Lease: November 15, 2004
------------------
1.4. Intentionally Omitted
---------------------
1.5. Design Completion Date (Exhibit B): January 15, 2005.
----------------------------------
1.6.
Commencement Date (of this Lease): The earlier of (i) the
---------------------------------
first day of December, 2005 or (ii) the
date Tenant begins operating its
business in the Premises; subject, however,
to Section 3.1 and 3.2 of this
Lease.
1.7. Term: Ten (10) Lease Years. As used in this Lease, the
term
----
"Lease Year" means a twelve (12) month
period during the term of this Lease
(as it may be extended), the first Lease
Year beginning on the Commencement
Date if the Commencement Date is the first
day of a month, or if the
Commencement Date is not the first day of a
month then on the first day of
the calendar month next following the
Commencement Date and including the
period of time from the Commencement Date
to the first day of the month next
following the Commencement Date.
1.8. Building: The office building to be constructed in the City
of
--------
St. Louis, Missouri, to be known and
numbered as 4320 Forest Park Boulevard,
St. Louis, Missouri 63108, including the
land upon which it is situated (the
"Property"). The Building will have three
(3) floors plus a mechanical
penthouse and consist of approximately
175,000 gross square feet, subject to
final measurement of the number of usable
square feet in the Premises in
accordance with BOMA Standards. The west
wing will have approximately *
square feet on each floor. Tenant will have
exclusive use of a minimum of
100 parking spaces on the Property as of
the Commencement Date or such
lesser number of parking spaces on the
Property as may be determined by
Tenant in its discretion from time to
time.
1.9. Premises: All of the first and second floors of the west
wing
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of the Building provided that the Premises
shall not include until occupied
by Tenant any of such space in excess of
approximately * total rentable
square feet of office space (the "Office
Space") and approximately * total
rentable square feet of assembly space (the
"Assembly Space") as generally
shown in Exhibit A-1
<FN>
* - REDACTED TEXT - CONFIDENTIAL TREATMENT
REQUESTED; OMITTED PORTIONS HAVE
BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
and A-2 attached to this Lease and as
improved in accordance with the
provisions of Exhibit B attached to this
Lease. The Office Space shall be
generally located on the first and second
floors and the Assembly Space
shall be located on the first floor. Upon
completion of construction of the
Building, Landlord shall cause the usable
area of the Premises to be
measured by Landlord's licensed architect
or engineer using the current
version of the Standard Method for
Measuring Floor Area in Office Buildings
published by the Building Owners and
Managers Association International (the
"BOMA Standards"); provided, however, that
the rentable area of the Premises
shall be calculated by multiplying the
usable area of the Premises by 1.12
and the BOMA Standards shall not be used in
calculating the rentable area of
the Premises. The Annual Base Rent set
forth in Section 1.11 and the Monthly
Base Rent set forth in Section 1.12 hereof
shall be adjusted to reflect the
rentable area of the Premises as so
calculated. Tenant shall have the right
to have such measurement verified by
Tenant's independent licensed architect
or engineer. The additional space for the
Premises in excess of the initial
Office Space and the initial Assembly Space
shall be included in the
Premises on the date Tenant begins use of
all or a portion of such space and
Rent and other charges shall commence to be
payable for such space as of the
date of such first use by Tenant at the
rate per rentable square foot set
forth below for additional Office Space.
The Assembly Space at the below
stated rent for the Assembly Space shall be
limited to * rentable square
feet at such rent. However, Tenant may take
additional Assembly Space in
excess of * rentable square feet at the
below stated rent for Office Space.
1.10. Permitted Use: General office usage, testing, including
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animal testing (limited to testing on dogs,
pigs and sheep), and assembly of
medical devices and any other uses
incidental thereto; provided, however,
that if Landlord shall lease any space
within the Building (including
consent by Landlord to any assignment or
subletting which expands the
permitted uses within the Building) for
uses other than the foregoing uses,
then the Permitted Use hereunder shall be
similarly expanded to include such
other uses (excluding any retail in the
Building, leases for amenities to
serve the tenants of the Building and
leases to vendors of tenants in the
Building).
1.11. Annual Base Rent: Amounts as follows per rentable square
foot
----------------
in the Premises:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
LEASE YEAR
ANNUAL BASE RENT
ANNUAL BASE RENT
FOR OFFICE SPACE
FOR ASSEMBLY SPACE
------------------------------------------------------------------------------------------------
<S>
<C>
<C>
1
through 2
$ * per r.s.f.
$ ** per r.s.f.
------------------------------------------------------------------------------------------------
3
through 4
$ * per r.s.f.
$ ** per r.s.f.
------------------------------------------------------------------------------------------------
5
through 6
$ * per r.s.f.
$ ** per r.s.f.
------------------------------------------------------------------------------------------------
7
through 8
$ * per r.s.f.
$ ** per r.s.f.
------------------------------------------------------------------------------------------------
9
through 10
$ * per r.s.f.
$ ** per r.s.f.
------------------------------------------------------------------------------------------------
<FN>
*Subject to a maximum of * rentable square
feet of Assembly Space and
subject to change to the Annual Base Rent
for Office Space if assembly use
is discontinued and changed to office use.
Tenant expressly reserves the
right to change or reconfigure all or any
part of the Assembly Space to
Office Space; provided, however, in the
event of any such change or
reconfiguration, the rent for such changed
space shall become the Base Rent
for Office Space, Landlord shall not be
obligated to provide any leasehold
improvements or leasehold improvement
allowance, and any such change or
reconfiguration shall be subject to the
provisions of Article 11 of this
Lease.
</TABLE>
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1.12. Monthly Base Rent Installment: The following amounts
(subject
-----------------------------
to adjustment in accordance with Section
1.9) during the following periods
within the Term:
--------------------------------------------------------------------------
LEASE YEAR
MONTHLY BASE RENT
MONTHLY BASE RENT
FOR OFFICE SPACE** FOR
ASSEMBLY SPACE**
--------------------------------------------------------------------------
1 through 2
$*
$*
--------------------------------------------------------------------------
3 through 4
$*
$*
--------------------------------------------------------------------------
5 through 6
$*
$*
--------------------------------------------------------------------------
7 through 8
$*
$*
--------------------------------------------------------------------------
9 through 10
$*
$*
--------------------------------------------------------------------------
<FN>
**Subject to adjustment pursuant to Section
1.9 of this Lease and Exhibit B
to this Lease.
1.13. Public Liability Insurance Required: Two Million Dollars.
-----------------------------------
1.14. Security Deposit: Fifty Thousand and 00/100 Dollars
----------------
($50,000.00).
1.15. Expense Stop: $7.50 per rentable square foot per year.
The
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Expense Stop shall not be reduced if tax
abatement or similar tax relief is
granted for the Building or Property.
Landlord agrees to exercise reasonable
efforts to obtain tax abatement for the
Building, but such tax abatement
shall not be a condition to the Lease.
1.16. Intentionally Omitted.
---------------------
1.17. Number of Parking Spaces: Two and one half (2.5)
undesignated
------------------------
and unreserved parking spaces on the
Property around the Building for each
1,000 rentable square feet included in the
Premises (including any expansion
of the Premises) for the periods of time
during the Term at no charge to
Tenant or to Tenant's guests, and
unreserved visitor parking being made
available at a location and upon conditions
determined by Landlord, subject
to the provisions of Section 21.17 hereof.
If Landlord has not acquired the
land shown on the Site Plan attached hereto
as Exhibit J prior to the
Commencement Date, then Landlord shall
obtain alternative parking within two
(2) blocks of the Building and Tenant shall
be entitled to the exclusive use
of the one hundred (100) parking spaces
currently owned by Landlord and
located on the Property.
1.18. Leasing Brokers: None.
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1.19. Exhibits: The following Exhibits attached to this Lease
are
--------
incorporated herein by this reference:
A-1. Floor Plan of
First Floor
A-2. Floor Plan of
Second Floor
A-3. Floor Plan of
Expansion Space (First Expansion Space
and Second Expansion Space--total space for both)
B. Work to
be Performed on the Premises by Landlord
C.
Building Rules
D.
Memorandum of Occupancy
E. Lease
Estoppel Certificate
F.
Subordination, Non-Disturbance and Attornment Agreement
G.
Janitorial Services Schedule
H.
Memorandum of Lease
I.
Schematic Layout of the Premises
J. Site
Plan
3
ARTICLE 2 - DEMISING CLAUSE
---------------------------
Landlord, for and in consideration of the rents, covenants and
agreements hereinafter mentioned and hereby
agreed to be paid, kept and
performed by Tenant, does hereby lease to
Tenant, and Tenant does hereby
lease from Landlord, the Premises on the
terms and conditions contained
herein.
ARTICLE 3 - TERM AND POSSESSION
-------------------------------
3.1. Term. The Term shall commence on the Commencement Date and
----
shall continue for the Term, unless earlier
terminated as provided herein,
provided that the Term shall include any
period of beneficial occupancy for
purposes of operating a business prior to
the Commencement Date and all of
the obligations of the parties under this
Lease shall commence on the date
of such beneficial occupancy for purposes
of operating a business, except
that Base Rent shall be equitably prorated
based upon the portion of the
Premises beneficially occupied.
3.2. Delay in Occupancy. If the Premises are not ready for
------------------
occupancy on the Commencement Date this
Lease shall nevertheless continue in
effect, but the Commencement date shall be
delayed until the Premises are
ready for Tenant's occupancy, and Landlord
shall have no other liability
whatsoever on account thereof, except as
expressly provided herein. Rent
shall not be abated if the Premises are not
ready for occupancy because of
or resulting from: (a) the failure to
complete the installation of special
items specified by Tenant after the Design
Completion Date, (b) any delay
resulting from Tenant's failure to make
timely selection of colors or
materials or to submit plans on or prior to
the Plan Submission Date in
accordance with Exhibit B, (c) changes or
additions by Tenant to the
Approved Plans (as defined in Exhibit B),
or (d) revisions requested by
Tenant to the Approved Plans or rebidding
requested by Tenant of the work
contemplated by the Approved Plans to
contractors after the Design
Completion Date (the foregoing events are
herein called a "Tenant Delay").
The Premises shall be deemed ready for
occupancy if a certificate or
temporary certificate of occupancy has been
issued for the Premises and only
insubstantial details of construction,
decoration or mechanical adjustments
remain to be done which will not interfere
with the operation of Tenant's
business. On the date on which Tenant takes
possession of the Premises (or
as soon as practicable thereafter), the
parties shall execute a Memorandum
of Occupancy in the form attached hereto as
Exhibit D confirming the
Commencement Date and setting forth any
incomplete items (if any), but
failure to execute such document shall not
in any manner affect the
obligations of the parties hereunder.
Notwithstanding the foregoing if the Premises are not ready for
occupancy on or prior to December 1, 2005
(which delivery date shall not be
subject to force majeure) and if the cause
for the Premises not being ready
for occupancy is not a Tenant Delay, then
Landlord shall indemnify and hold
harmless Tenant from and against any
claims, losses, and expenses
(including, without limitation, reasonable
attorney's fees and expenses)
relating to the cost of occupancy of real
estate by Tenant (including,
without limitation, claims by Tenant's
existing lessor for consequential or
other
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damages and holdover rent under its
existing lease, dated August 15, 2001,
with Emerging Technologies Building II, LLC
at 20 South Sarah Street)
sustained by Tenant as a result of such
failure to deliver the Premises on
or prior to December 1, 2005. Should the
Premises fail to be delivered on or
prior to May 1, 2006 and should such
failure not be due to a Tenant Delay,
Tenant shall have the right by written
notice to Landlord given prior to May
1, 2006 to terminate this Lease without
liability in which event the
Security Deposit shall be returned to
Tenant.
3.3.
Renewal Option. Tenant, upon giving Landlord not less than one
--------------
hundred eighty (180) days prior written
notice in each instance, shall have
the right to renew the Term with respect to
all space in the Building then
under lease to Tenant for two (2)
additional three (3) year periods at a
rental equal to the Fair Market Value
Rental Rate (as defined below) for
comparable office buildings in the vicinity
of the Building. At such time as
Tenant notifies Landlord of Tenant's desire
to renew this Lease, Landlord
shall within fifteen (15) days thereafter
notify Tenant of Landlord's
interpretation of the Fair Market Value
Rental Rate. Tenant may accept the
rate as quoted, or elect to enter into
negotiations with Landlord for a
period not to exceed sixty (60) days,
during which both parties will
negotiate on a diligent, good faith basis
to arrive at an agreement
concerning the Fair Market Value Rental
Rate. Should an agreement not be
reached by both parties during said sixty
(60) day period, then the Fair
Market Value Rental Rate shall be
determined as provided in this section.
Within ten (10) days following the end of
such sixty (60) day period, each
party shall appoint an independent
appraiser having the designation of MAI
and is knowledgeable with respect to
valuation of rental rates in the
geographic area of the Building. Each
appraiser shall be asked to give such
appraiser's professional opinion as to the
Fair Market Value Rental Rate for
the Premises. Each appraiser shall be asked
to deliver such appraiser's
opinion simultaneously to Landlord and
Tenant within fifteen (15) days after
the appointment of such appraiser. If a
party fails to appoint an appraiser,
then the Fair Market Value Rental Rate
shall be determined by the single
appraiser appointed. If the opinions of the
Fair Market Value Rental Rate
differ by no more than ten (10) percent of
the lower of such Rates, then the
average of the Fair Market Value Rental
Rates contained in such opinions
shall be the Fair Market Value Rental Rate
for the relevant renewal term.
Otherwise, the two (2) appraisers shall
appoint a third appraiser to give
such third appraiser's professional opinion
as to the Fair Market Value
Rental Rate which shall be no lower than
the lower of the two (2) prior
opinions and no higher than the higher of
the two (2) prior opinions. The
determination of such third appraiser of
the Fair Market Value Rental Rate
shall govern; provided, however, that in no
event shall the Fair Market
Value Rental Rate be less than the Annual
Base Rent for the prior term of
this Lease (the initial term or any renewal
term, as the case may be). The
cost of the appraiser appointed by Landlord
shall be paid by Landlord. The
cost of the appraiser appointed by Tenant
shall be paid by Tenant. The cost
of the third appraiser, if any, shall be
shared equally by Landlord and
Tenant. Tenant may exercise the second
renewal option only if Tenant has
exercised the first renewal option.
3.4. Early Entry. Landlord shall endeavor, so long as Tenant is
-----------
using labor compatible with Landlord's
labor forces at the Property at that
time, to permit Tenant, at its option,
along with its contractors,
subcontractors and agents, to enter the
Premises at any time during the four
(4) weeks immediately prior to the
scheduled Commencement Date and in any
event no less than three (3) weeks prior to
the scheduled Commencement Date
and Tenant, along with its contractors,
subcontractors and agents, shall be
permitted to enter the First Expansion
Space and the Second Expansion Space
at any time during the two (2) weeks prior
to the scheduled commencement
date with respect to the First Expansion
Space and Second Expansion Space,
as the case may be or if available at an
earlier date, provided such entry
and work shall be in harmony with
Landlord's
5
contractors, and with no obligation on the
part of Tenant to pay rent or
other costs during such period of
occupancy, for the purpose of constructing
Tenant's improvements, installing
furniture, fixtures and equipment
(including telephone equipment) as well as
non-Building standard leasehold
improvements. Tenant and its contractors
shall have free use of such
electricity, heating, ventilation and air
conditioning and elevator service
as may be available during the period of
such early entry for installation
of Tenant's improvements. All provisions of
this Lease (with the exception
of the obligation to pay Rent) shall be
applicable during any such early
entry of the Premises, the First Expansion
Space or the Second Expansion
Space, as the case may be. All
installations made by Tenant and work
performed by Tenant in the Premises during
such early entries shall be at
the sole risk of Tenant. Tenant's entry
into the Premises prior to the
Commencement Date shall not cause any delay
in Landlord's work in the
Premises and if such a delay is caused, the
Commencement Date shall be
accelerated by one (1) day for each day of
such delay caused by Tenant,
whether or not Landlord's work is complete
as of such accelerated
Commencement Date.
3.5. First Expansion. Landlord shall lease to Tenant and Tenant
---------------
shall lease from Landlord an additional
approximately 8,000 rentable square
feet in the Building (the "First Expansion
Space") commencing at the
beginning of the fourth Lease Year. The
First Expansion Space shall be the
remainder of the unleased area on the first
and second floors of the west
wing and the balance on the third floor of
the west wing of the Building in
a location approved by Landlord and Tenant
in the area shown on Exhibit A-3.
Tenant may, upon one hundred eighty (180)
days prior written notice, request
delivery of the First Expansion Space at
any time following the Commencement
Date, but the First Expansion Space shall,
in any event, become a part of
the Premises without further action of the
parties and Tenant shall become
obligated to pay Rent and other charges
hereunder for the First Expansion
Space at the rental rates and upon the
other terms and conditions of this
Lease (including, without limitation, the
Expense Stop) upon the earlier of:
(a) the date of occupancy of the First
Expansion Space by Tenant, or (b) the
first day of the thirty seventh (37th)
month of the Term of this Lease
provided Landlord has substantially
completed the buildout of the First
Expansion Space in accordance with plans
approved by Landlord and Tenant and
the same are ready for occupancy. It is
understood and agreed that any
portion of the First Expansion Space taken
by Tenant before the required
take-down as of the thirty seventh (37th)
month of the term of the Lease
shall be counted towards the 8,000 square
feet for the First Expansion
Space. By way of example only, if Tenant
has leased an additional 6,000
square feet on the second floor of the west
wing on the twenty fifth (25th)
month after the Commencement Date, then
Tenant shall be obligated under this
Section 3.5 to take only an additional
2,000 rentable square feet on the
remainder of the west wing (if any). Tenant
shall deliver to Landlord
Tenant's schematic layout for the First
Expansion Space at least ninety (90)
days prior to the beginning of the fourth
Lease Year containing information
sufficient for Landlord to prepare plans
and specifications for the
improvement of the First Expansion Space.
Should Tenant fail to deliver such
schematic layout for the First Expansion
Space on or prior to such date,
then the rent for the First Expansion Space
shall commence to be payable on
the first day of the thirty seventh (37th)
month of the term of this Lease
notwithstanding that the build out of the
First Expansion Space may be
incomplete.
3.6. Second Expansion. Landlord shall lease to Tenant and
Tenant
----------------
shall lease from Landlord an additional
approximately 8,000 rentable square
feet in the Building (the "Second Expansion
Space") commencing at the
beginning of the sixth Lease Year. The
Second Expansion Space shall be in a
location approved by Landlord and Tenant,
but contiguous to the Premises in
the area shown on Exhibit A-3. Tenant may,
upon one hundred eighty (180)
days prior written notice, request delivery
of the Second Expansion Space at
any time following the Commencement
Date,
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but the Second Expansion Space shall, in
any event, become a part of the
Premises without further action of the
parties and Tenant shall become
obligated to pay Rent and other charges
hereunder for the Second Expansion
Space at the rental rates and upon the
other terms and conditions of this
Lease (including, without limitation, the
Expense Stop) upon the earlier of:
(a) the date of occupancy of the Second
Expansion Space by Tenant, or (b)
the first day of the sixty first (61st)
month of the Term of this Lease
provided Landlord has substantially
completed the buildout of the Second
Expansion Space in accordance with plans
approved by Landlord and Tenant and
the same are ready for occupancy. It is
understood and agreed that any
additional space leased by Tenant before
the required take-down of the
Second Expansion Space as of the sixty
first (61st) month of the term of the
Lease shall be counted towards the 8,000
square feet for the Second
Expansion Space so long as Tenant has
leased all of the First Expansion
Space. By way of example only, if Tenant
has leased an additional 3,000
square feet in the Building (excluding the
* rentable square feet leased
initially or in connection with the
expansion pursuant to Section 3.5) on
the fifty first (51st) month after the
Commencement Date, then Tenant shall
be obligated under this Section 3.6 to take
only an additional 5,000
rentable square feet contiguous to the then
existing Premises. Tenant shall
deliver to Landlord Tenant's schematic
layout for the Second Expansion Space
at least ninety (90) days prior to the
beginning of the sixth Lease Year
containing information sufficient for
Landlord to prepare plans and
specifications for the improvement of the
Second Expansion Space. Should
Tenant fail to deliver such schematic
layout for the Second Expansion Space
on or prior to such date, then the rent for
the Second Expansion Space shall
commence to be payable on the first day of
the sixty first (61st) month of
the term of this Lease notwithstanding that
the build out of the Second
Expansion Space may be incomplete.
3.7. Expansion Space Improvement Allowance. Landlord shall
provide
-------------------------------------
to Tenant a leasehold improvement allowance
for each of the First Expansion
Space and the Second Expansion Space equal
to $3.50 per rentable square foot
for each Lease Year remaining in the
initial term of this Lease as of the
expected commencement date with respect to
the lease of such additional
space in respect of which Tenant does not
have the option to terminate this
Lease pursuant to Section 3.8 hereof,
subject to Tenant's right to waive the
provisions of Section 3.8 hereof described
below in this section. By way of
example only, if Tenant elects to lease an
additional 6,000 rentable square
feet on the second floor of the west wing
following the second Lease Year,
then Landlord shall provide a leasehold
improvement allowance of $3.50
multiplied by the number of years remaining
in the term of this Lease in
respect of which Tenant does not have an
option to terminate this Lease
pursuant to Section 3.8 hereof; provided,
however, that if Tenant waives the
provisions of Section 3.8 hereof, then
Landlord shall provide a leasehold
improvement allowance of $3.50 multiplied
by the number of years remaining
in the initial term of this Lease
(exclusive of renewal terms).
Notwithstanding the foregoing, Landlord
shall not be obligated to provide a
leasehold improvement allowance in respect
of any portion of the First
Expansion Space or Second Expansion Space
in which leasehold improvements
(consistent with the scope of the leasehold
improvements made at the
beginning of the term of this Lease) have
been made prior to the date on
which such portion becomes a portion of the
Premises.
3.8. Termination Option-Unavailability of Space. Tenant shall
have
------------------------------------------
the option exercisable by written notice
given at least one (1) year in
advance and delivered at any time during
the term following the end of the
sixth (6th) Lease Year to terminate this
Lease at the end of the twelfth
(12th) month succeeding the month in which
such notice is given only in the
event that Landlord is unable to deliver
such additional space within the
Building as Tenant shall deem necessary in
Tenant's sole discretion as to
which Tenant has given Landlord at least
one hundred
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eighty (180) days advance notice of
Tenant's need for such additional space.
This option to terminate shall expire,
lapse and become void upon the first
day of the eighth (8th) Lease Year. Should
Tenant elect to terminate the
Lease pursuant to the options set forth in
this section, then on the
termination date, and as a condition to
such termination, Tenant shall pay
to Landlord a termination fee in an amount
equal to one hundred twenty (120)
percent of Landlord's unamortized expense
of improving the Premises for
Tenant as described in Exhibit B hereto
(and inclusive of the leasehold
improvement allowance described in Section
3.7 hereof), computed on a
straight line basis over ten (10)
years.
3.9. Termination Option-Change of Control. Tenant shall have
the
------------------------------------
option exercisable by written notice given
at least one (1) year in advance
and delivered at any time during the term
following the end of the fifth
(5th) Lease Year to terminate this Lease at
the end of the twelfth (12th)
month succeeding the month in which such
notice is given only in the event
that majority control of Tenant is changed
at any time during the term of
this Lease. Should Tenant elect to
terminate the Lease pursuant to the
option set forth in this section, then on
the termination date, and as a
condition to such termination, Tenant shall
pay to Landlord all rent and
other charges accrued through the date of
termination plus a termination fee
in an amount equal to fifty percent (50%)
of the Base Rent payable by Tenant
during the balance of the then existing
term (initial term, or a renewal
term as the case may be) of this Lease, and
Tenant shall vacate and
surrender the Premises to Landlord in
accordance with Article 16 of this
Lease.
3.10. Lapse of Options. The options set forth in Sections 3.3
and
----------------
3.8 shall be exercisable only so long as no
uncured event of default by
Tenant has occurred under this Lease and
shall lapse and become void should
Tenant assign its interest in this Lease in
whole or in part or should
Tenant sublet the Premises in whole or in
part, in either case to an entity
which is not a Tenant Affiliate or a
Qualified Assignee (each as defined in
Section 8.3 hereof); provided, however,
that if Landlord consents to such
assignment or subletting, such options
shall not lapse in such event.
ARTICLE 4 - RENT
----------------
4.1. Annual Base Rent. Tenant shall pay the Annual Base Rent to
----------------
Landlord at the location designated from
time to time by Landlord in the
Monthly Base Rent Installment in advance on
or prior to the first day of
each and every month during the Term
without setoff or deduction whatsoever,
except as may be specifically provided in
this Lease. The rent for any
partial month shall be prorated on the
basis of thirty (30) days to the
month and shall be paid on the first day of
such partial period.
4.2. Adjustments to Annual Base Rent. The Annual Base Rent shall
be
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adjusted from time to time in accordance
with this section to reflect
increases in the expense of operating the
Building ("Expenses"). The Annual
Base Rent including the adjustments made
pursuant to this section is
referred to in this Lease as the "Rent". If
the Expenses for any calendar
year during the Term exceed the Expense
Stop (the "Base Amount"), Annual
Base Rent shall be adjusted to include
Tenant's Pro Rata Share (as defined
below) of such excess. As soon as
practicable after the end of each calendar
year (or portion thereof) during the Term,
and no later than 120 days after
the end of each calendar year, Landlord
will provide Tenant with a written
notice ("Statement") setting forth the
amount of any adjustments to Annual
Base Rent together with a statement of
Expenses of operating the Building
for the previous calendar year. Within
thirty (30) days following receipt of
the Statement, Tenant shall pay to
Landlord: (a) the adjustment to Annual
Base Rent for the
8
previous calendar year after credit for any
estimated payments which Tenant
has made pursuant to this section; and (b)
an estimated adjustment to Annual
Base Rent for the months which have elapsed
in the current calendar year
based on the previous calendar year's
increase in Expenses and Landlord's
good faith projection of the increase in
Expenses during the current
calendar year after credit for any
estimated payments made by Tenant
pursuant to this section. Commencing with
the month following the month in
which the Statement is dated and continuing
until such time as Tenant
receives Landlord's next Statement, the
Monthly Base Rent Installments shall
be adjusted to include Tenant's Pro Rata
Share of any Expenses in excess of
the Base Amount based on Landlord's good
faith projection of Expenses for
the current calendar year. The adjusted
portion of the payments of Annual
Base Rent shall be credited against the
actual Expenses as shown in
Landlord's next Statement. If the next
Statement shows that Tenant has
overpaid and if Tenant is not then in
monetary default, Landlord shall
credit such overpayment against the next
accruing payments of Rent until the
overpayment is reduced to zero (and at the
expiration or earlier termination
of the Lease, Landlord shall pay to Tenant
any remaining portion of
overpayment). The obligation to pay the
adjustments to Annual Base Rent
shall survive any termination of the Term.
Notwithstanding anything
contained in this Section 4.2, the Annual
Base Rent payable by Tenant shall
in no event at any time be less than the
Annual Base Rent specified in
Article 1 hereof.
4.3. Expenses. Expenses shall mean all expenses and costs of
--------
administering, repairing, managing,
replacing, and operating the Building
incurred by Landlord, including, without
limitation, the following costs:
(a) wages of all employees at or below the
grade of Building manager
(including employment taxes and fringe
benefits); (b) janitorial labor and
materials; (c) costs of building security
personnel and materials; (d)
electricity, gas, sewer, water, trash
disposal and other utilities; (e)
maintenance and repairs (including
maintenance and service contracts) ; (f)
landscaping maintenance; (g) insurance
premiums; (h) real estate and
personal property taxes assessed on the
Building and personal property of
Landlord therein, including, without
limitation, any decreases in taxes
resulting from Landlord's obtaining real
estate tax relief for the Building
and any increases in real estate taxes
resulting from the expiration of any
real estate tax relief obtained for the
Building, and further including any
tax imposed as a substitute for or
supplement to presently existing real
estate and/or personal property taxes; (i)
reasonable expenses of Landlord
in attempting to reduce or limit real
estate and/or personal property taxes
(any refunds to be credited against taxes
in the year received); (j) capital
improvements to the extent necessary to
comply with applicable governmental
rules and regulations enacted after the
Commencement Date, such costs to be
amortized over a reasonable period of time
in accordance with generally
accepted accounting principles; (k) expense
of building management fees not
to exceed the market rate for similar
buildings; and (l) capital expenses
which reduce any component cost of Expenses
(such cost to be reasonably
amortized in accordance with generally
accepted accounting principles by
Landlord and Expenses to include only the
cost as so amortized by Landlord
during the calendar year for which such
computation is made and not to
exceed the reduction in Expenses resulting
from such capital expense).
Expenses shall not include: (u) advertising
expense for the Building; (v)
charges incurred by a tenant for work
performed or services delivered to
such tenant at the request of such tenant
and not to all tenants of the
Building; (w) costs of alterations of any
tenant's premises; (x) principal
and interest payments on loans made on the
security of the Building; (y)
costs of capital expenditures (except as
provided above in this section);
(z) leasing commissions; costs incurred to
make major repairs or
replacements of any defective initial
construction of the Building and
related appurtenances as determined by
Landlord regardless of how such costs
are characterized under generally accepted
accounting principles; legal
expenses incurred in connection with the
preparation or negotiation of
leases or other related documents with
tenants or prospective tenants of the
9
Building, or in connection with disputes
with any such tenants; costs of
repairs or other work occasioned by fire or
other casualty of an insurable
nature or by means of eminent domain; costs
for sculptures or other art;
costs incurred in connection with the
removal or cleanup of hazardous
substances or materials from the Building
or property; costs incurred in
connection with renovating or otherwise
improving or decorating space to be
leased to tenants; any costs, fines or
penalties incurred by reason of
actual or alleged violations by Landlord of
any governmental law or
regulation. Actual Expenses, including the
Base Amount, shall be adjusted by
Landlord to reflect a ninety five (95)
percent serviced and leased Building
for the purpose of making the adjustment to
Annual Base Rent, if the actual
occupancy is less than ninety five percent
(95%) for all or part of the
year.
Expenses shall not include cleaning, trash removal and
janitorial
service for the Assembly Space and Landlord
shall reimburse Tenant for the
actual cost incurred by Tenant in providing
such service to the Assembly
Space in an amount not to exceed $1.35 per
rentable square foot in the
Assembly Space and upon delivery of
reasonable documentation supporting such
cost. Tenant may request that Landlord
provide such service to the Assembly
Space, in which event Landlord shall do so,
and in which event Expenses
shall include such service to the Assembly
Space.
4.4. Tenant's Pro Rata Share. As used herein Tenant's Pro Rata
-----------------------
Share shall be a fraction, the numerator of
which is the usable area of the
Premises for the applicable portion of the
Term and the denominator of which
is the total usable area of the Building.
The details of such computation
and appropriate supporting data shall be
furnished by Landlord in its first
Statement to Tenant.
4.5. Calculation of Areas. The usable areas of the Premises and
the
--------------------
Building shall be computed using the
standards of the Building Owners and
Managers Association International current
as of the date of this Lease.
4.6. Audit Rights. Tenant shall have the right, at Tenant's
sole
------------
cost and expense, to audit Landlord's
records of Expenses for the Building
provided that all of the following criteria
have been met: (1) no audit
shall be conducted during the months of
January, February or March of any
calendar year (Tenant's auditor shall make
an appointment with the
Landlord's audit supervisor designated by
Landlord. Landlord and Tenant
shall reasonably cooperate to arrange a
mutually acceptable time within
sixty (60) days of Tenant's request.
Notwithstanding the foregoing, Landlord
shall not be required to accommodate
Tenant's auditors if other tenants have
scheduled audits prior to Tenant's request
on the date proposed by Tenant);
(2) before conducting any audit, Tenant
must pay the full amount of Expenses
billed and must not be in default of any
other provision of this Lease; (3)
Tenant may review only those records of
Landlord that are specifically
related to Expenses. (Without limiting the
generality of the foregoing,
Tenant may not review any other leases,
cross easement agreements or
Landlord's tax returns or financial
statements.); (4) in conducting an
audit, Tenant shall utilize an independent
certified public accountant
experienced in auditing office building
records, subject to Landlord's
reasonable prior approval; (5) the audit
shall be conducted in St. Louis at
a location determined by Landlord, which
shall be, at Landlord's discretion,
at the principal office of Landlord or its
property manager; (6) upon
receipt thereof, Tenant shall deliver to
Landlord a copy of the audit report
and all accompanying data; (7) Tenant shall
keep confidential all agreements
involving the rights provided in this
section and the results of any audits
conducted hereunder. (Notwithstanding the
foregoing, Tenant shall be
permitted to furnish the foregoing
information to its auditors to the extent
that this information is required to
perform their audit services for Tenant
but whom shall also agree with Landlord in
writing to be bound to
confidentiality as hereinabove provided.);
(8) the audit shall be conducted
in accordance
10
with generally accepted rules of auditing
practices; (9) Tenant may not
conduct an audit more often than once each
calendar year; (10) Tenant may
audit records with respect to each Lease
Year only once; and (11) no audit
shall cover a period of time in excess of
the three (3) Lease Years
immediately preceding the audit.
If Tenant objects to Landlord's determination of Expenses,
Tenant
shall so advise Landlord, stating with
specificity its reasons therefor. If
Landlord and Tenant are unable, despite
their good faith reasonable efforts,
to agree upon the amount of Expenses, then,
within thirty (30) days of
Landlord's receipt of Tenant's objections
thereto, either party may submit
the matter to arbitration with a mutually
acceptable third-party arbitration
service. Tenant shall be entitled, upon
three (5) days prior written notice,
and during normal business hours at
Landlord's office or such other place in
the area in which the Building is located
as Landlord may reasonably
designate, to inspect and examine and/or
have a reputable independent CPA or
consultant selected by Tenant audit the
books and records of Landlord
relating to the determination of Expenses.
If the audit discloses that the
amount of Expenses billed to Tenant was
incorrect, the appropriate party
shall pay to the other party the deficiency
or overpayment, as applicable.
All costs and expenses of the audit shall
be paid by Tenant unless the audit
shows that Landlord overstated or
understated Expenses for the subject
calendar year by more than three percent
(3%), in which case, Landlord shall
pay all costs and expenses of the audit
(not to exceed $2,000.00). Landlord
shall maintain accurate and complete books
and records evidencing Expenses
for a period of not less than five (5)
years after Landlord issues a
statement for any calendar year. The books
and records shall be located in
the Building or another reasonable location
in the area in which the
Building is located.
ARTICLE 5 - SECURITY DEPOSIT
----------------------------
Tenant concurrently with its execution of this Lease has
deposited
with Landlord the Security Deposit to be
held to guarantee the faithful
performance by Tenant of all of its
obligations under this Lease. Any
interest earned thereon shall be the
property of Landlord. Unless and until
Tenant is in default with respect to any
provision hereof, the Security
Deposit shall be the property of Tenant. If
Tenant defaults with respect to
any provision of this Lease, Landlord may
expend the whole or any part of
the Security Deposit for the payment of any
amount which Landlord may expend
by reason of such default. If any portion
or all of the Security Deposit is
so used, Tenant shall, within ten (10) days
after demand therefor, deposit
cash with Landlord in an amount sufficient
to restore the security deposit
to its original amount and failure to do so
shall be a breach of this Lease.
If Tenant shall not be in default under
this Lease (beyond any applicable
cure period), the Security Deposit shall be
returned to Tenant at the end of
the thirty sixth (36th) month after the
Commencement Date. If Tenant is in
default (beyond any applicable cure period
as of such date), then Landlord
shall hold the Security Deposit until the
end of the Term and return to
Tenant at the end of the Term any portion
of the Security Deposit remaining
after reimbursement to Landlord of any
costs incurred due to any default;
provided that Landlord may retain the
Security Deposit (if not required to
be released to Tenant after the 36th month)
until such time as all amounts
due from Tenant hereunder have been paid in
full. In the event of a transfer
of the Building, Landlord shall pay over
the Security Deposit to Landlord's
transferee to be held under the terms of
this Lease and Landlord shall be
released from all liability for the return
of the Security Deposit. Under no
circumstances shall the Security Deposit be
interpreted as being part of the
Rent.
11
ARTICLE 6 - PERMITTED USE
-------------------------
Tenant shall use and occupy the Premises only for the Permitted
Use. Tenant shall comply, and shall use
reasonable good faith effort to
cause all persons permitted by Tenant to
come upon the Premises to comply,
with the Building Rules and with such
reasonable modifications thereof as
may be made from time to time in accordance
with the terms of this Lease.
Landlord shall not be liable for any
nonobservance of such rules by any
other person, but Landlord shall take
reasonable steps to enforce such
observance. All deliveries to the Premises
shall be subject to the
reasonable control of Landlord as to place
and time of deliveries. Tenant
shall not make or permit to be made any use
of the Premises which is
forbidden by applicable law or governmental
regulation or which may be
unreasonably dangerous to persons or
property or which may be in conflict
with or invalidate or increase the premium
cost of any policy of insurance
carried on the Building. If Landlord
permits a use of the Premises which
would increase the cost of insurance
coverage on the Premises and/or
Building by Landlord (which permission
Landlord may refuse to give in its
sole discretion), as a condition to such
permission Tenant shall pay all of
such increase in the cost of insurance.
ARTICLE 7 - SERVICES
--------------------
7.1. Standard Services. Landlord at its expense shall furnish:
(a)
-----------------
heat and air conditioning to provide a
seasonable temperature (subject to
governmental regulations) for Tenant's use
of the Premises under normal
business operations; (b) sewer/plumbing
service and cold water from the
public supply for drinking, lavatory and
toilet purposes and hot water for
kitchen and lavatory purposes from regular
Building supply drawn
