|
Exhibit
10.1
OFFICE
LEASE
by and
between
10 – 30 SOUTH
WACKER, L.P.
(“ Landlord
”)
and
CHICAGO MERCANTILE
EXCHANGE INC.
(“ Tenant
”)
Dated as of
August 24, 2007
TABLE OF
CONTENTS
|
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| 1. |
|
BASIC
LEASE PROVISIONS |
|
1 |
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| 2. |
|
PROJECT |
|
4 |
|
|
|
| 3. |
|
TERM |
|
7 |
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| 4. |
|
RENT |
|
9 |
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|
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| 5. |
|
USE AND
OCCUPANCY |
|
23 |
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| 6. |
|
SERVICES & UTILITIES |
|
25 |
|
|
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| 7. |
|
REPAIRS |
|
32 |
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|
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| 8. |
|
ALTERATIONS |
|
33 |
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|
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| 9. |
|
INSURANCE |
|
37 |
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| 10. |
|
DAMAGE OR
DESTRUCTION |
|
39 |
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| 11. |
|
INDEMNITY |
|
41 |
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| 12. |
|
CONDEMNATION |
|
45 |
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| 13. |
|
TENANT
TRANSFERS |
|
46 |
|
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| 14. |
|
LANDLORD
TRANSFERS |
|
52 |
|
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| 15. |
|
DEFAULT
AND REMEDIES |
|
54 |
|
|
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| 16. |
|
MISCELLANEOUS |
|
62 |
|
|
|
| 17. |
|
OPTION TO
EXTEND THE TERM |
|
70 |
|
|
|
| 18. |
|
CONTRACTION OPTIONS |
|
72 |
|
|
|
| 19. |
|
SWING
SPACE |
|
75 |
|
|
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| 20. |
|
PARKING |
|
75 |
|
|
|
| 21. |
|
RIGHT OF
FIRST OFFER |
|
76 |
|
|
|
| 22. |
|
TENANT’S RIGHT TO CLEAN THE PREMISES |
|
79 |
|
|
|
| 23. |
|
GENERATOR |
|
80 |
|
|
|
| 24. |
|
STORAGE SPACES |
|
81 |
- i -
|
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| 25. |
|
STAIRWELL USE |
|
81 |
|
|
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| 26. |
|
DEVELOPMENT INCENTIVES |
|
82 |
|
|
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| 27. |
|
ROOFTOP
COMMUNICATIONS EQUIPMENT |
|
82 |
|
|
|
| 28. |
|
COUNTERPARTS |
|
84 |
|
|
|
| 29. |
|
INFORMATION KIOSK |
|
84 |
|
|
|
| 30. |
|
INTENTIONALLY OMITTED |
|
84 |
|
|
|
| 31. |
|
EXISTING
LEASES |
|
84 |
|
|
|
| 32. |
|
CONSTRUCTION ALLOWANCE |
|
85 |
|
|
|
| 33. |
|
LANDLORD’S WORK |
|
87 |
|
|
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| 34. |
|
RENT
CREDIT |
|
89 |
- ii -
EXHIBITS
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| EXHIBIT A-l |
|
Legal
Description -10 South Wacker Building |
|
|
| EXHIBIT A-2 |
|
Legal
Description - 20 South Wacker Building |
|
|
| EXHIBIT A-3 |
|
Legal
Description - 30 South Wacker Building |
|
|
| EXHIBIT B-l |
|
Office Space
– Scheme F-l |
|
|
| EXHIBIT B-2 |
|
Office Space
– Scheme F-2 |
|
|
| EXHIBIT B-3 |
|
Fixed Term
Support Space |
|
|
| EXHIBIT B-4 |
|
Secured
Access Space |
|
|
| EXHIBIT B-5 |
|
Non Fixed
Term Storage Space |
|
|
| EXHIBIT C-l |
|
Rent
Schedule – Scheme F-l |
|
|
| EXHIBIT C-2 |
|
Rent
Schedule – Scheme F-2 |
|
|
| EXHIBIT D |
|
Rules and
Regulations |
|
|
| EXHIBIT E |
|
Landlord’s Work and Dates for Substantial
Completion |
|
|
| EXHIBIT F |
|
Janitorial
Specifications |
|
|
| EXHIBIT G |
|
RSF, USF,
and Tenant’s Share |
|
|
| EXHIBIT H |
|
Exclusive
Freight Elevator |
|
|
| EXHIBIT I |
|
Form of
Subordination, Non-disturbance and Attornment Agreement |
|
|
| EXHIBIT J |
|
Form of
Memorandum of Lease |
|
|
| EXHIBIT K |
|
Vertical
Transportation |
|
|
| EXHIBIT L |
|
Additional
Security Services |
|
|
| EXHIBIT M |
|
Tenant’s New HVAC Equipment and Generator |
|
|
| EXHIBIT N |
|
Electrical
Meters |
|
|
| EXHIBIT O |
|
CME Rooftop
Telecommunications Space |
|
|
| EXHIBIT P |
|
HVAC
Specifications and Rates |
|
|
| EXHIBIT Q |
|
Visitor’s Center Signage |
|
|
| EXHIBIT R |
|
Exterior
Monument Signage and Retail Directory Monument Signage
Locations |
- iii -
INDEX OF DEFINED
TERMS
|
|
|
|
10 South Wacker Building
|
|
1 |
|
1st Extension Term
|
|
70 |
|
20 South Wacker Building
|
|
1 |
|
20 South Wacker HVAC System
|
|
28 |
|
2nd Extension Term
|
|
70 |
|
30 South Wacker Building
|
|
1 |
|
Additional Exterior Building
Signage
|
|
64 |
|
Additional Insured
|
|
37 |
|
Additional Rent
|
|
10 |
|
Adverse Event
|
|
70 |
|
Affiliates
|
|
43 |
|
Alterations
|
|
33 |
|
Amended Support Space
Supplement
|
|
86 |
|
Amortization Rate
|
|
17 |
|
Antenna Site
|
|
83 |
|
Antennas
|
|
83 |
|
Asbestos Delay
|
|
59 |
|
Audit Claim
|
|
21 |
|
Audit Notice
|
|
20 |
|
Audit Right
|
|
20 |
|
Available for leasing
|
|
77 |
|
Available ROFO Area
|
|
77 |
|
Base Building
|
|
4 |
|
Base Rent
|
|
2 |
|
Bathroom Work
|
|
88 |
|
Billing Address
|
|
3 |
|
BOMA Standard
|
|
2 |
|
Brokers
|
|
3 |
|
Building
|
|
1 |
|
Building Standard
|
|
7 |
|
Building Structure
|
|
4 |
|
Business Hours
|
|
3 |
|
Capital Items
|
|
13 |
|
Claims
|
|
42 |
|
CME
|
|
63 |
|
Code
|
|
27 |
|
Common Areas
|
|
4 |
|
Comparable Market
|
|
73 |
|
Construction Allowance
|
|
3 |
|
Contraction Notice
|
|
73 |
|
Contraction Payment
|
|
73 |
|
Contraction Right
|
|
73 |
|
Contraction Space
|
|
73 |
|
Cost-Saving Expenses
|
|
12 |
|
Current Leases
|
|
86 |
|
Declaration
|
|
53 |
|
Default
|
|
54 |
|
Default Rate
|
|
58 |
|
Delivery Condition
|
|
10 |
|
Delivery Deadline
|
|
9 |
|
Design Problem
|
|
34 |
|
Desk Space User
|
|
46 |
|
Determination Date
|
|
71 |
|
Determination Notice
|
|
71 |
|
Dining Facility
|
|
23 |
|
Emergency Repairs
|
|
61 |
|
Enforcement Costs
|
|
57 |
|
Estimated Additional Rent
|
|
18 |
|
Exclusive Freight Elevator
|
|
7 |
|
Execution Date
|
|
1 |
|
Existing 20 South Lease
|
|
85 |
|
Existing Lease
|
|
85 |
|
Expenses
|
|
11 |
|
Expiration Date
|
|
2 |
|
Extension Option
|
|
70 |
|
Extension Term
|
|
70 |
|
Exterior Building Signage
|
|
63 |
|
Exterior Building Signage
Threshold
|
|
63 |
|
Fair Market Rent
|
|
57 |
|
First Offer Right
|
|
77 |
|
Force Majeure
|
|
59 |
|
Fuels
|
|
81 |
|
Generator
|
|
81 |
|
Generator Space
|
|
81 |
|
Ground Floor Retail Signage
|
|
64 |
|
Hazardous Materials
|
|
25 |
|
Holdover
|
|
8 |
|
HVAC
|
|
26 |
|
HVAC Connection Work
|
|
28 |
|
Indemnified Party Notice
|
|
44 |
|
Initial Construction
Allowance
|
|
3 |
|
Initial Premises
|
|
1 |
|
Interruption of Landlord Provided
Services
|
|
31 |
|
Interruption Period Estimate
|
|
40 |
|
Kiosk
|
|
85 |
|
Land
|
|
4 |
|
Landlord
|
|
1 |
|
Landlord Provided Services
|
|
31 |
|
Landlord’s Damages
|
|
57 |
|
Later Tenant Work
|
|
86 |
|
Lease
|
|
1 |
|
Leasehold Improvements
|
|
5 |
|
Lessor
|
|
52 |
|
Liability Limit
|
|
3 |
|
Mandated Expenses
|
|
12 |
|
Market Rent
|
|
72 |
|
Material Non-monetary Default
|
|
69 |
|
Maximum Connected Load
|
|
27 |
|
Mechanical Systems
|
|
4 |
|
Month
|
|
8 |
|
Mortgage
|
|
52 |
|
Mortgagee
|
|
52 |
|
New Lease Date
|
|
8 |
|
Non-Disturbance Agreement
|
|
53 |
- iv -
|
|
|
|
Non-Fixed Term Storage Space
|
|
4 |
|
Notice
|
|
63 |
|
Notice Addresses
|
|
3 |
|
Notice of Repair or Lack of
Service
|
|
60 |
|
Objection
|
|
18 |
|
Offer Notice
|
|
78 |
|
Offer Period
|
|
78 |
|
Office Space
|
|
1 |
|
Operator
|
|
76 |
|
Option Cancellation Notice
|
|
79 |
|
Outside Offer Date
|
|
79 |
|
Permitted Sublease
|
|
48 |
|
Permitted Transferee
|
|
47 |
|
Plans
|
|
33 |
|
Premises
|
|
1 |
|
Primary Use
|
|
23 |
|
Prime Rate
|
|
17 |
|
Privileges
|
|
76 |
|
Prohibited Signage Entity
|
|
64 |
|
Project
|
|
4 |
|
Qualified Arbitrator
|
|
71 |
|
Qualified Audit Arbitrator
|
|
22 |
|
Reasonable attorneys’
fees
|
|
57 |
|
Refrigerated Waste Facility
|
|
26 |
|
Reletting Expenses
|
|
58 |
|
Relocation Date
|
|
5 |
|
Remainder Rent
|
|
57 |
|
Rent
|
|
19 |
|
Repair Estimate
|
|
40 |
|
Repair Estimate Period
|
|
40 |
|
Repossession Expenses
|
|
58 |
|
Required Removal Items
|
|
8 |
|
Reserved Tonnage
|
|
28 |
|
ROFO Area
|
|
77 |
|
ROFO Area Availability Date
|
|
78 |
|
ROFO Area Commencement Date
|
|
79 |
|
Roof
|
|
83 |
|
RSF
|
|
1 |
|
Rules and Regulations
|
|
1 |
|
Scheduled Commencement Date
|
|
2 |
|
Scheduled Term
|
|
2 |
|
Second Construction Allowance
|
|
3 |
|
Secured Access Space
|
|
1 |
|
Secured Access Space Interior
Signage
|
|
66 |
|
Secured Areas
|
|
33 |
|
Security Deposit
|
|
3 |
|
Self Help Notice
|
|
61 |
|
Self Help Rights
|
|
59 |
|
Set Off Notice
|
|
62 |
|
Standard Services
|
|
25 |
|
Storage Space
|
|
82 |
|
Storage Space Agreement
|
|
4 |
|
Substantial Completion
|
|
10 |
|
Superior Lease
|
|
52 |
|
Supplemental HVAC System
|
|
28 |
|
Swing Space
|
|
75 |
|
Swing Space Additional
Charges
|
|
76 |
|
Swing Space Return Date
|
|
76 |
|
Taking
|
|
45 |
|
Tank
|
|
82 |
|
Taxes
|
|
10 |
|
Telecommunication Services
|
|
30 |
|
Tenant
|
|
1 |
|
Tenant Delay
|
|
10 |
|
Tenant Exclusive Telecom
Closets
|
|
5 |
|
Tenant Provided Services
|
|
31 |
|
Tenant’s Auditor
|
|
20 |
|
Tenant’s Personal
Property
|
|
7 |
|
Tenant’s Share
|
|
2 |
|
Tenant’s Wiring
|
|
31 |
|
Tenant’s Work
|
|
33 |
|
Term
|
|
8 |
|
Third-Party Exterior Building
Signage
|
|
64 |
|
Trading Termination Date
|
|
28 |
|
Transaction Costs
|
|
51 |
|
Transfer
|
|
46 |
|
Unamortized Contraction Cost
|
|
73 |
|
Untenantable
|
|
31 |
|
Use
|
|
2 |
|
USF
|
|
1 |
|
Visitor’s Center
|
|
5 |
|
Visitor’s Center
Signage
|
|
65 |
|
Voiding Notice
|
|
40 |
- v -
LEASE
Landlord and Tenant enter
this Lease (“ Lease ”) as of the Execution Date
on the following terms, covenants, conditions and
provisions:
| 1. |
BASIC LEASE PROVISIONS |
1.1. Basic Lease
Definitions. In this Lease, the following defined terms have
the meanings indicated.
|
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| (a) |
|
Execution Date: |
|
Dated as of
August 24, 2007 |
|
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|
| (b) |
|
Landlord: |
|
10 –
30 South Wacker, L.P., a Delaware limited partnership |
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| (c) |
|
Tenant: |
|
Chicago
Mercantile Exchange Inc., a Delaware corporation. |
|
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| (d) |
|
Building: |
|
“
Building ” means, collectively, the 10 South Wacker
Building, the 20 South Wacker Building, and the 30 South Wacker
building. |
|
|
|
|
|
|
|
“
10 South Wacker Building ” means the office tower and
related improvements commonly known as 10 South Wacker Drive,
Chicago, Illinois. The real estate occupied by the 10 South Wacker
Building is legally described on Exhibit A-1 . |
|
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|
|
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|
|
“
20 South Wacker Building ” means the trading floor box
and related improvements commonly known as 20 South Wacker Drive,
Chicago, Illinois. The real estate (air rights) occupied by the 20
South Wacker Building is (are) legally described on Exhibit
A-2 . |
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“
30 South Wacker Building ” means the office tower and
related improvements (including the Secured Access Space and retail
concourse and the upper lobby level space) commonly known as 30
South Wacker Drive, Chicago, Illinois. The real estate occupied by
the 30 South Wacker Building is legally described on Exhibit
A-3 . |
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| (e) |
|
Premises: |
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|
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Prior to December 1, 2008: |
|
The premises
in the Building consisting of both the “Premises” (as
defined in the Existing Lease), the “demised premises”
(as defined in the Existing 20 South Lease), together with the
Fixed Term Support Space depicted on Exhibit B-3 and the
other “Support Space” (as defined in the Amended
Support Space Supplement) which is not otherwise shown on
Exhibit B-3 or B-5 (collectively, the “
Initial Premises ”). |
|
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|
|
|
From and
after December 1, 2008: |
|
The premises
described in Exhibit B-1 (Scheme F-1) or Exhibit B-2
(Scheme F-2), as Tenant may elect pursuant to Section 2.5 .
In either case the Premises will consist of the office space
(“ Office Space ”) depicted on the applicable
exhibit, as well as the Secured Access Space (“ Secured
Access Space ”) depicted on Exhibit B-4 and Fixed
Term Support Space (as described on Exhibit B-3
). |
|
|
|
| (f) |
|
Rentable
Square Feet (“ RSF ”) / Usable Square Feet
(“ USF ”): |
|
If Tenant
elects Scheme F-1 pursuant to Section 2.5 , the Office Space
(as described on Exhibit B-1 ) is agreed to be 292,136 RSF;
and the aggregate Secured Access Space (as described on Exhibit
B-4 ) and Fixed Term Support Space (as described on Exhibit
B-3 ) is agreed to be 65,746 USF. |
|
|
|
|
|
|
|
If Tenant
elects Scheme F-2 pursuant to Section 2.5 , the Office Space
(as described on Exhibit B-2 ) is agreed to be 376,795 RSF;
and the aggregate Secured Access Space (as described on Exhibit
B-4 ), and Fixed Term Support |
- 1 -
|
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|
Space (as
described on Exhibit B-3 ) is agreed to be 65,746
USF. |
|
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|
|
The parties
agree that the RSF and USF amounts set forth above and elsewhere in
this Lease, including Exhibit G , have been agreed upon and
were the basis upon which the rents, allowances and other terms set
forth herein were negotiated. Consequently, the parties agree to
use such amounts for all purposes set forth in this Lease even if
an erroneous calculation of the applicable RSF or USF of any
portion of the Premises or the Building is discovered after the
Execution Date. |
|
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|
|
The RSF of
any ROFO Area leased by Tenant shall be based upon the floor areas
set forth on Exhibit G with the measurement of partial
floors calculated in accordance with the ANSI/BOMA Z65.1-1996
Standard Method of Measurement as adopted by BOMA (“ BOMA
Standard ”). |
|
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|
Notwithstanding the foregoing to the contrary, prior to
December 1, 2008, the USF and RSF, as applicable, of the Initial
Premises, shall be as set forth in the Current Leases. |
|
|
|
| (g) |
|
Use: |
|
As set forth
in Section 5.1 . |
|
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| (h) |
|
Term: |
|
Commencing
on the Scheduled Commencement Date and expiring on November 30,
2022 (“ Expiration Date ”), subject to extension
of the Expiration Date pursuant to Article 17 . |
|
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| (i) |
|
Scheduled
Commencement Date: |
|
The
Execution Date. |
|
|
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| (j) |
|
Base
Rent: |
|
The Base
Rent with respect to the Initial Premises during the period
commencing on the Execution Date and ending on November 30, 2008,
shall be the sum of the “Base Rent” (as defined in the
Existing Lease) due under the Existing Lease with respect to such
period, plus the “Base Rent” and “Additional
Rent” (as both terms are defined in Sections 1, 2.A and 2.C
of the Existing 20 South Lease) due under the Existing 20 South
Lease with respect to such period. From and after December 1, 2008,
the Base Rent shall be the amounts set forth on Exhibit C-1
(if Tenant elects, or is deemed to have elected, Scheme F-1) or
Exhibit C-2 (if Tenant elects Scheme F-2). |
|
|
|
| (k) |
|
Tenant’s Share: |
|
|
|
|
|
|
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|
|
|
Scheme
|
|
Tenant’s Share of the
10 South Wacker Building
|
|
|
Tenant’s Share of the 20 Wacker
Building and the 30 South
Wacker Building |
|
|
Scheme F-1:
|
|
10.3080 |
% |
|
15.0520 |
% |
|
Scheme F-2:
|
|
12.5780 |
% |
|
20.0055 |
% |
|
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|
Exhibit
G sets forth Tenant’s Share on a floor-by-floor basis.
Tenant and Landlord agree that for purposes of allocating the Taxes
and the Expenses of the Building, the Taxes and the Expenses
attributable to the 20 South Wacker Building and the 30 South
Wacker Building shall be combined into a single Taxes amount and a
single Expenses amount for the two Buildings, and the Taxes and the
Expenses attributable to each of the 10 South Wacker Building (and
Tenant’s Share thereof), and the combined 20 South Wacker
Building and the 30 South Wacker Building (and Tenant’s Share
thereof), will be calculated separately and without double
counting. |
|
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|
|
Notwithstanding the foregoing to the contrary, during the
period commencing on the Execution Date and ending November 30,
2008, the Tenant’s Share of each of the 10 South Wacker
Building, the 20 South Wacker Building and the 30 South Wacker
Building shall be as set forth in the Existing Lease and the
Existing 20 South Lease, as applicable. |
- 2 -
|
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|
| (l) |
|
Parking
Allotment: |
|
60 spaces,
subject to Article 20 . |
|
|
|
| (m) |
|
Security
Deposit: |
|
None |
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Notice
Addresses: |
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For each
party, the following addresses: |
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To Landlord:
10 – 30 South Wacker,
L.P.
c/o Tishman Speyer
45 Rockefeller Plaza
New York, New York 10111
Attn: Director of Management
With a copy of all notices to each
of:
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To Tenant:
Chicago Mercantile Exchange
Inc.
20 South Wacker Drive
Chicago, IL 60606
Attn: Chief Financial Officer
With a copy of all notices to each
of:
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General Counsel, at above
address
10 – 30 South Wacker,
L.P.
10 South Wacker Drive
Chicago, IL 60606
Attn: Building Manager
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General Counsel, at above
address
Treasurer, at above address
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Holly Duran Real Estate
Partners
10 South Wacker Drive, Suite
1965
Chicago, IL 60606
Attn: Holly Duran
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Billing
Address: |
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Billing
Address for Tenant: |
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Chicago Mercantile Exchange
Inc.
20 South Wacker Drive
Chicago, IL 60606
Attn: Treasurer
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Broker: |
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Holly Duran
Real Estate Partners LLC (for Tenant). Broker will be paid by
Landlord in accordance with a separate agreement. |
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Liability
Limit: |
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$10,000,000.00 for any one accident or occurrence. |
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Business
Hours: |
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From 6:00
a.m. to 7:00 p.m. on Mondays through Fridays, and from 7:00 a.m. to
2:00 p.m. on Saturdays, excepting: New Year’s Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day (collectively, “Holidays ”). |
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Construction
Allowance: |
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On the
Execution Date, the sum of $62.75 per RSF of the Premises
(exclusive of Secured Access Space and Fixed Term Support Space),
subject to the terms of Article 32 (being $18,331,534.00 for
Scheme F-1 or $23,643,886.25 for Scheme F-2, plus, in either case,
$300,000.00 (collectively, the “ Initial Construction
Allowance ”). |
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In addition,
on December 1, 2018, the additional sum of $15.50 per RSF of the
Premises described in Scheme F-1 or Scheme F-2, as Tenant may elect
pursuant to Section 2.5 , which is then leased by Tenant
pursuant to this Lease (exclusive of Secured Access Space and Fixed
Term Support Space) (the “ Second Construction
Allowance ”). |
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Non-Fixed
Term Storage Space: |
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Although not
part of the Premises, reference is made to the storage spaces
described on Exhibit B-5 (the “ Non-Fixed Term
Storage Space ”). Tenant’s rights and
Landlord’s obligations with respect to the Non-Fixed Term
Storage Space shall be as set forth in that certain Storage Space
Agreement, dated as of the Execution Date, between Landlord and
Tenant, as said agreement may be amended from time to time (the
“ Storage Space Agreement ”). |
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Landlord’s Work |
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The
Leasehold Improvements, Mechanical Systems, and other improvements
described on Exhibit E . |
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2.1. Project . “
Project ” means, collectively, the Land, the Building
(including the parking garage in the Building (the “
Parking Facilities ”) and the Common Areas), and all
plazas, sidewalks, and curbs adjacent thereto.
2.2. Land . “
Land ” means the real property (including air rights)
more particularly described on Exhibits A-1 , A-2 ,
and A-3 , including easements and other rights that benefit
or encumber such real property.
2.3. Base Building .
“ Base Building ” means the Building Structure
and the Mechanical Systems, collectively, defined as
follows:
(a) Building Structure
. “ Building Structure ” means the structural
components in the Building, including foundations, floor and
ceiling slabs, roofs, exterior walls, exterior glass and mullions,
columns, beams, shafts, and emergency stairwells. The Building
Structure excludes the Leasehold Improvements (and the leasehold
improvements to other tenant premises in the Building, whether or
not occupied or leased) and the Mechanical Systems.
(b) Mechanical Systems
. “ Mechanical Systems ” means the base building
systems generally serving the Building, including the sprinkler,
plumbing, HVAC, electrical, metering, lighting, communications,
security, drainage, sewage, waste disposal, vertical transportation
(other than the Exclusive Freight Elevator), and fire/life safety
systems, in each case up to the point of distribution of such
system in the Premises and other leasable areas of the Building.
“ Mechanical Systems ” shall also include
(i) the black iron ductwork serving the kitchen spaces which
exist on the Execution Date in the Premises, and (ii) the VAV
boxes that are part of the HVAC system (including those VAV boxes
located in the Premises).
2.4. Common Areas;
Access . (a) Tenant and its employees and invitees shall
have access to the Premises (including the Fixed Term Support
Space) 24 hours per day, 7 days per week. Tenant and its employees
and invitees shall have a non-exclusive right to use the Common
Areas subject to the terms of this Lease. “ Common
Areas ” means those interior and exterior common and
public areas on the Land and in the Building designated by Landlord
for the non-exclusive use by Tenant in common with Landlord, other
tenants and occupants of the Building, and their employees, agents
and invitees, but shall in any event include the emergency stairs
and stairwells, the lobbies (excluding the Secured Access Space),
all passenger and freight elevators (other than the Exclusive
Freight Elevator) serving the Premises, and all washrooms, common
hallways and elevator lobbies on multi-tenant floors.
(b) Landlord and Tenant
acknowledge that, prior to the date that the entrance to
Tenant’s visitors center (the “ Visitor’s
Center ”) is to be relocated from the 30 South Wacker
Building to the 20 South Wacker Building (which relocation date
shall be mutually and reasonably agreed upon between Landlord and
Tenant, but in no event shall such relocation occur later than
June 30, 2008 (the “ Relocation Date ”)),
the Secured Access Space is demised in
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such a manner that a freight
elevator and a janitor closet on the lower lobby level can only be
accessed through the Secured Access Space. Notwithstanding anything
to the contrary in this Lease, Landlord and its employees, agents
and contractors shall have the right to enter the Secured Access
Space at all reasonable times for the purpose of using such freight
elevator and janitor closet (excluding periods during which special
events are occurring ( provided , that (i) Tenant shall
deliver notice to Landlord at least 5 business days prior to such
special event and (ii) such access to said freight elevator
and janitor closet through the Secured Access space would
unreasonably interfere with the special event in question), absent
an emergency). However, Tenant may require an employee of Tenant or
its security service to accompany Landlord’s personnel (or
its agents or contractors) while in the Premises, provided ,
that Tenant has made such employee available to Landlord when
Landlord’s personnel (or Landlord’s agents or
contractors) desire to use such freight elevator or janitor closet.
From and after the Relocation Date, such freight elevator and
janitor closet shall be accessible through the Common Areas, and
this Section 2.4(b ) shall be of no further force or
effect.
(c) To the extent reasonably
required by Tenant, Tenant shall have access to areas within the
Building but outside of the Premises in which Landlord has
permitted Tenant to install equipment, wiring, piping, conduit,
cabling, or ductwork at reasonable times upon reasonable notice to
Landlord, and Landlord shall have the right to require, as a
condition to such access, that Tenant (or Tenant’s employee,
contractor, or other representative) at all times be accompanied by
a representative of Landlord (and/or, at Landlord’s
discretion, a representative of a third party riser management
company retained by Landlord) who Landlord shall make available
upon reasonable notice. Notwithstanding the foregoing, but subject
to Section 6.4(b) , Tenant shall have such access
without accompaniment to the telecommunications closets (and the
riser to which they provide access) in the 10 South Wacker Building
which are, as of the Execution Date, exclusively for Tenant’s
use for Tenant’s telecommunications cabling, conduit, and
wiring, and related equipment (“ Tenant Exclusive Telecom
Closets ”).
2.5. Premises . On or
before January 31, 2008, time being of the essence, Tenant
shall elect the Premises which shall be the subject of this Lease
from and after December 1, 2008. Tenant shall make such
election, electing only Scheme F-1 (as set forth on Exhibit
B-1) or Scheme F-2 (as set forth on Exhibit B-2) by
giving to Landlord written notice. If Tenant does not timely make
such election, then Tenant shall be deemed to have elected Scheme
F-1.
(a) Leasehold
Improvements . The Premises includes the Leasehold
Improvements. “ Leasehold Improvements ” means
all improvements in or serving the Premises that are not Building
Structure or Mechanical Systems. The Leasehold Improvements may
exist in the Premises as of the Execution Date, or be installed by
Landlord or Tenant under this Lease at the cost of either party,
including, but not limited to Landlord’s Work. The Leasehold
Improvements include: (1) interior walls and partitions
(including those surrounding structural columns entirely or partly
within the Premises); (2) the interior one-half of demising
walls; (3) the interior drywall on exterior structural walls;
(4) stairways and stairwells, if any, installed by or on
behalf of Tenant within the Premises; (5) the frames,
casements, doors, windows and openings installed in or on the
improvements described in clauses (1) through
(4) , or that provide entry/exit to/from the Premises;
(6) all hardware, fixtures, cabinetry, railings, paneling,
woodwork and finishes in the Premises or that are installed in or
on the improvements described in clauses (1) through
(5) ; (7) the Exclusive Freight Elevator;
(8) integrated ceiling systems
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(including grid, panels and
lighting); (9) carpeting and other floor finishes;
(10) kitchen, rest room, lavatory or other similar facilities
that are within and exclusively serve the Premises (including
plumbing fixtures, toilets, sinks and built-in appliances); and
(11) the distribution of the Mechanical Systems from the
common point of distribution for each system to and throughout the
Premises. Notwithstanding the foregoing, the Leasehold Improvements
shall in no event include any portion of the Building Structure or
the Mechanical Systems, whether or not located in the
Premises.
(b) Exclusions from the
Premises . The Premises shall not include: (1) any areas
above the finished ceiling or integrated ceiling systems, or below
the finished floor coverings that are not part of the Leasehold
Improvements; (2) janitor’s closets (which serve a
multi-tenant floor); (3) stairways and stairwells to be used
for emergency exiting or as Common Areas; (4) rooms for
connection of electrical and/or telecommunication equipment on
multi-tenant floors; (5) vertical transportation shafts (or
anything therein); (6) vertical shafts, risers, chases, flues
or ducts; and (7) any easements or rights to natural light,
air or view. Without limiting the foregoing, neither the RSF of the
Premises nor the USF of the Secured Access Space shall include (for
purposes of calculating Base Rent or Additional Rent) the low-rise
elevator lobby of the adjacent corridor space in the 30 South
Wacker Building, even though such space may be accessible from the
Premises only.
(c) Tenant Access to
Certain Facilities . Notwithstanding what is set forth in this
Lease, Tenant shall have non-exclusive access to the areas between
the ceiling of the Premises and the slab of the next higher floor
without Landlord’s prior consent to the extent that Leasehold
Improvements, including without limitation telecommunications
cabling, are located there. Landlord shall not make any
installations in such areas that would materially interfere with
any Leasehold Improvements located therein. In addition, Tenant
acknowledges that its use of dedicated rooms for connection of
electrical and/or telecommunications equipment on full floors of
the Premises is non-exclusive (except for Tenant Exclusive Telecom
Closets in the 10 South Wacker Building), that Tenant’s
installations in such rooms shall not exceed a reasonable portion
of the total space available in each such room (provided such
reasonable portion shall not be less than the current space
allotted Tenant as of the Execution Date), and that Landlord shall
have the right to install equipment or permit third-party providers
to install equipment, including, without limitation,
telecommunications cabling, in the remaining portion of such rooms.
Landlord and Tenant shall cooperate to ensure that none of the
installations made by (or at the direction of) either of Landlord
or Tenant in such rooms shall prevent the use of, or reasonable
access to, the installations made in such rooms by (or at the
direction of) the other party.
(d) Keys . Tenant
shall have the right to make (or have made for it) all locks and
keys, key or proximity cards or other access devices for any or all
points of entry into the Premises or within the Premises. Tenant
shall provide Landlord with a complete set of such keys, key or
proximity cards, or other access devices. On or prior to
June 1, 2008, Landlord shall cause the Building access and
security systems to be made compatible with Tenant’s keycard
system so Tenant’s employees may use their Tenant-issued key
cards for access to both of the Building and the Premises. Tenant
shall reasonably cooperate with Landlord to enable Landlord to
comply with the obligation set forth in the foregoing
sentence.
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(e) Exclusive Freight
Elevator . During the Term, Tenant shall have the exclusive
right to use the freight elevator located in the 30 South Wacker
Building and identified on Exhibit H (the “
Exclusive Freight Elevator ”), provided that Landlord
shall have the right to use the Exclusive Freight Elevator (in
cooperation with Tenant’s exclusive use of same), upon notice
(which notice may be oral to Tenant’s facility personnel) to
Tenant and subject to Tenant’s reasonable approval. Pursuant
to the terms and limitations of Sections 9.1(d) ,
11.3(b)(1) and 11.3(b)(2) , Landlord shall indemnify
and defend and hold Tenant harmless from and against Claims arising
from Landlord’s use of the Exclusive Freight Elevator under
this Section 2.5(e) . Tenant, at Tenant’s
expense, shall operate, maintain, repair, and replace the Exclusive
Freight Elevator, which obligation shall include, without
limitation, (1) providing any necessary personnel to operate
the Exclusive Freight Elevator, (2) entering into a service
contract in form and with a vendor reasonably acceptable to
Landlord that provides for the regular maintenance the Exclusive
Freight Elevator, (3) paying the cost of all of the electric
current consumed by the operation of the Exclusive Freight
Elevator, and (4) performing any repair, restoration, or
replacement required as a result of a casualty affecting the
Exclusive Freight Elevator.
2.6. Building Standard
. “ Building Standard ” means the general type
or quality of materials Landlord reasonably designates for use in
the Building from time to time, which shall be of no lesser quality
than those materials used in similar first class office buildings
in downtown Chicago.
2.7. Tenant’s
Personal Property . “ Tenant’s Personal
Property ” means Tenant’s trade fixtures,
furnishings, equipment, work product, inventory, stock-in-trade and
other personal property of Tenant that are not permanently affixed
to the Premises.
3.1. Delivery of
Premises . The parties acknowledge that as of the Execution
Date, Tenant occupies all of the Premises (excluding the area
currently used for escalators and other purposes that is part of
Landlord’s Work to convert to space which Tenant may occupy
for the conduct of Tenant’s business as contemplated herein)
pursuant to the Current Leases (as defined in Article 31 ).
Therefore, Tenant shall accept possession of the Premises on the
Scheduled Commencement Date in its then “as is”
condition, subject to the completion of Landlord’s Work in
accordance with the provisions of this Lease. Except for
Landlord’s Work, Landlord has no obligation to perform any
work, supply any materials, incur any expense, or make any
alterations or improvements to prepare the Premises for
Tenant’s occupancy; provided , that nothing in this
sentence shall negate Landlord’s obligations expressly set
forth elsewhere in this Lease.
3.2. Term . “
Term ” means the period that begins on the Scheduled
Commencement Date and ends on the Expiration Date, subject to
renewal or extension as provided in Article 17 or earlier
termination as provided in this Lease (including Article 18)
or at law. “ Month ” means a full calendar month
of the Term.
3.3. Holdover . If
Tenant keeps possession of any portion of the Premises after the
Expiration Date (or earlier termination of this Lease), without
Landlord’s prior written consent (a “ Holdover
”), which may be withheld in Landlord’s sole
discretion, then in addition to the
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remedies available elsewhere under this
Lease or at law, Tenant shall be a tenant-at-sufferance and must
comply with all of Tenant’s obligations under this Lease,
except that for each Month of any Holdover, Tenant shall pay 150%
for the first 30 days and 200% thereafter of the Rent payable for
the last Month of the Term with respect to the entire Premises (or
that would have been payable but for abatement or excuse), without
proration for any partial Month of Holdover. If Landlord signs a
lease with another Tenant for any portion of the Premises subject
to a Holdover and gives to Tenant notice of the execution of such
lease and of the date Landlord requires the Premises in order to
meet the obligations of such lease (“ New Lease Date
”), Tenant shall indemnify and defend and hold Landlord
harmless from and against all Claims that Landlord suffers due to
the Holdover of such portion of the Premises for more than 30 days
after Landlord gives to Tenant such notice or 30 days after the
Expiration Date or earlier termination of this Lease, whichever is
later. Landlord’s deposit of any of Tenant’s Rent
payments during any Holdover will not constitute Landlord’s
consent to such Holdover, or create or renew any
tenancy.
3.4. Condition on
Expiration .
(a) Return of the
Premises . At the end of the Term, Tenant will return
possession of the Premises to Landlord vacant, free of
Tenant’s Personal Property, in broom - clean condition, and
with all Leasehold Improvements in good condition and repair,
excepting ordinary wear and tear, damage by fire or other casualty
or condemnation that is not Tenant’s obligation to restore
under Articles 10 or 12 (and excepting normal,
minimal damage from removal of trade fixtures). In addition, Tenant
shall remove (and restore the Premises damaged by removal of) all
of the Required Removal Items. Notwithstanding any provision hereof
to the contrary, Tenant shall not be required to remove
(1) any of the Leasehold Improvements existing prior to the
Execution Date and (2) any other Alterations other than the
Required Removal Items. “ Required Removal Items
” means Alterations made after the Execution Date
(i) consisting of internal stairwells, floor cuts, floor
coring, vaults (other than the electric utility vaults) or
structural steel, (ii) that have altered the exterior curtain
wall, facade or exterior windows of the Building, including without
limitation by the installation of ventilation louvers (which must
be removed and the curtain wall restored), (iii) that consist
of (A) executive bathrooms, (B) bathrooms, shower rooms,
and locker rooms installed to service any fitness center in the
Premises, (C) kitchen improvements for commercial food
preparation service or cafeteria operations (including
commercial-style sinks, disposals, grease traps, built-in
refrigeration, hoods and venting, but excluding pantries, lunch and
breakout rooms with microwave cooking only or the use of caterers
in same with warming facilities that do not require venting and
excluding any Alterations within or serving the existing Club area
on the upper lobby level space), and (D) UPS or battery
back-up systems, or (iv) that Landlord required in writing to
be removed (or reserved the right to so require (in which case
Tenant shall request Landlord’s final determination with
respect to such items by giving to Landlord notice at least 30 but
not more than 60 days prior to the Expiration Date (or within 10
days of any earlier termination of this Lease)) at the time of
approval of the installation of same or for which Tenant failed to
obtain Landlord’s written consent, if required, under
Section 8.1(a) . In no event shall the Required Removal
Items include any wiring or cabling or any item of Landlord’s
Work.
(b) Correction by
Landlord . If Tenant fails to return possession of the Premises
to Landlord in the condition required under
Section 3.4(a) , then Tenant shall reimburse
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Landlord for 110% of the
actual and reasonable out of pocket costs incurred by Landlord to
restore the Premises to the condition required under
Section 3.4(a) .
(c) Abandoned Property
. Tenant’s Personal Property left behind in the Premises
after the end of the Term (and any period of Holdover pursuant to
Section 3.3 ) shall be considered abandoned. Landlord
may move, store, retain or dispose of such Personal Property and
Tenant shall reimburse Landlord for 110% of the reasonable cost
incurred by Landlord in connection therewith.
4.1. Base Rent .
(a) Tenant shall pay Base Rent in advance, in equal Monthly
installments, commencing (subject to the provisions of
Section 4.1(b)) on the Scheduled Commencement Date, and
on the first day of each Month thereafter during the Term;
provided , that if the first day of a Month is not a
business day then Base Rent shall be due on the first business day
of such Month. Base Rent for any partial Month shall be
prorated.
(b) If Landlord’s Work
with respect to any particular floor of the Premises in any of the
10 South Wacker Building, the 20 South Wacker Building, or the 30
South Wacker Building has not been Substantially Completed on or
before the date (each, a “ Delivery Deadline ”)
that is 75 days (as such 75-day period may be extended by reason of
Tenant Delay and/or Force Majeure delay affecting Landlord’s
Work on such floor) after the date set forth in Exhibit E
for Substantial Completion of such floor, then, as Tenant’s
sole and exclusive remedy therefor (except as set forth in
Sections 15.9 , 15.10 , 15.11 , and 19
), the Base Rent (and the Additional Rent under
Section 4.2) attributable to such floor shall be abated
by (i) one day for each day after the applicable Delivery
Deadline that Landlord’s Work with respect to such floor has
not been Substantially Completed, for up to 75 days, and
(ii) two days for each day from and after the 76th day after
the applicable Delivery Deadline that Landlord’s Work with
respect to such floor has not been Substantially Completed. For
purposes of this Section 4.1(b) , the portion of
Landlord’s Work consisting of the replacement of the Building
facade on the 20 South Wacker Building shall be deemed to be part
of Landlord’s Work applicable to (and only to) the third
floor in the 20 South Wacker Building (unless Tenant elects Scheme
F-2 pursuant to Section 2.5 , or is otherwise leasing
the seventh floor of the 20 South Wacker Building, in which case
such work shall also be deemed to be part of Landlord’s Work
applicable to the seventh floor in the 20 South Wacker Building).
Notwithstanding anything to the contrary contained in this
Section 4.1(b) , Tenant shall not be entitled to an
abatement of the Base Rent or the Additional Rent under this
Section 4.1(b) in respect of any particular floor of
the Premises in any particular Building if Tenant has taken
possession of such floor (whether for the performance of
Tenant’s Work, for the conduct of business or otherwise).
“ Tenant Delay ” means any delay that Landlord
may encounter in the performance of Landlord’s obligations
under this Lease by reason of any act or omission of any nature of
Tenant, its agents or contractors, including, without limitation,
delays due to changes in or additions to Landlord’s Work
requested by Tenant, delays by Tenant in submission of information
or giving authorizations or approvals, delays due to the
postponement of any of Landlord’s Work at the request of
Tenant, or delays due to Tenant’s failure to surrender any
space to Landlord in a timely manner and in the Delivery Condition
required for Landlord to commence Landlord’s Work in such
space (whether such delays are within or outside of the space in
question). Tenant shall pay to Landlord any actual
incremental
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out-of-pocket costs or
expenses incurred by Landlord by reason of any Tenant Delay.
“ Substantial Completion ” (and with correlative
meaning, “ Substantially Complete ” and “
Substantially Completed ”) of Landlord’s Work
means that Landlord’s Work shall have been substantially
completed other than minor construction and finishing details that
would not materially interfere with the performance of
Tenant’s Work or the conduct of Tenant’s business in
the space in question. “ Delivery Condition ”
means Tenant’s removal, at its sole cost and expense, of any
and all furniture, moveable personal property, equipment
(including, without limitation, computers) and other moveable items
from all offices and other areas of the floor in question (other
than such items located in or about the third floor (and if
applicable, seventh floor) of the 20 South Wacker Building; it
being understood that all such items left by Tenant in or about the
Premises may be demolished and/or removed by Landlord as part of
Landlord’s Work without any liability to Tenant
therefor).
4.2. Additional Rent .
Tenant’s obligation to pay Taxes and Expenses under this
Section 4.2 is referred to in this Lease as “
Additional Rent ”.
(a) Taxes . For each
full or partial calendar year during the Term, Tenant shall pay, in
the manner described below, Tenant’s Share of Taxes
attributable to each of the 10 South Wacker Building and the
combined 20 South Wacker Building and the 30 South Wacker Building,
each based upon Tenant’s Share thereof, without double
counting. “ Taxes ” means the total costs
incurred by Landlord for: (1) real property taxes and
assessments (including ad valorem and special assessments) levied
on the Project and Landlord’s personal property used in
connection with the Project; (2) taxes, if any, on
Landlord’s personal property used in the Project (but not the
Illinois personal property replacement income tax); (3) taxes,
assessments or fees in lieu of the taxes described in clauses
(1) and (2) of this sentence including, without
limitation, (A) a tax, assessment, levy, imposition, or charge
based on the income or rents received from the Project whether or
not wholly or partially as a capital levy or otherwise, (B) a
tax, assessment, levy, imposition, or charge measured by or based
in whole or in part upon all or any portion of the Project and
imposed upon Landlord, (C) a license fee measured by the rents
due at the Project, or (D) any other tax, assessment, levy,
imposition, charge, or license fee however described or imposed,
including business improvement district impositions; and
(4) the reasonable costs incurred to reduce the taxes
described in clauses (1) and (2) of this
sentence; less (5) Taxes billed to retail tenants of the
Project. The amount of Taxes attributable to any calendar year of
the Term shall be in the amount of Taxes accrued for such year (for
example, real property taxes for tax year 2008 will be accrued in
calendar year 2008 and will be paid in calendar year 2009). In the
case of special Taxes or assessments which may be paid by Landlord
in installments without incurring interest, only the amount of each
required installment accrued for a calendar year shall be included
in Taxes. Landlord shall use commercially reasonable efforts to
maintain the real estate taxes applicable to the Project at a level
consistent with the real estate taxes of other first class office
buildings in the downtown Chicago area (including contesting any
assessment of the Project for real estate tax purposes if Landlord
determines, in Landlord’s sole discretion, that such contest
is in the best interest of the Project). If Landlord contests any
assessment of the Project for real estate tax purposes, then all
costs of such contest shall be included in Taxes. Tenant shall
receive a credit against Rent due for Tenant’s Share of any
refund of Taxes, net of expenses incurred in connection with
obtaining such credit that have not been previously included in
Taxes, applicable to the Term. Taxes exclude federal, state and
local income taxes and capital stock, franchise, inheritance,
transfer, gift or estate taxes and taxes
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paid under
Section 4.3 . Taxes shall not include tax penalties
incurred as a result of Landlord’s failure to make payments
and/or to file any tax or informational returns when due, except
that Taxes shall include (i) interest that may accrue during
the pendency of any good faith contest of Taxes and
(ii) interest and penalties that arise in whole or in part
from Tenant’s failure or unwillingness to timely comply with
the terms of this Lease (which amounts described in this clause
(ii) shall be reimbursable 100% by Tenant). The benefit
of any tax exemption or tax abatement relating to all or any
portion of the Project that is attributable to a particular tenant
(other than Tenant) shall accrue solely to the benefit of Landlord
and Taxes shall be computed without taking into account any such
exemption or abatement. If a tax exemption or tax abatement accrues
to the benefit of Landlord relating to all or any portion of the
Project and is attributable to Tenant, then Tenant shall receive a
credit for the amount of such exemption or abatement, but Taxes
shall be computed without taking into account such credit. Tenant
shall be responsible for any applicable occupancy or rent tax now
in effect or hereafter enacted and, if such tax is payable by
Landlord, Tenant shall promptly pay such amounts to Landlord, upon
Landlord’s demand. Tenant shall be obligated to pay
Tenant’s Share of Taxes regardless of whether Tenant may be
exempt from the payment of any Taxes as the result of any
reduction, abatement, or exemption from Taxes granted or agreed to
by any governmental or quasi-governmental entity, or by reason of
Tenant’s diplomatic or other tax exempt status.
(b) Expenses . For
each full or partial calendar year during the Term, Tenant shall
pay, in the manner described below, Tenant’s Share of
Expenses attributable to each of the 10 South Wacker Building and
the combined 20 South Wacker Building and the 30 South Wacker
Building, each based upon Tenant’s Share thereof, without
double counting. “ Expenses ” means the total
costs (except as set forth in Section 4.2(b)(2) )
incurred by Landlord (determined on an accrual basis) to operate,
manage, administer, equip, secure, protect, repair, replace,
refurbish, clean, maintain, decorate and inspect the Project,
including a market fee to manage the Project of not more than 3% of
the gross revenue of the Project, less all Expenses billed to
retail tenants in the Project. If either of the 10 South Wacker
Building or the combined 20 South Wacker Building and the 30 South
Wacker Building is less than 95% occupied and operating, or if
Landlord is not furnishing a particular service otherwise
includable in Expenses to any tenant of the Building, Expenses
attributable to such building(s) which vary with occupancy, or
which are not being provided, will be calculated as if such
building(s) is (are) 95% occupied and operating and, subject to
Article 22 , all such services are provided to all
tenants.
(1) Expenses include, without
limitation:
(A) Subject to Article
22 and Section 6.3(a) , Standard Services provided
under Section 6.1 ;
(B) Repairs and maintenance,
including that performed under Section 7.2 ;
(C) Insurance maintained
under Section 9.2 (including deductibles to the extent not
in excess of those carried by prudent landlords of first class
office buildings in downtown Chicago);
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(D) Wages, salaries and
benefits of personnel, including an allocable portion thereof for
any personnel rendering services to the Project and to other
properties of Landlord or Landlord’s Affiliates;
(E) Costs of operating the
Project management office (including reasonable rent);
(F) Amortization installments
of the following Capital Items in the manner set forth in
Section 4.2(c) ;
(i) To comply with insurance
requirements or laws enacted, promulgated or amended (to the extent
such amendment reasonably requires the Capital Item in question) or
which first becomes effective (or the obligation to comply first
arises) on or after the Execution Date (“ Mandated
Expenses ”);
(ii) That are reasonably
calculated, based on reasonable engineering or other applicable
studies, to reduce other Expenses or the rate of increase in other
Expenses (“ Cost-Saving Expenses ”);
(G) All costs and expenses of
any nature incurred by Landlord with respect to the Refrigerated
Waste Facility including, without limitation, all costs and
expenses of operation, carting, repair, maintenance, betterment,
and replacement thereof; and
(H) All costs and expenses of
any nature incurred by Landlord with respect to the Parking
Facilities (including driveways in and out of same), whether or not
of a capital nature, and including all costs and expenses of
operation, repair, maintenance, betterment, and replacement
thereof; provided , that Landlord deducts from Expenses the
revenues associated with the Parking Facilities.
(2) Notwithstanding the
foregoing, Expenses exclude:
(A) Taxes;
(B) Interest, principal,
points, and fees on debts or amortization on any mortgage or
mortgages or any other debt instrument encumbering the Building or
otherwise incurred by Landlord (except as expressly permitted in
Sections 4.2(b)(1)(F) and 4.2(b)(2)(E) );
(C) Marketing costs
including, without limitation, leasing commissions,
attorneys’ fees in connection with the negotiation and
preparation of letters, deal memos, letters of intent, leases,
subleases and/or lease assignments, space planning costs, and other
costs and expenses incurred in connection with leases, subleases
and/or lease assignment negotiations, and similar transactions with
Tenant or present or prospective tenants or other occupants of the
Building; and the costs of constructing, operating, or maintaining
any leasing office located at the Project (but the ancillary use of
a Building management office for leasing purposes shall not
disqualify the costs of such management office from inclusion in
Expenses);
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(D) Costs billed to or
reimbursed by insurance proceeds or tenants of the Building (other
than as Additional Rent);
(E) Depreciation,
amortization, and interest payments, except as specifically
provided herein and except on materials, tools, supplies, and
vendor-type equipment purchased by Landlord to enable Landlord to
supply services Landlord is obligated to provide under this Lease
and otherwise contract for with a third party, and when
depreciation or amortization is permitted or required, the item
shall be amortized over its reasonably anticipated useful life
together with interest at the Amortization Rate; provided ,
that such depreciation, amortization and interest shall not exceed
the amount Landlord would reasonably expect to pay if Landlord
contracted on a market-rate basis with a third party for such
services;
(F) Costs required to be
capitalized (“ Capital Items ”) in accordance
with generally accepted accounting principles, consistently applied
(“ GAAP ”), except as permitted in Sections
4.2(b)(1)(F) and 4.2(b)(2)(E) ;
(G) Collection costs and
legal fees paid in disputes with tenants;
(H) Intentionally
Omitted;
(I) Any ground lease rental
(other than amounts which constitute a reimbursement to the ground
lessor for items which would have been included in Expenses under
this Lease if the same were paid directly by Landlord, which
amounts may be included by Landlord in Expenses so long as there is
no duplication of other amounts included therein);
(J) Rentals for items (except
when needed in connection with normal repairs and maintenance of
Mechanical Systems or with keeping Mechanical Systems in operation
while such repairs are being made) that if purchased, rather than
rented, would constitute a Capital Item that is specifically
excluded in Section 4.2(b)(2)(F) above (excluding,
however, equipment not affixed to the Building which is used in
providing janitorial or similar services);
(K) Costs incurred by
Landlord for the repair of damage to the Building to the extent
that Landlord is or would expect to, if Landlord carried valid and
collectible insurance as required by Section 9.2(a) ,
be reimbursed by insurance proceeds that are in excess of the
deductibles carried by prudent landlords of first class office
buildings in downtown Chicago, and costs of all capital repairs,
replacement or restorations (except those allowed under
Section 4.2(b)(1)(F) above), resulting from a casualty
regardless of whether covered by insurance;
(L) Costs, including permit,
license and inspection costs, incurred with respect to the
installation of Tenant or other occupants’ improvements in
the Building or incurred in renovating or otherwise improving,
decorating, painting, or redecorating vacant space for tenants or
other occupants of the Building;
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(M) Expenses in connection
with services or other benefits of a type which are not offered to
Tenant or for which Tenant is charged directly;
(N) Salaries and benefits,
including taxes and insurance, for all employees above the level of
General Manager of the Building, and the portion of such salaries
and benefits for any employees who render services to the Project
and to other properties of Landlord or Landlord’s Affiliates
which is allocable to such other properties;
(O) Costs that would not have
been incurred by Landlord but for the violation by Landlord or any
tenant of the terms and conditions of any lease of space in the
Building, and penalties and interest for non-payment or late
payment of items otherwise included in Expenses, and costs that
would not have been incurred by Landlord but for the violation by
Landlord (or its agents or contractors) of any contract, judgment
or law;
(P) Overhead and profit
increment paid to Landlord or to Affiliates of Landlord for goods
and/or services in or to the Building to the extent the same exceed
the costs of such goods and/or services rendered by unaffiliated
third parties on a competitive basis;
(Q) Intentionally
Omitted;
(R) Any compensation paid to
clerks, attendants, or other persons in commercial concessions
operated by Landlord;
(S) Intentionally
Omitted;
(T) Advertising and
promotional expenditures and costs of signs in or on the Building
identifying tenants of the Building or Landlord but excepting
(i) any Building newsletter or seasonal/holiday decorations
and (ii) any exterior signs identifying the owner of the
Building placed in or around the exterior of and the entrances to
the Building (including, without limitation, the revolving door
decals identifying the owner of the Building and any lettering or
signs identifying the address of the Building);
(U) The cost of any electric
power used by any tenant in the Building in excess of the Building
standard amount, or electric power costs for which any tenant
directly contracts with the local public service company or of
which any tenant is separately metered or submetered and is billed
by Landlord directly;
(V) Intentionally
Omitted;
(W) Tax penalties incurred as
a result of Landlord’s failure to make payments and/or to
file any tax or informational returns when due;
(X) Costs arising from the
gross negligence and/or willful misconduct of Landlord;
(Y) Landlord’s
charitable or political contributions;
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(Z) Intentionally
Omitted;
(AA) Costs of acquisition of
sculpture, paintings or other objects of fine art;
(BB) Costs associated with
the operation of the business of the entity which constitutes
Landlord as distinguished from the costs of operation of the
Building; for example, costs of entity accounting and legal
matters, costs of prosecuting or defending any claims or lawsuits
by or against any mortgagee or ground lessor, or costs of selling,
syndicating, financing, mortgaging or hypothecating any of
Landlord’s interest in the Building, costs of any disputes
between Landlord and its employees, costs of any disputes between
Landlord and Building management or any owner of Landlord, or
outside fees paid in connection with disputes between Landlord and
other tenants;
(CC) Costs of any “tap
fees” or any sewer or water connection fees, in each case
solely for the benefit of any particular tenant in the
Building;
(DD) Costs incurred in
connection with any environmental cleanup, response action, or
remediation on, in, under, or about the Premises or the Building
(i) to the extent resulting from the actions of Landlord or
another tenant or (ii) that arise from the presence of
Hazardous Materials in or about the Premises or the Building,
(including, without limitation, Hazardous Materials in the ground
water or soil) prior to the Execution Date, including, without
limitation, costs and expenses associated with the defense,
administration, settlement, monitoring, or management thereof;
provided , that (1) there shall be included in Expenses
any such costs with respect to Hazardous Materials which are
cleaning supplies, maintenance supplies, or similar supplies used
in compliance with all laws in the ordinary course of operating and
maintaining the Building and customarily used at other first class
downtown Chicago office buildings, and (2) Tenant shall
reimburse Landlord for 100% of any such costs resulting from the
acts or omissions of Tenant or anyone claiming under or through
Tenant;
(EE) Any entertainment,
dining, or travel expenses for any purpose including, but not
limited to, tickets for sporting and theater events;
(FF) Any flowers (other than
flowers to decorate the Building lobby), gifts, balloons, etc.
provided to any entity whatsoever including, but not limited to,
Tenant, other tenants, employees, vendors, contractors, prospective
tenants and agents, and concierge services;
(GG) Any
“validated” parking for any entity;
(HH) Any “finders
fees” or brokerage commissions;
(II) Any
“above-standard” cleaning or trash collection, removal,
hauling, and dumping including, but not limited to, construction
cleanup or special cleanings associated with parties/events and
specific tenant requirements, in excess of services offered to
Tenant;
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(JJ) The cost of any
magazine, newspaper, trade periodical, or other similar
subscriptions;
(KK) Intentionally
Omitted;
(LL) The cost of any
“tenant relations” parties, events, or promotions not
consented to by an authorized representative of Tenant in
writing;
(MM) Reserves for bad debts
or other non-cash reserves or reserves deposited with any mortgage
lender;
(NN) Costs of installing,
operating, and maintaining any specialty improvement including, but
not limited to, a cafeteria or dining facility, an athletic or
recreational club, an observatory, or a broadcast
facility;
(OO) Cleaning/janitorial
expenses (other than to Common Areas) if Tenant exercises its
rights under Article 22 ;
(PP) Insurance for leasehold
improvements of any tenants or occupants of the Project (other than
that portion of Landlord’s general insurance for the Project
that incidentally covers the replacement of certain leasehold
improvements of tenants or occupants of the Project);
and
(QQ) If Landlord does not
elect to include in Expenses the revenues associated with the
Parking Facility, all costs and expenses of any nature incurred by
Landlord principally in connection with the Parking Facilities
(including driveways in and out of same), whether or not of a
capital nature, and including all costs and expenses of operation,
repair, maintenance, betterment, and replacement
thereof.
(c) Amortization and
Accounting Principles.
(1) Each item of Mandated
Expenses will be fully amortized in equal annual installments, with
interest on the principal balance at the Amortization Rate, over
the number of years that Landlord reasonably projects the item of
Mandated Expenses will be productive for its intended use, without
replacement, but properly repaired and maintained.
(2) Each item of Cost-Saving
Expenses will be charged to Expenses over the period Landlord
reasonably estimates that it will take for the savings in Expenses
achieved by such items to equal their cost together with interest
on the unamortized cost thereof at the Amortization Rate. Each
year, Landlord may charge to Expenses its reasonable estimate of
the savings realized for such year, plus interest on the
unamortized balance at the Amortization Rate, until such time as
the unamortized balance equals zero. In no event shall the amount
included in Expenses in any year for such Cost-Saving Expenses
(excluding interest) exceed the reasonably estimated annual savings
for such year from the installation of the related Capital
Item.
(3) Any item of Expenses of
significant cost that is not required to be capitalized but is
unexpected or does not typically recur may, in Landlord’s
discretion, be
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amortized in equal annual
installments, with interest on the principal balance at the
Amortization Rate, over a number of years determined by
Landlord.
(4) “ Amortization
Rate ” means the Prime Rate, or, if Landlord shall have
actually obtained financing for such alterations, repairs,
replacements, and/or improvements, the actual interest rate
incurred by Landlord in connection with such financing. “
Prime Rate ” means the then current rate of interest
as announced from time to time by Citibank N.A., or its successor
(or a comparable financial institution selected by Landlord) as its
prime rate.
(5) In determining Expenses,
Landlord shall use accounting principles consistent with those
customarily utilized to determine Expenses in other first class
office buildings in downtown Chicago, which accounting principles
shall be consistently applied from year to year.
(6) Intentionally
Omitted.
(7) If, on or before the
later of (A) the last day of the calendar year next succeeding
the calendar year to which any statement of the actual Additional
Rent pursuant to Section 4.2(e) applies and
(B) the 270th day after the date Landlord shall have given to
Tenant such statement, Landlord discovers an error in the
calculation of Expenses for such calendar year that would result in
a reduction of Tenant’s Share of Expenses for such calendar
year, Landlord shall recalculate Tenant’s Share of Expenses
for such calendar year and treat any overpayment by Tenant as an
overpayment of Estimated Additional Rent as to which Tenant shall
be entitled to a credit.
(d) Estimates .
Landlord shall reasonably estimate Additional Rent each calendar
year that Additional Rent may be payable. Such estimate may not
exceed 105% of the actual Additional Rent for the previous year
unless Landlord can reasonably demonstrate the necessity for such
additional increase in such estimate. Notwithstanding the foregoing
limit on the increase of such estimate, such limit is not a limit
or a “cap” on the actual amount of Expenses that Tenant
may owe under this Lease for any calendar year. Tenant shall pay
the estimated Additional Rent in advance, in equal monthly
installments together with Base Rent. Landlord may reasonably
revise Landlord’s estimate of Additional Rent (based upon
evidence of actual increases in Expenses beyond those originally
estimated) not more than once during any calendar year, and Tenant
shall pay the monthly installments of such revised estimated
Additional Rent, commencing on the first day of the month that is
at least 30 days after the date Landlord gives to Tenant notice of
such revision. Such revised monthly installments of estimated
Additional Rent shall include an adjustment factor to compensate
for any underpayment of revised estimated Additional Rent for the
calendar year prior to the revision. The aggregate estimates of
Additional Rent payable by Tenant in a calendar year is the “
Estimated Additional Rent ”.
(e) Settlement . As
soon as practicable after the end of each calendar year that
Additional Rent is payable (or, in the case of Taxes, as soon as
practicable after receipt of the bill therefor), Landlord shall
deliver to Tenant a statement of the actual Additional Rent for
such calendar year. The statement of actual Additional Rent shall
be binding and conclusive upon
- 17 -
Landlord and Tenant except
for any corrections to the statement made by Landlord on or before
the later of (1) the last day of the calendar year next
succeeding the calendar year to which such statement relates and
(2) the 270th day after the date Landlord shall have given to
Tenant such statement, and except for items that are Objections or
for which Tenant exercises its Audit Right; provided , that
Tenant’s exercise of its Objections and/or Audit Right will
not relieve Tenant from its obligation to pay all such actual
Additional Rent pending resolution of any Objection or any Audit.
If the actual Additional Rent exceeds the Estimated Additional Rent
for such calendar year, Tenant shall pay the difference to Landlord
in a lump sum as Rent within 30 days after receipt of
Landlord’s statement of actual Additional Rent. If the
Estimated Additional Rent paid by Tenant exceeds the actual
Additional Rent for such calendar year, then Landlord shall credit
the amount of the overpayment against Rent next due.
Landlord’s and Tenant’s obligations under this
Section 4.2(e) shall survive the expiration or earlier
termination of this Lease.
(f) Objections .
Tenant shall have the right, upon giving to Landlord written notice
not later than 120 days after Tenant’s receipt of
Landlord’s statement pursuant to Section 4.2(e)
(or any correction to said statement pursuant to
Section 4.2(e)) , to reasonably and in good faith
object to or to question items of Additional Rent (“
Objection ”); provided , that such notice
identifies the items objected to or questioned with reasonable
specificity. Landlord shall use commercially reasonable efforts to
provide a sufficiently detailed explanation to adequately address
Tenant’s Objection, but Landlord shall not be required to
allow Tenant to conduct an Audit or to provide such detailed
information as is normally included in connection with an Audit
unless Tenant has exercised its Audit Right.
(g) Secured Access,
Support and Storage Space . In no event shall any Additional
Rent under this Section 4.2 be due with respect to the
Secured Access Space or the Fixed Term Support Space, whether
during the initial Term or during any extension thereof pursuant to
Article 17 .
(h) No Reduction of Base
Rent . In no event shall any decrease in Expenses or Taxes
result in a reduction in the Base Rent payable under this Lease;
provided , that the foregoing shall not be construed to
diminish any right expressly set forth in this Lease that Tenant
may have to an offset or credit against Rent.
(i) Allocation of Expenses
and Taxes among the Buildings . Landlord shall separately
determine Expenses and Taxes for the 10 South Wacker Building and
for the combined 20 South Wacker Building and the 30 South Wacker
Building. If any Taxes or Expenses are imposed or incurred with
respect to both the 10 South Wacker Building and the other
Buildings (including the cost of a shared management office),
Landlord shall allocate the same in accordance with sound
accounting and management practices consistently
applied.
4.3. Other Taxes .
Upon demand, Tenant shall reimburse Landlord for taxes Landlord may
be required to pay (a) on Tenant’s Personal Property
(excluding the existing Illinois personal property replacement tax,
which is in the nature of an income tax), or (b) which are
enacted after the Execution Date in lieu of real estate taxes and
payable with respect to (1) Rent, (2) Tenant’s
occupancy of the Premises, or (3) this Lease. If Tenant cannot
lawfully reimburse Landlord for these taxes, then the Base Rent
will be increased to yield to Landlord the same amount after these
taxes were imposed as Landlord would have received before these
taxes were imposed.
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4.4. Terms of Payment
. “ Rent ” means all amounts payable by Tenant
under this Lease and the Exhibits attached hereto, including Base
Rent and Additional Rent. If a time for payment of an item of Rent
is not specified in this Lease, then Tenant shall pay such item of
Rent within 45 days after receipt of Landlord’s statement or
invoice therefor. Unless otherwise provided in this Lease, Tenant
shall pay Rent without notice, demand, deduction, abatement or
setoff, in lawful U.S. currency, by wire transfer of funds into any
lockbox account or accounts as designated by Landlord. Landlord
shall provide the information for such lockbox account(s) pursuant
to instructions separate from this Lease. Landlord shall send
invoices payable by Tenant to Tenant’s Billing Address;
however, neither Landlord’s failure to send an invoice nor
Tenant’s failure to receive an invoice for Base Rent (and
installments of Estimated Additional Rent) will relieve Tenant of
its obligation to timely pay Base Rent (and installments of
Estimated Additional Rent). Each partial payment by Tenant shall be
deemed a payment on account. No endorsement or statement on any
check or any accompanying letter shall constitute an accord and
satisfaction, affect Landlord’s right to collect the full
amount due, or require Landlord to apply any payment in any
particular manner other than to any item of outstanding Rent (or
other obligation due from Tenant to Landlord pursuant to this
Lease). No payment by Tenant to Landlord will be deemed to extend
the Term or render any notice, pending suit or judgment
ineffective. Upon 10 business days notice given to the other, each
of Landlord and Tenant may change its Billing Address. Any payment
made by Tenant to a lockbox maintained by Landlord for the
collection of Rent payments shall not be deemed to have been
accepted by Landlord if such payment is returned to Tenant within
10 days after Tenant gives to Landlord notice that such payment has
been received into such lockbox.
4.5. Financial
Statement . If at any time during the Term (as the same may be
extended), Tenant’s financial statements are not publicly
available to Landlord, then not more than once during each calendar
year during the Term (as the same may be extended), Landlord may
request from Tenant, and Tenant shall provide to Landlord within 10
business days of such request, Tenant’s financial statement
covering the most recent calendar or fiscal year for which such
statements are available, certified by a member of Tenant’s
senior financial management team to have been prepared in
accordance with GAAP (if a GAAP statement is available) except as
noted in such certification and without footnotes.
4.6. Audit Right .
Landlord shall maintain complete books and records of all Expenses
and Taxes (including reasonable back-up documentation) sufficient
for the conduct of an Audit. Each calendar year that Additional
Rent is payable by Tenant, Tenant may audit Landlord’s
calculation of Additional Rent for the previous calendar year only
on the following terms and conditions (“ Audit Right
”):
(a) Procedure for
Review .
(1) To exercise the Audit
Right for any calendar year, Tenant must notify Landlord in writing
of Tenant’s election to audit (“ Audit Notice
”) within the later of (A) 120 days after the date
Tenant received the annual statement of actual Additional
Rent
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relating to such calendar
year pursuant to Section 4.2(e) and (B) 30 days
after Tenant received Landlord’s explanation of all
Objections pursuant to Section 4.2(f) .
(2) The audit shall be
limited to those accounting records of Landlord that are directly
relevant and reasonably required to determine the Expenses and
Taxes for the calendar year that is the subject of the applicable
annual statement of actual Additional Rent only.
(3) The audit shall be
conducted at the Project or at Landlord’s corporate offices
located in the Chicago or New York metropolitan area and shall
commence at a time mutually convenient to Landlord and Tenant that
is within 30 days after Tenant delivers the Audit Notice to
Landlord. The Audit Right shall expire on the date which is 60 days
after Tenant or Tenant’s Auditor is provided with all
reasonably requested information necessary to complete the audit.
Tenant or Tenant’s Auditor may copy any of Landlord’s
books or records reasonably necessary for the efficient conduct of
such audit or the preservation of records, or reasonably useful in
the preparation of (and intended to be included with) the audit
report.
(4) Tenant may perform the
audit with Tenant’s own employees, or may engage (A) a
national public accounting firm, (B) a regional public
accounting firm that is reasonably acceptable to Landlord (with the
understanding that, as of the Execution Date, BDO Seidman and
Blackman Kallick are acceptable to Landlord), or (C) another
lease auditor that is acceptable to Landlord in its sole
discretion, to perform the audit (“ Tenant’s
Auditor ”). In addition, Tenant may submit a list of
prospective Tenant Auditors to Landlord for Landlord’s
approval hereunder. If Tenant commences an audit with its own
employees, Tenant shall have the right to thereafter engage an
outside Tenant’s Auditor, and such Tenant’s Auditor
shall have the right to commence and complete the audit within a
reasonable time not to exceed 30 days after such Tenant’s
Auditor commenced its work or the outside date set forth in
Section 4.6(a)(3) , whichever is later. In no event
shall Tenant engage Tenant’s Auditor on a contingency fee
basis or any other fee basis by which the compensation of
Tenant’s Auditor is based upon the amount credited by
Landlord to Tenant as a result of such audit.
(5) Before commencing any
review of Landlord’s books and records, Tenant and
Tenant’s Auditor must each agree in writing to keep
confidential and not to disclose to any other person or entity
Landlord’s books and records that are the subject of review
and any negotiation and settlement of any dispute that may arise
from the audit; provided , that Tenant may disclose the
information Tenant is required to keep confidential to the extent
reasonably required (A) by law or governmental regulation,
(B) in a court proceeding or arbitration to resolve any
dispute arising out of the audit, or (C) to Tenant’s
attorneys, accountants and other professionals related to the
performance of the audit or resolution of any dispute arising out
of the Audit who agree in writing to be bound by Tenant’s
confidentiality agreement.
(6) To make a claim for
refund of any overpayment of Additional Rent disclosed by the
audit, Tenant must notify Landlord in writing of the claim (
“Audit Claim ”) within 30 days after completion
of Tenant’s Auditor’s review under
Section 4.6(a)(3) or (4) , as applicable. The
Audit Claim shall state in reasonable detail the basis for, and
calculation of the claim, and shall include a copy of any written
audit or report furnished to Tenant.
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(7) Tenant’s failure to
timely give Landlord the Audit Notice or Audit Claim, or to
otherwise adhere to the procedures set forth above shall
constitute:
(A) A waiver of
Tenant’s right to audit or otherwise dispute Landlord’s
calculation of Additional Rent for the applicable calendar year,
including any action that Tenant may be entitled to pursue under
law; and
(B) A full release of
Landlord for any claim by Tenant of overpayment of Additional Rent
for the applicable calendar year.
(8) No subtenant may conduct
an Audit. No assignee of Tenant’s rights under this Lease
(except a Permitted Transferee) may conduct an audit of Additional
Rent for any portion of the Term occurring prior to the effective
date of the applicable assignment.
(b) No Default . No
Audit Notice or Audit Claim will be effective if, when given or
made, a Material Non-monetary Default of this Lease (as defined in
Section 16.18 ) has occurred and is then continuing or
a monetary Default under Section 15.1 (a) has
occurred and is then continuing.
(c) Resolution of
Claim . Landlord and Tenant shall, for a period consisting of
not less than 90 days after Tenant delivers to Landlord an Audit
Claim (or an Objection, which is not of the type which requires an
audit to resolve), attempt in good faith to resolve such Audit
Claim.
(d) Costs . Landlord
shall reimburse Tenant for Tenant’s reasonable out-of- pocket
third-party expenses incurred in connection with an audit if the
total Expenses or Taxes used by Landlord to compute Additional Rent
for the calendar year audited were overstated by more than 5%;
provided , that such costs shall not include the cost of
services performed by Tenant’s own employees; and provided
further , that Landlord shall not be required to pay any fee
that is calculated on a contingency basis, nor shall Landlord be
obligated to pay any fee to an auditor to the extent said fee is
based upon the amount credited by Landlord to Tenant as a result of
such audit. If such total Expenses or Taxes were not overstated,
then Tenant shall reimburse Landlord, as Rent, for Landlord’s
reasonable out-of-pocket third-party expenses incurred in
connection with such audit.
(e) Arbitration . If
Landlord and Tenant are unable to resolve the Audit Claim (or the
Objection described in Section 4.6(c)) (in whole or in
part), then, not more than 30 days after expiration of the 90-day
period set forth in Section 4.6(c) , either of Landlord
or Tenant may give to the other notice of such party’s
election to arbitrate those issues raised by the Audit Claim that
remain in dispute, as follows:
(1) Landlord and Tenant shall
attempt to agree upon a single arbitrator who shall be a certified
public accountant in a national or regional public accounting firm
who shall have been active over the 15-year period immediately
prior to the date of such appointment in the accounting and/or
auditing of first-class commercial high-rise office properties in
the county in which the Building is located, and who does not then
represent or act and has not represented or acted in the 3 years
immediately prior to the date of such appointment on behalf of
either of Landlord or Tenant and is not a tenant, subtenant or
occupant of the Building or any
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other building in the
metropolitan area where the Building is located that is owned or
managed by Landlord (a “ Qualified Audit Arbitrator
”). If Landlord and Tenant cannot agree to a single Qualified
Audit Arbitrator within 10 business days after either Landlord or
Tenant (as applicable) gives to the other the notice to arbitrate
pursuant to Section 4.6(e) , then Landlord and Tenant
shall each appoint one Qualified Audit Arbitrator within 15
business days after either Landlord or Tenant (as applicable) gives
to the other such notice to arbitrate. If either of Landlord or
Tenant fails to timely appoint a Qualified Audit Arbitrator, then
the Qualified Audit Arbitrator shall be the sole appointed
Qualified Audit Arbitrator. If both Landlord and Tenant fail to
timely appoint a Qualified Audit Arbitrator then the Audit Claim
(or the Objection, as applicable) shall be void and of no further
force or effect;
(2) If each of Landlord and
Tenant appoints a Qualified Audit Arbitrator, then such two
Qualified Audit Arbitrators shall, within 10 days after the later
date of appointment of such two Qualified Audit Arbitrators,
appoint a third Qualified Audit Arbitrator. If the two Qualified
Audit Arbitrators fail to agree upon and appoint a third Qualified
Audit Arbitrator, then the identity of the third Qualified Audit
Arbitrator shall be submitted to arbitration under the provisions
of the commercial rules of the American Arbitration Association,
but subject to such arbitrator being a Qualified Audit
Arbitrator;
(3) A majority of the three
Qualified Audit Arbitrators (or the single Qualified Audit
Arbitrator as set forth in Section 4.6(e)(1) above as
the case may be) shall, within 30 days after the later of
(A) the appointment of the third Qualified Audit Arbitrator
and (B) the conclusion of a hearing, if requested by either
Landlord or Tenant, giving each of Landlord and Tenant an
opportunity to present its evidence and conclusions with respect to
the Audit Claim (or the Objection, as applicable), reach a decision
as to each item of the Audit Claim (or the Objection, as
applicable) in dispute, and shall notify Landlord and Tenant of
such decision, and such decision shall be final and binding upon
both Landlord and Tenant;
(4) The losing party, if any,
in the arbitration shall pay any fees and expenses of the
arbitration and the Qualified Audit Arbitrators. If there is no
losing party, then each of Landlord and Tenant shall pay any fees
and expenses of its respective Qualified Audit Arbitrator, and 50%
of the reasonable fees of the third Qualified Audit Arbitrator;
and
(5) Any overpayment or
underpayment of Expenses or Taxes determined by the Qualified Audit
Arbitrators (or Arbitrator, as applicable) shall be paid as
follows. If there was an underpayment then Tenant shall pay to
Landlord the amount of such underpayment in a lump sum as Rent
within 30 days after Landlord gives to Tenant notice of the
decision pursuant to Section 4.6(e)(3) . If there was
an overpayment then Landlord shall credit the amount of the
overpayment against Rent next due. Landlord’s and
Tenant’s obligations under this Section 4.6(e)(5)
shall survive the expiration of this Lease.
4.7. Credits and
Refunds . With respect to any credit against Rent provided
under this Article 4 , if this Lease shall expire or
terminate before any such credit shall have been fully applied, or
if the amount of such credit shall exceed the aggregate amount of
Rent next due and payable for the immediately following month, then
Landlord shall, within 30 days after the calculation of such
credit, refund to Tenant the unapplied balance of such credit,
after deducting any monies then owed and payable by Tenant to
Landlord.
- 22 -
5.1. Use .
(a) Subject to the provisions of Section 5.1(b) ,
Tenant shall use and occupy the Premises only for general
administrative non-governmental office use consistent with that of
comparable first class office buildings in the downtown Chicago
area, and the operation of electronic trading, open outcry trading,
clearing operations and operations ancillary thereto (the “
Primary Use ”); and, provided , that the same
are ancillary to the use of the Premises for the Primary Use, for
the following:
(1) the operation of
information technology, data, and computer facilities;
(2) intentionally
omitted;
(3) a fitness center for use
only by Tenant’s employees and the employees of
Tenant’s member firms; provided , that Tenant shall
cause such exercise facility to be constructed so that no noise or
vibration will emanate from the Premises to other portions of the
Building which interferes with Landlord or other tenants of the
Building;
(4) kitchens, cafeterias,
dining facilities, pantries and vending machines ( provided
, that each vending machine, where necessary, shall have a
waterproof pan thereunder and be connected to a drain) for the
preparation and sale of food and beverages (including a bar for the
sale and/or serving of alcoholic beverages) (each, a “
Dining Facility ”) for the use of Tenant’s
employees and business invitees; provided , that in the case
of each such Dining Facility where cooking will be done (other than
any Dining Facility where only microwave cooking will be done)
(A) such Dining Facility shall have an exhaust system and all
flues, vents, grease traps and ansul systems and other similar
items that are reasonably necessary, consistent with the standards
of a first-class office building in the downtown Chicago area,
(B) all ducts and flues shall be installed within the Premises
and shall exit the Building from a location reasonably acceptable
to Landlord, (C) Tenant shall clean any grease traps,
(D) Tenant shall bag all wet garbage, place such garbage in
containers that prevent the escape of odors, and immediately
dispose of such wet garbage in the Refrigerated Waste Facility to
store pending disposal, and (E) Tenant shall contract with an
exterminator (such exterminator to be subject to Landlord’s
reasonable approval) to exterminate vermin and rodents on a regular
basis as part of a program to keep the Premises free of vermin and
rodents by reason of the operation of each such Dining Facility;
and provided further , that in the case of each such Dining
Facility (whether or not cooking will be done), (a) Tenant
shall cause the Dining Facility to be properly ventilated so that
no odor will emanate from the Premises to other portions of the
Building, and (b) Tenant shall otherwise maintain and operate
each Dining Facility consistent with the standards of a Dining
Facility maintained by a tenant within its demised premises in a
first-class office building in the downtown Chicago
area;
(5) duplicating, photographic
reproduction and/or offset printing facilities for use in
Tenant’s business; provided , that Tenant shall cause
all such printing facilities to be constructed so that no noise or
vibration will emanate from the Premises to other portions of the
Building which interferes with Landlord or any other tenants of the
Building;
- 23 -
(6) so long as Tenant is
Chicago Mercantile Exchange Inc. or a Permitted Transferee, the
Visitor’s Center; provided , that (A) as of the
Relocation Date, the entrance to the Visitor’s Center shall
be through the 20 South Wacker Building, and (B) the operation
of the Visitor’s Center shall not result in persons
unreasonably assembling, congregating, or forming a line outside of
the Premises or any Building or otherwise impeding the flow of
pedestrian traffic outside of the Premises or any Building;
and
(7) other ancillary uses
reasonably required by Tenant in connection with the conduct of the
Primary Use in the Premises and customarily conducted by tenants
(including tenants that conduct trading operations) of first class
office buildings in the downtown Chicago area.
Landlord does not represent or warrant
that the Project is suitable for the conduct of Tenant’s
particular business.
(b) Notwithstanding the
provisions of Section 5.1(a) , in no event shall Tenant
use or occupy the Premises or any portion of the Project in a
manner that: (A) adversely interferes with the operation of
the Mechanical Systems or the Building Structure;
(B) adversely affects the first class character of the
Project; or (C) adversely interferes with or disturbs Landlord
or any other tenant of the Building. The provisions of this
Section 5.1(b) shall not apply to CME, as the provision
of this Lease expressly sets forth the manner in which CME shall
use or occupy the Premises or any portion of the
Project.
5.2. Compliance with Laws
and Directives .
(a) Tenant’s
Compliance . Subject to the remaining terms of this Lease,
Tenant shall comply at Tenant’s expense with all governing
authorities, laws, and reasonable directives of Landlord’s
insurers of which Tenant is given written notice from and after the
Execution Date (to the extent required to preserve the insurability
of the Building or, if non-compliance therewith is the cause based
upon a reasonable determination, of an increase in the cost of
insurance coverage or in the type of insurance coverage required,
Tenant shall pay such increase in cost), concerning:
(1) The Leasehold
Improvements and Alterations;
(2) Tenant’s use or
occupancy of the Premises, including without limitation compliance
with the Americans with Disabilities Act and Illinois laws relating
to accessibility, and rules and regulations under the foregoing as
in effect from time to time, and the actions of any of
Tenant’s contractors working in or about the Premises, but
excluding any work that is performed by Landlord;
(3) Any condition in the
Building created by Tenant, Tenant’s Affiliates, or their
respective employees, agents, contractors, or invitees;
(4) Any chemical wastes,
contaminants, pollutants or substances that are hazardous, toxic,
infectious, flammable or dangerous, or regulated by any local,
state or federal statute, rule, regulation or ordinance for the
protection of health or the environment (“ Hazardous
Materials ”) that are introduced to the Project, handled
or disposed of by Tenant,
- 24 -
Tenant’s Affiliates, or
their respective employees, agents, contractors, or (while in the
Premises) invitees. In no event shall Tenant, Tenant’s
Affiliates, or their respective employees, agents, contractors, or,
while within the Premises, Tenant’s invitees, introduce
Hazardous Materials into the Premises, except those which are
handled and disposed of, as applicable, in accordance with
applicable laws and Section 23.3 .
(b) Landlord’s
Compliance . Landlord shall comply with all governing
authorities and laws, and all reasonable directives of
Landlord’s insurers, concerning the Project (including laws
governing Hazardous Materials handled or disposed of by Landlord or
its Affiliates or any of their contractors), other than those that
are Tenant’s obligation under Section 5.2(a) or
any other tenant’s obligation under its lease;
provided , that if such failure to comply on the part of
another tenant materially and adversely affects the Common Areas or
the Premises, Landlord shall use commercially reasonable efforts to
correct such failure. Landlord shall be responsible for removing
any Hazardous Materials from the Project to the extent the presence
thereof is a violation of law, except to the extent such were
caused by or were the responsibility of Tenant, its Affiliates, or
their agents or contractors. If Landlord permits or requires Tenant
not to remove the Generator at the expiration or earlier
termination of this Lease, then Landlord shall assume liability for
any condition or Hazardous Materials relating to the Generator
after the date of the expiration or earlier termination of this
Lease, except to the extent caused by Tenant in violation of this
Lease prior to the date of expiration or earlier termination of
this Lease; provided , that the Generator is surrendered to
Landlord upon the date of expiration or earlier termination of this
Lease in good repair, normal wear and tear excepted, and in
compliance with all laws. The cost of Landlord’s compliance
under this Section 5.2(b) shall be included in
Expenses, except to the extent provided in
Section 4.2(b)(2)(DD) .
5.3. Occupancy .
Tenant shall not interfere with Building services or other
tenants’ rights to quietly enjoy their respective premises or
the Common Areas. Tenant shall not make or continue a nuisance,
including any objectionable odor, noise, fire hazard, vibration, or
wireless or electromagnetic transmission.
6.1. Standard Services
.
(a) Standard Services
Defined . “ Standard Services ”
means:
(1) Subject to Sections
6.3(a) , heating, ventilation and air-conditioning (“
HVAC ”) to the Premises (other than the third floor
(and the seventh floor, if Tenant is leasing same) of the 20 South
Wacker Building, and any Fixed Term Support Space to which HVAC is
not provided as of the Execution Date) during Business Hours
substantially in accordance with the design specifications set
forth on Exhibit P ;
(2) Tempered water from the
public utility for use in restrooms, showers, and kitchens within
the Premises and restrooms in the Common Areas;
(3) Subject to Article
22 , cleaning/janitorial services in accordance with the
specifications attached as Exhibit F ;
- 25 -
(4) Access to the Premises
(other than the Secured Access Space) during Business Hours via the
passenger elevators and escalators (if applicable) described on
Exhibit K ; and at all other times access to the Premises
(other than the Secured Access Space) by at least one passenger
elevator. Landlord shall furnish freight elevator service via the
freight elevators described on Exhibit K on Monday through
Friday, from 7:00 a.m. to 5:00 p.m., Saturdays, Sundays, and
Holidays excepted, to be used on a first-come, first-served basis
in common with Landlord and other tenants of the Building. Such
normal freight elevator service, if furnished at other times shall
be optional with Landlord and shall never be deemed a continuing
obligation of Landlord. Tenant may have access to freight elevator
service at such other times; provided , that (1) Tenant
shall give to Landlord at least 24 hours advance notice of
Tenant’s desire to use such freight elevator service (if,
however, Tenant gives to Landlord less than 24 hours advance
notice, Landlord shall use reasonable efforts to provide Tenant
with freight elevator service as soon as practicable) and
(2) Tenant shall pay to Landlord any actual incremental
out-of-pocket costs or expenses incurred by Landlord in connection
with such use;
(5) Security services in a
manner consistent with standards maintained in first class office
buildings in the downtown Chicago area, but subject to the
following. Attached hereto as Exhibit L are the security
measures that Landlord and Tenant shall implement at the Building
reasonably promptly (except as otherwise provided to the contrary
on Exhibit L ) after the Execution Date. Except as otherwise
provided to the contrary on Exhibit L , Landlord may modify
such security measures from time to time so long as the modified
level of security is not materially less than the level that would
be provided if the measures described in Exhibit L were in
effect;
(6) Landlord shall provide
and maintain a refrigerated waste facility (“ Refrigerated
Waste Facility ”) for use by all tenants of the Building
to store wet garbage pending disposal; and
(7) Window washing of the
exterior windows on the standard Building schedule but not less
than 3 times per year.
(b) Standard Services
Provided . From and after the Execution Date (other than when
Tenant is performing Tenant’s Work or when Tenant is not in
occupancy of a floor(s) for the conduct of Tenant’s business,
i.e., during Landlord’s Work), Landlord shall provide the
Standard Services to Tenant, except as provided in this Article
6 . The cost of the Standard Services shall be included in
Expenses (except as provided in Section 4.2(b)(2) .
Landlord is not responsible for any inability to provide the
Standard Services as a result of any of (1) a concentration of
personnel or equipment in the Premises that is in excess of that
customarily existing in first class office buildings in downtown
Chicago, or (2) Tenant’s use of equipment in the
Premises that is not customary office equipment, has special
requirements, or generates heat in excess of customary office
equipment.
(c) Impermissible REIT
Income . For so long as Landlord or any entity directly or
indirectly owning an interest in Landlord shall be a REIT, any
services required to be provided to Tenant under this Lease that
may result in the actual or constructive receipt by Landlord (or
any member of Landlord) of impermissible tenant service income as
described in Section 856(d)(7) of the Internal Revenue Code of
1986, as amended (the “ Code ”), may
be
- 26 -
performed by an Affiliate of
Landlord; provided , that such services are at market rates
and do not increase the cost of such services over the cost of such
services if such services were provided by Landlord.
6.2. Electricity .
Electricity for the Premises shall not be furnished by Landlord but
shall be furnished by the electric utility company or other
provider serving the Building as determined by Landlord;
provided , that at any time during the Term, Tenant shall
have the right to select the entity that will provide electric
current to the Premises. Landlord shall permit Tenant and the
electric utility company or other provider to make use of the
Building shafts and risers to bring electric current to the
Premises. Tenant shall make all necessary arrangements with the
electric utility company or other provider for metering and paying
for electric current furnished to Tenant, and Tenant shall pay such
electric utility company or other provider for all charges for
electric current consumed on the Premises during the Term of this
Lease. There shall be no mark up by Landlord on said charges for
electric current. Tenant’s electric current use in the
Premises shall not exceed the capacity of the Mechanical Systems
serving the Premises, as the capacity of such Mechanical Systems
may be upgraded from time to time. Tenant acknowledges that, as of
the Execution Date, the electric current capacity in the Premises
for Building Standard light fixtures and convenience outlets for
the operation of customary quantities and types of office
equipment, is a connected load not to exceed 9 watts per USF of the
Premises (“ Maximum Connected Load ”), and
Tenant shall not use electric current in the Premises for such
purposes at any time in an amount that exceeds the Maximum
Connected Load. Notwithstanding the foregoing, Tenant shall not be
required to reduce its use of electric current below the amount set
forth above if other tenants in the Building require additional
electric current. From and after the Trading Termination Date,
Landlord shall be responsible for the cost of electric current
measured by the electric meters described on Exhibit N
.
6.3. Additional
Services . Unless Tenant obtains Landlord’s prior written
consent (which consent shall not be unreasonably withheld, but may
be conditioned on payment to Landlord of any reasonable amounts
deemed necessary by Landlord to reimburse Landlord for
Landlord’s incremental costs to provide utilities or services
to Tenant in excess of the Standard Services), and except as
otherwise provided in this Lease, Tenant shall not use utilities or
services in excess of the Standard Services; provided , that
Landlord shall provide utilities and services in excess of the
Standard Services subject to and in accordance with the
following:
(a) HVAC .
(1) Subject to Sections
6.3(a)(2) and (b) , if Tenant requests HVAC service
during non-Business Hours to the portions of the Premises served
during Business Hours pursuant to Section 6.1(a)(1) ,
then, upon at least 2 hours prior notice to the Building engineer
(which notice may be oral to Landlord’s Building management
office), Landlord shall provide such HVAC service and Tenant shall
pay, as Rent, Landlord’s scheduled rate per hour for such
HVAC service with respect to each building elevator rise, which
scheduled rates are set forth on Exhibit P and shall not
exceed Landlord’s actual costs of providing such HVAC service
(but are subject to change from time to time for necessary labor
costs, including fully loaded wages and benefits and necessary
overtime for Building engineer(s)), which cost shall be accounted
for by Landlord to Tenant in reasonable detail.
- 27 -
(2) From and after the
Execution Date, Tenant shall, at its sole cost and expense, provide
HVAC (including, without limitation, all its supplemental air
conditioning requirements) to the portion of the Premises located
on the third floor (and the seventh floor, if Tenant is leasing
same) of the 20 South Wacker Building.
(3) From and after the date
which Tenant ceases to conduct open outcry trading operations in
the Premises (the “ Trading Termination Date ”),
the following shall occur:
(A) The chiller plant located
in the mechanical room in the 30 South Wacker Building (the “
20 South Wacker HVAC System ”) shall have become the
property of Landlord upon its acquisition of the Building. Tenant
hereby represents and warrants to Landlord that Tenant has no right
(except pursuant to this Lease), title, or interest in the 20 South
Wacker HVAC System. Within 120 days after the Trading Termination
Date, Landlord shall install all the necessary equipment to connect
the refrigeration capacity of the 20 South Wacker HVAC System to
the HVAC system located in the 30 South Wacker Building (such
installation and connection work shall hereinafter be referred to
as the “ HVAC Connection Work ”), such that the
HVAC Connection Work shall cause the refrigeration capacity of each
to cool the chilled water loop of both the 20 South Wacker Building
and the 30 South Wacker Building. Tenant shall reimburse Landlord,
within 45 days after Landlord delivers to Tenant an invoice
therefor after such work is substantially completed, 50% of the
capital costs of the HVAC Connection Work (which Tenant
reimbursement shall not exceed $300,000, i.e., 50% of an aggregate
capital costs of $600,000); and
(B) Landlord shall supply
Tenant with chilled water for Tenant’s supplemental air
conditioning equipment and systems in place as of the Execution
Date (the “ Tenant’s Supplemental HVAC System
”). Prior to the Trading Termination Date, Tenant shall
deliver a notice to Landlord specifying the number of tons of
chilled water that Tenant will require for the Tenant’s
Supplemental HVAC System (such amount not to exceed 1,000 tons of
chilled water (if Tenant elects Scheme F-1 pursuant to
Section 2.5 ) or 1,200 tons of chilled water (if Tenant
elects Scheme F-2 pursuant to Section 2.5 )) (the
“ Reserved Tonnage ”). Tenant shall pay, as
Additional Rent, for Tenant’s usage of chilled water, an
amount equal to $100.00 per ton per annum of connected load of the
Reserved Tonnage (and, to the extent applicable, any Tenant’s
use of chilled water in excess of the Reserved Tonnage); it being
agreed that such amount shall be subject to 3.5% increases on
January 1st of each year during the Term, which amount shall
be payable within 45 days after Landlord delivers to Tenant a bill
therefor; and
(C) Tenant shall relocate
Tenant’s chilled water cross connect pipes currently located
on the south wall of the 10th floor of the 10 South Wacker Building
to the core of the 10th floor of the 10 South Wacker Building, as
shown on Exhibit M .
(4) If Tenant desires to
discontinue use of Landlord’s chilled water for
Tenant’s Supplemental HVAC System or any of its supplemental
HVAC requirements, Tenant may install and connect to a new cooling
system utilizing an outside source of chilled water or river water
(which cooling system may be used, in whole or in part, to cool
Tenant’s Generator). Landlord shall reasonably cooperate with
Tenant to locate and make available to Tenant at no additional
charge riser and other mechanical space for Tenant’s use as
reasonably necessary to
- 28 -
install such new cooling
system. Tenant shall pay directly to the applicable utility
providers the costs of operating such cooling systems, including
the cost of chilled water, electricity, and maintenance. Tenant
shall install the heat exchangers and other equipment associated
with such new cooling system in a portion of the Fixed Term Support
Space located on level P-1 of the 10 South Wacker Building (P1-106)
as shown on Exhibit M . Landlord shall provide Tenant with
riser space for two pipes each up to 12” in diameter from
P1-106 to above the finished ceiling of the 10th floor of 10 South
Wacker Building. Tenant shall utilize such relocated chilled water
cross connect pipes to connect such new cooling system to the
portions of the Premises located in the 20 South Wacker Building
and the 30 South Wacker Building. Tenant shall install a connection
from such relocated chilled water cross connect pipe to the
existing riser located behind Stairwell #2 in the 30 South Wacker
Building to service the portion of the Premises located in the 30
South Wacker Building. Tenant shall utilize the four fans located
on the sixth floor interstitial area to service the third floor of
the 20 South Wacker Building, as well as the four fans located on
the second floor interstitial area to service both the second floor
interstitial area and the third floor of the 20 South Wacker
Building. Landlord shall install variable fan drives to the
existing four supply and return fans in the sixth floor
interstitial area of the 20 South Wacker Building and rebalance the
flows. If Tenant is leasing the seventh floor of the 20 South
Wacker Building as contemplated under this Lease (under Scheme
F-2), Tenant shall utilize the four fans located on the tenth floor
interstitial area to service said seventh floor. Tenant, at
Tenant’s expense, shall perform any necessary maintenance or
other necessary upgrades to such fans. In addition, Tenant may
install additional HVAC equipment and piping (and associated
ductwork, conduits, and wiring), including connections through two
16” pipes to utilize river water, all as shown on (and in
accordance with) Exhibit M . If Tenant is unable (or
determines the same is not economically practical) to obtain
chilled water from a purchased system (or river water, as
applicable) for any reason, Tenant and Landlord shall review
options to provide additional cooling required by Tenant, including
the installation by Tenant of a new chiller plant in P1-106 with
provisions to connect to river water or the existing base building
condenser water system at the 10 South Wacker Building, the 20
South Wacker Building and the 30 South Wacker Building, as shown on
Exhibit M .
(5) Landlord and Tenant shall
reasonably cooperate with each other in connection with the work
and systems described in this Section 6.3(a) . All of
Tenant’s work described in this Section 6.3(a)
shall be in accordance with this Lease including, without
limitation, Article 8 .
(b) Lighting . Tenant,
at Tenant’s expense, shall supply all lamps, bulbs, ballasts
and starters for the Premises.
(c) Other Utilities and
Services . Tenant shall pay, as Rent, the actual cost of
utilities or services (other than HVAC and lighting addressed in
Section 6.3(a) and (b)) either used by Tenant or
provided at Tenant’s request in excess of that provided as
part of the Standard Services. Tenant’s excess consumption of
Standard Services (or services not included in Standard Services)
shall be metered to measure Tenant’s consumption.
(d) Kitchen Exhaust
Systems Cleaning . Landlord shall clean and maintain
Tenant’s kitchen exhaust systems on a monthly basis, and
Tenant shall reimburse Landlord for the actual cost of such
cleaning and maintenance; provided , that, with respect to
the kitchen
- 29 -
exhaust system existing on
the Execution Date which services both the kitchen in the Premises
and certain retail tenants, Tenant shall reimburse Landlord for its
proportionate share (such share to be based on the number of users
at the time in question) of the cost of such cleaning and
maintenance until (1) Tenant delivers to Landlord notice that
Tenant is no longer utilizing such kitchen exhaust system and
(2) Tenant actually ceases to utilize such kitchen exhaust
system.
(e) Services Prior to
Tenant’s Occupancy . With respect to each floor of the
Premises in each of the 10 South Wacker Building, the 20 South
Wacker Building and the 30 South Wacker Building, from and after
the date that each such floor is Substantially Completed (but prior
to the date that Tenant occupies each such floor for the conduct of
Tenant’s business), Landlord shall provide normal freight
elevator service ( provided , that Tenant shall pay for any
incremental out-of-pocket expenses with respect to cab-roof
hoisting and the provision of elevator mechanic operators, as well
as loading dock and other security personnel). During such period
of time, Landlord shall provide, at Tenant’s expense (payable
by Tenant within 45 days after Landlord delivers to Tenant an
invoice therefor), refuse removal (including dumpsters), and any
other services requested by Tenant or Tenant’s contractor
which Landlord agrees to provide.
6.4. Telecommunication
Services . Tenant shall contract directly with third party
providers of telecommunications services and shall be solely
responsible for paying for all telephone, data transmission, video
and other telecommunication services (“ Telecommunication
Services ”) subject to the following:
(a) Providers . Each
Telecommunication Services provider who does not already provide
service to the Building shall be subject to Landlord’s
approval in its reasonable discretion. Without liability to Tenant,
the license of any Telecommunication Services provider servicing
the Building may be terminated under the terms of such license, or
not renewed upon the expiration of such license. Tenant may
continue to use Tenant’s existing Telecommunications Services
providers (or their respective successors) as of the Execution
Date.
(b) Tenant’s
Wiring . Other than that which is currently in place (and
replacements thereof) and other than that which is run through the
Tenant Exclusive Telecom Closets and the risers associated
therewith (and replacements thereof), Landlord may designate
reasonably convenient locations for all wires, cables, fibers,
equipment, and connections (“ Tenant’s Wiring
”) for Tenant’s Telecommunication Services, and,
subject to Section 2.4 , restrict and control access to
telephone cabinets and rooms pursuant to the Building’s
security procedures. Landlord’s access to such cabinets and
rooms on full Tenant floors shall be governed by
Section 16.17 . Except as otherwise expressly provided
in this Lease, Tenant may not use or access the Base Building,
Common Areas or roof for Tenant’s Wiring without
Landlord’s prior written consent, which consent shall not be
unreasonably withheld.
6.5. Special
Circumstances .
(a) Except as expressly set
forth herein, without breaching this Lease or creating any
liability on the part of Landlord, Landlord may interrupt, limit or
discontinue any utility or services Landlord provides under this
Article 6 (“ Landlord Provided Services
”) or which are obtained by Tenant under this Article
6 (“ Tenant Provided Services ”) under any
of the following circumstances: (1) in an emergency; (2) to
comply with laws; (3) to repair and
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maintain the Project; or
(4) to modify, renovate or improve the Project;
provided , that in the case of interruptions pursuant to
clauses (3) and (4) , Landlord shall coordinate
any such interruptions with Tenant so as not to unreasonably
disrupt Tenant’s use or occupancy of the Premises.
(b) For purposes of this
Lease “ Untenantable ” means that all or any
portion of the Premises is not usable or available by reason of
damage, Interruption of Landlord Provided Services, or lack of
access by normal means (including escalators and elevators) for the
normal conduct of business, which shall include the practical
inability to use any portion of the Premises by reason of damage,
Interruption of Landlord Provided Services, or inaccessibility to
any other portion of the Premises, and Tenant does not actually use
such portion of the Premises. “ Interruption of Landlord
Provided Services ” means (1) any interruption,
material limitation or discontinuance of any utility or services
expressly provided by Landlord to Tenant under this Article
6 , provided that such interruption, material limitation or
discontinuance is not caused by (A) a casualty or condemnation
described under Articles 10 or 12 or (B) Tenant,
Tenant’s contractors or any of their respective agents or
employees; or (2) any interruption, material limitation, or
discontinuance of any utility or services not expressly provided by
Landlord to Tenant under this Article 6 without regard to
the cause thereof (including Force Majeure), but caused by
Landlord’s gross negligence or willful misconduct. If an
Interruption of Landlord Provided Services occurs and continues for
a period in excess of 72 hours after Tenant gives to Landlord
notice of such Interruption of Landlord Provided Services from
Tenant, and as a result of such Interruption of Landlord Provided
Services all or any portion of the Premises is rendered
Untenantable, then, commencing upon the expiration of such 72-hour
period, (i) if such Interruption of Landlord Provided Services
is caused by circumstances that are within Landlord’s
reasonable control to remedy, Tenant’s Rent will abate in
proportion to the portion of the Premises so rendered Untenantable
for so long as such Interruption of Landlord Provided Services
continues, or (ii) if such Interruption of Landlord Provided
Services is caused by circumstances that are not within
Landlord’s reasonable control, then 50% of Tenant’s
Rent will abate in proportion to the portion of the Premises so
rendered Untenantable for so long as such Interruption of Landlord
Provided Services continues.
(c) If an Interruption of
Landlord Provided Services occurs and continues for a period in
excess of 270 consecutive days after Tenant gives to Landlord
notice of such Interruption of Landlord Provided Services, and if
such Interruption of Landlord Provided Services renders all or
substantially all of the Premises Untenantable and Tenant does not
actually use such portion of the Premises or conduct Tenant’s
business at the Premises, then commencing upon the expiration of
such 270-day period, Tenant shall have the right, upon giving to
Landlord written notice within 30 days after the expiration of such
270-day period, to terminate this Lease as of the giving of such
notice. Tenant hereby acknowledges that, except as expressly
provided in Articles 10 and 12 , Tenant’s sole
right to terminate this Lease by reason of an Interruption of
Landlord Provided Services is as expressly set forth in this
Section 6.5(c) , and Tenant hereby waives any right
that Tenant may otherwise have at law or in equity (including,
without limitation, any right to claim a constructive eviction) to
terminate this Lease based on an Interruption of Landlord Provided
Services.
(d) Without limiting
Tenant’s rights under Section 6.5(b) and
Section 6.5(c) , in no event shall Tenant be entitled
to any abatement of Rent or right to terminate this Lease by reason
of any failure, interruption, limit, or discontinuance of any
Tenant Provided Services
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(unless constituting an
Interruption of Landlord Provided Services with respect to
utilities as described in Section 6.5(b )), and Tenant
hereby waives any right at law or in equity to do so.
(e) Without limiting those
reasons for an irregularity or stoppage of services that may be
beyond Landlord’s control, any such irregularity or stoppage
that is required in order to comply with any laws will be deemed
caused by a reason beyond Landlord’s control.
6.6. Landlord shall not
voluntarily reduce (a) the amount of electric current
available to the Premises as of the Execution Date or (b) the
number of physical sources from which electric current is supplied
to the Building.
7.1. Tenant’s
Repairs . Except as provided in Articles 10 and
12 , during the Term Tenant shall, at Tenant’s cost,
repair, maintain and replace, if necessary, the Leasehold
Improvements and keep the Premises in good order, condition and
repair. Tenant’s work under this Section 7.1 must
be performed in compliance with law and in a good and workmanlike
manner with materials of at least Building Standard. If any repair
that is the obligation of Tenant affects the Base Building, then
such repair shall be performed by Landlord at Tenant’s
reasonable expense; provided , that if such repair
obligation affects a portion of the Base Building that exclusively
serves Tenant, then Landlord and Tenant shall cooperate to
reasonably determine which of Landlord or Tenant shall perform such
repair obligation (but in either case such repair obligation shall
be performed at Tenant’s reasonable expense). If Tenant fails
to perform any of Tenant’s obligations under this
Section 7.1 after Landlord gives to Tenant written
notice and a reasonable opportunity to perform such obligations
(but in any case Tenant shall commence performance of such
obligations within 30 days after Landlord gives to Tenant such
notice), then Landlord may perform such obligations and Tenant
shall pay, as Rent, to Landlord 110% of the reasonable cost of such
performance within 30 days after the date Landlord gives to Tenant
an invoice therefor. For purpose of performing such obligations, or
to inspect the Premises, Landlord may enter the Premises upon
giving to Tenant reasonable prior notice (in cases of actual or
suspected emergency, only such prior notice as is practicable, if
any, shall be required) without liability to Tenant for any loss or
damage incurred as a result of such entry (unless caused by
Landlord’s or its agents’ negligence or willful
misconduct); provided , that Landlord will take reasonable
steps in connection with such entry to minimize any disruption to
Tenant’s business or its use of the Premises and Tenant may
require an employee of Tenant or its security service, if Tenant
makes such employee available, to accompany Landlord’s
personnel (or its agents or contractors) while in the Premises; and
provided further , that absent an actual or suspected
emergency, Tenant may reasonably restrict Landlord’s access
to all Secured Areas of the Premises. “ Secured Areas
” shall consist of any areas of the Premises reasonably
identified by Tenant as having extraordinary security or
confidentiality requirements such that such areas are kept locked
or inaccessible to persons unauthorized by Tenant (and trading
areas shall not automatically be deemed Secured Areas). Tenant
shall notify Landlord of (a) any fire or other casualty in the
Premises, (b) any damage to or defect in the Premises,
including the fixtures and equipment in the Premises, for the
repair of which Tenant believes Landlord is responsible, and
(c) any damage to or defect in any parts of or appurtenances
to the Mechanical Systems located in or passing through the
Premises promptly after Tenant learns of the same.
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7.2. Landlord’s
Repairs . Except as provided in Articles 10 and
12 , during the Term Landlord shall repair, maintain and
replace, if necessary, all portions of the Project that are not
Tenant’s responsibility under Section 7.1 or
another tenant’s leasehold improvements, and otherwise
maintain the Project in good order and condition according to the
standards prevailing for first class office buildings in the
downtown Chicago area. Except in the case of an actual or perceived
emergency, Landlord shall use commercially reasonable efforts to
minimize disrupting the ordinary conduct of Tenant’s business
in the Premises in performing Landlord’s duties under this
Section 7.2 ; provided , that in no event shall
Landlord be required to employ premium or overtime labor. Subject
to Sections 15.9 , 15.10 , and 15.11 , Tenant
may not repair or maintain the Project on Landlord’s behalf
or offset any Rent for any repair or maintenance of the Project
that is undertaken by Tenant.
8.1. Alterations by
Tenant . “ Alterations ” means any
modification, addition or improvement to the Premises or Leasehold
Improvements made by Tenant during the Term, including any
modification to the Base Building or Common Areas required by law
or governing authority as a condition to performing an Alteration,
and including any Leasehold Improvements made by Tenant to prepare
the Premises for Tenant’s occupancy after Landlord’s
performance of Landlord’s Work (the “ Tenant’s
Work ”). Alterations shall be made at Tenant’s
expense, and shall be subject to the following:
(a) Consent Required .
All Alterations, except as specifically set forth below in
Section 8.1(e) , require Landlord’s prior written
consent. If a Design Problem exists, Landlord may withhold its
consent in Landlord’s sole discretion; otherwise, Landlord
will not unreasonably withhold its consent. Tenant, at
Tenant’s expense, shall (1) submit to Landlord for
Landlord’s approval detailed plans and specifications (the
“ Plans ”) of each proposed Alteration (other
than Decorative Alterations), and with respect to any Alteration
affecting any Mechanical Systems, evidence that such Alteration has
been designed by, or reviewed and approved by, Landlord’s
designated engineer for the affected Mechanical System,
(2) obtain all permits, approvals, and certificates required
by any governmental or quasi-governmental entity, (3) furnish
to Landlord duplicate original policies or certificates of
workers’ compensation (covering all persons to be employed by
Tenant and Tenant’s contractors and subcontractors in
connection with such Alteration, commercial general liability
(including property damage coverage), business auto insurance, and
Builder’s Risk coverage (as described in Article 9 )
all in such form, with such companies, for such periods and in such
amounts as Landlord may reasonably require, naming Landlord,
landlord’s agents and contractors and any of their employees,
any ground lessor and any mortgagee as additional insureds, and
(4) except in connection with Tenant’s Work and, upon
Landlord’s request, furnish to Landlord reasonably
satisfactory evidence of Tenant’s ability to complete and to
fully pay for any Alterations (other than Decorative Alterations)
that exceed the cost of $5,000,000, in the aggregate. Unless Tenant
obtains Landlord’s prior written consent to the Alterations
which constitute Required Removal Items becoming part of the
Premises to be tendered to Landlord upon the date of termination of
this Lease, Landlord may require Tenant to remove such Required
Removal Items and restore the Premises pursuant to
Section 3.4 upon the date of termination of this Lease.
If Landlord fails to reject or object to an Alteration within 10
days of Landlord’s receipt from Tenant of full and final
Plans therefor (including, to the extent required, fully certified,
stamped and sealed
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architectural and/or
engineering plans), then Tenant may give to Landlord a reminder
notice stating in all-capital bold-faced type, “IF
LANDLORD FAILS TO OBJECT TO THIS REMINDER NOTICE OF REQUEST FOR
CONSENT TO AN ALTERATION WITHIN 5 DAYS THEN LANDLORD SHALL BE
DEEMED TO HAVE APPROVED SUCH REQUEST”, and if Landlord
shall fail to reject or object to such Alteration within 5 days
after Tenant gives such reminder notice to Landlord then Landlord
shall be deemed to have approved such Alteration.
(b) Design Problem
Defined . “ Design Problem ” means a
proposed Alteration which:
(1) Does not comply with
laws;
(2) Does not meet or exceed
the Building Standard;
(3) Exceeds the capacity
(unless part of the Alterations would increase capacity
accordingly), adversely affects, is incompatible with, or impairs
Landlord’s ability to maintain, operate, alter, modify or
improve the Base Building;
(4) Affects the exterior
appearance of the Building or Common Areas;
(5) Except for Tenant’s
Work or work performed as contemplated in Article 6 ,
involves floor cuts, floor coring, adding new internal stairways,
or the installation of vaults or structural steel;
(6) Violates any insurance
regulations or standards for a fire-resistive office
building;
(7) Causes a “work of
visual art” to become “incorporated in or made part of
a building” (as defined in the Visual Artists Rights Act of
1990); or
(8) Locates any Leasehold
Improvements, equipment, Tenant’s Wiring or Tenant’s
Personal Property outside the Premises, including on the roof of
the Building, in Common Areas or in telecommunication or electrical
closets, except as specifically permitted by this Lease.
(c) Performance of
Alterations . Alterations shall be performed by Tenant in a
good and workmanlike manner according to plans and specifications
approved by Landlord in accordance with Section 8.1(a) . All
Alterations shall comply with law and insurance requirements. All
Alterations will be performed by qualified contractors that meet
Landlord’s reasonable insurance requirements and are
otherwise reasonably approved by Landlord. If Landlord does not
respond to Tenant’s request for consent to any firm or
contractor for Alterations work within 10 days after Landlord
receives Tenant’s request then Tenant shall give to Landlord
a reminder notice stating in all-capital bold-faced type,
“IF LANDLORD FAILS TO RESPOND TO THIS REMINDER NOTICE OF
REQUEST FOR CONSENT TO A FIRM OR CONTRACTOR WITHIN 5 DAYS THEN
LANDLORD SHALL BE DEEMED TO HAVE APPROVED SUCH REQUEST”,
and if Landlord fails to respond to such reminder notice within
such 5 days then Landlord shall be deemed to have approved such
request. Once
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Landlord approves a firm or
contractor, Tenant need not resubmit such firm or contractor for
approval for the same project unless Landlord withdraws such
approval by giving to Tenant notice, which withdrawal shall state
the reasons therefor. Promptly after completing any Alterations
requiring Landlord’s consent hereunder, Tenant shall deliver
to Landlord “as-built” Plans for such Alterations
prepared on an AutoCAD Computer Assisted Drafting and Design System
(or such other system or medium as Landlord may accept) (the
“ CAD System ”), using naming conventions issued
by the American Institute of Architects in June, 1990 (or such
other naming conventions as Landlord may accept) and magnetic
computer media of such record drawings and specifications
translated into DFX format or another format acceptable to
Landlord. Tenant, at Tenant’s expense, shall, as and when
required, promptly obtain certificates of partial and final
approval of such Alterations required by any governmental or
quasi-governmental entity and shall furnish Landlord with copies
thereof. Upon completion of such Alterations, Tenant shall provide
to Landlord copies of all construction contracts, proof of payment
for all labor and materials, a copy of the recorded notice of
completion, and final unconditional waivers of lien from all
contractors, subcontractors, materialmen, suppliers and others
having lien rights with respect to such Alterations, in the form
prescribed by Illinois law.
(d) Cost Reimbursement
. As to Alterations (excluding Tenant’s Work) requiring
Landlord’s consent hereunder, Tenant shall reimburse Landlord
for the actual reasonable cost that Landlord incurs to review
Tenant’s plans therefor; provided , such cost to
Tenant shall in no event exceed $0.25 per USF of planned space
(i.e., any portion of the Premises where the proposed Alterations
are to be made); and provided further , that if
Tenant utilizes Landlord’s engineers for the Building to
prepare the Plans for the Alteration in question, Tenant shall not
be charged for review of the work of such engineer.
(e) Alterations Without
Landlord’s Consent . Notwithstanding anything in this
Lease to the contrary, Tenant shall have the right, (1) upon
giving written or oral notice to Landlord’s Building
management office, but without obtaining Landlord’s consent,
to make Decorative Alterations to the Premises or perform low
voltage cabling installation or removal ( provided that such
installation or removal does not involve a Design Problem, will be
performed entirely within the Premises, and does not affect in any
material respect the Building Structure or the Mechanical Systems),
and (2) upon giving Landlord at least 5 business days prior
notice of the proposed Alteration, together with the Plans required
pursuant to Section 8.1(a) , and provided that
such Alteration does not involve a Design Problem, will be
performed entirely within the Premises, and does not affect in any
material respect the Building Structure or the Mechanical Systems,
then without obtaining Landlord’s consent, to make such
Alteration to the Premises. “ Decorative Alterations
” are Alterations that (i) consist of cosmetic changes
to the interior of the Premises (such as painting, wall coverings,
or floor coverings) that do not affect or alter the Base Building,
(ii) do not require a governmental permit of any kind, and
(iii) are otherwise performed in accordance with the terms of
this Lease.
8.2. Alterations by
Landlord . Landlord may modify, renovate or improve the Project
as Landlord deems appropriate; provided , that Landlord uses
commercially reasonable efforts to minimize disrupting the ordinary
conduct of Tenant’s business in the Premises; and
provided further , that such modifications,
renovations and improvements shall not unreasonably reduce
Tenant’s access to the Premises or Tenant’s ability to
use the Common Areas or reduce Landlord Provided Services below the
levels required to be provided pursuant to Article 6 or
reduce any Tenant Provided Service.
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8.3. Liens and
Disputes . Tenant shall keep title to the Project free of any
liens caused by Tenant, its Affiliates, and their agents and
contractors, and shall promptly take whatever action is required to
have any such lien either (a) released and removed of record
or (b) contested, in either case within 30 days after Landlord
gives to Tenant notice thereof. If Tenant elects to contest any
such lien, Tenant shall conduct such contest diligently and in good
faith and, at Tenant’s expense, obtain title insurance
insuring over the notice of lien or the lien from Chicago Title
Insurance Company, or another local, reputable title company
acceptable to Landlord and Tenant, in favor of Landlord and any
mortgagee or ground lessor with an interest in the Project, or, at
Tenant’s election, provide Landlord with alternative security
satisfactory to Landlord in its sole discretion insuring over any
possible loss or expense which may arise from non-discharge of such
lien. Tenant shall, promptly after the final determination of such
contest, pay or discharge any decision or judgment rendered,
together with all costs, charges, interest and penalties incurred
or imposed or assessed in connection with such contest. Tenant
shall indemnify Landlord from and against any and all Claims,
costs, and expenses that Landlord reasonably incurs as a result of
Tenant’s violation of this Section 8.3
.
8.4. Labor Relations .
Tenant shall not employ, or permit the employment of, any
contractor, mechanic, or laborer, or permit any materials to be
delivered to or used in the Project, if, in Landlord’s sole
judgment, such employment, delivery or use will interfere or cause
any conflict with other contractors, mechanics or laborers engaged
in the construction, maintenance or operation of the Project by
Landlord, Tenant or others. If such interference or conflict
occurs, upon Landlord’s request, Tenant shall cause all
contractors, mechanics or laborers causing such interference or
conflict to leave the Project immediately.
8.5. Heavy Equipment .
Tenant shall give to Landlord notice prior to moving any heavy
machinery, heavy equipment, freight, bulky matter, or fixtures
(collectively, “ Equipment ”) into or out of the
Project and shall pay to Landlord any costs actually incurred by
Landlord in connection therewith. If such Equipment requires
special handling, Tenant agrees (a) to employ only persons
holding all necessary licenses to perform such work, (b) all
work performed in connection therewith shall comply with all
applicable laws, and (c) such work shall be done only during
hours designated by Landlord.
8.6. No Representation of
Compliance . The approval of Plans, or consent by Landlord to
the making of any Alterations, does not constitute Landlord’s
representation that such Plans or Alterations comply with any laws.
Landlord shall not be liable to Tenant or any other party in
connection with Landlord’s approval of any Plans, or
Landlord’s consent to Tenant’s performing any
Alterations. If any Alterations made by or on behalf of Tenant
require Landlord to make any alterations or improvements to any
portion of the Project to comply with any laws, Tenant shall pay
all costs and expenses incurred by Landlord in connection with such
alterations or improvements.
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9.1. Tenant’s
Insurance .
(a) Tenant’s
Coverage . From and after the Scheduled Commencement Date,
Tenant shall obtain and keep in force the following insurance
coverages:
(1) Commercial general
liability insurance insuring Tenant’s use and occupancy of
the Premises and use of the Common Areas, and covering personal and
bodily injury, death, and damage to others’ property of not
less than the Liability Limit. This policy shall include cross
liability and severability of interests clauses, and be written on
an occurrence, and not claims-made, basis. This policy shall name
Landlord, the Building property manager, each secured lender, and
any other party reasonably designated by Landlord as an additional
insured (“ Additional Insured ”);
provided , that the names and mailing addresses and
interests of each of such parties are provided to
Tenant.
(2) All risk insurance
(including standard extended coverage endorsement perils, leakage
from fire protective devices and other water damage) covering the
full replacement cost of the Leasehold Improvements and
Tenant’s Personal Property. This policy shall name Landlord
and each Additional Insured as loss payee to the extent of their
interest in the Leasehold Improvements provided the Landlord
provides the name, address and interest of each party to be named
loss payee. This policy shall include a provision or endorsement in
which the insurer waives its right of subrogation against Landlord
and each Additional Insured. Notwithstanding their interest as loss
payee, if this Lease is not terminated pursuant to Article
10 and Tenant is not in monetary or Material Non-monetary
Default, all insurance proceeds under the policies described in
this Section 9.1(a)(2) and in
Section 9.1(a)(8) shall be made available to Tenant for
repair and restoration of the Leasehold Improvements. If this Lease
is terminated pursuant to Article 10 and Tenant is not in
monetary or Material Non-monetary Default, Tenant shall be entitled
to those insurance proceeds under the policies described in this
Section 9.1(a)(2) and in Section 9.1(a)(8)
that are equal to the value of the Leasehold Improvements that were
paid for by Tenant (not including the Construction Allowance or any
other allowances for installation of improvements in the Premises,
if any, paid by Landlord to Tenant (or paid to contractors or
subcontractors at the direction of Tenant) hereunder) or pre-date
the Execution Date (to the extent paid for by Tenant) and Landlord
shall be entitled to those insurance proceeds under the policies
described in this Section 9.1(a)(2) and in
Section 9.1(a)(8) that are equal to the value of the
Leasehold Improvements that were paid for by Landlord (specifically
including the Construction Allowance and any other allowance for
installation of improvements in the Premises, if any, paid to
Tenant by Landlord (or paid to contractors or subcontractors at the
direction of Tenant) hereunder).
(3) Business interruption
insurance covering the perils described in
Section 9.1(a)(2) with such limits as are reasonable
and customary for businesses comparable to Tenant, to the extent
that such insurance coverage is available at commercially
reasonable rates.
(4) For any boiler or
machinery owned by or installed by or on behalf of Tenant, boiler
and machinery insurance, with a limit of at least the Liability
Limit.
- 37 -
(5) Insurance required by
law, including workers’ compensation insurance.
(6) Employers liability
insurance with limits not less than $1,000,000.00 for each
accident, $1,000,000.00 for each disease for each employee, and
$1,000,000.00 for disease in the aggregate.
(7) Commercial automobile
liability insurance covering all owned, hired, and non-owned
vehicles with a combined single limit of not less than
$1,000,000.00 for each accident or person.
(8) Insurance covering the
Leasehold Improvements and Tenant’s Personal Property against
loss or damage due to earthquake or difference in conditions
perils. Tenant may elect to self-insure this coverage. If Tenant
does not elect to self-insure this coverage, then each of these
policies shall name Landlord and each Additional Insured a loss
payee to the extent of their interest in the Leasehold Improvements
(which shall be as provided in Section 9.1(a)(2)) ;
provided , that Landlord gives to Tenant the name, address,
and interest of each party to be named loss payee.
(9) During the performance of
any Alteration, until completion thereof, Builder’s Risk
insurance on an “all risk” basis and on a completed
value form including a Permission to Complete and Occupy
endorsement, for full replacement value covering the interest of
Landlord and Tenant (and their respective contractors and
subcontractors) in all work incorporated in the Project and all
materials and equipment in or about the Premises.
(10) Such other insurance in
such amounts as Landlord may reasonably require from time to time;
provided , that the same is then customarily being required
from tenants by landlords of other first class office buildings in
downtown Chicago.
(b) Insurers and Terms
. Each policy required under Section 9.1(a) above shall
be written with insurance companies licensed to do business in the
state of Illinois having a rating of not less than A- and a
Financial Size Class (“ FSC ”) of at least VII
by A. M. Best Company, and be on terms that are reasonably
acceptable to Landlord. Each policy of insurance required to be
carried by Tenant shall, if then available from Tenant’s
insurer on commercially reasonable terms, contain a provision that
(1) no act or omission of Tenant shall affect or limit the
obligation of the insurance company to pay the amount of any loss
sustained by Landlord, and (2) shall be non-cancellable and/or
no material change in coverage shall be made thereto unless the
applicable insurance company shall have given to Landlord 30 days
prior notice thereof.
(c) Proof of Insurance
. Tenant shall provide Landlord with certificates of insurance or
other reasonable proof that the coverage required under
Section 9.1(a) above is in effect. Tenant shall provide
reasonable proof of renewal or replacement at least 5 business days
prior to any policy expiration date. Tenant’s failure to
provide any insurance required by this Lease shall not be construed
as a waiver of liability or any limit of damages, and Landlord and
Tenant expressly agree that the requirement to carry insurance does
not imply that such required insurance is adequate to fully
compensate the insured parties for the damages so
insured.
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(d) Waiver of
Subrogation . Each policy of insurance required pursuant to
Sections 9.1(a)(2) , (3) , (4) , and
(8) shall include a provision or endorsement in which the
insurer waives its right of subrogation against Landlord and each
Additional Insured.
9.2. Landlord’s
Insurance .
(a) Landlord’s
Coverage . During the Term, Landlord shall obtain and keep in
force the following insurance coverages:
(1) Commercial general
liability insurance in an amount not less than $20,000,000.00
(including applicable umbrella coverage reserved, and specifically
available, for the Building).
(2) All risk insurance
(including standard extended coverage endorsement perils, leakage
from fire protective devices and other water damage) covering the
full replacement of the Base Building (other than footings and
foundations), with a deductible not to exceed $100,000.00
(excluding any deductible for Named Windstorm, Flood, Earthquake,
Turbines or Boiler and Machinery breakdowns, for which Landlord
shall maintain market deductibles); provided , that Landlord
may increase such deductible based on what is reasonably available
in the market for such risks. Each of these policies shall include
a provision or endorsement in which the insurer waives its right of
subrogation against Tenant.
(3) Insurance covering the
perils described in Section 9.2(a)(2) for
Landlord’s loss of rental income or insurable gross profits.
Each of these policies shall include a provision or endorsement in
which the insurer waives its right of subrogation against
Tenant.
(4) Boiler and machinery
insurance. This policy shall include a provision or endorsement in
which the insurer waives its right of subrogation against the
Tenant.
(5) Other insurance that
Landlord elects to maintain; provided , that such insurance
is then reasonable and customary for comparable first class office
buildings in the downtown Chicago market.
(b) Terms . Each of
the policies required under Section 9.2(a) shall
otherwise have those limits (except that the insurance described in
Section 9.2(a)(2) shall always cover full replacement),
deductibles, retentions and other terms that Landlord prudently
determines and shall be written with insurance companies licensed
to do business in the state of Illinois having a rating of not less
than A- and a FSC of at least VII by A. M. Best Company.
| 10. |
DAMAGE OR DESTRUCTION |
10.1. Damage and
Repair . If all or any portion of the Project is damaged by
fire or other casualty, then the following provisions shall
apply:
(a) Landlord’s
Estimates . Landlord shall assess the damage to the Project
(but not the Leasehold Improvements) and as soon as reasonably
practicable notify Tenant of Landlord’s reasonable estimate
of the time required to substantially complete repairs and
restoration of the Project from the date of such estimate taking
into account the time periods
- 39 -
required to make insurance
loss adjustments, obtain permits and engage contractors (“
Repair Estimate ”). The period of time set forth in
the Repair Estimate is referred to as the “ Repair
Estimate Period ”. In the Repair Estimate, Landlord shall
also estimate the time period that the Premises will be
Untenantable (the “ Interruption Period Estimate
”‘) taking into account any period of up to 120 days
that will be required to restore or repair the Leasehold
Improvements. Within thirty 30 days after the later of the
casualty, issuance of the Repair Estimate, or, in the case of
Landlord only, receipt of a denial of coverage from
Landlord’s insurer, each of Landlord and Tenant may terminate
the Lease by giving to the other written notice on the following
conditions:
(1) Landlord may elect to
terminate this Lease if the Premises or any material portion
thereof is Untenantable and either:
(A) The Repair Estimate
Period during which the Premises or any material portion thereof in
any of the 10 South Wacker Building, the 20 South Wacker Building,
or the 30 South Wacker Building will remain Untenantable exceeds
365 days, or
(B) The damage or destruction
occurs in the last 12 Months of the Term and all options to extend
the Term have expired; or
(C) The repair and
restoration necessary so that no material portion of the Project
will continue to be Untenantable is not substantially covered by
insurance maintained or required to be maintained by Landlord
(subject only to those deductibles or retentions Landlord elected
to maintain) or Landlord’s insurer finally and
unconditionally denies coverage.
(2) Tenant may elect to
terminate this Lease if the Interruption Period Estimate exceeds
365 days.
(3) If Tenant so elects,
Tenant may render void any election by Landlord to terminate this
Lease pursuant to Section 10.1(a)(1)(A) by giving to
Landlord written notice (a “ Voiding Notice ”)
within 30 days after Landlord gives to Tenant such termination
notice; provided , that (A) there are at least three
years remaining in the Term, or, if there are fewer than three
years remaining in the Term, that Tenant exercises, in accordance
with this Lease, an available Extension Option at or prior to the
time of the giving of such Voiding Notice, (B) the cost of the
Base Building repairs will be covered by insurance in all material
respects, excluding any deductibles or retentions Landlord elected
to maintain, and no material amount of such cost is uninsured or
subject to any final or unconditional denial of claim or coverage
by any insurance provider, (C) Tenant covenants in writing to
restore the Leasehold Improvements as required herein, and occupy
that portion of the Premises occupied by Tenant prior to the
Casualty, (D) less than 50% of the Building is damaged, and
(E) Tenant shall not have the right to terminate this Lease
pursuant to Section 10.1(a)(2) , and shall not
terminate this Lease pursuant to Section 10.1(b)(1) so
long as Landlord is diligently pursuing the repairs and
restoration.
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(b) Repairs . If
neither party terminates this Lease pursuant to Section
10.01(a) above or if Landlord terminates this Lease but Tenant
timely gives to Landlord a Voiding Notice, then this Lease shall
remain in full force and effect and the following provisions shall
apply:
(1) Landlord shall repair and
restore the Project (but not the Leasehold Improvements) to the
condition existing prior to such damage, except for modifications
required by law. Landlord shall perform such work diligently and
continuously with the intent of completing such repair and
restoration work on or before the expiration of the Repair Estimate
Period. Notwithstanding anything contained in this Lease to the
contrary, if Landlord fails to substantially complete the repair of
any portion of the Project necessary for Tenant’s occupancy
of the Premises for the purpose of repairing and restoring the
Leasehold Improvements within 180 days after the last day of the
Repair Estimate Period, subject to delays for insurance
adjustments, delays caused by matters beyond Landlord’s
reasonable control, and delays caused by Tenant (“ Final
Repair Period ”), then Tenant may terminate this Lease by
giving to Landlord written notice not later than 15 days after last
day of the Final Repair Period. If Tenant gives to Landlord such
notice then this Lease shall terminate effective as of the date
such notice was given. If Tenant shall not timely give to Landlord
such notice then Tenant’s right to terminate this Lease
pursuant to this Section l0.1(b)(1) shall be void and of no
further force or effect.
(2) Tenant shall repair and
restore the Leasehold Improvements diligently and with reasonable
promptness to the condition existing prior to such damage, but not
less than then current Building Standards, except for modifications
required by law.
10.2. Rent Abatement .
If, as a result of the damage or destruction described in
Section 10.1 , any portion of the Premises becomes
Untenantable and Tenant does not actually use such Untenantable
portion of the Premises for more than 3 consecutive business days,
then Tenant’s Base Rent and, if applicable, Additional Rent
for such Untenantable portion of the Premises not used by Tenant
shall be abated from the date Tenant ceased such use until the
earlier of the date (a) the damaged or destroyed portion of
the Premises becomes tenantable for the operation of Tenant’s
business, or (b) 120 days after Landlord completes
Landlord’s repairs and restoration of the Base Building,
including all Common Areas. Tenant’s sole remedy against
Landlord for damage or destruction of any portion of the Premises
is termination of this Lease pursuant to
Section 10.1(b)(1) and abatement of Base Rent and
Additional Rent under this Section 10.2 , and Landlord
shall not be liable to Tenant for any other amount, including
damages to Tenant’s Personal Property, consequential damages,
actual or constructive eviction, or abatement of any other item of
Rent.
11.1. Claims . “
Claims ” means any and all liabilities, losses,
claims, demands, damages or expenses that are suffered or incurred
by a party, including attorneys’ fees reasonably incurred by
that party in the defense or enforcement of the rights of that
party.
11.2. Landlord’s
Waivers and Tenant’s Indemnity .
(a) Landlord’s
Waivers . Landlord waives any Claims against Tenant and its
Affiliates for perils insured or required to be insured by Landlord
under Section 9.2(a)(2) and (3) , so long as
such loss, injury or damage results from or in connection with this
Lease or
- 41 -
Tenant’s use and
occupancy of the Premises and notwithstanding anything to the
contrary in this Lease, in all events Landlord waives any Claims
for any special or consequential damages (such as interruption of
business, loss of income, or loss of opportunity) except to the
extent that any such Claims are caused by the willful misconduct of
Tenant or anyone for whom Tenant is legally responsible and except
for any Claims resulting from Tenant’s Holdover in violation
of Section 3.3 .
(b) Tenant’s
Indemnity . Unless waived by Landlord under
Section 11.2(a) , Tenant shall indemnify and defend
Landlord and its Affiliates and hold each of them harmless from and
against Claims arising from:
(1) Any accident or
occurrence in, on, or about the Premises, except to the extent
caused by the negligence or willful misconduct of Landlord or its
Affiliates or of their agents or contractors, or;
(2) Any act or omission on
the part of Tenant or any of Tenant’s Affiliates or their
agents or contractors;
(3) Any claim for commission
or other compensation by any person other than Broker for services
rendered to Tenant in procuring this Lease; or
(4) Any breach, violation, or
nonperformance of any covenant, condition, or agreement of this
Lease on the part of Tenant to be fulfilled, kept, observed, or
performed (it being acknowledged, however, that Tenant’s sole
liability for a Holdover is as set forth in and limited by
Section 3.3 ).
11.3. Tenant’s
Waivers and Landlord’s Indemnity and Waiver .
(a) Tenant’s
Waivers . Tenant waives any Claims against Landlord and
Landlord’s Affiliates for:
(1) Perils insured or
required to be insured by Tenant under Sections 9.1(a)(2) ,
(3) , (4) , and (8) ; or
(2) Loss or theft of property
of Tenant or others;
(3) Except to the extent
caused by the negligence or willful misconduct of Landlord or its
Affiliates, damage caused by (A) damage to property of Tenant
or others; (B) injury or damage to persons or property
resulting from fire, explosion, falling plaster, escaping steam or
gas, electricity, water, rain or snow, or leaks from any portion of
the Project or from any pipes, appliances or plumbing, or from
dampness; or (C) other tenants, occupants or persons in the
Premises or other portions of the Project; or (D) the public
or by construction of any private or public work; and
(4) Any breach, violation, or
nonperformance of any covenant, condition, or agreement of this
Lease on the part of Tenant to be fulfilled, kept, observed, or
performed.
- 42 -
Notwithstanding anything in
this Lease to the contrary, in all events Tenant waives any Claims
for any special or consequential damages (such as interruption of
business, loss of income, or loss of opportunity), provided
, that nothing herein shall limit Tenant’s rights under
Section 4.1(b) .
(b) Landlord’s
Indemnity and Waiver . Unless waived by Tenant under
Section 11.3(a) , Landlord shall indemnify and defend
Tenant and its Affiliates and hold each of them harmless from and
against Claims arising from:
(1) Any accident or
occurrence in, on, or about the Common Areas, except to the extent
caused by the negligence or willful misconduct of Tenant, its
Affiliates, their agents or their contractors;
(2) Any act or omission on
the part of Landlord or any of Landlord’s Affiliates or their
agents or contractors;
(3) Any claim for commission
or other compensation by any person other than Broker for services
rendered to Landlord in procuring this Lease; and
(4) Any breach, violation, or
nonperformance of any covenant, condition, or agreement of this
Lease on the part of Landlord to be fulfilled, kept, observed, or
performed.
Notwithstanding anything in
this Lease to the contrary, in all events Landlord waives any
Claims for any special or consequential damages (such as
interruption of business, loss of income, or loss of opportunity)
except for any such claims arising from a Holdover pursuant to
Section 3.3 , and then Tenant’s liability shall
be as set forth in (and limited by) Section 3.3
.
11.4. Affiliates
Defined . “ Affiliates ” means with respect
to a party (a) each corporation or other entity that is a
direct or indirect parent or subsidiary of that party, and
(b) each corporation or other entity that is controlled by or
under common control of a direct or indirect parent of such party.
For purposes of the definition of “ Affiliates
”, “ control ” shall mean ownership of
more than 50% of all of the voting stock or legal and equitable
interest in the entity in question.
11.5. Defense of Claim
. (a) If any claim that is within the scope of the indemnities
set forth in this Article 11 is asserted against any
indemnified party, then the indemnified party shall give prompt
written notice (each, an “ Indemnified Party Notice
”) thereof to the indemnifying party (i.e., within a
time period so as not to prejudice the indemnifying party’s
or its insurer’s ability to defend effectively any action or
proceeding brought on such claim) and the indemnifying party shall
have the right to defend and control the defense of any action or
proceeding brought on such claim with counsel chosen by the
indemnifying party’s insurance company or by the indemnifying
party subject to the approval of the indemnified party (such
approval not to be unreasonably withheld). If the indemnified party
fails promptly to give an Indemnified Party Notice or if the
indemnified party shall not afford the indemnifying party the right
to defend and control the defense of any such action or proceeding
then, in either of such events, the indemnifying party shall have
no obligation under the applicable indemnity set forth
- 43 -
in this Lease with respect to such
action or proceeding or other actions or proceedings involving the
same or related facts. If the indemnifying party shall defend any
such action or proceeding, then the following shall
apply:
(1) the indemnified party
shall cooperate with the indemnifying party (or its insurer) in the
defense of any such action or proceeding in such manner as the
indemnifying party (or its insurer) may from time to time
reasonably request and the indemnifying party shall not be liable
for the costs of any separate counsel employed by the indemnified
party;
(2) the indemnifying party
shall not be liable for any settlement made without the
indemnifying party’s consent;
(3) if such action or
proceeding can be settled by the payment of money and without the
need to admit liability on the indemnified party’s part and
without any civil or criminal penalties being imposed upon the
indemnified party, then the indemnifying party shall have the right
to settle such action or proceeding without the indemnified
party’s consent and the indemnifying party shall have no
obligation under the applicable indemnity set forth in this Lease
with respect to such action or proceeding or other actions or
proceedings involving the same or related facts if the indemnified
party refuses to agree to such a settlement; and
(4) if such action or
proceeding cannot be settled merely by the payment of money and
without the need to admit liability on the indemnified
party’s part and without any civil or criminal penalties
being imposed upon the indemnified party, then the indemnifying
party shall not settle such action or proceeding without the
indemnified party’s consent (which consent shall not be
unreasonably withheld, conditioned or delayed) and if the
indemnified party unreasonably withholds, conditions or delays its
consent to any such settlement, then the indemnifying party shall
have no obligation to further defend (or pay for the defense of)
such action or proceeding or other actions or proceedings involving
the same or related facts, and shall not be liable for Claims
arising therefrom in excess of the amount of Claims the
indemnifying party would have paid pursuant to the proposed
settlement offer.
(b) If an indemnifying party
shall, in good faith, believe that a Claim set forth in an
Indemnified Party Notice is or may not be within the scope of the
indemnifying party’s indemnity set forth in this Lease then,
pending determination of that question, the indemnifying party
shall not be deemed to be in default under this Lease by reason of
its failure or refusal to indemnify and hold harmless any
indemnified party therefrom or to pay such costs, expenses and
liabilities; provided , that if it shall be finally
determined by a court of competent jurisdiction that such Claim was
within the scope of such indemnifying party’s indemnity set
forth in this Lease then such indemnifying party shall be liable
for any judgment or reasonable settlement and any reasonable legal
fees incurred by the party entitled to indemnity hereunder,
together with interest at the Default Rate on the outstanding
amount of all such costs and expenses from the date paid by the
indemnified party (or, if later, the date the notice of such Claim
was given to the indemnifying party) until the indemnifying party
pays to the indemnified party all such amounts in full.
- 44 -
11.6. Survival of Waivers
and Indemnities . Landlord’s and Tenant’s waivers
and indemnities under Sections 11.2 and 11.3 shall
survive the expiration or early termination of this
Lease.
12.1. Taking . “
Taking ” means all or a portion of the Project is
acquired by or through a governmental or quasi-governmental entity
by exercise of a right of eminent domain or other condemnation
authority. If a Taking occurs then the following provisions shall
apply:
(a) Total Taking . If,
because of a Taking, substantially all of the Premises are
Untenantable for substantially all of the remaining Term, then this
Lease shall terminate on the date of the Taking.
(b) Partial Taking .
If a Taking does not cause this Lease to be terminated pursuant to
Section 12.1(a) , then Landlord shall restore to the
extent practicable (and alter, as necessary) the Common Areas, the
Premises (and those other portions of the Project that Tenant has
rights to use under this Lease prior to the Taking) to be
tenantable, unless the Lease is terminated by either Landlord or
Tenant under the following circumstances:
(1) Landlord may terminate
this Lease upon giving to Tenant 60 days prior written notice if
Landlord reasonably determines that it is uneconomical to restore
or alter the Project to be tenantable.
(2) Tenant may terminate this
Lease upon giving to Landlord 60 days prior written notice if the
Taking causes more than 33% of the Premises to be Untenantable for
the remainder of the Term, and Tenant cannot economically conduct
Tenant’s business in the remaining Premises.
(c) If this Lease is not
terminated under Sections 12.1(a) or (b) , the
Rent (Base Rent and Additional Rent) shall be reduced for the term
of the Taking based upon the RSF (of Office Space) or USF (of Fixed
Term Support Space) of the Premises (as applicable) made
Untenantable by the Taking.
12.2. Awards .
Landlord shall be entitled, except as otherwise hereinafter
provided, to receive the entire award in the Taking proceeding,
including, without limitation, any award made for the value of the
estate vested by this Lease in Tenant or any value attributable to
the unexpired portion of the Term, and Tenant hereby assigns to
Landlord any and all right, title and interest of Tenant now or
hereafter arising in or to any such award or any part thereof, and
Tenant shall be entitled to receive no part of such award;
provided , that nothing shall preclude Tenant from
participating in any such condemnation proceeding to claim or
receive from the condemning authority any compensation to which
Tenant may otherwise lawfully be entitled in such case in respect
of Tenant’s Personal Property, the unamortized value of the
Leasehold Improvements (but only to the extent such Leasehold
Improvements were paid for by Tenant (and not reimbursed by
Landlord)), or moving expenses; provided , that the same do
not include any value of the estate vested by this Lease in Tenant
or of the unexpired portion of the Term and do not reduce the
amount available to Landlord or materially delay the payment
thereof.
- 45 -
12.3. Temporary Taking
. If all or any portion of the Premises is Taken temporarily during
the Term for any public or quasi-public use or purpose, Tenant
shall give to Landlord prompt notice thereof and the Term shall not
be reduced or affected in any way and Tenant shall continue to pay
all Rent payable by Tenant without reduction or abatement and to
perform all of Tenant’s other obligations under this Lease,
except to the extent Tenant is prevented from doing so by the
condemning authority, and Tenant shall be entitled to receive any
award or payment from the condemning authority for such use, which
shall be received, held and applied by Tenant as a trust fund for
payment of the Rent falling due.
13.1. Transfer Defined
. “ Transfer ” means any:
(a) Sublease of all or any
portion of the Premises, or assignment, mortgage, hypothecation or
other conveyance of an interest in this Lease either voluntarily or
involuntarily or by operation of law. Any material modification,
amendment, or extension of a sublease, and any agreement by which a
landlord of a building other than the Project or its affiliate
agrees to assume the obligations of Tenant under this Lease, shall
be deemed a sublease for the purposes of this Article 13.1
;
(b) Use of the Premises with
Tenant’s consent by anyone other than Tenant and its
employees in the ordinary course of Tenant’s business;
provided , that “ Transfer ” shall not
include the use of the Premises by a Desk Space User;
provided , that (1) any such use or occupancy of desk
or office space shall be without the installation of any separate
entrance, (2) each Desk Space User shall use the Premises in
accordance with all of the provisions of this Lease, and only for
the use expressly permitted pursuant to this Lease, (3) in no
event shall the use of any portion of the Premises by a Desk Space
User create or be deemed to create any right, title or interest of
such Desk Space User in any portion of the Premises or this Lease,
(4) such “desk sharing” arrangement shall
terminate automatically upon the termination of this Lease,
(5) such Desk Space User shall not have any signage outside of
the Premises, (6) each Desk Space User shall be engaged in a
business or activity which is in keeping with standards of the
Building and (7) such desk sharing arrangement is for a valid
business purpose and not to circumvent the provisions of this
Article 13 . “ Desk Space User ” means a
bona fide member, client, service provider, regulatory authority or
other person or entity with which Tenant has an active and
meaningful business relationship and is using the relevant portion
of the Premises for a purpose associated with the business of
Tenant;
(c) Transfer of 51% or more
of Tenant’s assets, shares (except shares transferred by
public trading or as the result of an acquisition, merger or
consolidation with the resulting entity having equity securities
traded on a public exchange), membership interests, partnership
interests or other ownership interests; or
(d) Transfer of effective
control of Tenant (except shares transferred by public trading or
as the result of an acquisition, merger or consolidation with the
resulting entity having equity securities traded on a public
exchange).
- 46 -
13.2. Prohibited
Transfers . Tenant may not enter into a Transfer or other
agreement to use or occupy the Premises that provides for rent or
other compensation based in whole or in part on the net income or
profits from the business operated in the Premises. Tenant may not
enter into a Transfer if the proposed transferee is directly or
indirectly related to the Landlord under Section 856 of the
Code; provided , that Landlord has given to Tenant notice
and appropriate evidence thereof. Any such Transfers in violation
of this Section 13.2 shall be considered null, void and
of no force or effect.
13.3. Consent Not
Required .
(a) Upon giving notice to
Landlord, but without Landlord’s prior consent, Tenant may
effect a Transfer to a Permitted Transferee; provided , that
as to any permitted Transfer resulting from a transaction involving
publicly traded equity securities, Tenant may give to Landlord
notice thereof promptly after such Transfer occurs. A “
Permitted Transferee ” is any person or entity that
meets the requirements of either Section 13.3(a)(1) or
(2) :
(1) The transferee (who in
the case of Section 13.1(c) or (d) may be
Tenant itself) is an Affiliate of Tenant; provided , that in
the case of any such Transfer, the Transfer is for a valid business
purpose and not to avoid any obligations under this Lease, and the
transferee assumes by written instrument satisfactory to Landlord
all of Tenant’s obligations under this Lease.
(2) The transferee (who in
the case of Section 13.1(c) or (d) may be Tenant
itself) is (A) an entity created by, or resulting from,
merger, acquisition, consolidation, reorganization or
recapitalization of, by, or with Tenant or (B) a purchaser of
all or substantially all of Tenant’s assets; provided
, that in the case of both clauses (A) and (B)
, that the transferee assumes by written instrument satisfactory to
Landlord all of Tenant’s obligations under this Lease (unless
Tenant is the surviving entity in a merger), such Transfer is for a
valid business purpose and not to avoid any obligations under this
Lease, and the transferee shall have, immediately after giving
effect to such Transfer, a net worth (computed in accordance with
GAAP) at least equal to $200,000,000.00.
(b) In addition to
Tenant’s Transfer rights (including the rights to sublease)
set forth in Section 13.3(a) , upon giving to Landlord
notice, but without Landlord’s prior consent, Tenant may
sublet to one or more subtenants up to 20% of the Premises in the
aggregate at any date of determination (“ Permitted
Sublease ”); provided , that:
(1) Any Permitted Sublease
shall not permit the subtenant thereunder to use, or permit the use
of, the Premises or any part thereof for:
(A) The offices or business
of a governmental or quasi-governmental bureau, department or
agency, foreign or domestic, including an autonomous governmental
corporation or diplomatic or trade mission;
(B) Conduct or maintenance of
any gambling or gaming facilities, facilities for any political
organization (excluding Tenant’s PAC) or any social or other
club, or a school or employment or placement agency; or
- 47 -
(C) Any use not included as a
Use, or which would violate any agreement which affects the
Building or binds Landlord, including without limitation, any
exclusive uses granted to then existing tenants of the
Building;
(2) Such proposed subtenant
is not named on the list of Specially Designated Nationals and
Blocked Persons maintained by the Office of Foreign Assets Control
of the United States Department of the Treasury or any such similar
list maintained by the state or federal government; and
(3) Except if such proposed
subtenant is a member firm of Tenant or Tenant’s customer or
of an Affiliated Entity or its customer, such proposed subtenant is
not (A) an existing tenant of the Building or an Affiliate of
an existing tenant of the Building, or (B) a party with whom
Landlord is actively negotiating to lease space in the Building (or
has, in the 6 months prior thereto, been actively negotiating to
lease space in the Building); and in each case space of a
comparable size is then available (or is anticipated to be
available no later than the date on which the proposed sublease is
scheduled to commence) for lease in the Building.
13.4. Consent Required
. Each proposed Transfer other than those prohibited under
Section 13.2 or permitted under
Section 13.3 shall be subject to Landlord’s prior
written consent, in which case the parties will proceed as
follows:
(a) Tenant’s
Notice . Tenant shall give to Landlord notice at least 30 days
prior to the proposed Transfer of the name and address of the
proposed transferee and the proposed use of the Premises, and
include in such notice the Transfer documents and copies of the
proposed transferee’s balance sheets and income statements
(both current and for the past 2 years to the extent available) and
any other information Landlord may reasonably request.
(b) Landlord’s
Rights . Within 30 days after Tenant gives to Landlord
Tenant’s complete notice pursuant to
Section 13.4(a) , Landlord may:
(1) If the proposed Transfer
is either an assignment of this Lease or a sublease that in
aggregate with the other subleases of the Premises in effect on the
date of determination covers more than 20% of the Premises and is
for all or substantially all of the then remaining Term, terminate
this Lease in respect of the space that Tenant proposes to sublease
(or entirely in the case of a proposed assignment) as of the
proposed Transfer date. If Landlord exercises its option to
terminate this Lease with respect to all or a portion of the
Premises, (A) this Lease shall end and expire with respect to
all or a portion of the Premises, as the case may be, on the date
that such assignment or sublease was to commence, (B) Rent
shall be apportioned, paid or refunded as of such date,
(C) Tenant, upon Landlord’s request, shall enter into an
amendment of this Lease ratifying and confirming such total or
partial termination, and setting forth any appropriate
modifications to the terms and provisions hereof, and
(D) Landlord shall be free to lease the Premises (or any
portion thereof) to Tenant’s prospective assignee or
subtenant or to any other party. Landlord shall pay all costs to
make each of the transferred space and the remainder of the
Premises a self-contained rental unit and to install any required
Building corridors; or
- 48 -
(2) Consent or deny consent
to the proposed Transfer; which consent shall not be unreasonably
withheld if:
(A) The proposed use is
consistent with the Use, and will not cause Landlord to be in
breach of any lease, law or other agreement affecting the
Project;
(B) The proposed transferee
is typical of tenants that directly lease premises in comparable
first class office buildings in downtown Chicago;
(C) The proposed transferee
is not a governmental or diplomatic entity;
(D) The proposed transferee
is not named on the list of Specially Designated Nationals and
Blocked Persons maintained by the Office of Foreign Assets Control
of the United States Department of the Treasury or any such similar
list maintained by the state or federal government;
(E) If space of a comparable
size is then available (or is anticipated to be available no later
than the date on which the proposed sublease or assignment is
scheduled to commence) in the Building for lease by such proposed
transferee, such proposed transferee (except for a proposed
transferee that is a member firm of Tenant or Tenant’s
customer or of an Affiliated Entity of Tenant or such Affiliated
Entity’s customer) is not an existing tenant or an Affiliate
of an existing tenant, or a party with whom Landlord is actively
negotiating to lease space in the Building (or has, in the last 6
months, been actively negotiating to lease space in the
Building);
(F) Tenant is not in Default
under this Lease;
(G) With respect to the third
floor (and the seventh floor, if Tenant is leasing same as
contemplated herein) of the 20 South Wacker Building, so long as
any such space is not separately demised or physically subdivided
in any manner which interferes with any Landlord services provided
to such floor(s) under this Lease (including Standard Services);
and
(H) Tenant shall have
reimbursed Landlord for all reasonable expenses incurred by
Landlord in consenting to such assignment or sublease, including
any investigations as to the acceptability of the Transferee and
all legal costs reasonably incurred in connection with the granting
of any requested consent.
(c) Compelling Consent
. If Landlord does not consent to a Transfer, Tenant’s sole
remedy against Landlord for breach of its obligation to be
reasonable shall be an action for specific performance or
declaratory relief, and Tenant may not terminate this Lease or seek
monetary damages, unless Tenant is able to demonstrate bad faith or
willful misconduct.
(d) Assignment and
Sublease Requirements . With respect to each and every
subletting and/or assignment pursuant to the provisions of this
Lease:
(1) the form of the proposed
assignment or sublease shall be reasonably satisfactory to
Landlord;
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(2) no sublease of the entire
Premises shall be for a term ending later than one day prior to the
Expiration Date;
(3) no Transferee shall take
possession of any portion of the Premises until an executed
counterpart of such sublease or assignment has been delivered to
Landlord and approved by Landlord as provided in
Section 13.4(a) , if this Lease requires approval of
such sublease or assignment; and
(4) each sublease shall be
subject and subordinate to this Lease and to the matters to which
this Lease is or shall be subordinate, and Tenant and each
Transferee shall be deemed to have agreed that upon any termination
of this Lease, Tenant has hereby assigned to Landlord, and Landlord
may, at its option, accept such assignment of, all right, title,
and interest of Tenant as sublandlord under such sublease, together
with all modifications, extensions, and renewals thereof then in
effect and such Transferee shall, at Landlord’s option,
attorn to Landlord pursuant to the then executory provisions of
such sublease, except that Landlord shall not be (A) liable
for any previous act or omission of Tenant under such sublease,
(B) subject to any counterclaim, offset, or defense not
expressly provided in such sublease or which theretofore accrued to
such Transferee against Tenant, (C) bound by any previous
modification of such sublease not consented to by Landlord or by
any prepayment of more than one month’s rent, (D) bound
to return such Transferee’s security deposit, if any, except
to the extent Landlord shall receive actual possession of such
deposit and such Transferee shall be entitled to the return of all
or any portion of such deposit under the terms of such
Transferee’s sublease, or (E) obligated to make any
payment to or on behalf of such Transferee, or to perform any work
in the sublet space or the Building, or in any way to prepare the
subleased space for occupancy, beyond Landlord’s obligations
under this Lease. The provisions of this
Section 13.4(d)(5) shall be self-operative, and no
further instrument shall be required to give effect to this
provision; provided , that Transferee shall execute and
deliver to Landlord any instruments Landlord may reasonably request
to evidence and confirm such subordination and
attornment.
13.5. Payments to
Landlord . If Tenant enters into any assignment or sublease
(other than an assignment or sublease pursuant to
Section 13.3(a)) , Tenant shall, within 60 days after
Landlord’s consent to such assignment or sublease (or, if
such assignment or sublease is permitted hereunder without
Landlord’s prior consent, within 60 days after the effective
date of such assignment or sublease), deliver to Landlord a list of
Tenant’s reasonable third-party brokerage fees, legal fees
and architectural fees paid or to be paid in connection with such
transaction, the cost of Alterations paid for by Tenant to effect
such Transfer, and, in the case of any sublease, any actual costs
incurred by Tenant in separately demising the sublet space
(collectively, “ Transaction Costs ”), together
with a list of all of Tenant’s Property to be transferred to
such Transferee. In consideration of such assignment or subletting,
Tenant shall pay to Landlord:
(a) In the case of an
assignment, on the effective date of the assignment, 50% of all
sums and other consideration paid to Tenant by the assignee for or
by reason of such assignment (including key money, bonus money and
any sums paid for services rendered by
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Tenant to the assignee in
excess of fair market value for such services and sums paid for the
sale or rental of Tenant’s Property, less the then fair
market or rental value thereof) after first deducting the
Transaction Costs; or
(b) In the case of a
sublease, 50% of any consideration payable under the sublease to
Tenant by the sublessee which exceeds on a per square foot basis
the Base Rent, Tenant’s Share of Expenses and Tenant’s
Share of Taxes accruing during the term of the sublease in respect
of the sublet space (together with any sums paid for services
rendered by Tenant to the sublessee in excess of fair market value
for such services and sums paid for the sale or rental of
Tenant’s Property, less the then fair market or rental value
thereof) after first deducting the Transaction Costs. The sums
payable under this clause shall be paid by Tenant to Landlord
monthly as and when paid by the subtenant to Tenant.
Landlord and Landlord’s
authorized representatives shall have the right at all reasonable
times to audit the books, records and papers of Tenant relating to
any Transfer (other than a Transfer pursuant to
Section 13.3(a) ), and shall have the right to make
copies thereof.
13.6. Effect of
Transfers . No Transfer shall release Tenant from any
obligation under this Lease. Landlord’s acceptance of a
payment from any person or entity other than Tenant shall not
constitute a waiver of Tenant’s obligations under this
Article 13 . Any Transfer in violation of this Article
13 is void and of no force or effect. If Tenant is in Default
of this Lease, Landlord may proceed against Tenant without
exhausting any remedies against any transferee and may require (by
giving to any transferee written notice) any transferee to pay rent
owed Tenant directly to Landlord (which Landlord shall apply
against Tenant’s Lease obligations). Termination of this
Lease for any reason shall not result in a merger of estates. Each
sublease shall be deemed terminated upon termination of this Lease
unless Landlord notifies the subtenant in writing of
Landlord’s election to assume any sublease, in which case the
subtenant shall attorn to Landlord under the executory terms of the
sublease. Landlord’s consent to any assignment or subletting
shall not relieve Tenant from the obligation to obtain
Landlord’s consent to any further assignment or subletting.
In no event shall any subtenant assign or encumber its sublease or
further sublet any portion of its sublet space, or otherwise suffer
or permit any portion of the sublet space to be used or occupied by
others.
13.7. Indemnity .
Tenant shall indemnify, defend, protect and hold harmless Landlord
from and against any and all Claims against Landlord by any
Transferee or anyone claiming under or through any Transferee or by
any brokers or other persons or entities claiming a commission or
similar compensation in connection with the proposed assignment or
sublease, irrespective of whether Landlord shall give or decline to
give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under this Article
13 .
13.8. Limitation on
Consent . If Landlord consents to a proposed assignment or
sublease and Tenant fails to execute and deliver to Landlord such
assignment or sublease within 180 days after the giving of such
consent, or the amount of space subject to any such sublease varies
by more than 10% from that specified in the notice given by Tenant
to Landlord pursuant to Section 13.4(a) , or the net
effective rent payable under such sublease is less than 90% of the
net effective rent specified in such notice, or if there are any
material changes in the terms and
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conditions of the proposed assignment or
sublease such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Article 13 ,
then Tenant shall again comply with all of the provisions and
conditions of this Article 13 before assigning this Lease or
subletting all or any portion of the Premises.
14.1. Landlord’s
Transfer . Landlord’s right to transfer any interest in
the Project or this Lease is not limited by this Lease, except as
expressly provided in this Article 14 . Upon any such
transfer, Tenant will attorn to Landlord’s transferee and
Landlord will be released from liability under this Lease, except
for any Lease obligations accruing before the transfer that are not
assumed by the transferee.
14.2. Attornment .
(a) Subject to the provisions of Section 14.2(d)
below, this Lease is subject and subordinate to all Mortgages and
Superior Leases. Tenant shall from time to time within 10 days
after request from Landlord execute and deliver any documents or
instruments that may be reasonably required by any Mortgagee or
Lessor and are reasonably satisfactory to Tenant to confirm any
subordination. “ Mortgage ” means any mortgage,
trust indenture or other financing document which may now or
hereafter affect all or any portion of the Premises, the Project,
the Building or any Superior Lease and the leasehold interest
created thereby, and all renewals, extensions, supplements,
amendments, modifications, consolidations and replacements thereof
or thereto, substitutions therefor, and advances made thereunder.
“ Mortgagee ” means any mortgagee, trustee or
other holder of a Mortgage. “ Superior Lease ”
means any ground or underlying lease of the Project or any part
thereof heretofore or hereafter made and all renewals, extensions,
supplements, amendments, modifications, consolidations, and
replacements thereof. “ Lessor ” means a lessor
under a Superior Lease.
(b) Any Mortgagee may elect
that this Lease shall have priority over the Mortgage and, upon
notification to Tenant by such Mortgagee, this Lease shall be
deemed to have priority over such Mortgage, regardless of the
Execution Date. Tenant shall execute and deliver to Landlord,
within 15 business days after request, any amendment of this Lease
reasonably requested by a Mortgagee; provided that such amendment
shall not (i) reduce or extend the Term, (ii) increase
the Rent, (iii) reduce the area of the Premises,
(iv) increase Tenant’s obligations or decrease
Tenant’s rights under this Lease in any respect, or
(v) decrease Landlord’s obligations or increase
Landlord’s rights under this Lease in any respect. Landlord
shall, within 45 days of Landlord’s receipt of Tenant’s
invoice therefor, reimburse Tenant for its reasonable out-of-pocket
legal fees in connection with the review and preparation of such
amendment requested by a Mortgagee, whether or not Tenant agrees
that the request meets the foregoing conditions.
(c) Subject to the following
provisions of this Section 14.2(c) . Landlord may
elect, at any time during the Term, to convert the Project (or any
part thereof) to condominium ownership or may subject the Project
(or any part thereof) to a condominium declaration, by laws and
other instruments (collectively, the “ Declaration
”) which may be recorded regardless of the reason therefor,
in order to subject the Project (or any part thereof) to a
condominium form of ownership pursuant to the Illinois Condominium
Property Act or any successor law; provided , that
(i) there shall never be more than one Landlord under this
Lease ( i.e. , all portions of the
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Premises must be owned by the
same entity at any one time), (ii) the Declaration does not by
its terms (A) reduce or extend the Term, (B) increase the
Rent, (C) reduce the area of the Premises, (D) increase
Tenant’s obligations or decrease Tenant’s rights under
this Lease in any respect, (E) decrease Landlord’s
obligations or increase Landlord’s rights under this Lease in
any respect, or (F) increase any Expenses reimbursed by Tenant
under this Lease and (iii) this Lease remains superior to the
Declaration. Tenant, at no cost and expense to Tenant, shall
cooperate with Landlord as reasonably requested by Landlord in
connection with this Section 14.2(c) .
(d) As a condition to
Tenant’s agreement hereunder to subordinate Tenant’s
interest in this Lease to any existing or future Mortgage and/or
any Superior Lease made between Landlord and such Mortgagee and/or
Lessor, Landlord shall obtain from each Mortgagee or Lessor an
agreement, substantially in the form of Exhibit I annexed
hereto (with such changes thereto as are reasonably acceptable to
Tenant and such Mortgagee and/or Lessor) or such other form
reasonably acceptable to Tenant and such Mortgagee and/or Lessor
(any such agreement, a “ Non-Disturbance Agreement
”). If any Lessor or Mortgagee executes and delivers to
Landlord a Non-Disturbance Agreement and Landlord delivers the same
to Tenant, and Tenant either fails or refuses to execute and
deliver said Non-Disturbance Agreement within 20 days following
Landlord’s delivery of such Non-Disturbance Agreement to
Tenant, this Lease shall be subject and subordinate to such
Superior Lease or Superior Mortgage and Tenant shall automatically
be deemed to be subject to and subordinate to such Superior Lessor
or Superior Mortgagee and Landlord shall have no further obligation
to obtain a Non-Disturbance Agreement for Tenant from such Lessor
or Mortgagee.
14.3. Estoppel
Certificate . Within 10 days after receipt of a written
request, Tenant or Landlord, as applicable, will execute,
acknowledge and deliver to the requesting party a certificate upon
which the requesting party and each existing or prospective
Encumbrance holder or prospective purchaser of the Project or
transferee of any Transfer may rely (for estoppel purposes only)
confirming the following (or specifying any exceptions to the
following) as of the date of such certificate:
(a) The Scheduled
Commencement Date and Expiration Date;
(b) The documents that
constitute the Lease, and that the Lease is unmodified and in full
force and effect;
(c) The date through which
Base Rent, Additional Rent and other Rent has been paid;
(d) To the knowledge of the
certifying party, that neither Landlord nor Tenant is in default
under this Lease;
(e) To the knowledge of the
certifying party, that Landlord has satisfied all Lease obligations
to improve the Premises (or provide Tenant an allowance therefor)
and Tenant has accepted the Premises;
(f) To the knowledge of the
certifying party, that Tenant (and other occupants permitted under
Article 13 without a sublease or assignment) are the sole
occupants of the Premises; and
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(g) Such other matters
concerning this Lease or Tenant’s occupancy that the
requesting party may
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