350 WEST MART CENTER
This Lease made as of November , 2007 (the “ Effective Date ”) between 350 North Orleans L.L.C., a Delaware limited liability company having an address c/o Merchandise Mart Properties, Inc., 222 Merchandise Mart Plaza, Suite 470, Chicago, IL 60654 (" Landlord ") and UPSHOT INC., a Delaware corporation, having a present address at 303 East Wacker Drive, Chicago, Illinois 60601 (" Tenant ").
(A) Landlord does hereby demise and lease to Tenant, and Tenant accepts that certain space shown cross-hatched on Exhibit "A" which is attached hereto and made a part hereof, consisting of approximately 41,486 rentable square feet and commonly described as the entire Fifth (5 th ) Floor South Tower (" Premises ") of a building located on land at 350 North Orleans Street (" Building ") (provided, however, the Building does not include the hotel premises (hereinafter the " Hotel Premises ") located in the same physical structure as the Building) constructed on the north portion of the property bounded on the north by West Kinzie Street, on the east by North Orleans Street, on the west by the Chicago River, and on the south by a line 352.50 feet south of and parallel with the south line of West Kinzie Street in Chicago, Illinois (such land and Building hereinafter referred to, together with all present and future easements, additions, improvements (other than the Hotel Premises) and other rights appurtenant thereto, as the " Property "), for a term beginning on the Commencement Date (as hereinafter defined) and ending on the last day of the Thirteenth (13 th ) full Lease Year (as hereinafter defined) thereafter (" Term "), unless sooner terminated as provided herein, subject to the terms, covenants and agreements herein contained. The Commencement Date shall be the later of (a) May 1, 2008, or (b) the day after the last day of the TI Construction Period (defined below). The “ TI Construction Period ” is the period of four calendar months after Landlord delivers the Premises to Tenant in accordance with the terms of this Lease and with all of the Shell and Core Work substantially completed such that Tenant can commence its Improvements; provided, however, that the TI Construction Period shall be extended on a day for day basis for each day of Landlord Delay (defined below) and Force Majeure Delay (defined below) that shall occur. The parties anticipate that the Premises will be so delivered to Tenant on or about January 1, 2008 (the “ Estimated Delivery Date ”).
For purposes of this Lease, " Lease Year " shall mean a period of twelve (12) consecutive calendar months, the first of which shall commence on the Commencement Date if the Commencement Date shall be the first day of a calendar month, or on the first day of the first calendar month following the Commencement Date if the Commencement Date shall be other than on the first day of a calendar month, and shall end on the last day of the twelfth (12th) calendar month thereafter. Each successive Lease Year shall be a twelve (12) calendar month period commencing on the anniversary of the commencement of the first Lease Year. Upon the
determination of the actual date of the Commencement Date, the parties agree to memorialize in writing such date for the determination of the Lease Year and the expiration of the Term hereof.
(B) Landlord and Tenant agree that the rentable area of the Premises initially demised pursuant to this Article 1 and any additional space that at any time may be demised hereunder and the rentable area of the Building shall be computed in accordance with Building Owners and Managers Association International Standard Method for Measuring Floor Area in Office Buildings known as American National Standard ANS1 Z65.1-1996, approved June 27, 1996 by American National Standards Institute, Inc. (" BOMA Standards "). Landlord and Tenant hereby stipulate that the rentable area of the Premises initially demised pursuant to this Article 1 is 41,486 rentable square feet.
2. USE. Tenant will use and occupy the Premises for general office purposes and other uses ancillary thereto (the “ Permitted Use ”) and for no other use or purpose. Tenant will not use or permit upon the Premises anything that will invalidate any policies of insurance now or hereafter carried on the Building or that will increase the rate of insurance on the Premises or on the Building; provided, however, that nothing herein shall prohibit Tenant from using the Premises for the Permitted Use or require Tenant to pay any specific increase in the rate of insurance associated with Tenant’s specific use of the Premises for the Permitted Use. Tenant will pay all extra insurance premiums on the Building which may be caused by the use which Tenant shall make of the Premises (other than a use stated in the first sentence hereof). Tenant will not (a) use or permit upon the Premises anything that may be dangerous to life or limb; (b) in any manner deface or injure the Building or any part thereof or overload the floors of the Premises; or (c) do anything or permit anything to be done upon the Premises in any way creating a nuisance or unreasonably disturbing any other tenant in the Building or the occupants of neighboring property (for example, creation of unreasonable noise, odors or vibration emanating from the Premises). Tenant shall further not carry-on or permit any activities which are reasonably likely to: (1) involve the storage, use or disposal of medical or hazardous waste or substances or the creation of an environmental hazard other than such substances in such amounts customarily used in normal office operations; or (2) impair or interfere with (i) the structure of the Building or the operation of Building systems, (ii) the character, reputation or appearance of the Building as a first-class building, or (iii) the furnishing of services (including utilities, telephone and communications) to any portion of the Building. The Premises shall not be used for the purposes of any so called "office suites", schools (although training for Tenant's corporate purposes is allowed), facilities of foreign governments, advertising agencies (other than Tenant or Tenant Occupants, as hereinafter defined), employment agencies, medical treatment facilities, governmental entities, a restaurant open to the public, or any retail, showroom or wholesale activities. Subject to Force Majeure events (as defined in Article 35(A)), Tenant will fully and promptly comply, and operate the Premises in conformity, with all applicable federal, state and municipal laws, ordinances, codes, regulations and requirements respecting the Premises or relating to Tenant's specific use or occupancy thereof, and activities therein provided, however, Tenant shall not be responsible for assuring (or repairing or maintaining) that the "Building Systems" (as defined in Article 7 hereof), are in compliance with such laws, ordinances, codes, regulations or requirements. Tenant will not use the Premises for lodging or sleeping purposes, nor conduct or permit to be conducted on the Premises any business
or activity which is contrary to the provisions of this Lease or to any applicable governmental laws, ordinances, codes, regulations and requirements. Tenant shall promptly pay all taxes of whatever kind which are imposed upon Tenant but which are to be collected by Landlord. Tenant shall at no time sell food (other than to Tenant’s employees and guests) on or from the Premises. Tenant shall at no time sell (within the meaning of the Illinois Liquor Control Act, as now or hereafter amended) alcoholic liquor on or from the Premises, provided, however, that Tenant may occasionally give complimentary food and alcoholic liquor to its employees and guests on the Premises, on condition that Tenant shall comply with all applicable governmental requirements, and on further condition that, prior to the giving of such alcoholic liquor, Tenant shall procure and maintain continuously thereafter (or cause to be procured and maintained continuously thereafter) in force a policy of or endorsement for host liquor liability insurance, as set forth in Article 25 hereof.
(A) Tenant shall pay to Landlord an annual base rent (" Base Rent ") for the Premises (based on 41,486 rentable square feet) as shown below for each respective period in equal monthly installments during each respective period as follows:
Tenant shall pay each installment of Base Rent in advance on the first day of every calendar month of the Term. All such payments shall be made payable to Landlord or Landlord's agent and shall be made at the office of the Building or at such other places and to such other parties as Landlord shall from time to time, by not less than ten (10) business days written notice, appoint. Base Rent shall be payable without any prior demand therefor and except as expressly provided otherwise herein, without any deductions or set-offs whatsoever. If the Term commences on a day other than the first day of the calendar month, or ends on a day other than the last day of the calendar month, the Base Rent for such fractional month shall be prorated on the basis of 1/365th (or the applicable year is a leap year, 1/366th) of the annual Base Rent for each day of such fractional month.
(B) Base Rent shall abate (1) in full for a period of fifteen (15) months commencing on the Commencement Date, (2) in the amount of $2,534.65 per month beginning at the start of the sixteenth (16th) month through the twenty-fourth (24 th ) month, and (3) in the amount of $2,598.17 per month beginning at the start of the twenty-fifth (25 th ) month through the thirty-second (32 nd ) month following the Commencement Date; provided that, if at any time during the forgoing abatement period, there shall occur an Event of Default, then for so long as such Event of Default shall continue without cure, in addition to all other rights, powers and remedies afforded to Landlord under this Lease, the abatement of Base Rent provided in the foregoing sentence shall immediately and without notice terminate and Landlord shall be entitled to receive and collect and Tenant shall pay all Base Rent which would have been paid but for the abatement herein permitted.
4. RENT ADJUSTMENTS. Landlord and Tenant agree that the following rent adjustments shall be made with respect to each calendar year of the Term, or portion thereof, including the calendar year in which the Term of this Lease begins and the calendar year in which the Term of this Lease terminates, after the Base Year (which “ Base Year ” for purposes of this Lease shall be the calendar year ending on the December 31, 2009). For purposes of such rent adjustments, “ Tenant's Proportionate Share ” is agreed to be (x) 3.352% for the period beginning on the Commencement Date and ending on the last day of the thirty-second (32 nd ) month following the Commencement Date, and (y) 3.442 % for the period beginning on the first day of the thirty-third (33 rd ) month following the Commencement Date, which amount is calculated by dividing the rentable square feet of the Premises by 1,205,289, stipulated to be the rentable square feet in the Building.
(A) Tenant shall pay to Landlord as additional rent an amount equal to Tenant's Proportionate Share of the amount by which Real Estate Related Taxes (as hereinafter defined) paid in any calendar year during the Term after the Base Year exceed Real Estate Related Taxes paid in the Base Year. Subject to the provisions below in this Paragraph (A), " Real Estate Related Taxes " shall mean all taxes, assessments, impositions and governmental charges of every kind and nature which Landlord shall pay in a calendar year because of or in any way connected with the ownership, leasing, management, and operation of the Building and the Property. The definition of Real Estate Related Taxes is subject to the following:
(1) the amount of ad valorem real and personal property taxes against Landlord's real and personal property to be included in Real Estate Related Taxes shall be the amount shown by the latest available tax bills required to be paid in the calendar year in respect of which Real Estate Related Taxes are being determined. The amount of any tax refunds shall be deducted from Real Estate Related Taxes in the calendar year they are received by Landlord;
(2) the amount of special taxes and special assessments to be included shall be limited to the amount of the installments (plus any interest, other than penalty interest, payable thereon) of such special tax or special assessment required to be paid during the calendar year in respect of which Real Estate Related Taxes are being determined;
(3) there shall be excluded from Real Estate Related Taxes all income taxes and any other taxes imposed upon or measured by Landlord’s gross income or profits [except for any specific tax or excise on rents or other income from the Property (or on the value of leases thereon) or a specific gross receipts tax or excise on rents or other income from the Property (or on the value of leases thereon)], excess profit taxes, transfer, sale, gift, franchise, capital stock and inheritance or estate taxes, except to the extent that any such tax is in lieu of or in substitution for, in whole or in part, any tax included in Real Estate Related Taxes. Real Estate Related Taxes shall also exclude all taxes, assessments, charges, costs and disbursements paid in connection with the Hotel Premises.
(4) Real Estate Related Taxes shall also include, in the calendar year paid, all fees, costs and expenses (including reasonable attorneys' fees) reasonably incurred by Landlord in contesting or attempting to reduce or limit any Real Estate Related Taxes, regardless of whether any such reduction or limitation is obtained.
In no event shall Tenant be obligated to pay any amount for Real Estate Related Taxes that are first billed to Tenant after the date that is two (2) years following the date of delivery of the Landlord's Annual Statement (defined below) for the calendar year to which such Real Estate Related Taxes are allocable.
(B) Tenant shall also pay to Landlord as additional rent an amount equal to Tenant's Proportionate Share of the amount by which Operating Expenses for any calendar year during the Term after the Base Year exceed Operating Expenses for the Base Year. Subject to the provisions below in this Paragraph (B), Operating Expenses shall mean all expenses, costs and disbursements of every kind and nature paid, incurred, or otherwise arising in respect of a calendar year because of or in connection with the ownership, management, maintenance, repair, and operation of the Building and the Property. The definition of Operating Expenses is subject to the following:
(i) There shall be excluded from Operating Expenses: (1) costs of alterations of tenant spaces; (2) interest, depreciation and amortization except as specifically provided in clause (ii), below; (3) principal and interest payments on mortgages or other funds borrowed by Landlord, financing or refinancing expenses, and expenses incurred in connection with the sale of the Property or any interest therein; (4) return on investment; (5) Real Estate Related Taxes with the respect to which Tenant is liable for its Proportionate Share pursuant to the preceding paragraph (A) and all costs and expenses not permitted to be included in Real Estate Related Taxes; (6) the cost of capital improvements, capital repairs in the nature of capital replacements, and capital equipment as determined in accordance with GAAP (defined below) (collectively, “ Capital Items ”), except as expressly provided in clause (ii) below with respect to Capital Items resulting in a reduction or limitation in Operating Expenses or required to comply with governmental requirements enacted or initially enforced after the date of execution hereof; (7) ground lease or master lease rents or costs in connection therewith; (8) real estate brokers' leasing commissions or compensation and any other expenses incurred in leasing space or procuring tenants; (9) any costs for which
Landlord has received reimbursement (other than reimbursements from tenants under operating expense escalation clauses), whether from insurance or condemnation proceeds and any costs for which Landlord would have been entitled to reimbursement if Landlord has carried the insurance Landlord is required to carry under this Lease; (10) attorneys' fees, costs and disbursements and other expenses incurred in connection with negotiation of leases with or disputes with tenants or prospective tenants of the Building; (11) expenses in connection with any service or other benefits of a type which are not provided to Tenant but which are provided to another tenant or occupant of the Building or that are provided to Tenant for an additional charge but are provided to any other tenant without charge or at a substantially reduced charge; (12) overhead and profit increment and any other amounts paid to parents, subsidiaries or affiliates of Landlord or its beneficiary for services on or to the Building or goods supplied to the Building to the extent that the costs of such services or goods exceed the competitive costs of such services or goods were they not so rendered by such parent, subsidiary or affiliate (subject, however, to the proviso in clause (15) below as to management fees); (13) any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord or Landlord's beneficiary or any affiliate of either; (14) advertising, marketing and promotional expenditures; (15) management fees to the extent such fees exceed similar costs incurred in comparable office buildings in the area; provided, however, that in any event Tenant agrees that there may be included in Operating Expenses a management fee, whether paid to an affiliate of Landlord's beneficiary or an unrelated third party, in an amount up to 3% of gross revenues derived from the Building; (16) wages, salaries or other compensation paid to any employees of Landlord or Landlord's beneficiary or management agent above the grade of Building manager or paid to any employee who does not devote substantially all of his or her employed time to the operation or maintenance of the Property unless such wages, salaries or other compensation are reasonably and equitably prorated; (17) the costs of complying with the O & M Program (defined below) and the costs incurred in connection with the removal, containment or other remediation of any asbestos containing materials in the Building in accordance with the O & M Program or otherwise; (18) the costs for furnishing electricity or janitorial services to tenant spaces in the Building from time to time if billed separately to Tenant in accordance with Article 9(C) and 9(D) hereof; (19) the cost of installing, equipping or operating any of the following specialty services at the Property-day care facility, health club, workout facility or luncheon, athletic or recreational club; (20) the cost of acquiring sculptures, paintings and other objects of art in the Building (provided that all reasonable and customary costs for maintaining and insuring any of the foregoing shall be includable in Operating Expenses); (21) legal expenses incurred in the negotiation and enforcement of leases; (22) the amount of any political or charitable contributions made by Landlord; (23) all income taxes, excess profit taxes, franchise, capital stock and inheritance or estate taxes paid by Landlord; (24) any and all costs and expenses borne directly by Tenant under this Lease or by any other tenant of the Building; (25) any and all costs and/or expenses associated with the operation of the business of the partnership or entity which constitutes the Landlord (or of which Landlord is a direct or indirect subsidiary, parent or affiliate), including, without limitation, for general corporate overhead and general and administrative expenses; (26) any and all costs and expenses for, in connection with or relating to the
management, maintenance, repair, and operation of the Hotel Premises other than certain shared costs pursuant to a Collateral Agreement between the Building and the Hotel Premises; (27) any and all costs and expenses related to bad debts or similar losses; (28) any and all costs and/or expenses associated with the operation of the business of the partnership or entity which constitutes the Landlord (or of which Landlord is a direct or indirect subsidiary, parent or affiliate), including, without limitation, for general corporate overhead and general and administrative expenses; (29) any and all cost and expenses for rentals and other related expenses incurred in leasing any Capital Items, the cost of which if purchased, could not be included in Operating Expenses; (30) any and all costs and expenses for reserves of any kind; and (31) any and all costs and/or expenses arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations pertaining to (a) the business of Landlord or the ownership or title to the Property or any portion thereof, (b) any disputes between Landlord and its partners and/or affiliates between Landlord and any other owner or interest holder in the Property, or any adjacent landowner, between constituent partners or members of Landlord, or (c) any disputes between Landlord and its employees. There shall be no duplication of charges in determining Operating Expenses hereunder, and Landlord shall not be entitled to collect in excess of one hundred percent (100%) of Operating Expenses from all tenants.
(ii) In the event Landlord makes any capital improvement or any capital repair in the nature of a capital replacement or installs any capital equipment during the Term hereof which (a) results in a reduction or limitation in Operating Expenses, or (b) is required to comply with any governmental rules, regulations or requirements applicable from time to time to the Building or to the Property and enacted or initially enforced after the date of execution hereof, the costs thereof, as amortized in each case on a straight-line basis (unless otherwise required by generally accepted accounting principles (“ GAAP ”) over the useful life of the item so capitalized (as determined in accordance with GAAP), may be included in Operating Expenses; provided, however, that the amount paid by Tenant for any calendar year or portion thereof which falls within the Term of this Lease on account of a capital item described in clause (a) above shall not exceed the reduction or limitation in Tenant's Proportionate Share of Operating Expenses with respect to such calendar year or portion thereof by reason of such capital item. If the Building shall not have been fully occupied by tenants at any time during the Base Year or any succeeding calendar year, the Operating Expenses for such year may be equitably adjusted (by grossing up the Operating Expenses that vary with occupancy of the Building) to reflect the amount of Operating Expenses that would have been incurred if the Building had been fully occupied throughout such year.
(iii) In no event shall Tenant be obligated to pay any amount for Operating Expenses that are first billed to Tenant after the date that is two (2) years following the date of delivery of the Landlord's Annual Statement (defined below) for the calendar year to which such Operating Expenses are allocable.
(D) In order to provide for current payments on account of increases in Real Estate Related Taxes and Operating Expenses over the Base Year, Tenant agrees, at Landlord's request, to pay on account to Landlord for each calendar year of the Term or portion thereof following the Base Year, Tenant's Proportionate Share of amounts due under Articles 4(A) and 4(B) above (“ Article 4 Additional Rent ”) for such ensuing calendar year or portion thereof, as reasonably estimated by Landlord from time to time, in equal monthly installments, commencing on the first day of the calendar month following the calendar month during which the day occurs that is ten (10) business days after the date on which Landlord notifies Tenant (by delivery of an Estimated Statement) of the amount of such estimated Article 4 Additional Rent, and Landlord may, by delivery of a revised Estimated Statement, revise its estimate of Article 4 Additional Rent payable for any calendar year; provided that Landlord's estimate of Article 4 Additional Rent payable for any calendar year shall not be changed more than twice during any calendar year. “Estimated Statement” means a written statement setting forth the estimated amount of Article 4 Additional Rent payable by Tenant with respect to such calendar year. The initial Estimated Article 4 Additional Rent payment for the calendar year shall be payable within thirty (30) days after the initial notice; thereafter such payments shall be payable at the same time and the same manner as Base Rent. If the Landlord’s Annual Statement (defined below) indicates that the Article 4 Additional Rent payable with respect to the applicable calendar year shall be greater than or less than the aggregate of all estimated installments of Article 4 Additional Rent previously paid to Landlord in accordance with this Article 4(D), then Tenant upon receipt of such invoice shall pay to Landlord within thirty (30) days immediately following such notification the amount of such underpayment, or, Landlord shall credit Tenant against the rent next coming due for the amount of such overpayment, as the case may be (or if the Term has expired and no further amounts are due to Landlord from Tenant hereunder, Landlord shall refund such amount to Tenant). It is the intention hereunder to estimate from time to time the amount of increases in Real Estate Related Taxes and Operating Expenses for each calendar year over Real Estate Related Taxes and Operating Expenses for the Base Year, and then to finally determine such rent adjustments at the end of such calendar year or as soon thereafter as possible based upon actual increases in Real Estate Related Taxes and Operating Expenses for such calendar year.
(E) Landlord agrees to keep books and records showing the Real Estate Related Taxes and Operating Expenses in accordance with GAAP and in compliance with such provisions of this Lease as may affect such accounts. Landlord shall deliver to Tenant within one hundred fifty (150) days after the close of each calendar year (including the calendar year in which this Lease begins and the calendar year in which this Lease terminates), a statement (an “ Annual Statement ”) certified by an officer of Landlord's agent substantially in the form of the sample statement attached hereto and made a part hereof as Exhibit "B" . Failure or delay in delivering any such statement or accompanying invoice, or failure or delay in computing the rent adjustments pursuant to this Article 4, shall not be deemed a waiver by Landlord of its right to deliver such items nor shall any such failure or delay be deemed a release of Tenant's obligations with respect to any such statement or invoice, or constitute a default hereunder; provided, however, that if any Annual Statement is not delivered within 240 days after the close of the applicable calendar year, Tenant may elect to seek specific performance). All rent adjustments payable hereunder shall, except as expressly provided otherwise in this Lease, be made without any deductions or set-offs whatsoever.
(F) The obligation of Tenant with respect to the payment of Base Rent and Article 4 Additional Rent due hereunder shall survive the expiration or termination of this Lease. Any payment, refund, or credit made pursuant to this Article shall be made without prejudice to any right of Tenant to dispute, or of Landlord to correct, any items as billed pursuant to the provisions hereof. In the event that the Term of this Lease shall have been in effect for less than the full calendar year immediately preceding Tenant's receipt of the statements provided for in Articles 4 (D) and (E) hereof or if the Term shall end on a day other than the last day of a calendar year, the rent adjustment shall be pro rata on a per diem basis. In no event shall any rent adjustment result in a decrease in the Base Rent payable from time to time hereunder.
(G) In the event that Tenant disputes the accuracy of the Annual Statement, or the information therein contained, furnished by Landlord to Tenant pursuant to Article 4(E) above, Tenant may require upon delivering notice in writing within nine (9) months after submission of such Annual Statement that Real Estate Related Taxes and Operating Expenses be audited by an independent, nationally recognized public accounting firm on a non-contingent fee basis as selected by Tenant and reasonably satisfactory to Landlord, at Tenant's expense, except as hereinafter provided. If it is finally determined that Article 4 Additional Rent for any calendar year is ninety-seven percent (97%) or less than the Article 4 Additional Rent as shown in the Annual Statement furnished by Landlord to Tenant pursuant to Article 4(E), Landlord shall pay the reasonable costs and expenses incurred by Tenant in engaging such public accounting firm to render such statement, and if it is finally determined that Tenant has overpaid for Article 4 Additional Rent for any calendar year, Landlord shall credit to Tenant the amount of such overpayment in the manner provided above in Article 4 (D); provided, further, that if as finally determined that the amount of Article 4 Additional Rent for any calendar year is greater than the Article 4 Additional Rent as shown in the applicable Annual Statement furnished by Landlord to Tenant, Tenant shall pay to Landlord the amount of such underpayment within thirty (30) days after the date on which Tenant receives an invoice from Landlord requesting payment thereof.
(H) In the event Tenant selects such firm of independent nationally-recognized certified public accountants to examine Landlord's books and records for any calendar year, such firm shall promptly conduct such examination in accordance with generally accepted accounting principles consistently applied and, as soon as practicable, render to Landlord and Tenant a report stating such accountants' determination of the Article 4 Additional Rent for such year, and, if such determination is inconsistent with Landlord's Annual Statement, providing a reasonably-detailed basis for the determination and explanation of each discrepancy. If the parties cannot agree following such submission, they shall engage in binding arbitration with respect to such discrepancy.
Such accountants engaged by Tenant may inspect, audit, review, copy and examine (and Landlord agrees to make the same available for such purposes) at Landlord’s agent’s office in Chicago, Illinois only such of Landlord's books and records as are reasonably related to the preparation of Landlord's Annual Statement, and such accountants engaged by Tenant may examine none of Landlord's books and records with respect to any property other than the Property.
Landlord shall not be obligated to permit any individual to examine Landlord's books and records unless such individual and such individual's employer first execute and deliver to Landlord a commercially reasonable written acknowledgment affirming that (i) such individual's examinations of Landlord's books and records shall be kept confidential, and (ii) the results thereof and information derived therefrom or obtained in the course thereof shall not be disclosed by such parties to any person other than Landlord and Landlord’s employees and agents and advisors, Tenant and Tenant's employees and agents and advisors who, in Tenant’s good faith determination, have a need to know such information and other individuals to whom disclosure is required by law or governmental rule or regulation or legal or administrative process; provided, however, such results and information from the accountant's examination may be used by Landlord and Tenant in enforcing their respective rights and obligations hereunder.
Tenant hereby covenants and agrees with Landlord that any examination of any information relating to Operating Expenses or Real Estate Related Taxes furnished by Landlord to Tenant and any examination of Landlord's books and records by Tenant, its employees or agents shall be kept confidential by Tenant in accordance with the provisions of this Article 4(H) and the results of such examinations and information derived therefrom or obtained in the course thereof shall not be disclosed by Tenant to anyone or used for any purpose other than as permitted pursuant to this Article 4.
5. CONDITION OF PREMISES. Tenant's entry into possession of all or any part of the Premises shall be presumptive evidence as against Tenant that such part of the Premises was in good order and satisfactory condition when Tenant took possession, except for (a) any latent defects in the structure of the Building (including the exterior of the Building and exterior windows of the Building) or the Building Systems, or (b) any latent defects in the Shell and Core Work constructed for Tenant's occupancy pursuant to Article 35(A) or in the electrical, plumbing, ventilating and/or cooling systems or other common systems of the Building, excluding items of damage caused by Tenant, its agents, contractors and suppliers, or (c) any incomplete Shell and Core Work which shall be identified by Landlord and Tenant within ten (10) business days after substantial completion of the Shell and Core Work as "punch list items" and which will be promptly completed by Landlord. Tenant acknowledges that no promise of Landlord or its agents to alter, remodel or improve the Premises or the Building and no representation respecting the condition of the Premises or the Building have been made by Landlord or its agents to Tenant other than as may be contained herein.
(A) Landlord shall use commercially reasonable efforts to deliver the Premises to Tenant with the Shell and Core Work substantially complete on or before the Estimated Delivery Date. In the event that possession of the Premises shall not be delivered to Tenant on the Estimated Delivery Date, this Lease shall nevertheless continue in full force and effect, and no liability shall arise against Landlord out of any such delay beyond the abatement of rent as provided in Article 35(A) so long as Landlord uses commercially reasonable efforts to deliver the Premises to Tenant
with the Shell and Core Work substantially completed as soon thereafter as possible; provided, however, that if Landlord shall fail, for any reason other than Force Majeure to deliver the Premises to Tenant with the Shell and Core Work complete on or before the day that is one hundred eighty (180) days after the Estimated Delivery Date, Tenant shall have the right to terminate this Lease by delivery of thirty (30) days' written notice to Landlord delivered within ten (10) days of the expiration of such 180 day period.
(B) Tenant shall have the right to enter into possession of all or any part of the Premises prior to the Commencement Date, for the purpose of conducting its business therein. All of the covenants and conditions of this Lease (including, without limitation, Landlord's provision of services as described in Article 9 hereof) shall be binding upon the parties hereto in respect of such pre-Term possession the same as if the first day of the Term had been fixed as of the date when Tenant entered into such possession, except that Tenant for the period prior to the Commencement Date, Tenant’s obligation to pay any Base Rent shall be prorated to be equal to the applicable Base Rent multiplied times a fraction, the numerator of which is the rentable square footage of the portion of the Premises in possession by Tenant and used by Tenant for the conduct of its business and the denominator of which is the rentable square footage of the Premises. Tenant shall have the ability to apply the abatement amounts set forth in Article 3(B) above against any Base Rent obligations arising hereunder. Tenant shall be responsible for the payment of all amounts pursuant to Article 9 from and after the date that Tenant so enters into possession.
(A) Tenant Repair Obligations . Subject to Force Majeure events (as defined in Article 35(A)), and subject to Article 7(C) below, Tenant will, at its own expense and subject to the provisions of Article 8 of this Lease, keep the "Tenant Responsible Premises" (as defined below in this Article 7) in good repair and tenantable condition at all times during the Term of this Lease, and Tenant shall promptly and adequately repair all damages to the Tenant Responsible Premises (except for reasonable wear and tear and as otherwise provided in Article 25 of this Lease) within a reasonable period of time. If Tenant does not commence such repairs and proceed diligently thereafter to completion, after written notice from Landlord, within ten (10) business days (except in cases of an emergency) Landlord may, but need not, make such repairs or replacements and the actual out of pocket amount paid by Landlord for such repairs and replacements (including Landlord’s overhead and the cost of providing any general conditions at Landlord’s then published rates) shall be deemed additional rent reserved under this Lease due and payable within thirty (30) days after delivery of a bill therefor by Landlord. Landlord may, but shall not be required so to do, enter the Premises at all reasonable times to make such repairs or alterations, improvements and additions, including but not limited to ducts and all other facilities for air conditioning service, as Landlord shall reasonably deem necessary or appropriate for the safety, preservation or improvement of the Premises or the Building or any equipment located in the Building, or as Landlord may be required to do by this Lease or by the City of Chicago or by the order or decree of any court or by any other governmental authority, provided that Landlord gives Tenant reasonable prior notice (except in cases of an emergency, in which case Landlord shall provide such notice as is reasonable under the circumstances) of any such repairs, alterations, improvements and additions
in the Premises, and (except in cases of an emergency) so long as the performance of such work during ordinary business hours does not unreasonably interfere with Tenant's ability to conduct its business in the Premises. Notwithstanding the foregoing, Tenant may, by written notice to Landlord, designate portions of the Premises as “ Secured Areas ” should Tenant require such areas for the purpose of securing certain valuable property or confidential information. Landlord and Landlord’s agents may not enter such Secured Areas, except (i) in the event of an emergency or (ii) to perform any of Landlord’s duties or work required hereunder, in which case Landlord shall provide Tenant with reasonable notice of the specific date and time of entry. Landlord shall not be required to provide any janitorial services to the Secured Areas.
(B) Landlord Repair Rights . In the event Landlord or its agents or contractors shall reasonably elect or be required (subject to the provisions of the preceding Paragraph A), to make repairs, alterations, improvements or additions to the Premises or the Building or any equipment located in the Building, subject to the following sentence, Landlord shall be allowed to take into and upon the Premises all material that may be reasonably required to make such repairs, alterations, improvements or additions and, during the continuance of any of said work, to temporarily close doors, entryways, public space and corridors in the Building and to interrupt or temporarily suspend Building services and facilities without being deemed or held guilty of eviction of Tenant or for damages to Tenant's property, business or person, and except as expressly provided otherwise in this Lease, the rent reserved herein shall in no way abate while said repairs, alterations, improvements or additions are being made, and except as expressly provided otherwise in this Lease, Tenant shall not be entitled to maintain any set-off or counterclaim for damages of any kind against Landlord by reason thereof. Landlord may, at its option, make all repairs, alterations, improvements and additions in and about the Building and the Premises during ordinary business hours, so long as (except in case of an emergency) the performance of such work during ordinary business hours does not unreasonably interfere with Tenant's access to the Premises or Tenant's ability to conduct its business in the Premises, and if such work during ordinary business hours is not of an emergency nature and does not unreasonably interfere with Tenant's access to the Premises or Tenant's ability to conduct its business in the Premises and Tenant nonetheless desires to have the same done during any other hours, Tenant shall pay for all overtime and additional expenses resulting therefrom.
(C) Tenant Responsible Premises . As used herein, "Tenant Responsible Premises" shall mean all alterations, additions and improvements in and to the Premises at any time or from time to time existing, whether constructed by Landlord or Tenant or acquired by Tenant from any former tenant, including but not limited to all items of work constructed in the Premises in preparation for Tenant's initial occupancy thereof, but excluding all "Building Systems" (as defined below in this Article 7).
(D) Landlord’s Repair Obligations . Subject to Force Majeure events, Landlord shall keep in good order and repair consistent with the current condition of the Building (and the cost thereof may be included in Operating Expenses, except as otherwise provided in Subparagraph B(ii) of Article 4 hereof) the following items (" Building Systems "): (i) the structural components and common areas of the Building serving the Premises; (ii) the mechanical, electrical, plumbing,
ventilation, and air cooling systems serving the Premises, including components of said systems outside and up to the perimeter of the Premises, but, other than as set forth in clauses (iii) and (iv), excluding any related systems, fixtures and equipment located within the Premises which are not a part of the Shell and Core Work; (iii) ventilating and cooling system ducts in the Premises, but excluding variable air volume (VAV) boxes, reheats, in-duct fans and other equipment and devices in or attached to the ducts; and (iv) the Building sprinkler system serving the Premises, including piping up to the Premises, but excluding any other piping, heads and apparatus within the Premises.
Any liability of Tenant or Landlord for the performance of their respective obligations under this Article 7 shall be subject to the provisions of Articles 11 and 25 hereof.
8. ALTERATIONS. Tenant shall not, without the prior written consent of Landlord in each instance obtained, make any repairs, replacements, alterations, improvements or additions to the Premises which affect the Building structure, Building Systems, common areas or other tenants' premises (collectively, “ Major Improvements ”). Landlord’s consent shall not be required for any repairs, replacements, alterations, improvements or additions to the Premises which are not Major Improvements (collectively, “ Minor Improvements ” and together with Major Improvements, collectively, referred to herein as “ Improvements ”) provided that Tenant shall give Landlord reasonable prior notice of all Minor Improvements during the Term. To the extent Landlord's consent is required for any Improvements, such consent shall not be unreasonably withheld, conditioned or delayed, but such consent may be conditioned upon such reasonable requirements regarding such Major Improvements as Landlord deems appropriate, including without limitation, the submission of reasonably detailed plans and specifications, and such Major Improvements shall be of a quality equal to or better than the reasonable standards of the Building. At the time that Landlord gives its consent to any such Major Improvements or Landlord receives notice of any Minor Improvements, Landlord may designate any items which are atypical for standard office uses or require unusual expense for removal (such as, but not limited to, satellite dish equipment, generator equipment, staircases, specialized flooring, underfloor installations, flooring or installations which have Tenant’s name or logo, specialized cabling, and/or vaults) as items which Landlord reserves the right to require Tenant to remove upon the expiration of the Term or upon any termination of this Lease or Tenant's right to possession hereunder (collectively, “ Potential Removal Improvements ”). Neither approval of any plans and specifications nor supervision of any improvement work by Landlord or its agents shall constitute a representation or warranty by Landlord or its agents that such plans or work either (i) are complete or suitable for their intended purpose, or (ii) comply with applicable laws, ordinances, codes and regulations, it being expressly agreed by Tenant that Landlord assumes no responsibility or liability whatsoever to Tenant or to any other person or entity for such completeness, suitability or compliance. All such Improvements shall be done at Tenant's by contractors hired by Tenant (which contractors shall be subject to Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed, and which contractors must be reputable and financially responsible, maintain proper insurance and preserve labor harmony), and, in either event, Tenant shall reimburse Landlord or its agent a charge for coordination, general conditions, and other actual costs actually and reasonably incurred plus any out of pocket costs reasonably incurred by Landlord in connection with such work, at the rates
established by Landlord from time to time for the Building. Tenant may hire its own project manager and not be required to use Landlord’s designated project manager.
In the event that Tenant uses its own contractors for the Improvements Landlord may, without limitation, require Tenant to: (a) comply with such reasonable construction standards or procedures as may be applicable from time to time for construction activities in the Building; (b) give assurances reasonably satisfactory to Landlord that the construction of such Improvements will not jeopardize labor harmony; (c) submit reasonably satisfactory insurance certificates; (d) obtain all necessary permits; (e) with respect to Improvements costing in excess of $500,000, furnish reasonably satisfactory security for the payment of all costs to be incurred in connection with the Improvements; and (f) upon completing any such Improvements, furnish Landlord with contractors' affidavits and full and final waivers of lien and receipted bills covering all labor and material expended and used and furnish Landlord with final construction drawings (marked up as constructed) for any such Improvements.
There are some asbestos-containing materials (" ACM ") in some areas of the Building. Landlord has adopted and implemented an abatement and operations and maintenance program (" O & M Program "), a copy of which is available for review by Tenant in Chicago, Illinois, which sets forth certain procedures to be followed in connection with any Improvements to be made in the Building, in order to prevent disturbance to any ACM that may be encountered. Tenant acknowledges, and hereby expressly agrees to cause its agents, employees and contractors to comply at all times with, the O & M Program (as amended from time to time). A summary of the O & M Program in effect as of the date hereof is attached hereto as “ Exhibit C” and made a part hereof.
Landlord and Tenant acknowledge that the Americans With Disabilities Act of 1990 (42 U.S.C. § 12-101 et seq .) and regulations and guidelines promulgated thereunder, as all of the same may be amended and supplemented from time to time (collectively " ADA "), establish requirements for business operations, accessibility and barrier removal, and that such requirements may or may not apply to the Premises and the Building depending on, among other things, whether: (1) Tenant's business is deemed a "public accommodation" or "commercial facility", (2) such requirements are "readily achievable", and (3) a given alteration affects a "primary function area" or triggers "path of travel" requirements. The parties hereby agree that (a) Landlord shall be responsible for ADA Title III compliance in the common areas of the Building and the Shell and Core Work, except as provided below, (b) Tenant shall be responsible for ADA Title III compliance in the Premises, including the threshold and doorway into the Premises and any leasehold improvements or other work to be performed in the Premises under or in connection with this Lease other than the Shell and Core Work, and (c) Landlord may perform, or require that Tenant perform, and Tenant shall be responsible for the cost of, ADA Title III "path of travel" requirements on the floor of the Building on which the Premises is located triggered by Improvements in the Premises other than the Shell and Core Work and the Tenant's Work to be performed in connection with Tenant's initial occupancy of the Premises. Tenant shall be solely responsible for requirements under Title I of the ADA relating to Tenant's employees.
All Improvements shall comply with all applicable insurance requirements (of which Tenant has notice) and with all applicable governmental laws, requirements, codes, ordinances and regulations. All Improvements shall be constructed in a good and workmanlike manner and only good grades of material shall be used. Except for the negligence and willful misconduct of Landlord, its members and their respective officers, directors, managers, beneficiaries, partners, members, agents and employees or their respective agents, Tenant shall protect, defend, indemnify and hold Landlord, the Building and the Property, Landlord's members, and their respective officers, directors, managers, beneficiaries, partners, members, agents and employees harmless from any and all liabilities of every kind and description which may arise out of or in connection with the construction of the Improvements by or on behalf of Tenant.
All Improvements made by Landlord or Tenant in or upon the Premises whether temporary or permanent in character, including but not limited to wall coverings, carpeting and other floor covering, lighting installations, built-in or attached shelving, cabinetry, and mirrors, shall become Landlord's property and shall remain upon the Premises at the termination of this Lease by lapse of time or otherwise without compensation to Tenant [excepting only Tenant's movable office furniture, trade fixtures (other than permanently attached or installed lighting equipment or can lighting), and office equipment and other personal property]; provided, however, that Landlord shall have the right to require Tenant to remove at Tenant's sole cost and expense in accordance with the provisions of Article 16 of this Lease any or all of the Potential Removal Improvements which are so identified by Landlord in accordance with the first paragraph of this Article 8; any and all hazardous materials installed or placed in the Premises by Tenant; and any equipment installed by Tenant on the roof of the Building or elsewhere outside the Premises, and all cabling and wiring and other facilities located outside the Premises (including cabling to the roof and/or cabling located in the risers and/or shafts) and serving or intended to serve the Premises.
All cabling, wiring and equipment installed at any time by or on behalf of Tenant outside of the Premises on the Property, whether as part of the initial Tenant's Work or otherwise (which installation shall in all cases be subject to Landlord's consent in its sole but good faith discretion), shall be operated and maintained at Tenant's sole cost and expense in a manner which does not disturb improvements on the Property or the operation thereof or interfere with the operations of, or services provided to, tenants in the Building. Any such installation, operation, and maintenance shall be in accordance with any reasonable rules and regulations established by the Landlord from time to time, shall be at Tenant's sole risk, and shall be subject to the Tenant insurance requirements of Article 25 hereof and the provisions of Article 11 hereof. All such cabling, wiring and equipment shall be appropriately identified by color code, identification plate and/or other means reasonably specified by Landlord at the time of installation if initially installed by Tenant, and Tenant shall provide Landlord with plans and drawings locating and identifying such items in such detail as may be reasonably requested by Landlord.
9. SERVICES. Landlord shall provide the following services on all days during the Term of this Lease excepting Sundays and Holidays, unless otherwise stated below, and the cost thereof is included in Base Rent unless otherwise expressly provided below:
(A) Adequate passenger elevator service will be furnished daily during Business Hours (defined below) and one (1) passenger elevator at all other times (including Sunday Holidays (defined below), subject to Force Majeure. “ Holidays ” means New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and at Landlord’s reasonable discretion, other state and nationally recognized holidays selected by Landlord which are consistent with the practices of the majority of the owners of the Comparable Buildings.
(B) Conditioned air for ventilating and cooling to the Premises as required for the comfortable use and occupancy of the Premises for the Permitted Use from 8:00 A.M. to 6:00 P.M. Monday through Friday, and 9:00 A.M. and 1:00 P.M. Saturday, not including Holidays, in accordance with the standards for the Premises set forth in the description of the Shell and Core Work in Exhibit "E" attached hereto and made a part hereof. Whenever heat-generating machines, equipment or lighting fixtures installed by Tenant (of a type not customarily associated with the Permitted Use) or excessive electrical usage (i.e., usage above the electrical usage specified on Exhibit E) by Tenant affects the temperature otherwise maintained by Landlord in the Premises, Landlord shall continue to provide the standard ventilation and air conditioning in the portion of the Premises so affected in accordance with said standards but shall not be responsible for any excess temperatures, and in such event Landlord further reserves the right at its option to (1) require Tenant to discontinue use of such heat-generating machines, equipment, lighting fixtures or excessive electrical load, or (2) install supplementary air conditioning units in the Premises, the actual cost of the acquisition, installation, operation and maintenance of which shall be paid by Tenant to Landlord. Tenant agrees that at all times it will cooperate with Landlord and abide by all reasonable regulations and requirements which Landlord may prescribe for the proper functioning of the ventilating and air conditioning systems.
Landlord agrees that it shall make available to Tenant after-hours ventilating and cooling service (“ After Hours HVAC ”) at the expense of Tenant at times other than those identified above in this Paragraph (B), provided that if Tenant desires any such service on Mondays through Fridays (holidays described above excepted), it shall request such service from Landlord on or before 4:00 p.m. on the day for which such service is requested, and in the event Tenant desires such service on Saturdays or Sundays or Holidays, it shall request such service from Landlord no later than 4:00 p.m. on Friday (for service on Saturday or Sunday) and by 4:00 p.m. on the day preceding any Holiday (for service on such Holiday). Tenant shall pay for all such after-hours ventilating and cooling services at Landlord's published rates in effect from time to time in the Building. Such rates shall not increase annually beyond actual increases attributable to labor and utility cost increases. Tenant may request such after-hours ventilating and cooling service by zone (determined by the respective areas served by separate fan rooms); and if another tenant has also specifically requested such after-hours service in the same zone during the same time period as requested by Tenant, Landlord shall reasonably and equitably allocate the charge for such service between Tenant and such other tenants so requesting such service.
(C) Electricity for the Premises shall not be furnished by Landlord but shall be furnished and billed directly to Tenant by the electric utility company serving the Building. Landlord shall cause the Premises to be separately metered, if necessary. Tenant shall make all necessary
arrangements with the utility company for paying for electric current furnished by it to Tenant and Tenant shall pay for all charges for electric current consumed on the Premises during the Term of this Lease. Tenant agrees that the Premises shall be engineered so that during and after normal Business Hours the minimum temperature required therein shall be maintained by Tenant at all times so long as electrical service to the Premises is not terminated or interrupted through no fault or neglect of Tenant. Tenant shall not install or operate any electrical equipment or fixtures that overload lines servicing the Premises or which exceed the loads indicated in Exhibit "E" .
The parties acknowledge that Commonwealth Edison Co. (" Utility ") is presently the utility company selected by Landlord to provide electricity service to the Premises, the Building and the Building's common areas and appurtenances. Notwithstanding the foregoing, Landlord, unless prohibited by law, shall have the exclusive right at any time and from time to time during the Term to either contract for service from a different company or companies providing electricity service [each such different company is hereinafter referred to as an " Electric Service Provider " (" ESP ")] or continue to contract for service from the Utility for the Premises, the Building and the Building's common areas and appurtenances. Tenant shall at all times reasonably cooperate (at no expense to Tenant) with Landlord, the Utility and ESP and, as reasonably necessary or requested, shall allow Landlord, the Utility and ESP reasonable access to the Premises' and/or the Building's electric lines, feeders, risers, wiring, cabling and any other machinery or apparatus within the Premises. To the extent, if any, [that Landlord is prohibited from selecting the utility company of its choice and] Tenant is specifically and expressly allowed by law (otherwise, Tenant shall not be allowed to make such selection) to select and Tenant does select an ESP (an “ Other ESP ”) other than the Utility or other ESP selected by Landlord, Tenant shall: (a) reimburse Landlord for the cost(s) of repairing any and all damage to the Premises, the Building and the Building's common areas and appurtenances caused directly or indirectly by Tenant's selected such Other ESP or its personnel or equipment, and Landlord hereby reserves the right to charge Tenant as additional rent for such cost(s) if such reimbursement for same is not promptly made; and (b) indemnify and hold Landlord harmless from and against any and all claims, demands, costs, expenses (including attorney's fees), liens and causes of action in any way whatsoever arising out of, or in any manner whatsoever relating to, actions or inactions by Tenant's selected Other ESP.
(D) Janitorial services, as specified on Exhibit "D" attached hereto and made a part hereof, shall be provided by Landlord, except that all increases in the costs of providing such janitorial services to Tenant in any calendar year in excess of the actual annualized cost per rentable square foot of providing such services to Tenant in calendar year 2009 on an estimated basis in monthly installments subject to final year-end adjustment in the same manner as provided for the Article 4 Additional Rent in Article 4. Tenant may from time to time procure directly from Landlord's cleaning contractor at Tenant's expense such additional cleaning services as are desired by Tenant.
(E) Building directory identification of a reasonable number of listings for Tenant (not less than ten (10) listings). Additionally, Tenant may at its sole cost, subject to Landlord’s prior review and approval (not to be unreasonably withheld, conditioned or delayed),
install (i) Building standard signage on the 5th floor of the Building and (ii) signage in keeping with its corporate standards on the side of the escalator facing into the elevator lobby on the 5 th floor of the Building.
(F) Cold water (and hot water in public restrooms) connection for normal washroom and employee lunchroom and cleaning purposes, twenty-four (24) hours a day, seven (7) days a week, fifty-two (52) weeks a year, subject to Force Majeure.
(G) Additional services (in addition to those described above) may be provided on terms and conditions as may be mutually agreed upon by Landlord and Tenant. Subject to Force Majeure, Tenant and its employees and invitees shall have access (including passenger elevator) to the Premises twenty-four (24) hours a day, seven (7) days a week, fifty-two (52) weeks a year. At times other than normal business hours (i.e. 8 A.M. to 6 P.M. Monday through Friday) access shall be available through limited entrances and subject to reasonable regulations and procedures in place in the Building from time to time, including the furnishing of proper employee identification or authorization and the registering of a person's name, room number and time of entry and departure in a register furnished by Landlord and placed in the lobby of the Building.
Tenant shall apply to the applicable utility company or municipality for gas, telephone and all other utility services, other than those provided by Landlord, required by Tenant for use in the Premises in accordance with Article 2 hereof and, subject to Article 8 hereof, Tenant shall be responsible for the connection and installation of same.
All charges for any services that are provided to Tenant at a separate charge (i.e., not as part of Operating Expenses) (“ Additional Services ”) shall be deemed rent reserved under this Lease and shall be due and payable at the same time as the installment of rent with which they are billed, or, if billed separately, shall be due and payable within thirty (30) days after such billing. In the event Tenant shall fail to make payment for such Additional Services Landlord may, in addition to all other remedies which Landlord may have for the non-payment of rent and without further notice to Tenant, prospectively discontinue providing any such Additional Services and such discontinuance shall not be held or pleaded as an eviction or as a disturbance in any manner whatsoever of Tenant's possession, or relieve Tenant from the payment of rent when due, or vary or change any other provision of this Lease or render Landlord liable for damages of any kind whatsoever.
Tenant agrees that, to the extent permitted by law, neither Landlord nor its members nor any of their respective officers, trustees, directors, managers, shareholders, members, partners, beneficiaries, employees or agents, shall be liable to Tenant, or any of Tenant's employees, agents, customers or invitees or anyone claiming through, by or under Tenant, for any damages, injuries, losses, expenses, claims or causes of action, because of any interruption, diminution, delay or discontinuance at any time in the furnishing of any of the above services (including access to the Premises as described above in this Article 9) and/or the interruption of any services being provided to the Premises by other vendors, when such interruption, diminution, delay or discontinuance is occasioned, in whole or in part, by repairs, renewals, improvements or additions, by any strike, lockout or other labor trouble, by inability to secure gas, electricity, water or other fuel at the
Building, by any accident or casualty whatsoever, by act or default of Tenant or other parties, any other cause beyond Landlord's reasonable control; nor shall any such interruption, diminution, delay or discontinuance be deemed an eviction or disturbance of Tenant's use or possession of the Premises or any part thereof; nor shall any such interruption, diminution, delay or discontinuance relieve Tenant from full performance of Tenant's obligations under this Lease, except as otherwise expressly provided herein. Notwithstanding the foregoing, in the event that (i) any interruption or discontinuance of services (including access to the Premises as described above) required to be provided pursuant to this Article 9 which was within the reasonable control of Landlord to prevent continues beyond three (3) consecutive business days after written notice to Landlord and materially and adversely affects Tenant's ability to conduct business in the Premises, (ii) the performance by Landlord of repairs in the Building that are not the responsibility of Tenant materially and adversely affects Tenant's ability to conduct business in the Premises and continues beyond three (3) consecutive business days after written notice to Landlord, (iii) any entry by Landlord or any of its agents or employees into the Premises, or any repair, maintenance or alteration which is required hereunder to be performed by Landlord and which Landlord fails to perform materially and adversely affects Tenant's ability to conduct business in the Premises and continues beyond three (3) consecutive business days after written notice to Landlord (any such set of circumstances as set forth in items (i), (ii), or (iii), above, to be known as an “ Abatement Event ”), and on account of such Abatement Event, Tenant ceases doing business in the Premises (or a material portion thereof), Base Rent shall abate thereafter (as to the Premises or as to such material portion thereof, as the case may be) and for so long as Tenant remains unable to conduct its business in the Premises. Landlord agrees to use reasonable efforts to restore such interrupted or discontinued service or to complete such repairs, as the case may be, as soon as reasonably practicable.
10. COVENANT AGAINST LIENS. Tenant agrees to pay when due for any work done or materials furnished by or on behalf of Tenant in or about the Premises or to all or any part of the Property and nothing in this Lease contained shall authorize or empower Tenant to do any act which shall in any way encumber the title of Landlord in and to the Premises or to the Property, nor shall the interest or estate of Landlord therein be in any way subject to any claims by way of lien or encumbrance whether claimed by operation of law or by virtue of any express or implied contract of Tenant, and any claim to a lien upon the Premises or the Property arising from any act or omission of Tenant shall accrue only against Tenant and shall in all respects be subordinate to the title and rights of Landlord to the Premises and the Property. Tenant covenants and agrees not to suffer or permit any lien or encumbrance to be placed against the Premises, the Building or the Property with respect to work or services claimed to have been performed for or materials claimed to have been furnished to Tenant or the Premises and, in case of any such lien or encumbrance attaching, or claim thereof being asserted, Tenant agrees to cause it to be promptly released and removed of record, or to provide security as hereinafter provided. If Tenant has not removed any such lien or encumbrance or provided Landlord with a title indemnity bond or such other security as is reasonably satisfactory to Landlord within twenty five (25) days after notice to Tenant by Landlord of the existence of such lien or encumbrance, such failure shall constitute a default hereunder and, in addition to all other remedies available herein, Landlord may, but shall not be obligated to, pay the amount necessary to remove the lien or encumbrance, without being
responsible for making any investigation as to the validity thereof, and the actual amount so paid together with all costs and expenses, including reasonable attorneys' fees, incurred in connection therewith shall be deemed additional rent reserved under this Lease due and payable within ten (10) days after demand therefor together with reasonable supporting documentation.
11. WAIVER OF CLAIMS. Subject to the provisions of Article 25 and the second paragraph of this Article 11, Tenant agrees that Landlord, Landlord's members and their respective officers, directors, managers, shareholders, partners, members, beneficiaries, agents, and employees shall not be liable to Tenant for (subject, however, to the provisions of Article 9 as to the abatement of rent) any direct or consequential damage (including, without limitation, damages claimed for actual or constructive eviction) sustained by Tenant, due to the Building, the Property, or any part thereof or any appurtenances thereof becoming out of repair, or due to the happening of any accident in or about the Building or the Property, or due to any act or neglect of any tenant or occupant of the Building or the Property, or any other person, except to the extent that any such damage is caused by the negligence or intentional acts of Landlord, its members or their respective agents, contractors, servants or employees. The foregoing provision, subject in all events to the provisions of Article 25 as stated above, shall apply particularly (but not exclusively) to damage caused by fire, explosion, water, snow, frost, steam, sewerage, illuminating gas, sewer gas or odors, or by the bursting or leaking of pipes, plumbing fixtures, or sprinkler system; without distinction as to the person whose act or neglect was responsible for the damage and whether the damage was due to any of the causes specifically enumerated above or to some other cause of an entirely different kind. Tenant further agrees that all personal property upon the Premises or brought or caused to be brought within the Building by Tenant shall be at the risk of Tenant only and that Landlord shall not be liable for any damage thereto or any theft thereof, except to the extent caused by the negligence or intentional acts of Landlord, its members or their respective agents, contractors, servants or employees, subject in all events, however, to the provisions of Article 25. Subject to the provisions of Article 25 hereof, and except for the negligence or intentional acts of Landlord, its members or their respective agents, contractors, servants or employees, Tenant shall protect, indemnify, defend and save Landlord, its members and their respective officers, directors, managers, shareholders, partners, members, beneficiaries, agents and employees harmless from and against any and all liabilities, damages, costs, claims, obligations and expenses (collectively, “ Claims ”) (a) arising out of or in connection with Tenant's use or occupancy of the Premises or Tenant's activities in or about the Building or the Property (in each instance, to the extent covered by Tenant’s insurance policies carried pursuant to the provisions of Article 25, below), or (b) arising out of (and to the extent caused by) any intentional act or negligence of Tenant or its agents, contractors, servants, or employees.
Subject to the provisions of Article 25 hereof, Landlord agrees that Tenant and its officers, directors, agents and employees shall not be liable to Landlord for any direct or indirect damage to the Building Systems or to person or property sustained by Landlord or any other person, caused by any portion of the Tenant Responsible Premises or any of Tenant's fixtures or equipment becoming out of repair or due to the happening of any accident in or about the Premises, except to the extent that any such damage is caused by the negligence or intentional acts of Tenant or Tenant's agents, contractors, servants or employees. Subject to the provisions of Article 25 hereof, and except for
the negligence or intentional acts of Tenant or its agents, contractors, servants, or employees, Landlord shall protect, indemnify, defend and save Tenant, and its officers, directors, shareholders, agents and employees harmless from and against any and all Claims arising out of or in connection with (and to the extent caused by) any intentional act or negligence of Landlord or its agents, contractors, servants, or employees
(A). Except as provided otherwise herein, Tenant shall not, without the prior written consent of Landlord, (i) assign, convey, mortgage, pledge or otherwise transfer this Lease, or any part thereof, or any interest hereunder; (ii) permit any assignment of this Lease, or any part thereof, by operation of law; (iii) sublet the Premises or any part thereof, or (iv) permit the use of the Premises, or any part thereof, by any parties other than Tenant, its agents and employees. without the prior written consent of Landlord, which shall not be unreasonably withheld conditioned or delayed (any event described in clause (i), (ii), (iii) or (iv), above, a “ Transfer ”) (with the parties agreeing that it shall be reasonable for Landlord to withhold its consent to any proposed Transfer to a tenant of the Building or the adjacent Merchandise Mart building (the “Mart Building”) or a prospective tenant of the Building or the Mart Building to whom Landlord has presented a written proposal within the six (6) month period prior to Tenant’s request for Landlord’s consent at any time that Landlord or the owner of the Mart Building can accommodate such existing or prospective tenant’s needs in the Building and/or the Mart Building). The foregoing clause (iv) shall not prohibit the use (in conformity with all of the applicable provisions of this Lease) of up to 25% of the space in the Premises by Tenant’s Occupants, as hereinafter defined, provided (1) such space is not separately demised or otherwise separated from the Premises, (2) such space is used solely by such Tenant’s Occupants in connection with a project or business venture being conducted by Tenant, and (3) Tenant is receiving no rent, payment or other consideration in connection with such use or occupancy except for possible reimbursement of occupancy costs (such as copying fees, secretarial fees, phone and/or utility usage) but in no event shall this include any reimbursement of rent or be in lieu of rent. Tenant shall, by notice in writing, advise Landlord of its desire from, on and after a stated date (which shall not be less than fifteen (15) days after the date of Tenant's notice), to assign this Lease, or any part thereof, or to sublet any part or all of the Premises for the balance or any part of the Term. Tenant's notice (a “ Transfer Notice ”) shall: state the name and address of the proposed assignee or subtenant; provide financial information in reasonable detail concerning the proposed assignee or subtenant (subject to Tenant's obligation to provide such additional information concerning the financial condition of the proposed assignee or subtenant as may be reasonably requested by Landlord); and include a description of all of the material terms of the proposed assignment or sublease (whether contained in such assignment or sublease or in separate agreements). In the event Tenant delivers such Transfer Notice, except as to a transaction involving a Tenant Occupant (as defined below) or an Affiliate or Successor (as such terms are defined below) of Tenant, or a sublease offering less then 50% of the Premises and for a term of less than all of the then remaining Term (excluding any unexercised extension terms), Landlord shall have the right, to be exercised by giving written notice to Tenant within ten (10) business days after receipt of the Transfer Notice, to recapture the space described in the Transfer Notice and such recapture notice shall, if given, cancel and terminate this Lease with respect to the space therein
described as of the date stated in the Transfer Notice; provided, however, that if Landlord elects to recapture the space, the Tenant shall have five (5) business days from the date of Landlord's election to recapture to rescind in writing its Transfer Notice in which case the recaptured space shall remain a part of the Premises under the Lease. If the Transfer Notice shall cover all of the Premises, and Landlord shall have exercised its foregoing recapture right, the Term of this Lease shall expire and end on the date stated in Tenant's notice as fully and completely as if that date had been herein definitely fixed for the expiration of the Term. If, however, this Lease be cancelled with respect to less than the entire Premises, Base Rent and Article 4 Additional Rent shall be adjusted on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, as described in this Lease, and this Lease as so amended shall continue thereafter in full force and effect. “ Tenant’s Occupants ” means Tenant’s Affiliates (defined below) and other entities or persons with whom Tenant has a good faith business relationship.
(B) If Landlord, upon receiving a Transfer Notice with respect to any such space, shall not exercise its right to (or shall have no right to) recapture as aforesaid, and if there is no Event of Default, Landlord will not unreasonably withhold, condition or delay its consent to Tenant's assignment of the Lease or subletting such space to the party identified in Tenant's Transfer Notice and upon the terms set forth in Tenant's Transfer Notice, provided, however, that in the event Landlord consents to any such assignment or subletting, and as a condition thereto, except with respect to any assignment or subletting to an Affiliate or Successor of Tenant, Tenant shall pay to Landlord fifty percent (50%) of all profit (as defined below) derived by Tenant from such assignment or subletting. If Landlord does not elect to recapture the space as aforesaid, Landlord shall notify Tenant within twenty five (25) days of its receipt of a Transfer Notice whether it will or will not approve the proposed Transfer (and if Landlord does not approve any proposed Transfer, Landlord shall reasonably describe its basis for not approving the same). For purposes of the foregoing, “ profit ” shall mean the amount paid or payable to Tenant to effect or to induce Tenant or any third party to enter into any such transaction, and the amount of all rent and other consideration of whatever nature payable by such assignee or sublessee or a third party in excess of the Base Rent and rent adjustments payable by Tenant under this Lease, after deducting therefrom Tenant's actual expenses incurred in connection with such sublease or assignment (collectively, “ Transfer Costs ”), including, without limitation, advertising expenses, brokerage commissions, rent concessions, tenant improvement allowances, other financial concessions, and legal fees. If a part of the consideration for such assignment or subletting shall be payable other than in cash, the payment to Landlord of its share of such non-cash consideration shall be in such form as is reasonably satisfactory to Landlord.
(C) With respect to any assignment or subletting for which Tenant must pay to Landlord fifty percent (50%) of all profit derived from such assignment or subletting, Tenant shall and hereby agrees that it will furnish to Landlord upon request from Landlord a complete statement, setting forth in reasonable detail the computation of all profit derived and to be derived from such assignment or subletting, such computation to be made in accordance with GAAP. Tenant agrees that Landlord or its authorized representatives shall be given access at all reasonable times to the books, records and papers of Tenant reasonably relating to the computation of profit with respect to
any such assignment or subletting, and Landlord shall have the right to make copies thereof. The percentage of profit due Landlord hereunder shall be paid to Landlord after recovery by Tenant of its Transfer Costs, within thirty (30) days of receipt of each payment of profit made from time to time by such assignee or sublessee to Tenant.
(D) Landlord's consent to any assignment or sublease shall not operate as a consent to any subsequent assignment or sublease or as a waiver of Landlord's right to require Tenant to seek Landlord's approval of all subsequent assignments and subleases. Any subletting or assignment hereunder shall not release or discharge Tenant of or from any liability, whether past, present or future, under this Lease, and Tenant shall continue fully liable hereunder. Any subtenant or assignee shall agree in a form satisfactory to Landlord to comply with and be bound by all of the terms, covenants, conditions, provisions and agreements of this Lease, including without limitation Article 2 hereof, to the extent of the space sublet or assigned, and Tenant shall deliver to Landlord promptly within ten (10) business days after execution, a fully executed copy of each such sublease or assignment and all other agreements related thereto and an agreement of compliance by each such subtenant or assignee. Tenant agrees to pay to Landlord, on demand, all reasonable costs incurred by Landlord (including fees paid to consultants, brokers, accountants and attorneys), not to exceed $2,500.00, in connection with any request by Tenant for Landlord to consent to any assignment or subletting by Tenant. Any sale, assignment, mortgage, transfer, or subletting of this Lease which is not in compliance with the provisions of this Article shall be of no effect and void. Notwithstanding any requirement for Landlord to consider, solicit or obtain a sublease or assignment, whether statutory or otherwise, Landlord and Tenant expressly agree that Landlord's obligation with respect to such sublease or assignment shall arise only when Tenant submits such sublease or assignment to Landlord in the manner set out in this Article 12. Notwithstanding anything else herein to the contrary, in no event shall Tenant assign and/or sublet all of any portion of the Premises in contravention of the terms of this Lease, including the use clause set forth in Article 2 hereof.
(E) For purposes of the foregoing, (i) if Tenant is a partnership, any change in the partners of Tenant resulting in a change in the control of such partnership, or (ii) if Tenant is a corporation the voting stock of which is not listed on a nationally recognized security exchange or the National Association for Securities Dealers Automated Quotations (NASDAQ) or its equivalent, any transfer of any or all of the shares of stock of Tenant by sale, assignment, operation of law or otherwise resulting in a change in the present control of such corporation, (iii) if Tenant is a limited liability company any change in the managing member causing a change in the present control of such limited liability company, or (iv) the transfer of all or substantially all of the assets of Tenant; shall be deemed to be an assignment within the meaning of this Article 12. Notwithstanding the foregoing, this shall not apply to the registered offering of the stock of Tenant, provided that (1) there is no material change in Tenant's management on account thereof, and (2) Tenant gives Landlord prior notice (except to the extent not permitted under applicable laws, rules, or regulations) of such registered public offering.
(F) Notwithstanding anything set forth above to the contrary, Tenant shall have the right without the prior consent of Landlord, to assign this Lease or sublet the Premises or any part thereof
to any Successor or Affiliate, as hereinafter defined, of Tenant, or to effect a transfer of ownership, control or assets of Tenant to a Successor or Affiliate of Tenant, on the following conditions: (i) Tenant shall notify Landlord in writing of such assignment, subletting or transfer not less than ten (10) days prior to the effective date thereof (except to the extent prior notice is not permitted under applicable laws), and furnish to Landlord such information (including the most recent financial statement or in lieu thereof a certificate of such entity stating its minimum net worth) regarding the identity, business, reputation and financial condition of such Affiliate or Successor as Landlord may reasonably request in connection with its exercise of rights under this Section 12(F); (ii) Tenant shall deliver to Landlord evidence reasonably satisfactory to Landlord that such Affiliate or Successor satisfies the requirements of this grammatical paragraph of Article 12; (iii) in the case of any assignment (other than a deemed assignment by transfer of ownership, control or assets of Tenant) or any subletting, Tenant shall deliver to Landlord copies of all operative documents effecting such assignment or subletting, which documents shall be reasonably acceptable to Landlord; and in the case of a deemed assignment by transfer of ownership, control or assets of Tenant, Tenant shall deliver to Landlord an executed copy of an agreement by which such transferee Affiliate or Successor has assumed (explicitly or implicitly) all of the rights and obligations of Tenant under this Lease; (iv) any such subletting, assignment or transfer shall not release or discharge the initial Tenant of or from any liability, whether past, present or future, under this Lease and the initial Tenant shall continue fully liable hereunder; and (v) in the event of an assignment of this Lease to a Successor or Affiliate, the creditworthiness of such Successor or Affiliate shall be reasonably acceptable to Landlord. " Successor " is defined as any person, corporation or entity that acquires in a single transaction or in a series of related transactions (by merger, consolidation, transfer of assets or otherwise), all or substantially all of the property and assets of Tenant or all of the outstanding equity interest in Tenant or that otherwise results from a merger or consolidation with Tenant; and " Affiliate " is defined as any corporation that through one or more intermediaries, controls or is controlled by, or is under common control with, Tenant (" control " meaning the possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise). If, after giving effect to any such assignment, subletting or transfer to a Successor or Affiliate and any merger, consolidation, reorganization or transfer of assets in connection therewith, the aggregate net worth of the assigning Tenant (remaining liable on the Lease), any prior tenants (remaining liable under the Lease) and the assignee, sublessee or transferee would be substantially the same as or greater than the net worth of the Tenant (and any prior tenant previously liable on the Lease) immediately prior to such assignment, sublease or transfer (and any merger, consolidation, reorganization or transfer of assets in connection therewith), then Landlord shall determine the creditworthiness of the Successor or Affiliate to be acceptable. It shall be a condition of Tenant's right to exercise any rights under this Article 12 herein that there shall not actually exist an Event of Default at the time Tenant delivers its written notice to Landlord of the proposed sublet or assignment (provided the foregoing shall not limit or affect Landlord's rights to enforce any defaults of Tenant pursuant to Article 15 hereof).
(G) Notwithstanding any other provisions of this Lease to the contrary, neither Tenant nor any direct or indirect assignee or subtenant of Tenant, including without limitation any Successor or Affiliate, may enter into any lease, sublease, license, concession or other agreement
for use, occupancy or utilization of space in the Premises which would require the payment of rent based on the net profits of any person or of any consideration that would not fall within the definition of “rents from real property”, as that term is defined in Section 856(d) of the Internal Revenue Code of 1986, as amended.
13. EXPENSES OF ENFORCEMENT. Tenant shall pay all reasonable attorneys' fees and expenses of Landlord incurred in successfully enforcing any of the obligations of Tenant under this Lease. Landlord shall pay all reasonable attorneys' fees and expenses of Tenant incurred in successfully enforcing any of the obligations of Landlord under this Lease.
15. LANDLORD'S REMEDIES. If (i) default shall be made in the payment of the rent or any installment thereof or in the payment of any other sum required to be paid by Tenant under this Lease, and such default shall continue for ten (10) days after written notice to Tenant or (ii) default shall be made in the performance of any of the other covenants or conditions which Tenant is required to observe and perform hereunder or under any other lease or agreement between Landlord and Tenant and such default shall continue for thirty (30) days after written notice to Tenant (or if any such default cannot be cured within such 30-day period, so long as Tenant has promptly commenced to cure such default during such initial 30-day period and thereafter diligently pursues such cure to completion within a reasonable period of time and in all events within an additional ninety (90) days after the expiration of said 30-day period, or (iii) the interest of Tenant in this Lease shall be levied on under execution or other legal process (and such levy is not dismissed or stayed within sixty (60) days), or any petition shall be filed by or against Tenant to declare Tenant a bankrupt (and is not dismissed or stayed within ninety (90) days) or to delay, reduce or modify Tenant's debts or obligations or any petition shall be filed or other action taken to reorganize or modify Tenant's capital structure, if Tenant be a corporation or other entity, or Tenant be declared insolvent according to law or if any assignment of Tenant's property shall be made for the benefit of creditors or a receiver or trustee is appointed for Tenant or its property or (iv) Tenant shall abandon the Premises (without payment of rent) during the Term of this Lease, then Landlord may treat the occurrence of any one or more of the foregoing events (an “ Event of Default ”) as a breach of this Lease, and thereupon at its option may, without (except as required by law) further notice or further demand of any kind to Tenant or any other person, have any one or more of the following described remedies in addition to all other rights and remedies provided at law or in equity:
(A) Landlord may, in accordance with applicable law, terminate this Lease and the Term created hereby, in which event Landlord may forthwith repossess the Premises by forcible entry and detainer suit or otherwise and be entitled to recover forthwith as damages a sum of money equal to the present value of the rent provided to be paid by Tenant for the balance of the stated Term of the Lease, less the present value of the fair rental value of the Premises for such period, and any other sum of money and damages then owed by Tenant to Landlord.
(B) Landlord may, in accordance with applicable law, terminate Tenant's right of possession and may repossess the Premises by forcible entry and detainer suit, or otherwise, without
(except as required by law) further demand or notice of any kind to Tenant and without terminating this Lease, in which event Landlord shall reasonably attempt to mitigate its damages. Landlord in such instances expressly reserves the right to relet all or any part of the Premises for such rent and upon such terms as shall be satisfactory to Landlord (including the right to relet the Premises for a term greater or lesser than that remaining under the Term of this Lease and the right to relet the Premises as a part of a larger area and the right to change the character or use made of the Premises). For the purpose of such reletting, Landlord may make such repairs, changes, alterations or additions in or to the Premises as may be necessary or convenient. If Landlord shall fail (despite its commercially reasonable efforts) to relet the Premises, then Tenant shall pay to Landlord as damages, a sum equal to the amount of the rent reserved in this Lease for such period or periods. If the Premises are relet and a sufficient sum shall not be realized from such reletting after paying all of the costs and expenses of such repairs, changes, alterations and additions and the expense of such reletting and the collection of the rent accruing therefrom, to satisfy the rent above provided to be paid, Tenant shall satisfy and pay any such deficiency upon demand therefor from time to time; and Tenant agrees that Landlord may file suit to recover any sums falling due under the terms of this paragraph from time to time and that any suit or recovery of any portion due Landlord hereunder shall be no defense to any subsequent action brought for any amount not theretofore reduced to judgment in favor of Landlord.
(C) In addition the event of a default by Tenant, Landlord shall be entitled to receive as damages from Tenant (in addition to, but only to the extent not included in, any other damages provided herein) an amount equal to (i) the then unamortized amount of the Landlord's Contribution (defined below) and Additional Allowance disbursed to Tenant pursuant to Article 34 hereof, assuming amortization of such amount over a period of 156 calendar months, commencing on the Commencement Date (or, if the Commencement Date is not the first day of a calendar month, on the first day of the first calendar month following the Commencement Date, at a level monthly payment with an interest factor equal to ten percent (10%) per annum, plus (ii) an amount equal to the unamortized amount of the abatement amount as provided in Article 3(B) hereof (with amortization of such amount in the same manner as described in clause (i), above); provided, however, in no event shall the provisions of this Article 15(C) permit Landlord to receive a double recovery of any rent actually paid by Tenant.
(D) Notwithstanding anything to the contrary herein, in the event of a default by Tenant hereunder, Landlord shall make reasonable efforts to attempt to mitigate damages as required by law, provided: (i) Landlord shall have the right to lease unoccupied space in the Building prior to re-leasing the Premises during the Term hereof; and (ii) any costs incurred by Landlord from such mitigation shall be repaid by Tenant.
16. SURRENDER OF POSSESSION. On or before the date this Lease and the Term hereby created terminate, or on or before the