EXHIBIT 10.3
LEASE
BETWEEN
LSAC TEMPE L.P., LANDLORD
AND
(I)STRUCTURE, LLC, TENANT
DATED: DECEMBER 29, 2005
PROPERTY:
2005 E. TECHNOLOGY CIRCLE
TEMPE, ARIZONA
<PAGE>
INDEX
Page
ARTICLE 1
PROPERTY AND TERM......................................6
ARTICLE 2
FIXED RENT AND ADDITIONAL RENT.........................9
ARTICLE 3
IMPOSITIONS...........................................11
ARTICLE 4
USE OF PROPERTY.......................................13
ARTICLE 5
CONDITION
OF PROPERTY, ALTERATIONS
AND REPAIRS...........................................14
ARTICLE 6
INSURANCE.............................................18
ARTICLE 7
DAMAGE OR DESTRUCTION.................................21
ARTICLE 8
CONDEMNATION..........................................24
ARTICLE 9
ASSIGNMENT AND SUBLETTING.............................26
ARTICLE 10
SUBORDINATION.........................................30
ARTICLE 11
OBLIGATIONS OF TENANT.................................32
ARTICLE 12
DEFAULT; REMEDIES.....................................35
ARTICLE 13
NO WAIVER.............................................41
ARTICLE 14
ESTOPPEL CERTIFICATE..................................42
ARTICLE 15
QUIET ENJOYMENT.......................................42
ARTICLE 16
SURRENDER.............................................42
ARTICLE 17
ACCESS................................................43
ARTICLE 18
ENVIRONMENTAL MATTERS.................................44
ARTICLE 19
FINANCIAL STATEMENTS..................................49
ARTICLE 20
MISCELLANEOUS PROVISIONS..............................49
ARTICLE 21
LEASE GUARANTY........................................52
ARTICLE 22
MEMORANDUM OF LEASE...................................52
ARTICLE 23
LIMITATION OF LIABILITY...............................52
ARTICLE 24
RIGHT OF FIRST OFFER..................................53
Exhibits
Exhibit "A" -
Description of the Land
57
Exhibit "B" -
Schedule
of Removable Personal Property
58
Exhibit "C" -
Form of
Memorandum of Lease
59
Exhibit "D" -
Form of
Lease Guaranty
63
<PAGE>
LEASE
THIS LEASE (the "Lease") is made as of the 29th day of
December, 2005 between LSAC TEMPE L.P., a Delaware limited
partnership
("Landlord"), having an office for the conduct of business at One
Penn Plaza,
Suite 4015, New York, New York 10119-4015, and (I)STRUCTURE, LLC, a
Delaware
limited liability company ("Tenant"), having an office for the
conduct of
business at 2005 E. Technology Circle, Tempe, Arizona.
W I T N E S S E T H:
The parties hereto, for themselves, their heirs, distributees,
executors,
administrators, legal representatives, successors and assigns,
hereby covenant
as follows:
ARTICLE A
CERTAIN LEASE PROVISIONS
1. Address for
2005 E. Technology Circle the
Property:
Tempe, Arizona
2. (a) Term:
(i) A Primary Term of approximately Twenty
(20) years, beginning on the Commencement
Date, and ending on the Expiration Date.
(ii) Option to Extend Term: Two (2) renewal
options of ten (10) years each.
(b)
Commencement
Date:
December 29, 2005
(c)
Expiration
Date:
Twenty (20) years after the last day in the
calendar month in which the Commencement
Date occurs, unless sooner terminated or
extended pursuant to this Lease.
3.
Fixed Rent
During the
Primary Term:
$1,127,520.00 per annum in equal monthly
installments of $93,960.00.
<PAGE>
4. Use
of the
Property:
Data center and general office and uses
incidental thereto.
5.
Address for Notice:
For Landlord:
LSAC Tempe L.P.
c/o Lexington Corporate Properties Trust
One Penn Plaza
Suite 4015
New York, New York 10119-4015
Attention: Mr. John Vander Zwaag
With a copy of
any notices of
default only, to:
Crowe Deegan LLP
535 Fifth Avenue, Suite 611
New York, New York
10017
Attention: Richard C.
Hamlin, Esq.
For Tenant:
(i)Structure, LLC
c/o Infocrossing, Inc.
2 Christie Heights Street
Leonia, NJ 07605
Attention: President and General Counsel
With a copy of
any notices of
default only, to:
Gibson Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: D. Eric Remensperger , Esq.
6.
Guarantor:
Infocrossing, Inc.
2 Christie Heights Street
Leonia, NJ 07605
Attention:
President
<PAGE>
ARTICLE B
CERTAIN DEFINITIONS
"Additional Rent" is defined in Section 2.2.
"Alterations" is defined in Section 5.4.
"Bankruptcy Code" means the provisions of 11 U.S.C. Section
101 et seq. or any statute of similar purpose or nature as
more particularly set forth in Section 9.9.
"Building" means collectively the buildings, building,
equipment and improvements now or hereinafter erected on the
Land.
"Business Day" is every day which most large banks based in
New York, New York are open for the ordinary conduct of
business.
"Claims" is defined in Section 11.3.
"Commencement Date" is defined in Article A, Section 2(b).
"Corporate Transfer" is defined in Section 9.7(b).
"Default" means an event has occurred which constitutes an
Event of Default or which, with the giving of notice, the lapse of
time or both
would constitute an Event of Default.
"Default Rate" means three percent (3%) over the prime
reference rate announced from time to time by Citibank, N.A. in New
York, New
York, as such prime reference rate may be adjusted and announced
from time to
time, or if unavailable, the parties shall use the prime reference
rate for
major New York banks as reported in the Wall Street Journal.
"Deficiency" is defined in Section 12.4(c).
"De Minimis Hazardous Substances" is defined in Section 18.1.
"Environmental Laws" is defined in Section 18.10.
"Event of Default" is defined in Section 12.1.
"Expiration Date is
defined in Article A, Section 2(c).
"Extension Term" is defined in Section 1.3.
"Fixed Rent" is defined in Article A, Section 3.
"Ground Lease" means that certain Ground Lease dated October
8, 1984 between Owner as ground lessor and Ground Lessee as amended
by that
certain First Amendment to Ground Lease dated June 1, 1991, that
certain Second
Amendment to Ground Lease dated November 20, 1992, that certain
Third Amendment
to Ground Lease dated December 1, 1995, that certain Fourth
Amendment to Ground
Lease dated December 19, 1997 and that certain Fourth Amendment to
Ground Lease
[sic] dated April 25, 2002.
"Ground Lessee" means Arizona State University Research Park,
Inc. formerly known as Price-Elliott Research Park, Inc.
"Ground Sublease" means that certain ASU Research Park Lease
dated December 17, 1997 (the "Original Sublease") between
Price-Elliott Research
Inc. as landlord and PKS Information Services, Inc. as tenant which
was assigned
to and assumed by Tenant pursuant to an Assignment and Assumption
Agreement
dated October 12, 2004 and thereafter amended by that certain First
Amendment to
ASU Research Park Lease and Consent dated January 28, 2003.
"Guarantor" means Infocrossing, Inc. and its permitted
successors and assigns.
"Guaranty" means that certain Lease Guaranty given by
Guarantor in accordance with Section 21.
"Hazardous Substances" is defined in Section 18.11.
"Impositions" is defined in Section 3.1.
"Indemnified Parties" is defined in Section 11.3.
"Land" means that certain real property described on Exhibit
"A", attached hereto and incorporated herein by this reference.
"Landlord" is defined in the introductory paragraph to this
Lease.
"Lease" means this lease made between Landlord, as landlord,
and Tenant, as tenant.
"Lease Year" shall mean each twelve month period during the
Primary Term and each Extended Term. The first Lease Year shall
commence on the
Commencement Date and continue until and include the last day of
the calendar
month in which the first anniversary of the Commencement Date
occurs, unless the
Commencement Date is on the first day of the month, in which case
it shall end
on the day immediately preceding such first anniversary.
"Mortgage" is defined in Section 3.2.
"Mortgagee" is defined in Section 3.2.
"Non-Disturbance Agreement" is defined in Section 10.1.
"Offer" is defined in Section 24.1.
"Owner" means The Arizona Board of Regents acting for and on
behalf of Arizona State University which is the owner in fee simple
of the Land.
"Permitted Encumbrances" shall mean those certain liens,
easements, rights of way and other encumbrances now or hereafter
encumbering the
Property.
"Property" means collectively Landlord's interest in the Land
and the Building.
"Purchase Date" is defined in Section 24.1.
"Purchase Price" is defined in Section 24.6.
"Remedial Work" is defined in Section 18.7.
"Rent" is defined in Section 2.3.
"Report" is defined in Section 18.1.
"Requirements" is defined in Section 11.1.
"Restoration" is defined in Section 7.1.
"ROFO Notice" is defined in Section 24.2.
"Sale Agreement" means the Agreement for Sale and Leaseback
dated as of November 30, 2005 between Landlord, as buyer, and
Tenant, as seller.
"Sublease" is defined in Section 9.1.
"Tenant" is defined in the introductory paragraph to this
Lease.
"Tenant's Knowledge" is defined in Section 18.13 and Section
20.15.
"Term" is defined in Article A, Section 2(a).
"Third Party" means any third party other than Tenant,
Landlord, any affiliate of Landlord and/or any Mortgagee.
"Third Party Contract" is defined in Section 24.3.
"Third Party Price" is defined in Section 24.3.
"Threshold Amount" is defined in Section 5.4.
"Transfer" is defined in Section 9.1.
"Work" is defined in Section 5.5.
ARTICLE 1
PROPERTY AND TERM
Section 1.1. (a) During the Term, Landlord, in consideration
of the rents herein reserved and of the terms, provisions,
covenants and
agreements on the part of Tenant to be kept, observed and
performed, does hereby
lease and demise the Property unto Tenant, and Tenant does hereby
hire and take
the Property from Landlord, subject to each and every matter
affecting title to
the Property including, without limitation, all of the following
which are in
effect as of the Commencement Date: all easements, rights of way,
declarations,
covenants, conditions and restrictions, liens, encumbrances,
encroachments,
licenses, notices of pendency, charges, zoning laws, ordinances,
regulations,
building codes and other governmental laws, rules and orders
affecting the
Property, and other exceptions to Landlord's title, whether or not
the same are
of public record.
(b) The parties acknowledge that Landlord's interest
in the Land is in fact a subleasehold interest pursuant to the
Ground Sublease,
which interest was assigned by Tenant to Landlord immediately prior
to the
Commencement Date pursuant to an Assignment and Assumption of Lease
Agreement.
Tenant acknowledges and agrees that in addition to all other
obligations for
which it is responsible pursuant to this Lease, during the Term, it
shall fully
and timely discharge all of Landlord's obligations as subtenant
pursuant to the
Ground Sublease. Tenant shall deliver to Landlord, and Landlord
shall deliver to
Tenant, copies of any written notice received by it from Ground
Lessee or Owner
no later than one (1) Business Day after its receipt thereof.
Section 1.2. Tenant shall lease the Property for the Term,
unless sooner terminated as hereinafter provided or pursuant to
law.
Section 1.3. (a) Provided there is no then uncured Event of
Default, Tenant shall have the right, at its option, to extend the
Term for two
(2) additional ten (10) year periods, (each, an "Extension Term")
in the manner,
and subject to the conditions, set forth below. The first Extension
Term shall
commence on the day after the Expiration Date and shall expire on
the day
immediately preceding the tenth anniversary of the Expiration Date
unless the
Extension Term shall sooner end pursuant to any of the terms,
covenants or
conditions of this Lease or pursuant to law. The second Extension
Term shall
commence on the day after the first Extension Term shall expire and
shall expire
on the tenth anniversary of the day the second Extension Term
commenced, unless
such second Extension Term shall sooner end pursuant to any of the
terms,
covenants or conditions of this Lease or pursuant to law. Provided
this Lease
shall then be in full force and effect and there is then no uncured
Event of
Default hereunder, Tenant may exercise its option to extend the
Term by giving
Landlord written notice of such election no sooner than two (2)
years prior to
the Expiration Date or the expiration of the then current Extension
Term, as the
case may be, and no later than eighteen (18) months prior to the
Expiration Date
or the expiration of the then current Extension Term, as the case
may be, the
time of exercise being of the essence, and upon the giving of such
notice, this
Lease and the Term shall be extended without execution or delivery
of any other
or further documents, with the same force and effect as if such
Extension Term
had originally been included in the Term and the Expiration Date
shall thereupon
be deemed to be the last day of such Extension Term.
Notwithstanding Tenant's
exercise of its option under this Section 1.3, if there shall then
be an uncured
Event of Default hereunder as of the Expiration Date, as such
Expiration Date
may have been extended, Landlord shall have the right to cancel
such exercise by
Tenant, in which event the Term shall expire on the Expiration Date
or the
expiration date of the then current Extension Term, as the case may
be and the
provisions of this Section 1.3 shall be deemed null and void and of
no further
force or effect. Except as provided in subsections (b) and (c)
below, all of the
terms, covenants and conditions of this Lease shall continue in
full force and
effect during each Extension Term, including items of Additional
Rent which
shall remain payable on the terms herein set forth.
(b) Fixed Rent during each Extension Term shall be equal to
one hundred (100%) percent of the fair market rent (the "Fair
Market Rent") as
determined in accordance with the procedure set forth below.
(c) The Fair Market Rent for the purpose of this Section 1.3
shall be determined in the following manner:
(i) The Fair Market Rent shall be the "triple net" rent
generally
payable in the market area in which the Property is located for
equivalent space
in a single-tenant Class-A building of approximately the same
quality, size and
condition as the Building, giving due consideration to the quality
of the design
of the Building, the type of improvements, the condition of the
Property as
improved, the location of the Property and the Building, the length
of the
extended Term, the credit-worthiness of the Tenant and all other
factors that
would be relevant to a willing landlord and a willing tenant
unaffiliated with
the Landlord desiring to enter into a lease of the Property for the
Term.
Landlord and Tenant shall attempt to reach an agreement as to the
determination
of the Fair Market Rent within thirty (30) days after the date of
Landlord's
receipt of Tenant's election to renew the Term of the Lease. Tenant
shall
specify the name and address of its designated appraiser with each
election made
by Tenant to extend the Term of this Lease pursuant to Section
1.3(a). If,
within thirty (30) days after Landlord's receipt of Tenant's
election to renew
the Term of the Lease, the parties have not agreed upon the Fair
Market Rent,
Landlord shall give written notice to Tenant specifying the name
and address of
its designated appraiser within three (3) business days from the
last day of
such 30-day period. Such two appraisers shall, within thirty (30)
days after the
designation of the Landlord's appraiser, each make their
determination of the
Fair Market Rent in writing and simultaneously shall give written
notice thereof
to each other and to Landlord and Tenant. Such two appraisers shall
have twenty
(20) days after the receipt of notice of each other's
determinations to confer
with each other and to attempt to reach agreement as to the
determination of the
Fair Market Rent. If such appraisers shall fail to concur as to
such
determination within said twenty (20) day period, they shall give
written notice
thereof to Landlord and Tenant and shall designate a third
appraiser within
three (3) business days from the last day of such 30-day period. If
the two
appraisers shall fail to agree upon the designation of such third
appraiser
within five (5) days after said twenty (20) day period, either or
both of them
shall give written notice of such failure to agree to Landlord and
Tenant and,
if Landlord and Tenant fail to agree upon the selection of such
third appraiser
within five (5) days after the appraisers appointed by the Landlord
and Tenant
give notice as aforesaid, then either party on behalf of both may
apply to the
American Arbitration Association or any successor thereto, or on
its failure,
refusal, or inability to act, to a court of competent jurisdiction,
for the
designation of such third appraiser.
(ii) All appraisers shall be independent MAI real estate
appraisers who shall have had at least fifteen (15) years'
continuous experience
in the business of appraising leased real estate in the
metropolitan area in
which the Property is located.
(iii) The third appraiser shall conduct such investigations as
he or she may deem appropriate and shall, within twenty (20) days
after the date
of his or her designation, make an independent determination of the
Fair Market
Rent.
(iv) If none of the determinations of the appraisers varies
from the mean of the determinations of the other appraisers by more
than ten
percent (10%), the mean of the determinations of the three
appraisers shall be
the Fair Market Rent. If, on the other hand, the determination of
any single
appraiser varies from the mean of the determinations of the other
two appraisers
by more than ten percent (10%), the mean of the determination of
the two
appraisers whose determinations are closest shall be the Fair
Market Rent.
(v) The determination of the appraisers, as provided above,
shall be conclusive upon Landlord and Tenant and shall have the
same force and
effect as a judgment made in a court of competent jurisdiction.
(vi) Each party shall pay fees, costs and expenses of the
appraiser selected by it and its own counsel fees and one-half
(1/2) of all
other expenses and fees of any such appraisal, including, but not
limited to,
the fees, costs and expenses of the third appraiser.
(d) If for any reason the Fair Market Rent has not been
determined by the date on which it shall become effective, then,
until such Fair
Market Rent has been determined in accordance herewith, the Fixed
Rent shall
continue to be the Fixed Rent in effect at the end of current Term,
and there
shall be an adjustment of Fixed Rent promptly after determination
of Fair Market
Rent in accordance with this Section 1.3.
<PAGE>
ARTICLE 2
FIXED RENT AND ADDITIONAL RENT
Section 2.1. Tenant shall pay to Landlord as Fixed Rent for
the Property during the (a) Primary Term the amounts stated in
Article A,
Section 3, and (b) each Extension Term the amounts determined in
accordance with
Section 1.3(b). Fixed Rent shall be payable in equal monthly
installments in
advance on the first day of each and every month during the Term,
without
previous demand therefor and without offset or deduction of any
kind whatsoever.
Notwithstanding the foregoing, Tenant shall pay the partial month's
installment
of Fixed Rent (with respect to the remaining days of the month in
which
Commencement Date occurs) on the Commencement Date.
Section 2.2. During the Term, Tenant shall also pay and
discharge as additional rent (the "Additional Rent") all other
amounts,
liabilities and obligations of whatsoever nature relating to the
Property,
including, without limitation, all Impositions (as defined in
Section 3.1),
insurance premiums (as contemplated by Sections 6.1 and 6.10), all
of Landlord's
obligations under the Ground Sublease, including the obligation to
pay "Annual
Rent" and the "Municipal Services Fee", as each are defined in the
Ground
Sublease, as well as any insurance which is required to be carried
in favor of
Ground Lessee and Owner, and any obligations arising under any
declarations,
easements, restrictions, or other similar agreements affecting the
Property or
any adjoining property thereto, and all interest and penalties that
may accrue
thereon in the event of Tenant's failure to pay such amounts when
due, and all
damages, costs and expenses which Landlord may incur by reason of
any default of
Tenant or failure on Tenant's part to comply with the terms of this
Lease, all
of which Tenant hereby agrees to pay upon demand or as is otherwise
provided
herein. Upon any failure by Tenant to pay any of the Additional
Rent, Landlord
shall have all legal, equitable and contractual rights, powers and
remedies
provided either in this Lease or by statute or otherwise in the
case of
nonpayment of the Fixed Rent. The term Additional Rent shall be
deemed rent for
all purposes hereunder.
Section 2.3. All Fixed Rent and all Additional Rent payable to
Landlord hereunder (collectively, "Rent") shall be made payable to
Landlord and
sent to Landlord's address set forth in Article A, or to such other
person or
persons or at such other place as may be designated by notice from
Landlord to
Tenant made in accordance with Section 20.8, from time to time, and
shall be
made in United States currency which shall be legal tender for all
debts, public
and private. At Landlord's request, Rent shall be payable when due
by wire
transfer of immediately available funds to an account designated
from time to
time by Landlord. Notwithstanding the foregoing, Impositions and
all sums due
pursuant to the Ground Sublease shall be payable to the parties to
whom they are
due, except as otherwise provided herein.
Section 2.4. This Lease shall be deemed and construed to be a
"net lease", and Tenant shall pay to Landlord, absolutely net
throughout the
Term, the Rent, free of any charges, assessments, impositions or
deductions of
any kind and without abatement, deduction or set-off whatsoever,
except as
otherwise expressly provided herein. Under no circumstances or
conditions,
whether now existing or hereafter arising, or whether beyond the
present
contemplation of the parties, shall Landlord be expected or
required to make any
payment of any kind whatsoever or be under any other obligation or
liability
hereunder, except as herein otherwise expressly set forth. Tenant
shall pay all
costs, expenses and charges of every kind and nature relating to
the Property,
except debt service on any Mortgage or any other indebtedness of
Landlord, which
may arise or become due or payable prior to, during or after (but
attributable
to a period falling prior to or within) the Term, as may be
extended. Except as
otherwise specifically provided in this Lease, Tenant's obligation
to pay Rent
hereunder shall not terminate prior to the date definitely fixed
for the
expiration of the Term (as may be extended) notwithstanding the
exercise by
Landlord of any or all of its rights under Article 12 hereof or
otherwise, and
the obligations of Tenant hereunder shall not be affected (except
as is
otherwise specifically provided herein to the contrary) by reason
of: any damage
to or destruction of the Property or any part thereof, any taking
of the
Property or any part thereof or interest therein by condemnation or
otherwise,
any prohibition, limitation, restriction or prevention of Tenant's
use,
occupancy or enjoyment of the Property or any part thereof, or any
interference
with such use, occupancy or enjoyment by any person or for any
reason, any
matter affecting title to the Property any eviction by paramount
title or
otherwise, any default by Landlord hereunder, the
impossibility,
impracticability or illegality of performance by Landlord, Tenant
or both, any
action of any governmental authority, Tenant's acquisition of
ownership of all
or part of the Property (unless this Lease shall be terminated by a
writing
signed by all persons, including any mortgagee, having an interest
in the
Property), any breach of warranty or misrepresentation, or any
other cause
whether similar or dissimilar to the foregoing and whether or not
Tenant shall,
have notice or knowledge hereof and whether or not such cause shall
now be
foreseeable. The parties intend that the obligations of Tenant
under this Lease
shall be separate and independent covenants and agreements and
shall continue
unaffected unless such obligations have modified or terminated
pursuant to an
express provision of this Lease.
Section 2.5. If Tenant shall fail to make payment of any
installment of Fixed Rent or Additional Rent payable to Landlord
hereunder
within five (5) business days from the date upon which the same
shall first have
been due hereunder then and in each such event Tenant shall pay
Landlord on
demand, in addition to the installment or other payment due, as
Additional Rent
hereunder, a late payment fee to compensate Landlord for legal,
accounting and
other expenses incurred by Landlord in administering the delinquent
account by
reason of such late payment an additional sum of four (4%) percent
of the amount
due as a late charge. For the purposes of this Section 2.5,
payments shall be
deemed made upon the date of actual receipt by Landlord at the
place specified
in or pursuant to Article A, Section 5 hereof. The late payment fee
required to
be paid by Tenant pursuant to this Section 2.5 shall be in addition
to all other
rights and remedies provided herein or by Law to Landlord for such
nonpayment.
ARTICLE 3
IMPOSITIONS
Section 3.1. From and after the Commencement Date and
throughout the Term, Tenant shall pay and discharge not later than
fifteen (15)
days before any fine, penalty, interest or cost may be added
thereto for the
non-payment thereof, all taxes, assessments, water rents, sewer
rents and
charges, duties, impositions, license and permit fees, charges for
public
utilities of any kind, common area maintenance charges, assessments
and dues
with respect to any Permitted Encumbrances, payments and other
charges of every
kind and nature whatsoever, foreseen or unforeseen, general or
special, in said
categories, together with any interest or penalties imposed upon
the late
payment thereof, which, pursuant to past, present or future law,
during, prior
to or after (but attributable to a period falling prior to or
within) the Term,
shall have been or shall be levied, charged, assessed, imposed upon
or become
due and payable out of or for or have become a lien on the Property
or any part
thereof, any improvements or personal property in or on the
Property, the Rents
and income payable by Tenant or on account of any use of the
Property and such
franchises as may be appurtenant to the use and occupation of the
Property (all
of the foregoing being hereinafter referred to as "Impositions").
Tenant shall
submit to Landlord the proper and sufficient receipts or other
evidence of
payment and discharge of the same promptly after payment thereof.
If any
Impositions are not paid when due under this Lease, Landlord shall
have the
right but shall not be obligated to pay the same, provided Tenant
does not
contest the same as herein provided. If Landlord shall make such
payment,
Landlord shall thereupon be entitled to repayment by Tenant on
demand as
Additional Rent hereunder.
Section
3.2. Tenant shall have the right to protest and
contest any Impositions imposed against the Property or any part
thereof,
provided (a) the same is done at Tenant's sole cost and expense,
(b) nonpayment
will not subject the Property or any part thereof to sale or other
liability by
reason of such nonpayment, (c) Landlord shall have the right to
require Tenant
to post a bond or other reasonable security with Landlord in order
to assure
timely and complete performance by Tenant of its obligations
hereunder and (d)
such contest shall not subject Landlord or the holder (the
"Mortgagee") of any
mortgage or deed of trust (a "Mortgage") encumbering all or any
part of the
Property to the risk of any criminal or civil liability.
Section 3.3. To the extent permitted by law, Tenant shall have
the right to apply for the conversion of any Impositions to make
the same
payable in annual installments over a period of years, and upon
such conversion
Tenant shall pay and discharge said annual installments as they
shall become due
and payable. If such Impositions either (a) are initially imposed
prior to the
last three years of the Term (as the same may be extended) or (b)
reflect
assessments for public improvements initiated or requested by
Tenant, Tenant
shall pay all such deferred installments prior to the expiration or
sooner
termination of the Term, notwithstanding that such installments
shall not then
be due and payable; provided, however, that (x) any Impositions
other than one
converted by Tenant so as to be payable in annual installments as
aforesaid or
(y) Impositions which are converted by Tenant so as to be payable
in annual
installments during the last three years of the Term and which in
either event,
relate to a fiscal period of the taxing authority, a part of which
is included
in a period of time after the Expiration Date, shall (whether or
not such
Impositions shall be assessed, levied, confirmed, imposed or become
payable,
during the Term) be adjusted between Landlord and Tenant as of the
Expiration
Date, so that Landlord shall pay that portion of such Impositions
which relate
to that part of such fiscal period included in the period of time
after the
Expiration Date, and Tenant shall pay the remainder thereof.
Section 3.4. If at any time during the Term, a tax or excise
on Rents or other tax, however described, is levied or assessed
with respect to
the Rent or any part thereof (as opposed to the income of Landlord)
or against
Landlord as a substitute in whole or in part for any Impositions
theretofore
payable by Tenant, other than taxes referenced in Section 3.5
below, Tenant
shall pay and discharge such tax or excise on Rents or other tax
before it
becomes delinquent, and the same shall be deemed to be an
Imposition levied
against the Property.
Section 3.5. Except as set forth in Section 3.4 above, Tenant
shall not be obligated to pay any franchise, excise, corporate,
estate,
inheritance, succession, capital, levy or transfer tax of Landlord
or any
income, profits or revenue tax upon the income of Landlord.
Section 3.6. In the event that Landlord is required pursuant
to the terms of any Mortgage to make monthly or other tax escrow
payments to any
Mortgagee, or in the event that a Default occurs, Tenant agrees
that, on demand
made by Landlord, it shall: (a) deposit with Mortgagee (or with
Landlord if
there is no Mortgage), on the day of demand and on the same day
each month
thereafter until thirty (30) days prior to the date when the next
installment of
impositions is due to the authority or other person to whom the
same is paid, an
amount equal to said next installment of Impositions divided by the
number of
months over which such deposits are to be made; and (b) thereafter
during the
Term deposit with Mortgagee (but not Landlord) an amount each month
estimated by
Mortgagee to be adequate to create a fund which, as each succeeding
installment
of Impositions becomes due, will be sufficient, thirty (30) days
prior to such
due date, to pay such installment in full; provided that the amount
and other
terms pertaining to such deposits shall otherwise be consistent
with the terms
and provisions of this Article 3. If at any time the amount of any
Imposition is
increased or Mortgagee believes that it will be, said monthly
deposits shall be
increased upon demand by Mortgagee so that, thirty (30) days prior
to the due
date for each installment of Impositions, there will be deposits on
hand with
Mortgagee (but not Landlord) sufficient to pay such installments in
full. To the
extent permitted by applicable law, Mortgagee shall not be required
to deposit
any such amounts in an interest bearing account. For the purpose of
determining
whether Mortgagee has on hand sufficient moneys to pay any
particular Imposition
at least thirty (30) days prior to the due date therefor, deposits
for each
category of Imposition shall be treated separately, it being the
intention that
Mortgagee shall not be obligated to use moneys deposited for the
payment of an
item not yet due and payable to the payment of an item that is due
and payable.
Notwithstanding the foregoing, it is understood and agreed that to
the extent
permitted by applicable law, deposits provided for hereunder may be
held by
Mortgagee in a single bank account and commingled with other funds
of Mortgagee.
Upon a transfer of the Property, the transferor shall be deemed to
be released
from all liability with respect to the deposits made hereunder to
the extent
that the transferor has transferred deposits of Impositions made
hereunder to
the transferee and Tenant agrees to look to the transferee solely
with respect
thereto, and the provisions hereof shall apply to each successive
transfer of
the said deposits. At such time as any Mortgage is released as a
lien on the
Property, any deposit made hereunder shall be transferred to a new
Mortgagee, or
if there is no Mortgage, to Landlord to be returned to Tenant.
Section 3.7. Landlord shall not be required to join in any
proceedings referred to in this Article unless the provisions of
any law, rule
or regulation at the time in effect shall require that such
proceedings be
brought by and/or in the name of Landlord, in which event,
Landlord, at Tenant's
sole risk and expense, shall join and cooperate in such proceedings
or permit
the same to be brought in its name but shall not be liable for the
payment of
any costs or expenses in connection with any such proceedings.
Section 3.8. The provisions of this Article 3 shall survive
the expiration or earlier termination of this Lease.
ARTICLE 4
USE OF PROPERTY
Section 4.1. The Property may be used and occupied only for
the purposes set forth in Article A, Section 4. In addition,
Landlord agrees not
to unreasonably withhold, condition or delay its consent to any
other lawful use
requested in writing by Tenant provided that: (a) at the time of
such request,
Tenant has a tangible net worth at least equal to or better than
its tangible
net worth on the Commencement Date, (b) such use will not result in
the
production, storage, use or release of Hazardous Materials in
violation of
Article 18, (c) such use will not diminish the fair market value of
the
Property, and (d) such use will comply with all Permitted
Encumbrances and all
other terms of this Lease. Tenant shall not create or suffer to
exist any public
or private nuisance, hazardous or illegal condition or waste on or
with respect
to the Property.
Section 4.2. Tenant hereby represents and warrants to Landlord
that all necessary certificates of occupancy, permits, licenses and
consents
from any or all appropriate governmental authorities have been
obtained by or on
behalf of Tenant and are in full force and effect as may be
required by law for
Tenant to occupy the Property and conduct business thereon.
<PAGE>
ARTICLE 5
CONDITION OF PROPERTY, ALTERATIONS AND REPAIRS
Section 5.1. Tenant has examined the Property, is familiar
with the physical condition, expenses, operation and maintenance,
zoning, status
of title and use that may be made of the Property and every other
matter or
thing affecting or related to the Property, and is leasing the same
in its "As
Is" condition. Landlord has not made and does not make any
representations or
warranties whatsoever with respect to the Property or otherwise
with respect to
this Lease. Tenant assumes all risks resulting from any defects
(patent or
latent) in the Property or from any failure of the same to comply
with any
governmental law or regulation applicable to the Property or the
uses or
purposes for which the same may be occupied and Tenant hereby
waives all claims
with respect to the same, including without limitation, all tort
and breach of
warranty claims.
Section 5.2. During the Primary Term and each Extended Term,
at Tenant's sole cost and expense, Tenant shall keep the Property
and the
adjoining sidewalks and curbs (unless third parties are responsible
for the
cleaning and maintenance of such adjoining sidewalks and curbs), if
any, clean
and in good condition and repair, free of accumulations of dirt,
rubbish, snow
and ice, and Tenant shall make all repairs and replacements,
structural and
non-structural, foreseen and unforeseen, and shall perform all
maintenance,
necessary to maintain the Property and any sidewalks and curbs
adjacent thereto
in good condition and repair (unless third parties are responsible
for the
cleaning and maintenance of such adjoining sidewalks and curbs).
When used in
this Section 5.2, the term "repairs" shall include all necessary
additions,
alterations, improvements, replacements, renewals and
substitutions. All repairs
made by Tenant shall be not less than equal in quality and class to
the original
Alteration and shall be made in compliance with all Requirements
(hereinafter
defined). Landlord shall not be required to furnish any services or
facilities
or to make any repairs or alterations to the Property, and Tenant
hereby assumes
the full and sole responsibility for the condition, operation,
repair,
replacement, maintenance and management of the Property, and all
costs and
expenses incidental thereto.
Section 5.3. Landlord shall not be responsible for the cost of
any alterations of or repairs to the Property of any nature
whatsoever,
structural or otherwise, whether or not now in the contemplation of
the parties.
To the extent not prohibited by law, Tenant hereby waives and
releases all
rights now or hereinafter conferred by statute or otherwise which
would have the
effect of limiting or modifying any of the provisions of this
Article 5.
Section 5.4. Tenant shall have the right at any time and from
time to time during the Term to make, at its sole cost and expense,
changes,
alterations, additions or improvements (collectively,
"Alterations") in or to
the Property subject, in each case, to all of the following:
(a) No Alteration shall be undertaken except after fifteen
(15) days' prior notice to Landlord, provided that no such notice
shall be
required with respect to any nonstructural Alteration involving an
estimated
cost of less than the Threshold Amount (hereinafter defined) (as
estimated by a
licensed architect or engineer reasonably approved by Landlord) or
involving an
actual cost (based on a lump sum or guaranteed maximum price
contract) less than
the Threshold Amount.
(b) No structural Alteration, and no other Alteration
involving an estimated cost of more than the Threshold Amount (as
estimated by a
licensed architect or engineer reasonably approved by Landlord)
shall be made
without the prior written consent of Landlord, which consent shall
not be
unreasonably withheld, delayed or conditioned. Notwithstanding the
foregoing,
Tenant may make Alterations consisting of normal painting,
carpeting, wall
coverings, installation, removal or reconfiguration of cubicles,
demountable
wall partitions or other similar office installations and office
decorations
without Landlord's prior written consent.
(c) Any Alteration when completed shall be of such a character
as not to reduce the value of the Property below its value
immediately before
such Alteration.
(d) No Alteration shall be performed by Tenant if the same
would materially reduce the cubic content of the usable area of the
Building, or
weaken, temporarily or permanently, the structure of the Building
or any part
thereof, or impair any zoning or materially impair other amenities
of the
Property.
(e) The reasonable cost and expense of Landlord's, and the
cost and expense of Mortgagee's review of any plans and
specifications required
to be furnished pursuant to Section 5.5 below shall be paid by
Tenant to
Landlord, within ten (10) days after demand, or, at the option of
Landlord, as
Additional Rent.
(f) For purposes of Sections 5.4 and 5.5,the "Threshold
Amount" shall mean an amount equal to $250,000.00, exclusive of
equipment. For
purposes of determining the Threshold Amount, an Alteration shall
include any
series of related improvements (exclusive of equipment) whose cost,
in the
aggregate equals or exceeds $250,000.00.
(g) The provisions and conditions of Section 5.5 shall apply
to any work performed by Tenant under this Article.
Section 5.5. Tenant agrees that all Alterations, repairs,
Restoration and other work that Tenant shall be required or
permitted to do
under the provisions of this Lease (each hereinafter called the
"Work") shall be
(i) performed in a first-class, workmanlike manner, and in
accordance with all
Requirements and all requirements set forth in the Ground Sublease,
as well as
any plans and specifications therefor which shall have been
approved by Landlord
to the extent that such approval is required hereunder, (ii)
commenced and
completed promptly and (iii) done in accordance with all of the
following terms
and conditions:
(a) If the Work shall (i) involve any structural repair,
Alterations, Restoration or other Work, or (ii) cost in excess of
the Threshold
Amount, then the Work shall not be commenced until detailed plans
and
specifications (including layout, architectural, mechanical and
structural
drawings), prepared by a licensed architect or engineer reasonably
approved by
Landlord shall have been submitted to and approved by Landlord,
which approval
shall not be unreasonably withheld, conditioned or delayed.
(b) All Work shall be commenced only after all required
municipal and other governmental permits, authorizations and
approvals and all
approvals required pursuant to the Ground Sublease shall have been
obtained by
Tenant, at its own cost and expense, and the originals or certified
copies
thereof delivered to Landlord. Landlord will, on Tenant's written
request,
promptly execute any documents necessary to be signed by Landlord
to obtain any
such permits, authorizations and approvals, provided that Tenant
shall bear any
expense or liability of Landlord in connection therewith.
(c) No Work costing more than $500,000.00 or affecting the
structure of the Improvements shall be undertaken except under the
supervision
of a licensed architect or engineer approved by Landlord, which
approval shall
not be unreasonably withheld.
(d) If the Work will cost more than the $1,000,000.00 (as
estimated in writing by a licensed architect or engineer reasonably
approved by
Landlord or based upon the actual cost of the Work based on a lump
sum or
guaranteed maximum price contract for the Work), it shall not be
commenced until
Tenant shall have obtained from its general contractor and
delivered to
Landlord, a performance bond and a labor and materials payment bond
(issued by a
corporate surety licensed to do business in the state in which the
Property is
located and reasonably satisfactory to Landlord), each in an amount
equal to the
estimated cost of such Work and in form otherwise reasonably
satisfactory to
Landlord.
(e) Subject to Tenant's contest rights pursuant to Section
11.4, the cost of all Work shall be paid promptly so that the
Property and
Tenant's leasehold estate therein shall at all times be free from
(i) liens for
labor or materials supplied or claimed to have been supplied to the
Property or
Tenant, and (ii) chattel mortgages, conditional sales contracts,
title retention
agreements, security interests and agreements, and financing
agreements and
statements.
(f) At all times when any Work is in progress, Tenant shall
maintain or cause to be maintained with such companies and for such
periods as
Landlord may require (i) workmen's compensation insurance covering
all persons
employed in connection with the Work, in an amount at least equal
to the minimum
amount of such insurance required by law; and (ii) for the mutual
protection of
Landlord, Tenant and any Mortgagee, (1) builder's risk insurance,
completed
value form, covering all physical loss, in an amount reasonable
satisfactory to
Landlord, and (2) commercial general liability insurance against
all hazards,
with limits for bodily injury or death to any one person, for
bodily injury or
death to any number of persons in respect of any one accident or
occurrence, and
for Property damage in respect of one accident or occurrence in
such amounts as
Landlord may reasonably require. Such commercial general liability
insurance may
be satisfied by the insurance required under Section 6.1(a), but
may be effected
by an endorsement, if obtainable, upon the insurance policy
referred to in said
Section. The provisions and conditions of Article 6 hereof shall
apply to any
insurance which Tenant shall be required to maintain or cause to be
maintained
under this subsection.
(g) Upon completion of any Work, Tenant, at Tenant's expense,
shall obtain certificates of final approval of such Work required
by any
governmental or quasi-governmental authority and shall furnish
Landlord with
copies thereof, together with "as-built" plans and specifications
for such Work
(if the Work undertaken by Tenant required the filing of any plans
with any
governmental authority).
(h) The
conditions of Section 5.4 shall have been
complied with, to the extent applicable to the Work.
Section 5.6. Any Work shall be subject to inspection at any
reasonable time and from time to time and when accompanied by a
representative
of Tenant (except in the event of an emergency), by Landlord, its
architect and
Mortgagee, or their duly authorized representatives, and if
Landlord's architect
or Mortgagee upon any such inspection shall be of the opinion,
which opinion
shall not be unreasonable, that the Work is not being performed
substantially in
accordance with the provisions of this Article 5 or the plans
and
specifications, or that any of the materials or Workmanship are not
first-class
or are unsound or improper, Tenant shall correct any such failure
and shall
replace any unsound or improper materials or workmanship.
Section 5.7. For purposes of this Lease, the word "structural"
when used in connection with any Work shall mean Work affecting the
load bearing
walls, support beams, structural components of the roof, any
replacement of the
roof (whether or not of structural components), foundation of the
Building or
that affects the proper functioning of the Building's mechanical,
electrical,
sanitary, plumbing, heating, air-conditioning, ventilating, utility
or any other
service systems.
Section 5.8. All fixtures, structures and other improvements
shall become the property of Landlord and shall remain upon and be
surrendered
with the Property other than (a) trade fixtures (including, without
limitation,
process equipment and compressors), (b) de-mountable wall
partitions, and (c)
those items listed on Exhibit "B", whether now installed or
installed in or upon
the Property at any time during the Term. Prior to the commencement
of any Work,
Landlord will, upon written request by Tenant, notify Tenant
whether Landlord
will require such Work to be removed from the Property prior to the
Expiration
Date or earlier termination of this Lease. If Tenant fails to
request such
determination at the time of any such Work, Landlord may notify
Tenant no later
than one hundred twenty (120) days prior to the Expiration Date,
that Landlord
elects to have the same removed by the Expiration Date at Tenant's
expense. All
property permitted or required to be removed by Tenant at the end
of the Term
remaining in the Property after Tenant's removal shall be deemed
transferred and
assigned to Landlord and may, at the election of Landlord, either
be retained as
Landlord's property or may be removed from the Property by Landlord
at Tenant's
expense. Tenant shall be responsible for, and shall reimburse
Landlord within
three (3) business days after written demand therefor, any damage
to the
Property caused in whole or in part by the removal or demolition of
Tenant's
fixtures, structures or other improvements which Tenant is required
to remove
pursuant to this Section 5.8 or which Tenant elects under the
provisions of this
Lease to remove. The provisions of this Section 5.8 shall survive
the expiration
or earlier termination of this Lease.
<PAGE>
ARTICLE 6
INSURANCE
Section 6.1. Throughout the Primary Term and each Extended
Term, Tenant shall, at its own cost and expense, provide and keep
in force, for
the benefit of Landlord, Tenant and any Mortgagee:
(a) broad form commercial general liability insurance
(including protective liability coverage on operations of
independent
contractors engaged in construction and blanket contractual
liability insurance
and certified and non-certified acts of terrorism if reasonably
available)
protecting Landlord, Tenant and any Mortgagee against all claims
for damages to
person or property or for loss of life or of property occurring
upon, in, or
about the Property, if any, written on a per-occurrence basis with
limits of
liability of not less than $5,000,000.00 with respect to bodily
injury and
property damage arising from any one occurrence and $10,000,000.00
in general
aggregate limit and an umbrella policy in an amount not less than
$10,000,000.00
in excess coverage, or such greater limits as may be reasonably
required from
time to time by any Mortgagee or as may be reasonably required from
time to time
by Landlord consistent with insurance coverage on properties
similarly
constructed, occupied and maintained. Such coverage shall waive the
insurer's
rights of subrogation against Landlord;
(b) a standard all-risk property insurance policy in respect
of the Property and all installations, additions and improvements
which may now
or hereafter be erected thereon, including, without limitation,
Broad Form Flood
(including back-up of sewers and drains, seepage and surface
water), ICC,
demolition coverage of not less than $5,000,000 and full coverage
for Contingent
Operation of Building Laws, and, to the extent required by any
Mortgagee,
Earthquake (if located within a seismic area), and certified and
uncertified
terrorism coverage in an amount equal to the full replacement value
of the
Property for non-certified terrorism and no reduction of limits for
certified
terrorism, all of the foregoing coverages shall be in an amount
sufficient to
prevent Landlord and Tenant from becoming co-insurers and in any
event in an
amount not less than one hundred percent (100%) of the actual
replacement value
thereof (i.e., including the cost of debris removal but excluding
foundations
and excavations) as reasonably determined by Landlord from time to
time;
(c) business interruption insurance covering risk of loss due
to the occurrence of any of the hazards covered by the insurance to
be
maintained by Tenant described in Section 6.1(b) with coverage, for
a period of
at least eighteen (18) months following the insured-against peril
plus six (6)
months extended period of indemnity coverage, of 100% of all Rent
to be paid by
Tenant under this Lease. Coverage under this section (c) arising
out of an act
of terrorism shall be limited to a period of twelve (12)
months;
(d) Worker's compensation insurance (including employers,
liability insurance) covering all persons employed at the Property
by Tenant to
the extent required by the laws and statutes of the state in which
the Property
is located, including, without limitation, during the course of
Work to the
Property;
(e) boiler insurance, if applicable, in an amount not less
than one hundred percent (100%) of the actual replacement value
thereof and of
any improvements in which any such boiler is located (including the
cost of
debris removal but excluding foundations and excavations) as
reasonably
determined by Landlord from time to time which insurance includes
combined
direct damage and business interruption on a comprehensive basis
subject to a
deductible of no greater than $ 25,000;
(f) if a sprinkler system is located in the Building,
sprinkler leakage insurance in amounts reasonably approved by
Landlord; and
(g) such other or further insurance, in such amounts and in
such form, as is customarily obtained by owners of properties
similarly located,
constructed, occupied and maintained and is available at
commercially reasonable
rates, or as otherwise reasonably required by any Mortgagee.
Section 6.2. Whenever under the terms of this Lease Tenant is
required to maintain insurance for the benefit of Landlord,
Landlord shall be
(a) an additional insured in all such liability insurance policies
and (b) an
additional named insured and as loss payee in all such property
policies. In the
event that the Property shall be subject to any Mortgage, the
commercial general
liability insurance shall, if required by such Mortgage, name the
Mortgagee as
an additional insured and all other insurance provided hereunder
shall name the
Mortgagee as an additional insured under a standard
"non-contributory mortgagee"
endorsement or its equivalent. All policies of insurance shall
provide that such
coverage shall be primary and that any insurance maintained
separately by
Landlord or the Mortgagee shall be excess insurance only, except as
otherwise
provided in Section 6.10 below. The original certificates of
insurance and
endorsements for all policies required to be maintained by Tenant
under this
Lease and legible copies of the original property policies shall be
delivered to
Landlord and any Mortgagee.
Section 6.3. The amounts payable under any and all insurance
policies insuring against property damage to the Building shall,
subject to
Article 7, be made available or "paid over" to Mortgagee or, if
there is none,
to Landlord. All property insurance policies required by this Lease
shall
provide that all adjustments for claims with the insurers in excess
of Fifty
Thousand Dollars ($50,000.00) (exclusive of any deductible) shall
be made with
Landlord, Tenant and any Mortgagee. Subject to the terms of any
Mortgage, any
adjustments for claims with the insurers involving sums of Fifty
Thousand
Dollars ($50,000.00) (exclusive of any deductible) or less shall be
made with
Tenant.
Section 6.4. All of the above-mentioned insurance policies
and/or certificates shall be obtained by Tenant and delivered to
Landlord on or
prior to the date hereof, and thereafter as provided for herein,
and shall be
written by insurance companies: (a) rated A:X or better in "Best's
Insurance
Guide" (or any substitute guide acceptable to Landlord); (b)
authorized to do
business in the state where the Property is located; and (c) of
recognized
responsibility and which are satisfactory to Landlord and any
Mortgagee. Any
deductible amounts shall not exceed $25,000 per occurrence under
any property
insurance policy and liability insurance policy hereunder. In the
event any of
Tenant's insurance policies contain deductible amounts, Tenant
agrees to pay the
amount of such deductibles in the event of a claim.
Section 6.5. At least thirty (30) days prior to the expiration
of any policy or policies of such insurance, Tenant shall renew
such insurance,
by delivering to Landlord or Mortgagee, within the said period of
time,
certificates of insurance (followed by copies of original policies
within a
reasonable period of time) evidencing the coverage described in
this Article 6.
All coverage described in this Article 6 shall provide Landlord and
Mortgagee
with thirty (30) days' notice of cancellation or change in terms.
If Tenant
shall fail to procure the insurance required under this Article 6
in a timely
fashion or to deliver certificates of insurance and the original
policies as
required hereunder, Landlord may, at its option and in addition to
Landlord's
other remedies in the event of a Default by Tenant, upon not less
than three (3)
business days written notice to Tenant (unless Tenant's insurance
will expire
prior thereto, in which event no such prior notice shall be
required), procure
the same for the account of Tenant, and the cost thereof shall be
paid to
Landlord as Additional Rent.
Section 6.6. Tenant shall not violate, or permit to be
violated, any of the conditions of any of the said policies of
insurance, and
Tenant shall perform and satisfy the requirements of the companies
writing such
policies so that companies of good standing, reasonably
satisfactory to
Landlord, shall be willing to write and/or continue such
insurance.
Section 6.7. Tenant shall not carry separate or additional
insurance effecting the coverage described in Section 6.1 (b) and
(c),
concurrent in form and contributing in the event of any loss or
damage to the
Property with any insurance required to be obtained by Tenant under
this Lease,
unless such separate or additional insurance shall comply with and
conform to
all of the provisions and conditions of this Article. Tenant shall
promptly give
notice to Landlord of such separate or additional insurance.
Section 6.8. The insurance required by this Lease, at the
option of Tenant, may be effected by blanket and/or umbrella
policies issued to
Tenant covering the Property and other properties owned or leased
by Tenant,
provided that the policies otherwise comply with the provisions of
this Lease
and allocate to the Property the specified coverage, without
possibility of
reduction or coinsurance by reason of, or damage to, any other
premises named
therein, and if the insurance required by this Lease shall be
effected by any
such blanket or umbrella policies, Tenant shall furnish to Landlord
or Mortgagee
certified copies or duplicate originals of such policies in place
of the
originals, with schedules thereto attached showing the amount of
insurance
afforded by such policies applicable to the Property.
Section 6.9. Landlord shall not be limited in the proof of any
damages which Landlord may claim against Tenant arising out of or
by reason of
Tenant's failure to provide and keep in force insurance, as
aforesaid, to the
amount of the insurance premium or premiums not paid or incurred by
Tenant and
which would have been payable under such insurance, but Landlord
shall also be
entitled to recover as damages for such breach, the uninsured
amount of any
loss, to the extent of any deficiency in the insurance required by
the
provisions of this Lease and damages, costs and expenses of suit
suffered or
incurred by reason of damage to, or destruction of, the Property,
occurring
during any period when Tenant shall have failed or neglected to
provide
insurance as aforesaid.
Section 6.10. Anything is this Article 6 to the contrary
notwithstanding, Landlord shall on the Commencement Date obtain and
maintain
during the Term of this Leasethe insurance coverages provided for
in Section 6.1
(other than liability insurance for Tenant's operations, business
interuption
insurance for Tenant's operations and workers' compensation for
Tenant's
employees pursuant to Section 6.1(d) above) in accordance with the
requirements
of this Article 6. Landlord shall submit to Tenant, and Tenant
shall pay as
Additional Rent, the invoices for the premiums for the insurance
coverages
obtained by Landlord which shall be billed at Landlord's actual
cost as
allocated to the Property and which shall be payable within ten
(10) days of
delivery to Tenant. In the event that after the Commencement Date,
Landlord
elects to no longer obtain and maintain the insurance coverages
provided for in
Section 6.1, Landlord shall give Tenant not less than thirty (30)
days notice
thereof in which event Tenant shall obtain and maintain the
insurance coverages
provided for in Section 6.1 in accordance with the requirements of
this Article
6 with Landlord retaining the right to thereafter obtain and
maintain such
insurance coverages on not less than thirty (30) days notice to
Tenant in which
event the provisions of this Section 6.1 shall apply.
ARTICLE 7
DAMAGE OR DESTRUCTION
Section 7.1. (a) If the Property or any part thereof shall be
damaged or destroyed by fire or other casualty (including any
casualty for which
insurance was not obtained or obtainable) of any kind or nature,
ordinary or
extraordinary, foreseen or unforeseen, (i) Landlord shall, subject
to Sections
7.2 and 7.3, pay over to Tenant, upon the terms set forth in
Section 7.2, any
moneys which may be recovered by Landlord from property insurance,
(ii) this
Lease shall be unaffected thereby and shall continue in full force
and effect,
and (iii) Tenant shall, at Tenant's sole cost and expense,
expeditiously and in
a good and workmanlike manner, cause such damage or destruction to
be remedied
or repaired (the "Restoration") by restoring the Property to its
condition
immediately prior to such damage, or destruction. All Restoration
Work shall be
performed in accordance with the provisions of this Lease,
including, without
limitation, the provisions of Sections 5.4 and 5.5 hereof. Tenant
hereby waives
the provisions of any law or statute to the contrary and agrees
that the
provisions of this Article shall govern and control in lieu
thereof. If Tenant
shall fail or neglect to restore the Property with reasonable
diligence, or
having so commenced such Restoration, shall fail to complete the
same with
reasonable diligence, or if prior to the completion of any such
Restoration by
Tenant, this Lease shall expire or be terminated for any reason,
Landlord shall
have the right, but not the obligation, to complete such
Restoration at Tenant's
cost and expense and the cost thereof shall be payable on demand as
Additional
Rent, together with interest thereon at the Default Rate. In
addition, if
Landlord so completes the Restoration as provided hereunder,
Landlord shall be
entitled to a supervision fee in the amount equal to two and
one-half percent (2
1/2 %) of the cost of the Restoration Work from Tenant to
compensate Landlord
for administering the Restoration.
(b) Notwithstanding anything contained herein to the contrary,
provided (i) a material portion of the Property is damaged or
destroyed by fire
or other casualty and such damage is of such a nature that the
Restoration
cannot be substantially completed within eighteen (18) months after
the
occurrence of the casualty (it being agreed that substantial
completion means
that the Property can then be lawfully occupied by Tenant no later
than the end
of such period), as estimated by a licensed architect or engineer
retained by
Tenant and reasonably approved by Landlord (for purposes of such
estimate, such
Restoration shall not include Alterations made by Tenant and
installation of
personal property, equipment and trade fixtures of Tenant), (ii)
there is then
no Event of Default (including without limitation any uncured Event
of Default
with respect to the matters set forth in Article 6), (iii) the
insurance
proceeds actually available to Landlord for Restoration, together
with any other
funds Tenant may elect to contribute, equal or exceed the cost of
such
Restoration (as estimated in writing by a licensed architect
retained by
Landlord), and (iv) such amounts are paid to Landlord, Tenant may
terminate this
Lease in which event this Lease shall be of no further force and
effect as of
the date of such termination, except that any obligation or
liability of Tenant,
actual or contingent, under this Lease which has accrued on or
prior to such
termination date shall survive.
Section 7.2. Subject to the provisions of this Article 7,
Landlord shall pay over to Tenant from time to time, upon the
following terms,
any moneys which may be received by Landlord from property
insurance provided by
Tenant but, in no event, to any extent or in any sum exceeding the
amount
actually collected by Landlord upon the loss; provided, however,
that Landlord,
before paying such moneys over to Tenant, shall be entitled to
reimburse itself
therefrom to the extent, if any, of the reasonable out-of-pocket
expenses
actually paid or incurred by Landlord in collection of such moneys.
Landlord
shall pay to Tenant, as herein provided, the aforesaid insurance
proceeds, for
the purpose of Restoration to be made by Tenant to restore the
Property to a
value which shall be not less than their value prior to such fire
or other
casualty. Prior to making any Restoration, Tenant shall furnish
Landlord with an
estimate of the cost of such Restoration, prepared by a licensed
architect or
engineer reasonably approved by Landlord. Such insurance proceeds
shall be paid
to Tenant from time to time thereafter in installments as the
Restoration
progresses, upon application to be submitted by Tenant to Landlord
showing the
cost of labor and material incorporated in the Restoration, or
incorporated
therein since the last previous application, and paid for by
Tenant. If any
vendor's, mechanic's, laborer's, or materialman's lien is filed
against the
Property or any part thereof, or if any public improvement lien is
created or
permitted to be created by Tenant and is filed against Landlord, or
any assets
of, or funds appropriated to, Landlord, Tenant shall not be
entitled to receive
any further installment until such lien is satisfied or otherwise
discharged,
unless such lien is contested by Tenant in good faith and Tenant
has obtained
and delivered a bond issued by a surety, in an amount equal to the
lien amount
and in form otherwise reasonably satisfactory to Landlord. The
amount of any
installment to be paid to Tenant shall be such proportion of the
total insurance
moneys received by Landlord as the cost of labor and materials
theretofore
incorporated by Tenant in the Restoration bears to the total
estimated cost of
the Restoration by Tenant, less (a) all payments theretofore made
to Tenant out
of said insurance proceeds, and (b) ten percent (10%) of the amount
so
determined, provided that Landlord shall release the ten percent
(10%) retention
with respect to any contractor, subcontractor, trade or supplier
which (x) has
completed its work as certified by Tenant and Tenant's architect,
if one is
required pursuant hereto and (y) such contractor, subcontractor,
trade or
supplier has delivered an unconditional lien waiver with respect to
its work or
materials if the value thereof is in excess of $100,000. Upon
completion of and
payment for the Restoration by Tenant, including reimbursement to
Tenant of such
ten percent (10%) retention, to the extent not previously released,
the balance
of any and all insurance proceeds held by Landlord shall be paid to
Landlord. In
the event that the insurance proceeds are insufficient for the
purpose of paying
for the Restoration, Tenant shall nevertheless be required to make
the
Restoration and pay any additional sums required for the
Restoration in
accordance with the provisions of Section 7.4 hereof.
Notwithstanding the
foregoing, if Landlord makes the Restoration at Tenant's expense,
as provided in
Section 7.1 hereof, then Landlord shall use any amounts held by
Landlord to pay
for the cost of such Restoration. Notwithstanding anything
contained herein to
the contrary, Tenant may retain insurance proceeds for any
Restoration the
estimated cost of which is less than $100,000, provided Tenant uses
such
proceeds for such Restoration.
Section 7.3. When insurance proceeds are retained by Landlord
pursuant to Section 7.2 above, Landlord may impose reasonable
conditions
precedent to the disbursement of each payment made to Tenant as
provided in
Section 7.2 above, including the following:
(a) there shall be submitted to Landlord the certificate from
Tenant or if the restoration amount equals or exceeds $1,000,000, a
certificate
of the aforesaid architect, stating (i) that the sum then requested
to be
withdrawn either has been paid by Tenant and/or is justly due to
contractors,
subcontractors, materialmen, engineers, architects or other persons
(whose names
and addresses shall be stated) who have rendered or furnished
certain services
or materials for the Work and giving a brief description of such
services and
materials and the principal subdivisions or categories thereof and
the several
amounts so paid or due to each of such persons in respect thereof,
and stating
in reasonable detail the progress of the Work up to the date of
said
certificate, (ii) that no part of such expenditures has been or is
being made
the basis, in any previous or then pending request, for the
withdrawal of
insurance money or has been made out of the proceeds of insurance
received by
Tenant, (iii) that the sum then requested does not exceed ninety
(90%) percent
of the cost of the services and materials described in the
certificate, except
with respect to such contractors or subcontractors who have
completed their
portion of the Work (as certified by the architect, or if there is
no architect,
Tenant) and provided final lien waivers and (iv) that the balance
of any
insurance proceeds held by Landlord, together with such other sums,
if any,
which Tenant has made or will (for which evidence of Tenant's
intention and
ability shall be to Landlord's reasonable satisfaction) make
available for the
Restoration in accordance with Section 7.4 hereof and to Landlord's
satisfaction
will be sufficient upon completion of the Restoration to pay for
the same in
full, and stating in reasonable detail an estimate of the cost of
such
completion;
(b) there shall be furnished to Landlord an official search,
or a certificate of a title insurance company satisfactory to
Landlord, or other
evidence satisfactory to Landlord, showing that there has not been
filed any
vendor's, mechanic's, laborer's or materialman's statutory or other
similar lien
affecting the Property or any part thereof, or any public
improvement lien
created or permitted to be created by Tenant affecting Landlord, or
the assets
of, or funds appropriated to, Landlord, which has not been
discharged of record,
except such as will be discharged upon payment of the amount then
requested to
be withdrawn, or unless any such lien is contested by Tenant in
good faith and
Tenant has obtained and delivered a bond issued by a surety, in an
amount equal
to the lien amount and in form otherwise reasonably satisfactory to
Landlord;
and
(c) at the time of making such payment, no Default shall have
occurred and be continuing.
Section 7.4. If the estimated cost of any Restoration,
determined as provided in Section 7.2 hereof, exceeds the net
insurance proceeds
then, prior to the commencement of any Restoration, Tenant hereby
covenants to
obtain from its general contractor and deliver to Landlord a bond,
or other
security satisfactory to Landlord in the amount of such excess, to
be held and
applied by Landlord in accordance with the provisions of Section
7.2 hereof, as
security for the completion of the Work, free of public
improvement, vendor's,
mechanic's, laborer's or materialman's statutory or other similar
liens.
Section 7.5. As material consideration to Landlord for its
agreement to enter into this Lease, the parties agree that, except
as expressly
set forth in the provisions of this Article 7, (i) this Lease shall
not
terminate or be forfeited or be affected in any manner, and there
shall be no
reduction or abatement of the Rent payable hereunder, by reason of
damage to or
total, substantial or partial destruction of the Property or any
part thereof or
by reason of the untenantability of the same or any part thereof,
for or due to
any damage or destruction to the Property from any cause
whatsoever, and, (ii)
notwithstanding any law or statute, present or future, Tenant
waives any and all
rights to quit or surrender the Property or any part thereof on
account of any
damage or destruction of the Property. Tenant expressly agrees that
its
obligations hereunder, including the payment of Rent payable by
Tenant
hereunder, shall continue as though the Property had not been
damaged or
destroyed and without abatement, suspension, diminution or
reduction of any
kind.
ARTICLE 8
CONDEMNATION
Section 8.1. If the whole or substantially all of the Property
shall be taken by condemnation or other eminent domain proceedings
pursuant to
any law, general or special, then at Tenant's option, this Lease
and the Term
shall terminate and expire on the date of such taking and the Rent
payable by
Tenant hereunder shall be apportioned as of the date of such
taking. If Tenant
chooses to execute the option to cancel the Lease provided for
herein, Tenant
shall notify Landlord in writing within thirty (30) days of the
date that Tenant
receives notice of such taking. For purposes of this Article 8
"substantially
all of the Property" shall be deemed to mean such portion of the
Property as,
when so taken, would leave remaining a balance of the Property
which, due either
to the area so taken or the location of the part so taken in
relation to the
part not so taken, would not under economic conditions, applicable
zoning laws,
building regulations then existing or prevailing, readily
accommodate Tenant's
business existing at the date of such taking and after performance
of all
covenants, agreements, terms and provisions herein and by law
provided to be
performed and paid by Tenant. Tenant, in cooperation with Landlord,
shall have
the right to participate in any condemnation proceedings and be
represented by
counsel for the purpose of protecting its interests hereunder.
Landlord agrees
that it will not enter into any agreement with any condemning
authority in
settlement of or on the threat of any condemnation or other eminent
domain
proceeding affecting the Property without the consent of Tenant,
which consent
shall not be unreasonably withheld or delayed.
Section 8.2. If only a portion of the Property shall be so
taken and Section 8.1 does not apply, this Lease shall be
unaffected by such
taking, and Tenant shall continue to pay the Fixed and Additional
Rent pursuant
to Article 2 except that the Rent shall be equitably reduced to a
just and
appropriate amount according to the nature and extent of the taking
as mutually
agreed in writing by Landlord and Tenant. In no event, however,
shall Additional
Rent be reduced as a result of any such taking.
Section 8.3. (a) Landlord shall be entitled to receive the
entire award in any proceeding with respect to any taking provided
for in this
Article 8 without deduction therefrom for any estate vested in
Tenant by this
Lease and Tenant shall receive no part of such award, except as
otherwise
provided in Section 8.1 hereof. Tenant hereby assigns to Landlord
all of its
right, title and interest in or to every such award. Nothing herein
contained
shall be deemed to prohibit Tenant from making a separate claim, to
the extent
permitted by law, for the value of Tenant's loss of good will,
inventory,
movable trade fixtures, machinery and moving expenses, provided
that the making
of such claim does not adversely affect or diminish Landlord's
award.
(b) Notwithstanding the foregoing, in the event Section 8.2 is
applicable, Landlord shall pay over to Tenant from time to time any
moneys which
may be received by Landlord on account of exercise of the power of
eminent
domain with respect to the Property, provided, however, that
Landlord, before
paying such moneys over to Tenant, shall be entitled to reimburse
itself
therefrom to the extent, if any, of the expenses paid or incurred
by Landlord in
the collection of such moneys. Such moneys shall be paid over to
Tenant solely
for purposes of the Restoration of the Property, on the terms and
subject to the
conditions set forth in Article 7, as if, for this purpose, such
moneys were
insurance proceeds resulting from casualty to the Property. Tenant
agrees to
undertake such Restoration on such terms and subject to such
conditions. Any
funds remaining after the completion of such Restoration shall
belong to and be
retained by Landlord.
Section 8.4. In the event of any taking of the Property which
does not result in a termination of this Lease, Tenant at Tenant's
expense,
subject to the provisions of Articles 5 and 7 and whether or not
any award or
awards shall be sufficient for the purpose, shall proceed with
reasonable
diligence to Restore the remaining parts of the Property to
substantially the
condition existing immediately prior to the date of taking to the
extent that
the same may be feasible and so as to constitute a complete and
tenantable
Property. If the proceeds of such award or awards are not
sufficient to pay the
full cost thereof as estimated by a licensed architect or engineer
approved by
Landlord, Tenant shall pay such deficit, and if the cost of the
Restoration will
cost more than $1,000,000, Tenant shall obtain from its general
contractor and
deliver to Landlord a bond or other security reasonably
satisfactory to Landlord
and Mortgage in the amount of such deficiency to be held as
security for the
completion of such Work. If, upon completion of Restoration any
portion of the
award shall remain, Landlord shall retain same.
Section 8.5 If during the Initial Term, the temporary use or
occupancy of all or any part of the Property shall be lawfully
taken by
condemnation or in any other manner for any public or quasi-public
use or
purpose, Landlord shall be entitled to receive all of the award for
such taking
and this Lease shall continue and remain unaffected by such taking.
If the
temporary use or occupancy of all or any part of the Property shall
be lawfully
taken by condemnation or in any other manner for any public or
quasi-public use
or purpose during the Primary Term or any Extended Term of this
Lease, Tenant
shall be entitled, except as hereinafter set forth, and unless a
Default shall
occur and be continuing, to receive that portion of the award for
such taking
which represents compensation for the use and occupancy of the
Property and, if
so awarded, for the taking of Tenant's loss of good will,
inventory, movable
trade fixtures, machinery and for moving expenses, and that portion
which
represents reimbursement for the cost of Restoration of the
Property. This Lease
shall be and remain unaffected by such taking and Tenant shall be
responsible
for all obligations hereunder not affected by such taking and shall
continue to
pay in full when due the Fixed Rent, Additional Rent and all other
sums required
to be paid by Tenant pursuant to the provisions of this Lease. If
the period of
temporary use or occupancy shall extend beyond the Expiration Date,
that part of
the award which represents compensation for the use or occupancy of
the Property
(or a part thereof) shall be divided between Landlord and Tenant so
that Tenant
shall receive so much thereof as represents the period to and
including the
Expiration Date and Landlord shall receive so much as represents
the period
subsequent to the Expiration Date and Landlord shall be entitled to
receive that
portion which represents reimbursement for the cost of Restoration
of the
Property and the remainder of such award.
Section 8.6. In case of any governmental action, not resulting
in the taking or condemnation of any portion of the Property but
creating a
right to compensation therefor, such as the changing of the grade
of any street
upon which the Property abut, this Lease shall continue in full
force and effect
without reduction or abatement of Rent and the award shall be paid
to Landlord.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
Section 9.1. (a) Tenant shall not sell, assign, mortgage or
otherwise transfer (a "Transfer") all or any portion of its
interest in this
Lease without the prior written consent of Landlord, which shall
not be
unreasonably withheld, conditioned or delayed, and any Mortgagee
and to the
extent required, the Ground Lessee. Landlord's consent shall not be
considered
unreasonably withheld if (i) the proposed transferee's financial
condition does
not meet Landlord's criteria, provided however, that the proposed
transferee's
financial condition shall not require Landlord's review and
approval where the
proposed Transfer is a sublease and provided further, that for any
other
proposed Transfer, if the proposed transferee's net worth equals or
exceeds that
of Tenant at the Commencement Date, the transferee shall be deemed
financially
responsible; (ii) the proposed transferee's business is not
suitable for the
Building; (iii) the proposed use is different than the permitted
use pursuant to
Article A, Section 4, (iv) the proposed transferee is a government
agency; or
(v) there is an Event of Default outstanding. Tenant acknowledges
that the
foregoing is not intended to be an exclusive list of the reasons
for which
Landlord may reasonably withhold its consent to a proposed
Transfer.
(b) Tenant shall have the right to sublease all or any portion
of the Property without Landlord's consent provided that (i) such
sublease (a
"Sublease") is in full compliance with the use restrictions set
forth in this
Lease, (ii) Tenant shall provide Landlord with a fully executed and
complete
copy of the Sublease prior to its commencement date and (iii) such
Sublease
shall otherwise comply with the requirements of this Article 9 with
respect to
Subleases.
(c) Notwithstanding anything to the contrary herein, Tenant
may, without the written consent of, but with written notice to,
Landlord,
assign, transfer or sublet to any Affiliate of Tenant, provided
such Affiliate
remains an Affiliate of Tenant and such Transfer is subject to the
remaining
provisions of this Article 9. For purposes of this Article 9, the
term Affiliate
shall mean any entity controlling, controlled by or under common
control with
Tenant and the terms "control" or "controlling" shall mean
possession, direct or
indirect, of the power to direct, or cause the direction of, the
management and
policies of any person or entity, whether through the ow
