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EX-10.1
OFFICE LEASE
THIS OFFICE LEASE is executed this
21st day of December 2006, by and between DUKE REALTY LIMITED
PARTNERSHIP, an Indiana limited partnership ("Landlord"), and
AKORN, INC., a Louisiana corporation ("Tenant").
ARTICLE 1 — LEASE OF
PREMISES
Section 1.01 .
Basic Lease Provisions and Definitions .
(a) Leased Premises (shown
outlined on Exhibit A attached hereto):
Suite 300 (third floor) of the building to be built prior to
the Commencement Date (as defined herein) commonly known as
Westlake at Conway Park (the "Building"), located at 1925 West
Field Court, Lake Forest, IL 60045, within Conway Park (the
"Park").
(b) Rentable Area of Leased
Premises and Building: The rentable square feet ("RSF") of the
Leased Premises is approximately 34,436 and the RSF of the Building
is approximately 99,538. All space shall be measured upon
completion of the Building in accordance with 1996 BOMA standards.
The determination of Rentable Area shall be deemed correct for all
purposes hereunder unless otherwise agreed to in writing by the
parties. The actual RSF of the Leased Premises and Building is
subject to Section 1.03.
(c) Tenant’s
Proportionate Share: Subject to Section 1.03, 34.60%.
(d) Minimum Annual Rent:
Subject to Section 1.03, the Minimum Annual Rent is as
follows:
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Year 1
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$
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0.00
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(5 months)
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Year 1
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$
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361,578.00
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(7 months)
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Year 2
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$
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632,244.96
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Year 3
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$
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644,986.32
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Year 4
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$
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657,727.56
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Year 5
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$
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670,813.32
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Year 6
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$
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684,243.36
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Year 7
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$
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698,017.68
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Year 8
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$
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712,136.52
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Year 9
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$
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726,255.24
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Year 10
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$
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740,718.36
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(e) Monthly
Rental Installments: Subject to Section 1.03, the Monthly
Rental Installments are as follows:
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Months 1-5
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$
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0.00
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Months 6-12
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$
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51,654.00
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Months 13-24
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$
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52,687.08
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Months 25-36
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$
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53,748.86
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Months 37-48
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$
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54,810.63
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Months 49-60
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$
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55,901.11
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Months 61-72
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$
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57,020.28
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Months 73-84
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$
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58,168.14
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Months 85-96
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$
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59,344.71
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Months 97-108
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$
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60,521.27
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Months 109-120
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$
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61,726.53
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(f) [
Intentionally Omitted ] .
(g) Target Commencement Date:
April 1, 2008. Provided the Leased Premises are ready for
occupancy, Landlord will allow Tenant to take possession of the
Leased Premises prior to the Target Commencement Date. All terms
and conditions of this Lease will become effective upon Tenant
taking possession of the Leased Premises, except for the payment of
Minimum Annual Rent and Annual Rental Adjustment, which will
commence on April 1, 2008.
(h) Lease Term: Subject to
Section 16.16, Ten (10) years.
(i) Security Deposit:
NONE.
(j) Broker(s): Duke Realty
Services, LLC and CB Richard Ellis, Inc. representing Landlord and
CB Richard Ellis, Inc. representing Tenant.
(k) Permitted Use: General,
administrative and executive office purposes.
(l) Address for notices and
payments are as follows:
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Landlord:
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Duke Realty Limited Partnership
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c/o Duke Realty Corporation
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Attn: Vice President — Property
Management
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6133 North River Road, Suite 200
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Rosemont, IL 60018
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With payments to:
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Duke Realty Limited Partnership
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75 Remittance Drive, Suite 3205
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Chicago, IL 60675-3205
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Tenant (prior to occupancy):
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Akorn, Inc.
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2500 Millbrook Drive
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Buffalo Grove, IL 60089
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Attn: Jeffrey Whitnell
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Tenant (following occupancy):
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Akorn, Inc.
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1925 West Field Court, Suite 300
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Lake Forest, IL 60045
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(m) Guarantor(s):
None.
EXHIBITS
Exhibit A — Leased Premises
Exhibit B — Tenant Improvements
Exhibit B-1 — Shell Specifications
Exhibit B-2 — Tenant Improvements Scope of Work
Exhibit B-3 — Schedule
Exhibit C — Letter of Understanding
Exhibit D — Janitorial Specifications
Exhibit E — Rules and Regulations
Exhibit F — Roof Area
Exhibit G — Dish Data Sheet
Section 1.02 .
Lease of Premises . Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the Leased Premises, under the
terms and conditions herein, together with a non-exclusive right,
in common with others, to use the following (collectively, the
"Common Areas"): the areas of the Building and the underlying land
and improvements thereto that are designed for use in common by all
tenants of the Building and their respective employees, agents,
customers, invitees and others.
Section 1.03 . RSF
Adjustment . Prior to the Commencement Date (as defined below),
Landlord shall cause its architect to measure the RSF of the
Building and Leased Premises in accordance with 1996 BOMA Standards
and certify to Landlord and Tenant the correct dimensions. In the
event the RSF of the Building or Leased Premises differs from the
RSF specified in Section 1.01(b), Landlord and Tenant will amend
this Lease accordingly, as applicable, with respect to
Tenant’s Proportionate Share, Minimum Annual Rent and Monthly
Rental Installments.
ARTICLE 2 — TERM AND
POSSESSION
Section 2.01 .
Term . The Lease Term shall commence as of the date (the
"Commencement Date") that Substantial Completion (as defined in
Exhibit B hereto) of the Shell Work (as defined
in Exhibit B ) and the Tenant Improvements (as
defined in Section 2.02 below) occurs.
Section 2.02 .
Construction of Tenant Improvements . Landlord shall
construct and install all leasehold improvements to the Leased
Premises (collectively, the "Tenant Improvements") in accordance
with Exhibit B attached hereto and made a part
hereof.
Section 2.03 .
Surrender of the Premises . Upon the expiration or earlier
termination of this Lease, Tenant shall, at its sole cost and
expense, immediately (a) surrender the Leased Premises to
Landlord in
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broom-clean condition and in good order, condition and repair,
(b) remove from the Leased Premises (i) Tenant’s
Property (as defined in Section 8.01 below), and
(ii) any alterations required to be removed pursuant to
Section 7.03 below, and (c) repair any damage
caused by any such removal and restore the Leased Premises to the
condition existing upon the Commencement Date, reasonable wear and
tear excepted. All of Tenant’s Property that is not removed
within ten (10) days following Landlord’s written demand
therefor shall be conclusively deemed to have been abandoned and
Landlord shall be entitled to dispose of such property at
Tenant’s cost without incurring any liability to Tenant. This
Section 2.03 shall survive the expiration or any
earlier termination of this Lease.
Section 2.04 .
Holding Over . If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease,
Tenant shall be a tenant at sufferance at one hundred fifty percent
(150%) of the Monthly Rental Installments and Annual Rental
Adjustment (as hereinafter defined) for the Leased Premises in
effect upon the date of such expiration or earlier termination, and
otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Tenant shall not be liable for any
consequential damages Landlord may suffer as a result of
Tenant’s holdover unless such holdover continues for sixty
(60) days after expiration of the Lease Term. Acceptance by
Landlord of rent after such expiration or earlier termination shall
not result in a renewal of this Lease, nor shall such acceptance
create a month-to-month tenancy. In the event a month-to-month
tenancy is created by operation of law, either party shall have the
right to terminate such month-to-month tenancy upon thirty
(30) days’ prior written notice to the other, whether or
not said notice is given on the rent paying date. This
Section 2.04 shall in no way constitute a consent by
Landlord to any holding over by Tenant upon the expiration or
earlier termination of this Lease, nor, except as expressly
provided herein, limit Landlord’s remedies in such event.
ARTICLE 3 — RENT
Section 3.01 .
Base Rent . Tenant shall pay to Landlord the Minimum Annual
Rent in the Monthly Rental Installments in advance, without demand,
deduction or offset, on the Commencement Date and on or before the
first day of each and every calendar month thereafter during the
Lease Term. The Monthly Rental Installments for partial calendar
months shall be prorated.
Section 3.02 .
Annual Rental Adjustment Definitions .
(a) " Annual Rental
Adjustment " shall mean the amount of Tenant’s
Proportionate Share of Operating Expenses for a particular calendar
year.
(b) " Operating
Expenses " shall mean the amount of all of Landlord’s
costs and expenses paid or incurred in operating, repairing,
replacing and maintaining the Building and the Common Areas in good
condition and repair for a particular calendar year (including all
additional costs and expenses that Landlord reasonably determines
that it would have paid or incurred during such year if the
Building had been fully occupied), including by way of illustration
and not limitation, the following: all Real Estate Taxes (as
hereinafter defined), insurance premiums and deductibles; water,
sewer, electrical and other utility charges other than the
separately billed electrical and other charges paid by Tenant as
provided in this Lease (or other tenants in the Building); service
and other charges incurred in the repair, replacement, operation
and maintenance of the elevators and the heating, ventilation and
air-conditioning system; costs associated with providing fitness
facilities, if any; cleaning and other janitorial services; tools
and supplies; repair costs; landscape maintenance costs; access
patrols; license, permit and inspection fees; management fees;
administrative fees; supplies, costs, wages and related employee
benefits payable for the management, maintenance and operation of
the Building; maintenance, repair and replacement of the driveways,
parking and sidewalk areas (including snow and ice removal),
landscaped areas, and lighting; and maintenance and repair costs,
dues, fees and assessments incurred under any covenants or charged
by any owners association.
Operating Expenses shall
specifically exclude the following:
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(i)
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Capital improvements, except for capital
improvements that are (x) made for the purpose of reducing
Operating Expenses, (y) may be required to be made by laws,
statutes, codes or regulations that were not in effect or
applicable to the Building at the time it was constructed, or
(z) required pursuant to Section 16.15(b) below,
and the cost of any such capital improvements, if any, shall be
amortized over the useful life of such improvements (as reasonably
determined by Landlord using amortization and useful life measures
customary for landlords of similar buildings in the area), and only
the amortized portion shall be included in Operating
Expenses;
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(ii)
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Costs of alterations of any tenant’s
premises, including the Leased Premises;
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(iii)
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Real estate or leasing brokers’ leasing or
sales commissions;
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(iv)
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Any costs or expenses incurred by Landlord or on
Landlord’s behalf resulting from or in connection with the
marketing or promotion of space in the Building;
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(v)
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Building management fees in excess of 3% of the
gross rent for the Building;
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(vi)
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Depreciation on the Building;
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(vii)
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Interest or penalties resulting from late
payments by Landlord;
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(viii)
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Costs directly reimbursed by tenants, including
costs for special services to any tenant;
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(ix)
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Costs reimbursed by insurance proceeds and/or
paid pursuant to warranties;
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(x)
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Costs reimbursed by governmental authorities such
as condemnation;
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(xi)
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Legal fees for enforcing any tenants’
leases;
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(xii)
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Any costs or expenses that are otherwise covered
by any enforceable warranties or guaranties;
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(xiii)
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Any offsite managerial costs, expense salaries or
other compensation above the level of property manager, except to
the extent of the prorated portion thereof attributable only to the
Building; and
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(xiv)
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Costs and expenses related to operation of any
services or amenities (other than the now existing reserved parking
in the Common Areas) operated for a profit by Landlord.
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(c) "
Tenant’s Proportionate Share of Operating Expenses "
shall mean an amount equal to the product of Tenant’s
Proportionate Share times the Operating Expenses.
(d) " Real Estate
Taxes " shall mean all real estate taxes and assessments,
special or otherwise, levied or assessed upon or with respect to
the Building and Common Areas, provided real estate taxes and
assessments (except as provided below with respect to special
assessments) shall be included in Real Estate Taxes for a calendar
year only to the extent such taxes and assessments are paid in such
calendar year, and ad valorem taxes for any personal property owned
by Landlord and used in connection therewith. Should the State of
Illinois, or any political subdivision thereof, or any other
governmental authority having jurisdiction over the Building and
Common Areas: (a) impose a tax, assessment, charge or fee, or
increase a then existing tax, assessment, charge or fee that
Landlord shall be required to pay, either by way of substitution of
Real Estate Taxes and ad valorem personal property taxes, or in
addition to Real Estate Taxes and ad valorem personal property
taxes, or (b) impose an income or franchise tax or a tax on
rents ("Rent Tax") in substitution for or as a supplement to a tax
levied against the Building and Common Areas which are incurred
during any calendar year during the Term, all such taxes,
assessments, fees or changes (hereafter referred to as "in lieu
taxes") shall be deemed to constitute Real Estate Taxes hereunder.
If any special assessments payable in installments is levied
against all or part of the Building and Common Areas, then Real
Estate Taxes for the calendar year in which such assessment is
levied and for each calendar year thereafter or portion thereof
during the Term shall include only the amount of any installments
of such assessments plus interest thereon paid or payable during
such calendar year (without regard to any right to pay or make
payments of such assessment in a single payment). Real Estate Taxes
shall also include all reasonable fees and costs incurred by
Landlord in seeking to obtain a reduction of or limit on the
increase in Real Estate Taxes, regardless of whether any reduction
or limitation is obtained. Except as provided with regard to "in
lieu taxes", Real Estate Taxes shall not include any Illinois
Replacement Tax or any tax on inheritance, state, succession,
transfer, sales, gift, franchise, income, capital or stock. In
addition, to the extent any Rent Tax is not levied in lieu of any
of the above-described Real Estate Taxes, Landlord shall pass
though and apportion any such Rent Tax directly to the Building and
Common Area tenants to whom such Rent Tax is attributable to the
extent practicable.
Section 3.03 .
Payment of Additional Rent .
(a) Any amount required to be
paid by Tenant hereunder (in addition to Minimum Annual Rent) and
any charges or expenses incurred by Landlord on behalf of Tenant
under the terms of this Lease shall be considered "Additional Rent"
payable in the same manner and upon the same terms and conditions
as the Minimum Annual Rent reserved hereunder, except as set forth
herein to the contrary. Any failure on the part of Tenant to pay
such Additional Rent when and as the same shall become due shall
entitle Landlord to the remedies available to it for non-payment of
Minimum Annual Rent.
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(b) In addition to the
Minimum Annual Rent specified in this Lease, commencing as of the
Commencement Date, Tenant shall pay to Landlord as Additional Rent
for the Leased Premises, in each calendar year or partial calendar
year during the Lease Term, an amount equal to the Annual Rental
Adjustment for such calendar year. Landlord shall estimate the
Annual Rental Adjustment annually, and written notice thereof shall
be given to Tenant prior to the beginning of each calendar year.
Tenant shall pay to Landlord each month, at the same time the
Monthly Rental Installment is due, an amount equal to one-twelfth
(1/12) of the estimated Annual Rental Adjustment. If Operating
Expenses increase during a calendar year, Landlord may increase the
estimated Annual Rental Adjustment, but no more than one
(1) time per calendar year, by giving Tenant written notice to
that effect, and thereafter Tenant shall pay to Landlord, in each
of the remaining months of such year, an amount equal to the amount
of such increase in the estimated Annual Rental Adjustment divided
by the number of months remaining in such year. Within a reasonable
time after the end of each calendar year, Landlord shall prepare
and deliver to Tenant a statement showing the actual Annual Rental
Adjustment. Within thirty (30) days after receipt of the
aforementioned statement, Tenant shall pay to Landlord, or Landlord
shall credit against the next rent payment or payments due from
Tenant, as the case may be, the difference between the actual
Annual Rental Adjustment for the preceding calendar year and the
estimated amount paid by Tenant during such year. This
Section 3.03 shall survive the expiration or any
earlier termination of this Lease.
Section 3.04 .
Late Charges . Tenant acknowledges that Landlord shall incur
certain additional unanticipated administrative and legal costs and
expenses if Tenant fails to pay timely any payment required
hereunder. Therefore, in addition to the other remedies available
to Landlord hereunder, if any payment required to be paid by Tenant
to Landlord hereunder shall become overdue, such unpaid amount
shall bear interest from the due date thereof to the date of
payment at the prime rate of interest, as reported in the Wall
Street Journal (the "Prime Rate") plus four percent (4%) per annum
Notwithstanding the above, Landlord shall provide Tenant with a
written notice of such payment default prior to assessing the late
charge and Tenant shall have an additional five (5) days to
cure such payment default before Landlord assesses any late
charges; provided, however, that Landlord shall not be required to
give such notice more than one (1) time with respect to any
particular payment default, nor more than two (2) times in the
consecutive twelve (12) month period with respect to any
payment defaults in the aggregate.
Section 3.05 .
Electricity Charges . Tenant acknowledges that the Leased
Premises shall be separately metered for electricity. Tenant shall
obtain in its own name and pay directly to the appropriate supplier
the cost of all electricity serving the Leased Premises.
Section 3.06 .
Inspection and Audit Rights.
(a) Tenant shall have the
right to inspect, at reasonable times and in a reasonable manner,
during the ninety (90) day period following the delivery of
Landlord’s statement of the actual amount of the Annual
Rental Adjustment (the "Inspection Period"), such of
Landlord’s books of account and records as pertain to and
contain information concerning the Annual Rental Adjustment for the
prior calendar year in order to verify the amounts thereof. Such
inspection shall take place at Landlord’s office upon at
least fifteen (15) days prior written notice from Tenant to
Landlord, but such notice period shall not affect the duration of
the Inspection Period. Only Tenant or an accountant that is not
being compensated for its services on a contingency fee basis shall
conduct such inspection. Tenant shall also agree to follow
Landlord’s reasonable procedures for auditing such books and
records. Landlord and Tenant shall act reasonably in assessing the
other party’s calculation of the Annual Rental Adjustment.
Tenant shall provide Landlord with a copy of its findings within
sixty (60) days after completion of the audit. In the event of
any errors on the part of Landlord costing Tenant in excess of
three percent (3%) of Tenant’s actual Operating Expense
liability for any calendar year, Landlord will also reimburse
Tenant for the costs of an audit reasonably incurred by Tenant in
an amount not to exceed $10,000. Tenant’s failure to exercise
its rights hereunder within the Inspection Period shall be deemed a
waiver of its right to inspect or contest the method, accuracy or
amount of such Annual Rental Adjustment. If within the period
aforesaid, Tenant provides Landlord with its notice disputing the
correctness of the statement, and if such dispute shall have not
been settled by agreement, Tenant may submit the dispute to a
reputable firm of independent certified public accountants selected
by Tenant and approved by Landlord, such approval shall not be
unreasonably withheld or delayed, and the decision of such
accountants shall be conclusive and binding upon the parties. If
such accountant decides that there was an error, Landlord will make
correcting payment if Tenant overpaid such amount, and Tenant shall
pay Landlord if Tenant underpaid such amount. The actual
out-of-pocket fees and expenses involved in such decision shall be
borne by the unsuccessful party.
(b) If Landlord and Tenant
agree that Landlord’s calculation of the Annual Rental
Adjustment for the inspected calendar year was incorrect, the
parties shall enter into a written agreement confirming such
undisputed error and then Landlord shall make a correcting payment
in full to Tenant within thirty (30) days after the
determination of the amount of such error or credit such amount
against
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future Additional Rent if Tenant overpaid such amount, and
Tenant shall pay Landlord within thirty (30) days after the
determination of such error if Tenant underpaid such amount.
(c) To the extent not
otherwise of public record or otherwise readily available without
disclosure by Tenant, all of the information obtained through
Tenant’s inspection with respect to financial matters
(including, without limitation, costs, expenses and income) and any
other matters pertaining to Landlord, the Leased Premises, the
Building and/or the Park as well as any compromise, settlement or
adjustment reached between Landlord and Tenant relative to the
results of the inspection shall be held in strict confidence by
Tenant and its officers, agents, and employees; and Tenant shall
cause its independent professionals to be similarly bound. The
obligations within the preceding sentence shall survive the
expiration or earlier termination of the Lease.
ARTICLE 4 — SECURITY
DEPOSIT
Intentionally
Omitted
ARTICLE 5 — OCCUPANCY AND
USE
Section 5.01 .
Use . Tenant shall use the Leased Premises for the Permitted
Use and for no other purpose without the prior written consent of
Landlord.
Section 5.02 .
Covenants of Tenant Regarding Use .
(a) Tenant shall (i) use
and maintain the Leased Premises and conduct its business thereon
in a safe, careful, reputable and lawful manner, (ii) comply
with all covenants that encumber the Building that are made know to
Tenant by written notice from Landlord and all laws, rules,
regulations, orders, ordinances, directions and requirements of any
governmental authority or agency, now in force or which may
hereafter be in force, including, without limitation, those which
shall impose upon Landlord or Tenant any duty with respect to or
triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, and
(iii) comply with and obey all reasonable directions, rules
and regulations of Landlord, including the Building Rules and
Regulations attached hereto as Exhibit E and
made a part hereof, as may be modified from time to time by
Landlord on reasonable notice to Tenant. Landlord shall make
commercially reasonable efforts to uniformly enforce any rules and
regulations as to all tenants of the Building.
(b) Tenant shall not do or
permit anything to be done in or about the Leased Premises that
will in any way cause a nuisance, obstruct or interfere with the
rights of other tenants or occupants of the Building or injure or
annoy them. Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Building of
any of Landlord’s directions, rules and regulations, but
agrees that any enforcement thereof shall be done uniformly. Tenant
shall not use the Leased Premises, nor allow the Leased Premises to
be used, for any purpose or in any manner that would
(i) invalidate any policy of insurance now or hereafter
carried by Landlord on the Building, or (ii) increase the rate
of premiums payable on any such insurance policy unless Tenant
reimburses Landlord for any increase in premium charged.
Section 5.03 .
Landlord’s Rights Regarding Use . Without limiting any
of Landlord’s rights specified elsewhere in this Lease
(a) Landlord shall have the right at any time, without notice
to Tenant, to control, change or otherwise alter the Common Areas
in such manner as it deems necessary or proper, and
(b) Landlord, its agents, employees and contractors and any
mortgagee of the Building shall have the right to enter any part of
the Leased Premises at reasonable times upon reasonable notice
(except in the event of an emergency where no notice shall be
required) for the purposes of examining or inspecting the same
(including, without limitation, testing to confirm Tenant’s
compliance with this Lease), showing the same to prospective
purchasers, mortgagees or tenants during the last twelve
(12) months of the Lease Term or otherwise agreed upon by the
parties, and making such repairs, alterations or improvements to
the Leased Premises or the Building as Landlord may deem necessary
or desirable. Landlord shall incur no liability to Tenant for such
entry, nor shall such entry constitute an eviction of Tenant or a
termination of this Lease, or entitle Tenant to any abatement of
rent therefor. Notwithstanding the foregoing, Landlord shall make
commercially reasonable efforts to minimize interference with
Tenant’s access or use of the Leased Premises when exercising
its rights under this Section 5.03 .
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ARTICLE 6 — UTILITIES AND OTHER BUILDING
SERVICES
Section 6.01 .
Services to be Provided . Provided Tenant is not in default,
Landlord shall furnish to Tenant, except as noted below, the
following utilities and other services to the extent reasonably
necessary for Tenant’s use of the Leased Premises for the
Permitted Use, or as may be required by law or directed by
governmental authority:
(a) Heating, ventilation and
air-conditioning ("HVAC") between the hours of 8:00 a.m. and 6:00
p.m. Monday through Friday and 9:00 a.m. to 1:00 p.m. on Saturday
of each week except on legal holidays. Tenant shall pay for any
after-hours HVAC use in the Leased Premises;
(b) Electrical current not to
exceed four (4) watts per square foot;
(c) Water in the Common Areas
for lavatory and drinking purposes;
(d) Automatic passenger
elevator service to be used by Tenant in common with other tenants.
Landlord may restrict Tenant’s use of the elevators for
freight purposes to hours reasonably determined by Landlord;
(e) Cleaning and janitorial
service in the Leased Premises and Common Areas in accordance with
the janitorial specifications attached hereto and made a part
hereof as Exhibit D ("Janitorial
Specifications"), which are subject to change from time to time, on
Monday through Friday of each week except legal holidays; provided,
however, Tenant shall be responsible for carpet cleaning other than
routine vacuuming;
(f) Washing of windows at
intervals reasonably established by Landlord;
(g) Replacement of all lamps,
bulbs, starters and ballasts in Building standard lighting as
required from time to time as a result of normal usage; and
(h) Maintenance of the Common
Areas, including the removal of rubbish, ice and snow.
Section 6.02 .
Additional Services .
(a) If Tenant requests
utilities or building services in addition to those identified
above, or if Tenant uses any of the above utilities or services in
frequency, scope, quality or quantity substantially greater than
that which Landlord reasonably determines is normally required by
other tenants in the Building, then Landlord shall use reasonable
efforts to attempt to furnish Tenant with such additional utilities
or services. In the event Landlord is able to and does furnish such
additional utilities or services, the costs thereof (which shall be
deemed to mean the cost that Tenant would have incurred had Tenant
contracted directly with the utility company or service provider)
shall be borne by Tenant, who shall reimburse Landlord monthly,
after receipt of an itemized invoice from Landlord for the same as
Additional Rent. Except as otherwise provided in Section 3.05,
Landlord shall also have the right to submeter or separately meter
the Leased Premises at Tenant’s sole cost, and Tenant shall
pay such utilities based on the submeter or separate meter.
(b) If any lights, density of
staff, machines or equipment used by Tenant in the Leased Premises
materially affect the temperature otherwise maintained by the
Building’s air-conditioning system or generate substantially
more heat in the Leased Premises than that which would normally be
generated by other tenants in the Building or by tenants in
comparable office buildings making the same use thereof as the
Permitted Use hereunder, then Landlord shall have the right to
install any machinery or equipment that Landlord considers
reasonably necessary in order to restore the temperature balance
between the Leased Premises and the rest of the Building,
including, without limitation, equipment that modifies the
Building’s air-conditioning system. All costs expended by
Landlord to install any such machinery and equipment and any
additional costs of operation and maintenance in connection
therewith shall be borne by Tenant, who shall reimburse Landlord
for the same as provided in this Section 6.02 .
Section 6.03 .
Interruption of Services . Tenant acknowledges and agrees
that any one or more of the utilities or other services identified
in Sections 6.01 or 6.02 or otherwise hereunder
may be interrupted by reason of accident, emergency or other causes
beyond Landlord’s control, or may be discontinued or
diminished temporarily by Landlord or other persons until certain
repairs, alterations or improvements can be made, which shall be
made as promptly and diligently as commercially reasonable. Except
as expressly provided in this Section 6.03 , Landlord
shall not be liable in damages or otherwise for any failure or
interruption of any utility or service and no such failure or
interruption shall entitle Tenant to terminate this Lease or
withhold sums due hereunder. Notwithstanding the foregoing, in the
event that (i) an interruption of utility service to the
Leased Premises is due to Landlord’s negligence or
intentional wrongful acts and (ii) the restoration of such
utility service is entirely within Landlord’s control and
(iii)
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such interruption renders all or a portion of the Leased
Premises untenantable (meaning that Tenant is unable to use, and
does not use, such space in the normal course of its business for
the Permitted Use) for more than three (3) consecutive
business days, then Tenant shall promptly notify Landlord in
writing that Tenant intends to abate rent. If service has not been
restored prior to the expiration of such three (3) consecutive
business days, then Minimum Annual Rent shall abate proportionately
with respect to the portion of the Leased Premises rendered
untenantable on a per diem basis for each day after such three
(3) consecutive business-day period during which such portion
of the Leased Premises remains untenantable. Notwithstanding the
foregoing, no restoration of services shall be deemed to have
occurred unless the restored services are continuously operational
for three (3) consecutive business days. Such abatement shall
be Tenant’s sole remedy for Landlord’s failure to
restore service as set forth above, and Tenant shall not be
entitled to damages (consequential or otherwise), except for said
abatement, as a result thereof.
ARTICLE 7 — REPAIRS, MAINTENANCE AND
ALTERATIONS
Section 7.01 .
Repair and Maintenance of Building . Landlord shall make all
necessary repairs and replacements to the roof, exterior walls,
exterior doors, windows, corridors and other Common Areas, and
Landlord shall keep the Building in a clean and neat condition and
use reasonable efforts to keep all equipment used in common with
other tenants in good condition and repair. The cost of such
repairs, replacements and maintenance shall be included in
Operating Expenses to the extent provided in
Section 3.02 ; provided however, to the extent any such
repairs, replacements or maintenance are required because of the
negligence, misuse or default of Tenant, its employees, agents,
contractors, customers or invitees, Landlord shall make such
repairs at Tenant’s sole expense.
Section 7.02 .
Repair and Maintenance of Leased Premises . Landlord shall
keep and maintain the Leased Premises in good condition and repair.
The cost of such repairs and maintenance to the Leased Premises
shall be included in Operating Expenses; provided however, to the
extent any repairs or maintenance are required in the Leased
Premises because of the negligence, misuse or default of Tenant,
its employees, agents, contractors, customers or invitees or are
made at the specific request of Tenant, Landlord shall make such
repairs or perform such maintenance at Tenant’s sole expense.
Notwithstanding the above, Tenant shall be solely responsible for
any repair or replacement with respect to Tenant’s Property
(as defined in Section 8.01 below) located in the
Leased Premises. Nothing in this Article 7 shall
obligate Landlord or Tenant to repair normal wear and tear to any
paint, wall covering or carpet in the Leased Premises.
Section 7.03 .
Alterations . Except for the construction of the Tenant
Improvements in accordance with Section 2.02 , Tenant
shall not permit alterations in or to the Leased Premises unless
and until Landlord has approved the plans therefor in writing with
the exception of alterations or improvements not exceeding One
Hundred Thousand and No/100 Dollars ($100,000.00) in any one
calendar year during the Lease Term which do not affect the
structure, mechanical systems or electrical systems of the Building
(the "Minor Alterations"). In situations where Landlord’s
prior approval is not so required, Tenant shall promptly notify
Landlord with respect to such alterations and furnish Landlord with
architectural drawings regarding same, the review of which, if made
by Landlord, shall be without charge or cost to Tenant. As a
condition of such approval, Landlord may require Tenant to remove
the alterations and restore the Leased Premises upon termination of
this Lease; otherwise, all such alterations shall at
Landlord’s option become a part of the realty and the
property of Landlord, and shall not be removed by Tenant. Tenant
shall ensure that all alterations shall be made in accordance with
all applicable laws, regulations and building codes, in a good and
workmanlike manner and of quality equal to or better than the
original construction of the Building. No person shall be entitled
to any lien derived through or under Tenant for any labor or
material furnished to the Leased Premises, and nothing in this
Lease shall be construed to constitute Landlord’s consent to
the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed
to have been furnished to Tenant, Tenant shall cause such lien to
be discharged of record within thirty (30) days after filing.
Tenant shall indemnify Landlord from all costs, losses, expenses
and attorneys’ fees in connection with any construction or
alteration and any related lien. Except for Minor Alterations (as
defined above), Tenant agrees that at Tenant’s option, all
work on any alterations to the Leased Premises shall be performed
by either (i) Duke Construction Limited Partnership or a
subsidiary or affiliate of Landlord ("DCLP"), who shall receive a
fee as Landlord’s construction manager or general contractor,
or (ii) an experienced and reputable contractor approved by
Landlord (which approval shall not be unreasonably withheld,
conditioned or delayed).
ARTICLE 8 — INDEMNITY AND
INSURANCE
Section 8.01 .
Release . All of Tenant’s trade fixtures, merchandise,
inventory and all other personal property in or about the Leased
Premises, the Building or the Common Areas, which is deemed to
include the trade fixtures, merchandise, inventory and personal
property of others located in or about
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the Leased Premises or Common Areas at the invitation, direction
or acquiescence (express or implied) of Tenant (all of which
property shall be referred to herein, collectively, as
"Tenant’s Property"), shall be and remain at Tenant’s
sole risk. Landlord shall not be liable to Tenant or to any other
person for, and Tenant hereby releases Landlord from (a) any
and all liability for theft or damage to Tenant’s Property,
and (b) any and all liability for any injury to Tenant or its
employees, agents, contractors, guests and invitees in or about the
Leased Premises, the Building or the Common Areas, except to the
extent of personal injury (but not property loss or damage) caused
directly by the negligence or willful misconduct of Landlord, its
agents, employees or contractors. Nothing contained in this
Section 8.01 shall limit (or be deemed to limit) the
waivers contained in Section 8.06 below. In the event
of any conflict between the provisions of Section 8.06
below and this Section 8.01 , the provisions of
Section 8.06 shall prevail. This
Section 8.01 shall survive the expiration or earlier
termination of this Lease.
Section 8.02 .
Indemnification by Tenant . Tenant shall protect, defend,
indemnify and hold Landlord, its agents, employees and contractors
harmless from and against any and all claims, damages, demands,
penalties, costs, liabilities, losses, and expenses (including
reasonable attorneys’ fees and expenses at the trial and
appellate levels) to the extent (a) arising out of or relating to
any act, omission, negligence, or willful misconduct of Tenant or
Tenant’s agents, employees, contractors, customers or
invitees in or about the Leased Premises, the Building or the
Common Areas, (b) arising out of or relating to any of
Tenant’s Property, or (c) arising out of any other act or
occurrence within the Leased Premises, in all such cases except to
the extent of personal injury (but not property loss or damage)
caused directly by the negligence or willful misconduct of
Landlord, its agents, employees or contractors. Nothing contained
in this Section 8.02 shall limit (or be deemed to
limit) the waivers contained in Section 8.06 below. In the
event of any conflict between the provisions of
Section 8.06 below and this Section 8.02 ,
the provisions of Section 8.06 shall prevail. This
Section 8.02 shall survive the expiration or earlier
termination of this Lease.
Section 8.03 .
Indemnification by Landlord . Landlord shall protect,
defend, indemnify and hold Tenant, its agents, employees and
contractors harmless from and against any and all claims, damages,
demands, penalties, costs, liabilities, losses and expenses
(including reasonable attorneys’ fees and expenses at the
trial and appellate levels) to the extent arising out of or
relating to any act, omission, negligence or willful misconduct of
Landlord or Landlord’s agents, employees or contractors.
Nothing contained in this Section 8.03 shall limit (or
be deemed to limit) the waivers contained in
Section 8.06 below. In the event of any conflict
between the provisions of Section 8.06 below and this
Section 8.03 , the provisions of
Section 8.06 shall prevail. This
Section 8.03 shall survive the expiration or earlier
termination of this Lease.
Section 8.04 .
Tenant’s Insurance .
(a) During the Lease Term
(and any period of early entry or occupancy or holding over by
Tenant, if applicable), Tenant shall maintain the following types
of insurance, in the amounts specified below:
(i)
Liability Insurance . Commercial General Liability Insurance
(which insurance shall not exclude blanket contractual liability,
broad form property damage, personal injury, or fire damage
coverage) covering the Leased Premises and Tenant’s use
thereof against claims for bodily injury or death and property
damage, which insurance shall provide coverage on an occurrence
basis with a per occurrence limit of not less than $5,000,000 for
each policy year, which limit may be satisfied by any combination
of primary and excess or umbrella per occurrence policies
("Tenant’s GLI").
(ii)
Property Insurance . Special Form Insurance (which
insurance shall not exclude flood or earthquake) in the amount of
the full replacement cost of Tenant’s Property and
betterments (including alterations or additions performed by Tenant
pursuant hereto, but excluding those improvements, if any, made
pursuant to Section 2.02 above), which insurance shall
include an agreed amount endorsement waiving coinsurance
limitations.
(iii)
Worker’s Compensation Insurance . Worker’s
Compensation insurance in amounts required by applicable law.
(iv)
Business Interruption Insurance . Business Interruption
Insurance, in amounts and for occurrences reasonably deemed
necessary by Tenant; provided, however, that Tenant acknowledges
that Landlord is released from any liability arising during the
term of the Lease that would have been covered by business
interruption insurance, if Tenant had carried such insurance.
(b) Tenant’s GLI
required by Tenant hereunder shall (i) be issued by one or
more insurance companies reasonably acceptable to Landlord,
licensed to do business in the State in which the Leased Premises
is located and having an AM Best’s rating of A IX or better,
and (ii) provide that said insurance shall not be materially
changed, canceled or permitted to lapse on less than thirty
(30) days’ prior written
-9-
notice to Landlord. In addition, Tenant’s GLI shall
protect Tenant and Landlord as their interests may appear, naming
Landlord, Landlord’s managing agent, and any mortgagee
requested by Landlord, as additional insureds. On or before the
Commencement Date (or the date of any earlier entry or occupancy by
Tenant), and thereafter, within ten (10) days prior to the
expiration of each such policy, Tenant shall furnish Landlord with
certificates of insurance in the form of ACORD 25 or ACORD 25-S (or
other evidence of insurance reasonably acceptable to Landlord),
evidencing Tenant’s GLI coverage, together with a copy of the
endorsements to Tenant’s GLI policy evidencing primary and
non-contributory coverage offered to the appropriate additional
insureds. Promptly following Tenant’s receipt of a request
from Landlord, Tenant shall provide Landlord with copies of all
insurance policies, including all endorsements, evidencing the
coverages required hereunder. If Tenant fails to carry such
insurance and furnish Landlord with such certificates of insurance
or copies of insurance policies (if applicable), Landlord may
obtain such insurance on Tenant’s behalf and Tenant shall
reimburse Landlord upon demand, following Tenant’s receipt of
an itemized invoice therefore, for the cost thereof as Additional
Rent. Landlord reserves the right from time to time to require
Tenant to obtain higher minimum amounts or different types of
insurance if it becomes customary for other landlords of similar
buildings in the area to require similar sized tenants in similar
industries to carry insurance of such higher minimum amounts or of
such different types.
Section 8.05 .
Landlord’s Insurance . During the Lease Term, Landlord
shall maintain the following types of insurance, in the amounts
specified below (the cost of which shall be included in Operating
Expenses):
(a) Liability
Insurance . Commercial General Liability Insurance (which
insurance shall not exclude blanket, contractual liability, broad
form property damage, personal injury, or fire damage coverage)
covering the Common Areas against claims for bodily injury or death
and property damage, which insurance shall provide coverage on an
occurrence basis with a per occurrence limit of not less than
$5,000,000, for each policy year, which limits may be satisfied by
any combination of primary and excess or umbrella per occurrence
policies.
(b) Property
Insurance . Special Form Insurance (which insurance shall
not exclude flood or earthquake) in the amount of the full
replacement cost of the Building, including, without limitation,
any improvements, if any, made pursuant to Section 2.02
above, but excluding Tenant’s Property and any other items
required to be insured by Tenant pursuant to Section 8.04
above.
Section 8.06 .
Waiver of Subrogation . Notwithstanding anything contained
in this Lease to the contrary, Landlord and Tenant hereby waive any
rights each may have against the other on account of any loss of or
damage to their respective property, the Leased Premises, its
contents, or other portions of the Building or Common Areas arising
from any risk which is required to be insured against by
Sections 8.04(a)(ii) and 8.05(b) above. The
special form coverage insurance policies maintained by Landlord and
Tenant as provided in this Lease shall include an endorsement
containing an express waiver of any rights of subrogation by the
insurance company against Landlord and Tenant, as applicable.
ARTICLE 9 — CASUALTY
In the event of total or partial
destruction of the Building or the Leased Premises by fire or other
casualty, Landlord agrees promptly to restore and repair same;
provided, however, Landlord’s obligation hereunder with
respect to the Leased Premises shall be limited to the
reconstruction of such of the Tenant Improvements required to be
made by Landlord pursuant to Section 2.02 above, if
any. Rent shall proportionately abate during the time that the
Leased Premises or part thereof are unusable because of any such
damage. Notwithstanding the foregoing, in the event the Building or
the Leased Premises should be totally or substantially destroyed or
damaged as provided herein, then within thirty (30) days
following the date of such destruction or damage, Landlord will
provide Tenant with written notice, stating Landlord’s good
faith estimate of the length of time necessary for reconstruction
and restoration. If Landlord reasonably and in good faith
determines that the reconstruction and restoration will take more
than one hundred eighty (180) days from the date of casualty to
substantially complete, either party shall be entitled to terminate
this Lease upon thirty (30) days prior written notice to the
other party. Upon such termination, both parties shall be released
from all liability hereunder, except for any right or obligation
arising prior to the date of such termination or which survives
termination hereof. However, if neither party terminates within
such thirty (30) day period, Landlord shall promptly
thereafter commence and diligently perform the necessary
reconstruction. If, after undertaking such reconstruction, the
Leased Premises are not restored to a stage where Tenant can use
the Leased Premises for the Permitted Use within the one hundred
eighty (180) day period, as extended as a result of Force
Majeure or Tenant Delays (as hereinafter defined), Tenant shall be
entitled to terminate this Lease upon written notice delivered to
Landlord within thirty (30) days after the 180-day period.
Upon such termination, both parties shall be released from all
liability hereunder, except for any right or obligation arising
prior to the date of such termination or which survives termination
hereof. Tenant waives any right under applicable laws inconsistent
with the terms of this paragraph.
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ARTICLE 10 — EMINENT DOMAIN
If all or any substantial part of
the Building or Common Areas shall be acquired by the exercise of
eminent domain, Landlord may terminate this Lease by giving written
notice to Tenant on or before the date possession thereof is so
taken. If all or any part of the Leased Premises or common areas
shall be acquired by the exercise of eminent domain so that the
Leased Premises shall become impractical for Tenant to use for the
Permitted Use, Tenant may terminate this Lease by giving written
notice to Landlord as of the date possession thereof is so taken.
All damages awarded shall belong to Landlord; provided, however,
that Tenant may claim dislocation damages if such amount is not
subtracted from Landlord’s award.
ARTICLE 11 — ASSIGNMENT AND
SUBLEASE
Section 11.01 .
Assignment and Sublease .
(a) Except to a Permitted
Transferee (as hereinafter defined), Tenant shall not assign this
Lease or sublet the Leased Premises in whole or in part without
Landlord’s prior written consent. In the event of any
permitted assignment or subletting, Tenant shall remain primarily
liable hereunder, and any extension, expansion, rights of first
offer, rights of first refusal or other options granted to Tenant
under this Lease shall be rendered void and of no further force or
effect. The acceptance of rent from any other person shall not be
deemed to be a waiver of any of the provisions of this Lease or to
be a consent to the assignment of this Lease or the subletting of
the Leased Premises. Any assignment or sublease consented to by
Landlord shall not relieve Tenant (or its assignee) from obtaining
Landlord’s consent to any subsequent assignment or
sublease.
(b) Except to a Permitted
Transferee, by way of example and not limitation, Landlord shall be
deemed to have reasonably withheld consent to a proposed assignment
or sublease if in Landlord’s reasonable opinion (i) the
Leased Premises are or may be in any way adversely affected;
(ii) the business reputation of the proposed assignee or
subtenant is unacceptable; (iii) the financial worth of the
proposed assignee or subtenant is insufficient to meet the
obligations hereunder, or (iv) the prospective assignee or
subtenant is a current tenant of the Building or has previously
viewed the Building as a prospective tenant thereof. Landlord
further expressly reserves the right to refuse to give its consent
to any subletting if the proposed rent is publicly advertised to be
less than the then current rent for similar premises in the
Building. If Landlord refuses to give its consent to any proposed
assignment or subletting and Tenant does not withdraw its request
for such consent within fifteen (15) days following
Tenant’s receipt of Landlord’s written refusal to give
such consent, Landlord may, at its option, within thirty
(30) days after receiving a request to consent, terminate this
Lease by giving Tenant thirty (30) days prior written notice
of such termination, whereupon each party shall be released from
all further obligations and liability hereunder, except those which
expressly survive the termination of this Lease.
(c) Except to a Permitted
Transferee, if Tenant shall make any assignment or sublease, with
Landlord’s consent, for a rental in excess of the rent
payable under this Lease, Tenant shall pay to Landlord fifty
percent (50%) of any such excess rental upon receipt, after first
paying from such excess the reasonable and customary costs and
expenses incurred by Tenant in connection with such subleasing or
assignment. Tenant agrees to pay Landlord $500.00 for reasonable
accounting and attorneys’ fees incurred in conjunction with
the processing and documentation of any requested assignment,
subletting or any other hypothecation of this Lease or
Tenant’s interest in and to the Leased Premises as
consideration for Landlord’s consent.
Section 11.02 .
Permitted Transfer . Notwithstanding anything to the
contrary contained in Section 11.01 above, Tenant shall
have the right, without Landlord’s consent, but upon ten
(10) days prior notice to Landlord, to (a) sublet all or
part of the Leased Premises to any related corporation or other
entity which controls Tenant, is controlled by Tenant or is under
common control with Tenant or to a successor entity into which or
with which Tenant is merged or consolidated or which acquires
substantially all of Tenant’s assets or property;
(b) assign all or any part of this Lease to any related
corporation or other entity which controls Tenant, is controlled by
Tenant, or is under common control with Tenant, or to a successor
entity into which or with which Tenant is merged or consolidated or
which acquires substantially all of Tenant’s assets or
property; or (c) effectuate any public offering of
Tenant’s stock on the New York Stock Exchange or in the
NASDAQ over the counter market, provided that in the event of a
transfer pursuant to clause (b), the tangible net worth after any
such transaction is not less than the tangible net worth of Tenant
as of the date of the transfer, and provided further that such
successor entity assumes all of the obligations and liabilities of
Tenant (any such entity hereinafter referred to as a "Permitted
Transferee"). For the purpose of this Article 11 (i)
"control" shall mean ownership of not less than fifty percent (50%)
of all voting stock or legal and equitable interest in such
corporation or entity, and (ii) "tangible net worth" shall mean the
excess of the value of tangible assets (i.e. assets excluding those
which are intangible such as goodwill, patents and trademarks) over
liabilities. Any such transfer
-11-
shall not relieve Tenant of its obligations under this Lease.
Nothing in this paragraph is intended to nor shall permit Tenant to
transfer its interest under this Lease as part of a fraud or
subterfuge to intentionally avoid its obligations under this Lease
(for example, transferring its interest to a shell corporation that
subsequently files a bankruptcy), and any such transfer shall
constitute a Default hereunder. Any change in control of Tenant
resulting from a merger, consolidation, or a transfer of
partnership or membership interests, a stock transfer, or any sale
of substantially all of the assets of Tenant that do not meet the
requirements of this Section 11.02 shall be deemed an
assignment or transfer that requires Landlord’s prior written
consent pursuant to Section 11.01 above.
ARTICLE 12 — TRANSFERS BY
LANDLORD
Section 12.01 .
Sale of the Building . Landlord shall have the right to sell
the Building at any time during the Lease Term, subject only to the
rights of Tenant hereunder; and such sale shall operate to release
Landlord from liability hereunder after the date of such
conveyance.
Section 12.02 .
Estoppel Certificate . Within ten (10) days following
receipt of a written request from Landlord, Tenant shall execute
and deliver to Landlord, without cost to Landlord, an estoppel
certificate in such form as Landlord may reasonably request
certifying (a) that this Lease is in full force and effect and
unmodified or stating the nature of any modification, (b) the
date to which rent has been paid, (c) that there are not, to
Tenant’s knowledge, any uncured defaults or specifying such
defaults if any are claimed, and (d) any other matters or
state of facts reasonably required respecting the Lease. Such
estoppel may be relied upon by Landlord and by any purchaser or
mortgagee of the Building.
Section 12.03 .
Subordination . Landlord shall have the right to subordinate
this Lease to any mortgage, deed to secure debt, deed of trust or
other instrument in the nature thereof, and any amendments or
modifications thereto (collectively, a "Mortgage") presently
existing or hereafter encumbering the Building by so declaring in
such Mortgage. Within ten (10) days following receipt of a written
request from Landlord, Tenant shall execute and deliver to
Landlord, without cost, any instrument that Landlord deems
reasonably necessary or desirable to confirm the subordination of
this Lease. Notwithstanding the foregoing, if the holder of the
Mortgage shall take title to the Leased Premises through
foreclosure or deed in lieu of foreclosure, Tenant shall be allowed
to continue in possession of the Leased Premises as provided for in
this Lease so long as Tenant is not in Default.
Section 12.04 .
Non-Disturbance . Landlord represents that, as of the
Commencement Date, the Building will not be encumbered by a
mortgage, deed to secure debt, deed of trust or other instrument in
the nature thereof. Simultaneously with Landlord’s request to
Tenant to execute a subordination agreement pursuant to this
Section 12.03 or upon Tenant’s written request, Landlord
shall use commercially reasonable efforts to secure a
non-disturbance agreement from any future mortgagee, in a form
reasonable acceptable to Tenant and Tenant’s attorneys.
ARTICLE 13 — DEFAULT AND
REMEDY
Section 13.01 .
Default. The occurrence of any of the following shall be a
"Default":
(a) Tenant fails to pay any
Monthly Rental Installments or Additional Rent within five (5) days
after the same is due.
(b) Tenant fails to perform
or observe any other term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days
after written notice thereof from Landlord; provided, however, that
if the nature of Tenant’s default is such that more than
thirty (30) days are reasonably required to cure, then such
default shall be deemed to have been cured if Tenant commences such
performance within said thirty (30) day period and thereafter
diligently completes the required action within a reasonable
time.
(c) Intentionally
Omitted.
(d) Tenant shall assign or
sublet all or a portion of the Leased Premises in contravention of
the provisions of Article 11 of this Lease.
(e) All or substantially all
of Tenant’s interest in this Lease are attached or levied
under execution (and Tenant does not discharge the same within
sixty (60) days thereafter); a petition in bankruptcy,
insolvency or for reorganization or arrangement is filed by or
against Tenant (and Tenant fails to secure a stay or discharge
thereof within sixty (60) days thereafter); Tenant makes a
general assignment for the benefit of creditors; Tenant takes the
benefit of any insolvency action or law; the appointment of a
receiver or trustee in bankruptcy for Tenant or its assets if such
receivership has not been vacated or set aside within thirty
(30) days thereafter; or, dissolution or other termination of
Tenant’s
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corporate charter if Tenant is a corporation, except in the
instance of such termination that is the result of a consolidation
or merger permitted pursuant to Section 11.02.
In addition to the defaults described above, the parties agree
that if Tenant receives written notice of a violation of the
performance of any (but not necessarily the same) term or condition
of this Lease three (3) or more times during any twelve
(12) month period, regardless of whether such violations are
ultimately cured, then such conduct shall, at Landlord’s
option, represent a separate Default.
Section 13.02 .
Remedies . Upon the occurrence of any Default, Landlord
shall have the following rights and remedies, in addition to those
stated elsewhere in this Lease and those allowed by law or in
equity, any one or more of which may be exercised without further
notice to Tenant:
(a) Landlord may re-enter the
Leased Premises and cure any Default of Tenant, and Tenant shall
reimburse Landlord as Additional Rent for any costs and expenses
which Landlord thereby incurs; and Landlord shall not be liable to
Tenant for any loss or damage which Tenant may sustain by reason of
Landlord’s action.
(b) Without terminating this
Lease, Landlord may terminate Tenant’s right to possession of
the Leased Premises, and thereafter, neither Tenant nor any person
claiming under or through Tenant shall be entitled to possession of
the Leased Premises, and Tenant shall immediately surrender the
Leased Premises to Landlord, and Landlord may re-enter the Leased
Premises and dispossess Tenant and any other occupants of the
Leased Premises by any lawful means and may remove their effects,
without prejudice to any other remedy that Landlord may have. Upon
termination of possession, Landlord may (i) re-let all or any
part thereof to a person or entity that is not an affiliate of
Landlord for a term different from that which would otherwise have
constituted the balance of the Lease Term and for rent and on terms
and conditions different from those contained herein, but in any
event on commercially reasonable terms, whereupon Tenant, to the
extent permitted by law, shall be immediately obligated to pay to
Landlord an amount equal to the present value (discounted at the
Prime Rate) of the difference between the rent provided for herein
and that provided for in any lease covering a subsequent re-letting
of the Leased Premises, for the period which would otherwise have
constituted the balance of the Lease Term (the "Accelerated Rent
Difference"), or (ii) to the extent permitted by law, without
re-letting, declare the present value (discounted at the Prime
Rate) of all rent which would have been due under this Lease for
the balance of the Lease Term to be immediately due and payable as
liquidated damages (the "Accelerated Rent"). Upon termination of
possession, Tenant shall be obligated to pay to Landlord
(A) the Accelerated Rent Difference or the Accelerated Rent,
whichever is applicable, (B) all loss or damage that Landlord
may sustain by reason of Tenant’s Default ("Default
Damages"), which shall include, without limitation, expenses of
preparing the Leased Premises for re-letting, demolition, repairs,
tenant finish improvements, brokers’ commissions and
attorneys’ fees, and (C) all unpaid Minimum Annual Rent
and Additional Rent that accrued prior to the date of termination
of possession, plus any interest and late fees due hereunder (the
"Prior Obligations").
(c) Landlord may terminate
this Lease and declare, to the extent permitted by law, the
Accelerated Rent to be immediately due and payable, whereupon
Tenant shall be obligated to pay to Landlord (i) the
Accelerated Rent, (ii) all of Landlord’s Default
Damages, and (iii) all Prior Obligations. It is expressly
agreed and understood that all of Tenant’s liabilities and
obligations set forth in this subsection (c) shall survive
termination.
(d) Landlord and Tenant
acknowledge and agree that, to the extent permitted by law, the
payment of the Accelerated Rent Difference or the Accelerated Rent
as set above shall not be deemed a penalty, but merely shall
constitute payment of liquidated damages, it being understood that
actual damages to Landlord are extremely difficult, if not
impossible, to ascertain. Neither the filing of a dispossessory
proceeding nor an eviction of personalty in the Leased Premises
shall be deemed to terminate the Lease.
(e) Landlord may sue for
injunctive relief or to recover damages for any loss resulting from
the Default.
Section 13.03 .
Landlord’s Default and Tenant’s Remedies .
Landlord shall be in default if it fails to perform any term,
condition, covenant or obligation required under this Lease for a
period of thirty (30) days after written notice thereof from
Tenant to Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is such that it
cannot reasonably be performed within thirty (30) days, such
default shall be deemed to have been cured if Landlord commences
such performance within said thirty-day period and thereafter
diligently undertakes to complete the same. Upon the occurrence of
any such default, Tenant may sue for injunctive relief or to
recover damages for any loss directly resulting from the breach,
but Tenant shall not be entitled to terminate this Lease (except as
provided in Paragraph 3 of Exhibit B attached hereto) or
withhold, offset
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or abate (except for any abatement specifically provided in
Section 6.03 and Article 9) any sums due hereunder.
Section 13.04 .
Limitation of Landlord’s Liability . If Landlord shall
fail to perform any term, condition, covenant or obligation
required to be performed by it under this Lease and if Tenant
shall, as a consequence thereof, recover a money judgment against
Landlord, Tenant agrees that it shall look solely to
Landlord’s right, title and interest in and to the Building
for the collection of such judgment; and Tenant further agrees that
no other assets of Landlord shall be subject to levy, execution or
other process for the satisfaction of Tenant’s judgment.
Section 13.05 .
Nonwaiver of Defaults . Neither party’s failure or
delay in exercising any of its rights or remedies or other
provisions of this Lease shall constitute a waiver thereof or
affect its right thereafter to exercise or enforce such right or
remedy or other provision. No waiver of any default shall be deemed
to be a waiver of any other default. Landlord’s receipt of
less than the full rent due shall not be construed to be other than
a payment on account of rent then due, nor shall any statement on
Tenant’s check or any letter accompanying Tenant’s
check be deemed an accord and satisfaction. No act or omission by
Landlord or its employees or agents during the Lease Term shall be
deemed an acceptance of a surrender of the Leased Premises, and no
agreement to accept such a surrender shall be valid unless in
writing and signed by Landlord.
Section 13.06 .
Attorneys’ Fees . If either party defaults in the
performance or observance of any of the terms, conditions,
covenants or obligations contained in this Lease and the
non-defaulting party obtains a judgment against the defaulting
party, then the defaulting party agrees to reimburse the
non-defaulting party for reasonable attorneys’ fees incurred
in connection therewith. In addition, if a monetary Default shall
occur and Landlord or Tenant engages outside counsel to exercise
its remedies hereunder, and then Tenant or Landlord cures such
monetary Default, then as applicable, Tenant or Landlord shall pay
to the other party, on demand, all expenses incurred by the
applicable party as a result thereof, including reasonable
attorneys’ fees, court costs and expenses actually incurred.
Notwithstanding the foregoing, if both Landlord and Tenant are
alleged to be a defaulting party by the other party, then the
attorney’s fees shall be awarded to the party the court
determines prevailed more substantially on its claim.
ARTICLE 14 — LANDLORD’S RIGHT
TO RELOCATE TENANT
[INTENTIONALLY OMITTED]
ARTICLE 15 — TENANT’S
RESPONSIBILITY REGARDING
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES
Section 15.01 .
Environmental Definitions .
(a) "Environmental Laws"
shall mean all present or future federal, state and municipal laws,
ordinances, rules and regulations applicable to the environmental
and ecological condition of the Leased Premises, and the rules and
regulations of the Federal Environmental Protection Agency and any
other federal, state or municipal agency or governmental board or
entity having jurisdiction over the Leased Premises.
(b) "Hazardous Substances"
shall mean those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances"
"solid waste" or "infectious waste" under Environmental Laws and
petroleum products.
Section 15.02 .
Restrictions on Tenant . Tenant shall not cause or permit
the use, generation, release, manufacture, refining, production,
processing, storage or disposal of any Hazardous Substances on,
under or about the Leased Premises, or the transportation to or
from the Leased Premises of any Hazardous Substances, except as
necessary and appropriate for its Permitted Use in which case the
use, storage or disposal of such Hazardous Substances shall be
performed in compliance with the Environmental Laws and the highest
standards prevailing in the industry.
Section 15.03 .
Notices, Affidavits, Etc . Promptly after Tenant has actual
knowledge, Tenant shall promptly (a) notify Landlord of
(i) any violation by Tenant, its employees, agents,
representatives, customers, invitees or contractors of
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