<PAGE>
Exhibit 10.5
OFFICE LEASE
BETWEEN
TRANSWESTERN GREAT LAKES REIT, L.P., AS LANDLORD
AND
QUATRX PHARMACEUTICALS COMPANY, AS TENANT
777 EISENHOWER PLAZA
777 EAST EISENHOWER PARKWAY
ANN ARBOR, MICHIGAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
----
<S>
<C>
1. DEFINITIONS
.........................................................
1
2. LEASE
GRANT/POSSESSION ..............................................
4
3. USE
.................................................................
5
4. RENT
................................................................
5
5. SECURITY DEPOSIT
.................................................... 6
6. SERVICES TO BE
FURNISHED BY LANDLORD ................................ 6
7. LEASEHOLD
IMPROVEMENTS; TENANT'S PROPERTY ...........................
7
8. SIGNAGE
.............................................................
8
9. MAINTENANCE,
REPAIRS AND ALTERATIONS ................................
8
10. USE OF ELECTRICAL SERVICES BY TENANT
................................ 9
11. ASSIGNMENT AND SUBLETTING
........................................... 9
12. MECHANIC'S LIENS
.................................................... 11
13. INSURANCE
...........................................................
11
14. INDEMNITY
...........................................................
12
15. DAMAGES FROM CERTAIN CAUSES
......................................... 13
16. CASUALTY DAMAGE
..................................................... 13
17. CONDEMNATION
........................................................
14
18. EVENTS OF DEFAULT
................................................... 14
19. REMEDIES
............................................................
15
20. NO WAIVER
...........................................................
17
21. PEACEFUL ENJOYMENT
.................................................. 17
22. SUBSTITUTION
........................................................
17
23. HOLDING OVER
........................................................
18
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
24. SUBORDINATION TO MORTGAGE; ESTOPPEL CERTIFICATE
..................... 18
25. NOTICE
..............................................................
19
26. SURRENDER OF PREMISES
............................................... 19
27. RIGHTS RESERVED TO LANDLORD
......................................... 19
28.
MISCELLANEOUS........................................................
20
29. NO OFFER
............................................................
21
30. ENTIRE AGREEMENT
.................................................... 21
31. LIMITATION OF LIABILITY
............................................. 22
</TABLE>
EXHIBIT A - OUTLINE AND LOCATION OF PREMISES
EXHIBIT B - RULES AND REGULATIONS
EXHIBIT C - PAYMENT OF BASIC COSTS
EXHIBIT D - WORK LETTER
EXHIBIT E - ADDITIONAL PROVISIONS
EXHIBIT F - COMMENCEMENT LETTER
ii
<PAGE>
OFFICE LEASE
This
Office Lease (the "Lease") is made and entered into on this the
11th
day of November, 2004, between TRANS WESTERN GREAT LAKES, L.P., a
Delaware
limited partnership ("LANDLORD"), and QUATRX PHARMACEUTICALS
COMPANY, a
_________________________ ("TENANT").
WITNESSETH:
1. DEFINITIONS. The
following are definitions of some of the defined terms
used in this Lease. The definition of other defined terms are found
throughout
this Lease.
A. "BUILDING" SHALL mean the office building at 777 East
Eisenhower
Parkway, Ann Arbor, Michigan, currently known as 777 Eisenhower
Plaza.
B. "BASE RENT": Base Rent shall be paid according to the
following
schedule, subject to the provisions of Section 4 hereof. For the
purposes
of
this Section 1B, "Lease Year" shall mean the twelve (12) month
period
commencing on the Commencement Date, and on each anniversary of
the
Commencement Date (or portion thereof ending on the Expiration
Date).
<TABLE>
<CAPTION>
ANNUAL MONTHLY
INSTALLMENTS
PERIOD
BASE
RENT
OF BASE RENT
------------
-----------
--------------------
<S>
<C>
<C>
MONTHS 1-3 $ 0.00
$
0.00
MONTHS 4-15 $130,341.12
$10,861.76
MONTHS 16-27
$133,325.12 $11,110.43
MONTHS 28-39
$136,309.12
$11,359.09
MONTHS 40-51
$139,293.12
$11,607.76
MONTHS 52-63
$142,277.12
$11,856.43
MONTHS 64-75
$145,261.12
$12,105.09
</TABLE>
The Base Rent and Additional Rent due for the fourth month during
the Lease Term
(hereinafter defined) shall be paid by Tenant to Landlord
contemporaneously with
Tenant's execution hereof.
C. "ADDITIONAL RENT" shall mean Tenant's Pro Rata Share of Basic
Costs
(hereinafter defined) and Tenant's Pro Rata Share of Taxes
(hereinafter
defined) and any other slims (exclusive of Base Rent) that are
required to
be
paid to Landlord by Tenant hereunder, which sums are deemed to
be
Additional Rent under this Lease.
D. "BASIC COSTS" is defined in Exhibit C attached hereto.
1
<PAGE>
E. "TAXES" is defined in Exhibit C attached hereto.
F. "SECURITY DEPOSIT" shall mean a letter of credit in the amount
of
One
Hundred Twenty Thousand and 00/100 Dollars ($120,000.00), subject
to
the
terms set forth in Exhibit E. The Security Deposit shall be paid
by
Tenant to Landlord contemporaneously with Tenant's execution
hereof.
G. "LEASE TERM" shall mean a period of Seventy Five (75) months
commencing on the date upon which Landlord's Work in the Premises
has been
substantially completed, as such date is determined pursuant to the
Work
Letter attached hereto as EXHIBIT D (the later to occur of such
dates being
defined as the "COMMENCEMENT DATE"). Landlord shall make a good
faith
effort to substantially complete Landlord's Work in the Premises
by
December 15, 2005 (THE "TARGET COMMENCEMENT DATE"). "EXPIRATION
DATE" SHALL
MEAN
the last day of the Lease Term. Notwithstanding the foregoing, if
the
Expiration Date, as determined herein, does not occur on the last
day of a
calendar month, the Lease Term and the last Lease Year thereof
shall be
extended by the number of days necessary to cause the Expiration
Date to
occur on the last day of the last calendar month of the Lease Term.
Tenant
shall pay Base Rent and Additional Rent for such additional days at
the
same
rate payable for the portion of the last calendar month
immediately
preceding such extension. Upon the determination of the actual
Commencement
Date
and the actual Expiration Date, Landlord and Tenant shall each
execute
and
deliver a Commencement Letter in the form of Exhibit F attached
hereto.
H. "PREMISES" shall mean the office space located within the
Building
and
outlined on EXHIBIT A to this Lease, and commonly referred to as
Suite
100.
If the Premises include one or more floors in their entirety,
all
corridors and restroom facilities located on such full floor(s)
shall be
considered part of the Premises.
I. "RENTABLE AREA IN THE PREMISES" shall mean 5,968 square
feet.
J. "RENTABLE AREA IN THE BUILDING" shall mean 281,080 square
feet.
K. "TENANT'S PRO RATA SHARE" shall mean Two and 12/100 percent
(2.12%).
L. "PERMITTED USE" shall mean general office use and no other use
or
purpose.
M. "BASE YEAR" shall mean 2004.
N. "GUARANTOR(S)" shall mean NONE.
O. "BROKER" shall mean, collectively, Friedman Real Estate Group
and
Transwestern Commercial Services.
P. "BUSINESS DAY(S)" shall mean Mondays through Fridays exclusive
of
the
normal business holidays.
Q. "COMMON Areas" shall mean those areas located within the
Building
or
on the Property designated by Landlord, from time to time, for
the
common use or benefit of
2
<PAGE>
tenants generally and/or the public.
R. "DEFAULT RATE" shall mean the lower of (i) fifteen percent
per
annum, or (ii) the highest rate of interest from time-to-time
permitted
under applicable federal and state law.
S. "NORMAL BUSINESS HOURS" for the Building shall mean 8:00 a.m.
to
6:00
p.m. Mondays through Fridays, and 8:00 a.m. to 1:00 p.m. on
Saturdays,
exclusive of holidays.
T. "PROPERTY" shall mean the Building and the parcel(s) of land
on
which it is located, other improvements located on such land,
adjacent
parcels of land that Landlord operates jointly with the Building,
and other
buildings and improvements located on such adjacent parcels of
land.
U. "NOTICE ADDRESSES" shall mean the following addresses for
Tenant
and
Landlord, respectively:
Tenant:
QUATRx Pharmaceuticals Company
777 East Eisenhower Parkway, Suite 100
Ann Arbor, Michigan 48108
Landlord:
Transwestern Commercial Services
777 East Eisenhower Parkway, Suite 136
Ann Arbor, Michigan 48108
Attn: Property Manager
with a copy to:
Transwestern Investment Company
150 North Wacker Drive, Suite 800
Chicago, Illinois 60606
Attn: Owner's Representative
and to:
Drane, Freyer and Lapins
150 North Wacker Drive, 8th Floor
Chicago, Illinois 60606
Attn: Wendy Freyer, Esq.
Payments of Rent only shall be made payable to the order of:
3
<PAGE>
Transwestern 777 Eisenhower Plaza at the following address:
Transwestern Commercial Services
777 East Eisenhower Parkway, Suite 136
Ann Arbor, Michigan 48108
Attn: Property Manager
or such other name and address as Landlord shall, from time to
time, designate.
2.
LEASE GRANT/POSSESSION.
A. Subject to and upon the terms herein set forth, Landlord leases
to
Tenant and Tenant leases from Landlord the Premises on an "as is"
basis
(except as otherwise expressly set forth herein), together with the
right,
in
common with others, to use the Common Areas. By taking possession
of the
Premises, Tenant is deemed to have accepted the Premises and agreed
that
the
Premises is in good order and satisfactory condition, with no
representation or warranty by Landlord as to the condition of the
Premises
or
the Building or suitability thereof for Tenant's use. Tenant, and
its
employees, guests and invitees, shall have the non-exclusive right
to use
up
to 3.76 parking spaces per one thousand (1,000) rentable square
feet of
space in the Premises in the surface parking spaces (except the
reserved or
designated parking spaces) in the parking area adjacent to the
Building
free
of charge during the term of the Lease.
B. Notwithstanding anything to the contrary contained in this
Lease,
if
Landlord is unable to tender possession of any portion of the
Premises
on
the date possession is to be delivered due to the holding over
of
another party, this Lease shall not be void or voidable or
otherwise
affected and Tenant shall have no claim for damages against
Landlord.
Landlord shall use reasonable efforts to regain possession of the
Premises
in
order to deliver the same to Tenant. If the Commencement Date as
set
forth in Section 1G is a specified date, the Commencement Date
shall be
postponed until the date Landlord delivers possession of the
Premises to
Tenant, the Expiration Date shall, at the option of Landlord,
correspondingly be postponed on a per diem basis, and, upon the
determination of the actual Commencement Date and the actual
Expiration
Date, Landlord and Tenant shall each execute and deliver a
Commencement
Letter in the form of Exhibit F attached hereto.
Notwithstanding the foregoing, if Landlord has not
substantially
completed the Landlord's Work in the Premises by May 1, 2005, for
any
reason other than a Tenant Delay or Force Majeure, then Tenant
shall have
the
right to terminate this Lease upon written notice received by
Landlord
by
May 10, 2005.
C. If Tenant, with Landlord's prior written approval, takes
possession
of
the Premises prior to the Commencement Date for the sole purpose
of
performing any improvements therein or installing furniture,
equipment or
other personal property of Tenant, such possession shall be subject
to all
of
the terms and conditions of this Lease,
4
<PAGE>
except that Tenant shall not be required to pay Rent with respect
to the
period of time prior to the Commencement Date during which Tenant
performs
such
work. Tenant shall, however, be liable for the reasonable cost of
any
services (e.g., electricity, HVAC, freight elevators) that are
provided to
Tenant during the period of Tenant's possession prior to the
Commencement
Date. Nothing herein shall be construed as granting Tenant the
right to
take
possession of the Premises prior to the Commencement Date, whether
for
construction, fixturing or any other purpose, without the prior
written
consent of Landlord.
3.
USE. The Premises shall be used for the Permitted Use and for no
other
purpose. Tenant agrees not to use or permit the use of the Premises
for any
purpose which is illegal or dangerous, which creates a nuisance or
which would
increase the cost of insurance coverage with respect to the
Building. Tenant
will conduct its business and control its agents, servants,
employees,
customers, licensees, and invitees in such a manner as not to
interfere with or
disturb other tenants or Landlord in the management of the
Property. Tenant will
maintain the Premises in a clean and healthful condition, and
comply with all
laws, ordinances, orders, rules and regulations of any governmental
entity with
reference to the use, condition, configuration or occupancy of the
Premises.
Tenant shall not, and shall not allow its employees, agents,
contractors or
invitees, to bring into the Building or the Premises any dangerous
or hazardous
materials, except for customary office and cleaning supplies,
provided Tenant
uses, stores and disposes of the same in compliance with all
applicable law.
Tenant, at its expense, will comply with the rules and regulations
of the
Building attached hereto as EXHIBIT B and such other rules and
regulations
adopted and altered by Landlord from time-to-time and will cause
all of its
agents, employees, invitees and visitors to do so. All such changes
to rules and
regulations will be reasonable and shall be sent by Landlord to
Tenant in
writing. In the event of a conflict between the rules and
regulations and the
terms of this Lease, the terms of this Lease shall control.
Landlord shall not
knowingly enforce the rules and regulations against Tenant in a
discriminatory
manner.
4.
RENT.
A. Tenant covenants to pay to Landlord during the Lease Term,
without
any
setoff or deduction except as otherwise expressly provided herein,
the
full
amount of all Base Rent and Additional Rent due hereunder and the
full
amount of all such other sums of money as shall become due under
this
Lease, all of which hereinafter. may be collectively called "Rent."
In
addition, Tenant shall pay, as Additional Rent, all rent, sales and
use
taxes or other similar taxes, if any, levied or imposed by any
city, state,
county or other governmental body having authority, such payments
to be in
addition to all other payments required to be paid to Landlord by
Tenant
under this Lease. Such payments shall be paid concurrently with
the
payments of the Rent on which the tax is based. Base Rent and
Additional
Rent
for each calendar year or portion thereof during the Lease Term,
shall
be
due and payable in advance in monthly installments on the first day
of
each
calendar month during the Lease Term, without demand. If the
Lease
Term
commences on a day other than the first day of a month or
terminates
on a
day other than the last day of a month, then the installments of
Base
Rent
and Additional Rent for such month or months shall be prorated,
based
on
the number of days in such month. All amounts received by Landlord
from
Tenant hereunder shall be applied first to the earliest accrued
5
<PAGE>
and
unpaid Rent then outstanding. Tenant's covenant to pay Rent shall
be
independent of every other covenant set forth in this Lease.
B. If Tenant fails to pay any installment of Base Rent and
Additional
Rent
or any other item of Rent when due and payable hereunder, a
"LATE
CHARGE" equal to five percent (5%) of such unpaid amount will be
due and
payable immediately by Tenant to Landlord.
C. The Additional Rent payable hereunder shall be adjusted from
time-to-time in accordance with the provisions of EXHIBIT C
attached
hereto.
5.
Security Deposit. The Security Deposit shall be held by Landlord
without
liability for interest and as security for the performance by
Tenant of Tenant's
covenants and obligations under this Lease, it being expressly
understood that
the Security Deposit shall not be considered an advance payment of
Rent or a
measure of Tenant's liability for damages in case of default by
Tenant. Landlord
shall not be required to keep the Security Deposit separate from
its other
accounts, shall have no fiduciary responsibilities or trust
obligations
whatsoever with regard to the Security Deposit. Landlord may, from
time-to-time,
without prejudice to any other remedy and without waiving such
default, use the
Security Deposit to the extent necessary to cure or attempt to
cure, in whole or
in part, any default of Tenant hereunder. Following any such
application of the
Security Deposit, Tenant shall pay to Landlord within five (5) days
after demand
the amount so applied in order to restore the Security Deposit to
its original
amount. If Tenant is not in default at the termination of this
Lease, the
balance of the Security Deposit remaining after any such
application shall be
returned by Landlord to Tenant within sixty (60) days thereafter.
If Landlord
transfers its interest in the Premises during the Lease Term,
Landlord shall
assign the Security Deposit to the transferee and thereafter shall
have no
further liability for the return of such Security Deposit.
6.
SERVICES TO BE FURNISHED BY LANDLORD.
A. Landlord shall furnish the following services: (i) heating and
air
conditioning during Normal Business Hours to provide a
temperature
condition required, in Landlord's reasonable judgment, for
comfortable
occupancy of the Premises under normal business operations; (ii)
water for
drinking, and, subject to Landlord's approval, water at Tenant's
expense
for
any private restrooms and office kitchen requested by Tenant;
(iii)
janitorial service in the Premises and Common Areas on Business
Days; (iv)
electricity to the Premises for general office use, in accordance
with and
subject to the terms and conditions of Section 10 of this Lease and
(v)
passenger elevator service, 24 hours a day, 7 days a week; and
freight
elevator service on Business Days, upon request of Tenant and
subject to
scheduling and charges by Landlord.
B. If Tenant requests any other utilities or building services
in
addition to those identified in Section 6A, or any of the above
utilities
or
building services in frequency, scope, quality or quantities
substantially greater than the standards set by Landlord for the
Building,
then
Landlord shall use reasonable efforts to attempt to furnish
Tenant
with
such additional utilities or building services. Landlord may impose
a
6
<PAGE>
reasonable charge for such additional utilities or building
services, which
shall be paid monthly by Tenant as Additional Rent on the same day
that the
monthly installment of Base Rent is due.
C. Except as otherwise expressly provided herein, the failure
by
Landlord to any extent to furnish, or the interruption or
termination of
utilities and Building services identified in Section 6A in whole
or in
part, resulting from
adherence to laws, regulations and administrative
orders, wear, use, repairs, improvements, alterations or any causes
shall
not
render Landlord liable in any respect nor be construed as an actual
or
constructive eviction of Tenant, nor give rise to an abatement of
Rent, nor
relieve Tenant from the obligation to fulfill any covenant or
agreement
hereof.
D. Notwithstanding anything to the contrary contained in this
Section
6,
if: (i) Landlord ceases to furnish any service in the Building for
a
period in excess of five (5) consecutive Business Days after
Tenant
notifies Landlord of such cessation (the "INTERRUPTION NOTICE");
(ii) such
cessation does not arise as a result of an act or omission of
Tenant; (iii)
such
cessation is not caused by a fire or other casualty (in which
case
Section 16 shall control); (iv) the restoration of such service
is
reasonably within the control of Landlord; and (v) as a result of
such
cessation, the Premises or a
material portion thereof, is rendered
untenantable and Tenant in fact ceases to use the Premises, or
material
portion thereof, then Tenant, as its sole remedy, shall be entitled
to
receive an abatement of Base Rent payable hereunder during the
period
beginning on the sixth (6th) consecutive Business Day of such
cessation and
ending on the day when the service in question has been restored.
In the
event the entire Premises has not been rendered untenantable by
the
cessation in service, the amount of abatement that Tenant is
entitled to
receive shall be prorated based upon the percentage of the Premises
so
rendered untenantable and not used by Tenant.
7.
LEASEHOLD IMPROVEMENTS: TENANT'S PROPERTY. All fixtures,
equipment,
improvements and appurtenances attached to, or built into, the
Premises at the
commencement of or during the Lease Term, whether or not by, or at
the expense
of, Tenant ("LEASEHOLD IMPROVEMENTS"), shall be and remain a part
of the
Premises, shall be the property of Landlord, and shall not be
removed by Tenant
except as expressly provided herein. All unattached and moveable
partitions,
trade fixtures, moveable equipment or furniture located in the
Premises and
acquired by or for the account of Tenant, without expense to
Landlord, which can
be removed without structural damage to the Building or Premises,
and all
personalty brought into the Premises by TENANT ("TENANT'S
PROPERTY") shall be
owned and insured by Tenant. Landlord may, nonetheless, within one
(1) month
after, the expiration or earlier termination of this Lease or
Tenant's right to
possession of the Premises, require Tenant to remove any Leasehold
Improvements,
except those Leasehold Improvements installed pursuant to the Plans
referenced
in the Work Letter attached hereto as Exhibit D (the "REQUIRED
REMOVABLES") at
Tenant's sole cost. Upon the termination of the Lease Term or the
sooner
termination of Tenant's right to possession of the Premises, Tenant
shall remove
Tenant's Property, all electronic, phone and data cabling
exclusively serving
the Premises (whether such cabling is located within or outside of
the
Premises), and all Required Removables. Tenant shall, at its sole
cost and
expense, repair any damage caused by such removal and perform such
other work as
is reasonably necessary to
7
<PAGE>
restore the Premises to a "move in" condition. If Tenant fails to
remove any of
the foregoing items or to perform any required repairs and
restoration, (i)
Landlord, at Tenant's sole cost and expense, may remove the same
(and repair any
damage occasioned thereby) and dispose thereof or deliver such
items to any
other place of business of Tenant, or warehouse the same, and
Tenant shall pay
the cost of such removal, repair, delivery, or warehousing of such
items within
five (5) days after demand from Landlord and (ii) such failure
shall be deemed a
holding over by Tenant under Section 23 hereof until such failure
is rectified
by Tenant or Landlord.
8.
SIGNAGE. Tenant shall not install any signage visible from the
exterior
of the Premises; all signage shall be in the standard graphics for
the Building
and no others shall be used or permitted without Landlord's prior
written
consent. Landlord will install Building standard suite and Building
directory
signage identifying Tenant, the cost of which will be deducted from
the Tenant
Allowance described in Exhibit D attached hereto.
9.
MAINTENANCE, REPAIRS AND ALTERATIONS.
A. Except to the extent such obligations are imposed upon
Landlord
hereunder, Tenant shall, at its sole cost and expense, maintain
the
Premises in good order, condition and repair throughout the entire
Lease
Term, ordinary wear and tear excepted. Tenant agrees to keep the
areas
visible from outside the Premises in a neat, clean and attractive
condition
at
all times. Tenant shall, within thirty (30) days after
Landlord's
written demand therefor, reimburse Landlord for the cost of all
repairs,
replacements and alterations (collectively, "Repairs") in and to
the
Premises, Building and Property and the facilities and systems
thereof,
plus
an administration charge of ten percent of such cost, the need
for
which Repairs arises out of (1) Tenant's use or occupancy of the.
Premises,
(2)
the installation, removal, use or operation of Tenant's Property
or
Required Removables, (3) the moving of Tenant's Property and
Required
Removables into or out of the Building, (4) any Alterations
(hereinafter
defined) or other work performed by Landlord pursuant to the Work
Letter
(subject to any construction allowance), or (5) the act, omission,
misuse
or
negligence of Tenant, its agents, contractors, employees or
invitees.
Landlord shall be responsible for the performance of all other
Building
repairs.
B. Tenant shall not make or allow to be made any alterations,
additions or improvements to the Premises (collectively,
"ALTERATIONS"),
without first obtaining the written consent of Landlord. Prior
to
commencing any Alterations and as a condition to obtaining
Landlord's
consent, Tenant shall deliver to Landlord plans and
specifications
acceptable to Landlord; names and addresses of contractors
reasonably
acceptable to Landlord; copies of contracts; necessary permits
and
approvals; evidence of contractor's and subcontractor's insurance
in
accordance with Section 13 hereof; and a payment bond or other
security,
all
in form and amount satisfactory to Landlord. Tenant shall be
responsible for insuring that all such persons procure and
maintain
insurance coverage against . such risks, in such amounts and with
such
companies as Landlord may reasonably require. All Alterations shall
be
constructed in a good and workmanlike manner using Building
standard
materials or other new materials of equal or greater quality.
Landlord, to
the
extent reasonably necessary to avoid any disruption to the
8
<PAGE>
tenants and occupants of the Building, shall have the right to
designate
the
time when any Alterations may be performed and to otherwise
designate
reasonable rules, regulations and procedures for the performance of
work in
the
Building. Upon completion of the Alterations, Tenant shall deliver
to
Landlord "as-built" plans, contractor's affidavits and full and
final
waivers of lien and receipted bills covering all labor and
materials. All
Alterations shall comply with the insurance requirements and
with
applicable codes, ordinances, laws and regulations. Tenant shall
reimburse
Landlord upon demand for all reasonable sums, if any, expended by
Landlord
for
third party examination of the architectural, mechanical,
electrical
and
plumbing plans for any Alterations. In addition, if Landlord so
requests, Landlord shall be entitled to oversee the construction of
any
Alterations that may affect the structure of the Building or any of
the
mechanical, electrical, plumbing or life safety systems of the
Building. If
Landlord elects to oversee such work, Landlord shall be entitled to
receive
a
fee for such oversight in an amount equal to ten percent (10%) of
the
cost
of such Alterations. Landlord's approval of Tenant's plans and
specifications for any Alterations performed for or on behalf of
Tenant
shall not be deemed to be representation by Landlord that such
plans and
specifications comply with applicable insurance requirements,
building
codes, ordinances, laws or regulations or that the Alterations
constructed
in
accordance with such plans and specifications will be adequate
for
Tenant's use.
10.
USE OF ELECTRICAL SERVICES BY TENANT. All electricity used by
Tenant in
the Premises shall, at Landlord's option, be paid for by Tenant by
a separate
charge billed directly to Tenant by Landlord and payable by Tenant
as Additional
Rent within thirty (30) days after billing. Landlord shall have the
right at any
time and from time-to-time during the Lease Term to contract for
electricity
service from such providers of such services as Landlord shall
elect (each being
an "ELECTRIC SERVICE PROVIDER"). Tenant shall cooperate with
Landlord, and the
applicable Electric Service Provider, at all times and, as
reasonably necessary,
shall allow Landlord and such Electric Service Provider reasonable
access to the
Building's electric lines, feeders, risers, wiring, and any other
machinery
within the Premises. Tenant's use of electrical services furnished
by Landlord
shall not exceed in voltage, rated capacity, or overall load that
which is
standard for the Building. In the event Tenant shall request that
it be allowed
to consume electrical services in excess of Building standard,
Landlord may
refuse to consent to such usage or may consent upon such conditions
as Landlord
reasonably elects, and all such additional usage shall be paid for
by Tenant as
Additional Rent. Landlord, at any time during the Lease Term, shall
have the
right to separately meter electrical usage for the Premises or to
measure
electrical usage by survey or any other method that Landlord, in
its reasonable
judgment, deems appropriate.
11.
ASSIGNMENT AND SUBLETTING.
A. Except in connection with a Permitted Transfer (defined in
Section
11E
below), Tenant shall not assign, sublease, transfer or encumber
any
interest in this Lease or allow any third party to use any portion
of the
Premises (collectively or individually, a "Transfer") without the
prior
written consent of Landlord, which consent shall not be
unreasonably
withheld. Without limitation, it is agreed that Landlord's consent
shall
not
9
<PAGE>
be
considered unreasonably withheld if: (1) the proposed
transferee's
financial condition is not adequate for the obligations such
transferee is
assuming in connection with the proposed Transfer, (2) the
transferee's
business or reputation is not suitable for the Building considering
the
business and reputation of the other tenants and the Building's
prestige,
or
would result in a violation of another tenant's rights under its
lease
at
the Building; (3) the transferee is a governmental agency or
occupant of
the
Building; (4) Tenant is in default beyond any applicable notice
and
cure
period; (5) any portion of the Building or the Premises would
likely
become subject to additional or different laws as a consequence of
the
proposed Transfer, or (6) Landlord or its leasing agent has
received a
proposal from or made a proposal to the proposed transferee to
lease space
in
the Building within six (6) months prior to Tenant's delivery of
written
notice of the proposed Transfer to Landlord. Any attempted Transfer
in
violation of this Section 11, shall, exercisable in Landlord's sole
and
absolute discretion, be void. Consent by Landlord to one or more
Transfers
shall not operate as a waiver of Landlord's rights to approve
any
subsequent Transfers. If Landlord withholds its consent to any
Transfer
contrary to the provisions of this Section 11, Tenant's sole remedy
shall
be to seek an
injunction in equity to compel performance by Landlord to
give
its consent and Tenant expressly waives any right to damages in
the
event of such withholding by Landlord of its consent. In no event
shall any
Transfer or Permitted Transfer release or relieve Tenant from
any
obligation under this Lease or any liability hereunder.
B. If Tenant requests Landlord's consent to a Transfer, Tenant
shall
submit to Landlord (i) financial statements for the proposed
transferee,
(ii)
a copy of the proposed assignment or sublease, and (iii) such
other
information as Landlord may reasonably request. After Landlord's
receipt of
the
required information and documentation, Landlord shall either.
(1)
consent or reasonably refuse consent to the Transfer in writing;
(2) in the
event of a proposed assignment of this Lease, terminate this
Lease
effective the first to occur of ninety (90) days following written
notice
of
such termination or the date that the proposed Transfer would have
come
into
effect; and (3) in the event of a proposed subletting, terminate
this
Lease with respect to the portion of the Premises which Tenant
proposes to
sublease effective the first to occur of ninety (90) days following
written
notice of such termination or the date the proposed Transfer would
have
come
into effect. Tenant shall pay Landlord a review fee of $1,000.00
for
Landlord's review of any Permitted Transfer or proposed Transfer.
In
addition, Tenant shall reimburse Landlord for its actual reasonable
costs
and
expenses (including, without limitation, reasonable attorney's
fees)
incurred by Landlord in connection with Landlord's review of such
proposed
Transfer or Permitted Transfer.
C. Tenant shall pay to Landlord fifty percent (50%) of all cash
and
other consideration which Tenant receives as a result of a Transfer
that is
in
excess of the rent payable to Landlord hereunder for the portion of
the
Premises and Lease Term covered by the Transfer within ten (10)
days
following receipt thereof by Tenant.
D. Except as provided below with respect to a Permitted Transfer,
if
Tenant is a corporation, limited liability company, partnership or
similar
entity, and the person, persons or entity which owns or controls a
majority
of
the voting interests at the time
10
<PAGE>
changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or
control shall
constitute a Transfer. The foregoing shall not apply so long as
Tenant is
an
entity whose outstanding stock is listed on a nationally
recognized
security exchange, or if at least eighty percent (80%) of its
voting stock
is
owned by another entity, the voting stock of which is so
listed.
E. Tenant may assign its entire interest under this Lease or
sublet
the
Premises (i) to any entity controlling or controlled by or under
common
control with Tenant or (ii) to any successor to Tenant by purchase,
merger,
consolidation or reorganization (hereinafter, collectively,
referred to as
"PERMITTED TRANSFER") without the consent of Landlord, provided:
(1) Tenant
is
not in default under this Lease; (2) if such proposed transferee is
a
successor to Tenant by purchase, said proposed transferee shall
acquire all
or
substantially all of the stock or assets of Tenant's business or,
if
such
proposed transferee is a successor to Tenant by merger,
consolidation
or
reorganization, the continuing or surviving entity shall own all
or
substantially all of the assets of Tenant; (3) with respect to a
Permitted
Transfer to a proposed
transferee described in clause (ii), such proposed
transferee shall have a net worth which is at least equal to the
greater of
Tenant's net worth at the date of this Lease or Tenant's net worth
as of
the
day prior to the proposed purchase, merger, consolidation or
reorganization as evidenced to Landlord's reasonable satisfaction;
and (4)
Tenant shall give Landlord written notice at least thirty (30) days
prior
to
the effective date of the proposed purchase, merger, consolidation
or
reorganization.
12.
Mechanic's Liens. Tenant will not permit any mechanic's liens or
other
liens to be placed upon the Property. If a lien is attached to the
Property,
then, in addition to any other right or remedy of Landlord,
Landlord may, but
shall not be obligated to, discharge the same. Any amount paid by
Landlord for
any of the aforesaid purposes including, but not limited to,
reasonable
attorneys' fees, shall be paid by Tenant to Landlord within thirty
(30) days
after demand as Additional Rent. Tenant shall within ten (10) days
of receiving
such notice of lien or claim have such lien or claim released of
record.
Tenant's failure to comply with the provisions of the foregoing
sentence shall
be deemed an Event of Default entitling Landlord to exercise all of
its remedies
therefor without the requirement of any additional notice or cure
period.
13.
INSURANCE.
A. Landlord shall, at all times during the Lease Term, procure
and
maintain: (i) policies of insurance covering loss or damage to the
Property
in
an amount equal to the full replacement cost of the Building,
including
leasehold improvements in the Premises, which shall provide
protection
against loss by fire and other all-risk casualties including
earthquake and
flood and such other property insurance as may be required by
Landlord's
mortgagee or as otherwise desired by Landlord, and (ii) commercial
general
liability insurance applicable to the Building and the Common
Areas,
providing a minimum limit of $3,000,000.00 per occurrence.
B. Tenant shall procure and maintain, at its expense, (i)
all-risk
(special form) property insurance in an amount equal to the
full
replacement cost of Tenant's Property
11
<PAGE>
located in the Premises; (ii) a policy or policies of general
liability and
umbrella or excess liability insurance applying to Tenant's
operations and
use
of the Premises, providing a minimum limit of $3,000,000.00 per
occurrence and in the aggregate, naming Landlord and Landlord's
Building
manager as additional insureds, (iii) automobile liability
insurance
covering owned, non-owned and hired vehicles in an amount not less
than a
combined single limit of $1,000,000.00 per accident, and (iv)
workers'
compensation insurance in accordance with the laws of the State in
which
the
Property is located and employer's liability insurance in an amount
not
less
than $1,000,000.00 each accident, $1,000,000.00 disease-each
employee
and
policy limit, with the insurance policies required under this
clause
(iv)
to be endorsed to waive the insurance carriers' right of
subrogation.
Tenant shall maintain the foregoing insurance coverages in
effect
commencing on the earlier to occur of the Commencement Date and the
date
Tenant takes possession of the Premises, and continuing to the end
of the
Lease Term.
C. The insurance requirements set forth in this Section 13 are
independent of the waiver, indemnification, and other obligations
under
this
Lease and will not be construed or interpreted in any way to
restrict,
limit or modify the waiver, indemnification and other obligations
or to in
any
way limit any party's liability under this Lease. In addition to
the
requirements set forth in Sections 13 and 14, the insurance
required of
Tenant under this Lease must be issued by an insurance company with
a
rating of no less than A-VIII in the current Best's Insurance Guide
or that
is
otherwise acceptable to Landlord, and admitted to engage in the
business
of
insurance in the state in which the Building is located; be
primary
insurance for all claims under it and provide that any insurance
carried by
Landlord, Landlord's Building manager, and Landlord's lenders is
strictly
excess, secondary and noncontributing with any insurance carried by
Tenant;
and
provide that insurance may not be cancelled, nonrenewed or the
subject
of
change in coverage of available limits of coverage, except upon
thirty
(30)
days' prior written notice to Landlord and Landlord's lenders.
Tenant
will
deliver to Landlord a legally enforceable certificate of insurance
on
all
policies procured by Tenant in compliance with Tenant's
obligations
under this Lease on or before the date Tenant first occupies any
portion of
the
Premises, at least ten (10) days before the expiration date of
any
policy and upon the renewal of any policy. Landlord shall have the
right to
approve all deductibles and self-insured retentions under
Tenant's
policies, which approval shall not be unreasonably withheld,
conditioned or
delayed.
D. Neither Landlord nor Tenant shall be liable (by way of
subrogation
or
otherwise) to the other party (or to any insurance company insuring
the
other party) for any loss or damage to any of the property of
Landlord or
Tenant, as the case may be, with respect to their respective
property, the
Building, the Property or the Premises or any addition or
improvements
thereto, or any contents therein, to the extent covered by
insurance
carried or required to be carried by a party hereto even though
such loss
might have been occasioned by the negligence or willful acts or
omissions
of
the Landlord or Tenant or their respective employees, agents,
contractors or invitees. Landlord and Tenant shall give each
insurance
company which issues policies of insurance, with respect to the
items
covered by this waiver, written notice of the terms of this mutual
waiver,
and
shall have such insurance policies properly endorsed, if necessary,
to
prevent the invalidation of any of the coverage provided by such
insurance
policies by reason of
12
<PAGE>
such
mutual waiver. For the purpose of the foregoing waiver, the amount
of
any
deductible applicable to any loss or damage shall be deemed covered
by,
and
recoverable by the insured under the insurance policy to which
such
deductible relates.
14.
INDEMNITY. To the extent not expressly prohibited by law, Landlord
and
Tenant each (in either case, the "INDEMNITOR") agree to hold
harmless and
indemnify the other and the other's agents, partners, shareholders,
members,
officers, directors, beneficiaries and employees (collectively,
the
"INDEMNITEES") from any losses, damages, judgments, claims,
expenses, costs and
liabilities imposed upon or incurred by or asserted against the
Indemnitees,
including without limitation reasonable attorneys' fees and
expenses, for claims
by a third party for death or injury to, or damage to property of,
third
parties, other than the Indemnitees, that may arise from the
negligence or
willful misconduct of Indemnitor or any of Indemnitor's agents,
members,
partners or employees. Such third parties shall not be deemed third
party
beneficiaries of this Lease. If any action, suit or proceeding is
brought
against any of the Indemnitees by reason of the negligence or
willful misconduct
of Indemnitor or any of Indemnitor's agents, members, partners or
employees,
then Indemnitor will, at Indemnitor's expense and at the option of
said
Indemnitees, by counsel reasonably approved by said Indemnitees,
resist and
defend such action, suit or proceeding. In addition, to the extent
not expressly
prohibited by law, Tenant agrees to hold harmless and indemnify
Landlord and
Landlord's Indemnitees from any losses, damages, judgments, claims,
expenses,
costs and liabilities imposed upon or incurred by or asserted
against Landlord
or Landlord's Indemnitees, including reasonable attorneys' fees and
expenses,
for claims by a third party for death or injury to, or damage to
property of,
third parties (other than Landlord's Indemnitees) that may arise
from any act or
occurrence in the Premises, except to the extent caused by the
negligence or
willful misconduct of Landlord or Landlord's Indemnitees. Landlord
shall
indemnify, defend and hold Tenant harmless from and against any
claims, damages,
costs and expenses arising out of any environmental contamination
or clean-up
required for the Building or the land on which the Building is
located or
violation of any law, rule or regulation by Landlord, except if due
to the acts
of Tenant.
15.
DAMAGES FROM CERTAIN CAUSES. To the extent not expressly prohibited
by
law, Landlord shall not be liable to Tenant or Tenant's employees,
contractors,
agents, invitees or customers, for any injury to person or damage
to property
sustained by Tenant or any such party or any other person claiming
through
Tenant resulting from any accident or occurrence in the Premises or
any other
portion of the Building caused by the Premises or any other portion
of the
Building becoming out of repair or by defect in or failure of
equipment, pipes,
or wiring, or by broken glass, or by the backing up of drains, or
by gas, water,
steam, electricity, or oil leaking, escaping or flowing into the
Premises
(except where due to Landlord's grossly negligent or willful
failure to make
repairs required to be made pursuant to other provisions of this
Lease, after
the expiration of a reasonable time after written notice to
Landlord of the need
for such repairs), nor shall Landlord be liable to Tenant for any
loss or damage
that may be occasioned by or through the acts or omissions of other
tenants of
the Building or of any other persons whomsoever, including, but not
limited to
riot, strike, insurrection, war, court order, requisition, order of
any
governmental body or authority, acts of God, fire or theft.
16.
CASUALTY DAMAGE. If the Premises or any part thereof shall be
damaged
by fire or
13
<PAGE>
other casualty, Tenant shall give prompt written notice thereof to
Landlord. In
case the Building shall be so damaged that substantial alteration
or
reconstruction of the Building shall, in Landlord's sole opinion,
be required
(whether or not the Premises shall have been damaged by such
casualty) or in the
event there is less than one (1) year of the Lease Term remaining
or in the
event Landlord's mortgagee should require that the insurance
proceeds payable as
a result of a casualty be applied to the payment of the mortgage
debt or in the
event of any material uninsured loss to the Building, Landlord may,
at its
option, terminate this Lease by notifying Tenant in writing of such
termination
within ninety (90) days after the date of such casualty. If
Landlord does not
thus elect to terminate this Lease, Landlord shall commence and
proceed with
reasonable diligence to restore the Building, and the improvements
located
within the Premises to substantially the same condition in which it
was
immediately prior to the happening of the casualty. Notwithstanding
the
foregoing, Landlord's obligation to restore the Building, and the
improvements
located within the Premises shall not require Landlord to expend
for such repair
and restoration work more than the insurance proceeds actually
received by
Landlord as a result of the casualty. When the repairs described in
the
preceding two sentences have been completed by Landlord, Tenant
shall complete
the restoration of all furniture, fixtures and equipment which are
necessary to
permit Tenant's reoccupancy of the Premises. Landlord shall not be
liable for
any inconvenience or annoyance to Tenant or injury to the business
of Tenant
resulting in any way from such damage or the repair thereof, except
that Rent
shall be abated from the date of the damage or destruction for any
portion of
the Premises that is unusable by Tenant, which abatement shall be
in the same
proportion that the Rentable Area of the Premises which is unusable
by Tenant
bears to the total Rentable Area of the Premises; provided that
Tenant shall not
be entitled to any abatement of Rent if the damage or destruction
within the
Premises is restored within five (5) Business Days after Landlord's
receipt of
written notice from Tenant of the occurrence of the damage or
destruction.
17.
CONDEMNATION. If the whole or any substantial part of the Premises
or
if the Building or any portion thereof which would leave the
remainder of the
Building unsuitable for use comparable to its use on the
Commencement Date, or
if the land on which the Building is located or any material
portion thereof,
shall be taken or condemned for any public or quasi-public use
under
governmental law, ordinance or regulation, or by right of eminent
domain, or by
private purchase in lieu thereof, then Landlord may, at its option,
terminate
this Lease and Rent shall be abated during the unexpired portion of
this Lease,
effective when the physical taking of said Premises or said portion
of the
Building or land shall occur. If this Lease is not terminated, the
rent for any
portion of the Premises so taken or condemned shall be abated
during the
unexpired Lease Term effective when the physical taking of said
portion of the
Premises shall occur. All compensation awarded for any taking or
condemnation,
or sale proceeds in lieu thereof, shall be the property of
Landlord, and Tenant
shall have no claim thereto, the same being hereby expressly waived
by Tenant,
except for any portions of such award or proceeds which are
specifically
allocated by the condemning or purchasing party for the taking of
or damage to
trade fixtures of Tenant and moving costs, which Tenant
specifically reserves to
itself.
18.
EVENTS OF DEFAULT. The following events shall be deemed to be
"EVENTS
OF DEFAULT" under this Lease: (i) Tenant fails to pay any Rent when
due;
provided that the first (1st) such failure during any consecutive
twelve (12)
month period during the Term shall not be
14
<PAGE>
an Event of Default if Tenant pays the amount due within five (5)
days after
Tenant's receipt of written notice from Landlord that such payment
was not made
when due, (ii) Tenant fails to perform any other provision of this
Lease not
described in this Section 18, and such failure is not cured within
thirty (30)
days (or immediately if the failure involves a hazardous condition)
after notice
from Landlord, however, other than with respect to a hazardous
condition, if
Tenant's failure to comply cannot reasonably be cured within thirty
(30) days,
Tenant shall be allowed additional time (not to exceed thirty (30)
additional
days) as is reasonably necessary to cure the failure so long as
Tenant begins
the cure within thirty (30) days and diligently pursues the cure to
completion;
(iii) Tenant fails to observe or perform any of the covenants with
respect to
(a) assignment and subletting as set forth in Section 11, and such
failure is
not cured within ten (10) days after notice from Landlord, (b)
mechanic's liens
as set forth in Section 12, and such failure is not cured within
time periods
provided therein, (c) insurance as set forth in Section 13, and
such failure is
not cured within time periods provided therein, or (d) delivering
subordination
agreements or estoppel certificates as set forth in Section 24, and
such failure
is not cured within time periods provided therein; (iv) the
leasehold in
