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